Доклад SFN 8.3. - Возвращение к аутсорсингу / Outsourcing Revisited

Shaping the Future of the Newspaper STRATEGY REPORT
ANALYSING STRATEGIC DEVELOPMENTS AND OPPORTUNITIES IN THE PRESS INDUSTRY Volume 8 N°3 MARCH 2009 © WAN

8.3
Outsourcing
In a challenging economy,
newspaper companies around
the world have implemented

Revisited
outsourcing and offshoring
strategies across the value
chain in order to reduce costs,
realise process efficiencies and
focus on core competencies

www.futureofthenewspaper.com
All the strategy reports are available to WAN members and subscribers at the SFN Web site

Shaping
the Future
of the Newspaper

www.wan-press.org
A WORLD ASSOCIATION OF NEWSPAPERS PROJECT,
SUPPORTED BY WORLD LEADING BUSINESS PARTNERS

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THE LEADING SUPPLIER OF SOLUTIONS AND SERVICES FOR DIGITAL, ADVERTISING,
CONTENT MANAGEMENT AND SUBSCRIPTION APPLICATIONS.

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A WORLD LEADING PRODUCER OF NEWSPRINT AND MAGAZINE PAPER,
WITH 18 PAPER MILLS AROUND THE WORLD

© WORLD ASSOCIATION OF NEWSPAPERS, 2009

VOLUME 8 REPORT N° 3 OUTSOURCING REVISITED

TABLE OF CONTENTS

Executive Summary 5
Introduction 7
1 2009 WAN Outsourcing Survey 9
Accounting Function 11
Administration Function 13
Advertising Function 15
Circulation Function 17
Customer Service Function 19
Editorial Function 21
Human Resources Function 23
IT Function 25
Printing Function 27
2 Why Newspapers Outsource 29
Survey Respondents Discuss Outsourcing Measures 29
ValueNotes Research 32
3 How Newspapers Manage Outsourcing 37
The Miami Herald 37
Firsthand Account: Sub-Editor Prepares to Offshore Job 40
RCS Quotidiani S.p.A. 41
Tips from Newspapers on Outsourcing and Offshoring 41
4 Outsourcers Discuss Their Businesses 43
Advertising, Design and Artwork 43
Tips from Outsourcing and Offshoring Companies 45
Editorial 48
Outsourced Printing 50
Conclusion 53

3

MARCH 2009 SHAPING THE FUTURE OF THE NEWSPAPER

4


Executive Summary

As economic challenges escalate for developed in 1990 by Gary Hamel and C.K.
newspaper companies, many are seeking new Prahalad, starts the strategic process at the
ways to reduce costs, create efficiencies and centre of the company’s core strengths, with a
earn new revenues. Newspaper companies higher quality, at a lower cost and faster than
have found that outsourcing various company their competitors.
functions can save an estimated 10 percent to
In most categories, the 2009 survey findings
50 percent of in-house costs. If the outsourcing
mirrored the results of the 2005 WAN
partnership is well-managed, it can produce as
Outsourcing Survey, with circulation, IT and
good or better results in quality and efficiency
printing being the most popular departments to
than if the functions remain in-house,
outsource either partially or fully in both
according to publishers surveyed and
surveys. Between 50 and 60 percent of the
interviewed for this report.
2009 respondents said they fully or partially
outsource these departments.
According to the 2009 World Association of
Newspapers’ Outsourcing Survey, most The least likely department to be outsourced is
publishers focused on two main objectives editorial, with 52.5 percent of the respondents
when engaging in outsourcing: cost savings saying they had no plans to outsource editorial
and their core competencies, typically defined functions, the same percentage as in 2005. But,
as editorial and advertising. A popular theme as a slew of editorial and advertising
resounded in the survey and follow-up outsourcing companies emerge both
interviews: Newspapers must focus on their domestically and abroad, the world’s
core competencies of advertising and editorial newspaper companies are experimenting in
in-house, and many of the rest of the company outsourcing functions that do not fall under the
functions can be outsourced cost-effectively if all-important categories of gathering news and
these situations are managed well. selling advertising.
The “Core Competence” business model, These ancillary advertising and editorial

5


functions that are ripe for outsourcing and owned subsidiaries, designed to focus on
offshoring are typically administratively and excellence in each competency, but with
technically focused, such as ad production and separate budgets and with contractual ties to
call centres for the ad departments, and page the mother ship. Subsidiaries that serve as
makeup, sub-editing, listings compilation and outsourcers are particularly common among
online forum moderation in the editorial larger media companies and multi-national
departments. newspaper companies.
While offshoring is by far less popular than “The primary reason for outsourcing our
domestic outsourcing, the editorial and activities was our company strategy with its
advertising departments are the most likely focus on the core business. The other reasons
functions to be offshored. According to the were cost-related through better utilisation of
2009 survey, respondents said 28.6 percent of the (parent) group resources, but also to enable
their editorial outsourcing is offshored, while better focus for the outsourced companies and
27 percent of their advertising outsourcing was development of core competencies, further on
offshored. – more transparent structure and internal
This report details five of the most prominent relations,” said a respondent from a 100,000
offshoring companies for advertising and circulation newspaper in Eastern Europe,
editorial, with production centres in India, the which saves 20 percent of its total costs on
Philippines, Australia and the United States. outsourcing six of its key departments to
These expanding businesses, many of which companies owned by its parent company
didn’t exist in 2005, may be part of the reason within its country’s borders.
for the uptick in outsourcing and offshoring in Sound advice from both outsourcing
advertising and editorial departments. companies and the publishers that hire them is
Respondents who had no plans to outsource published in this report. Among the many tips
advertising functions fell from 47 percent to are:
42.4 percent from 2005 to 2009.
• Create a thorough analysis of each
Compared with the 2005 outsourcing survey, department’s process and identify which
printing and IT continue to be among the most functions would be appropriate to outsource.
outsourced departments in responding
newspaper companies, and growing. In 2005, • New roles must be created when adding
52 percent of the respondents partially or fully outsourced functions to any company,
outsourced IT, or were planning to do so including in-house project manager.
within two years, compared with 64.5 percent • Check references of the vendor, and
in 2009. Regarding printing, those respondents thoroughly review a vendor's progress in the
who either partially or fully outsourced first months of the contract.
printing rose from 52 percent to 56 percent
• Make sure the vendor offers business
from 2005 to 2009.
continuity. Do they have data backup? Will
A variety of case studies are featured in the they still be able to operate and provide the
report, including the outsourcing practices of service if a problem develops?
the Miami Herald in the United States
(editorial), RCS Quotidiani S.p.A. in Italy • Visit the facility. “You can tell the minute
(prepress, IT and printing) and News you walk in what you're going to get.”
International’s Newsprinters plant in the • Understand the company's finances. Find out
United Kingdom (printing), as well as a who owns the company, and whether they are
variety of outsourcing anecdotes from media sustainable.
companies that did not wish to be identified.
• Top management must buy into the
Among the objectives for outsourcing include outsourcing concept, and support those who
the important goals to improve quality, are carrying out the outsourcing strategy.
efficiency, speed and know-how in the
company. • There must be clear benchmarks and a broad
agreement on how the project will scale up.
Respondents report an interesting outsourcing
theme: the domestic outsourcing of key
departments within the company to wholly-

6


Introduction

Newspaper companies around the world are Why Outsource?
facing a preternatural challenge: audiences are
expanding, but revenues are contracting. As As the road to outsourcing becomes more
readers migrated to the Internet and ad travelled, newspaper companies are finding
revenues dwindled along with a sickly global that not only does outsourcing help them
economy, newspapers increasingly sought new achieve savings and limit expenses, it also
ways to make their budgets stretch, all while allows for greater flexibility to experiment
maintaining the quality levels in their content. with new revenue streams in today's dynamic
At first, many newspaper executives and their environment. But most importantly,
staff felt outsourcing was a betrayal of their outsourcing done right allows them to focus on
own business, wanting to keep all functions in- and strengthen core competencies.
house. But as times got tougher, the industry “Look at what makes you unique, what brings
reached a tipping point, and the road to value, and outsource the rest,” said Robert
outsourcing began. Berkeley, CEO of offshoring company Express
KCS.
Today, although outsourcing is nowhere near a
Respondents to the 2009 World Association of
point of saturation, it is in current or future
Newspapers Outsourcing Survey said the
business plans of most newspapers.
ability to focus more on their core business
ValueNotes Research, for example, estimates
was the main reason to outsource non-core
the current opportunity to provide offshore
functions.
services to the newspaper industry in the
United Kingdom and United States alone is Common functions or departments to
about US$3.5 billion. Offshore vendor outsource include accounting, administration,
revenues in India are currently valued at $35 circulation, customer service, IT and printing,
million – just 1 percent of the total the survey found, while those less likely to be
opportunity. outsourced were advertising and editorial.

7


“The key reporters and editors that create not a silver bullet. One European newspaper
content are exclusive and unique to us, so we executive pointed out that although
had to identify these areas where we thought outsourcing creates opportunity to gain more
we could achieve some savings that didn't control, reduce costs and reshape departments,
impact that more sophisticated news it also comes with new challenges to be met.
gathering,” said Rick Hirsch, multimedia
In-house, existing employees must work with
editor of the Miami Herald, which has four
the outsourcer as if the work was still internal.
ongoing projects with India-based Mindworks
“This is still your business and you are still
Global Media Services.
responsible,” the executive said, whether that
“I think in the environment we're in, you really work is done in-house, in another city or
need to check out what possible alternatives around the world.
are. Again, the goal is to make sure we can do
Several respondents to WAN's survey said they
investigative reporting and cover local news,
learned early on how important it is to define
so if there are experiments you can do to
tasks in outsourcers' contracts, as hiring
bolster those resources and save costs
someone outside the company makes it
elsewhere, we want to try them.”
necessary to clearly define the scope of
services, yearly outlay and cost controls in the
Cutting Costs contract.
When an industry must reduce its operating When it comes to offshoring, one of the most
costs, it becomes ripe for outsourcing. common challenges is “bridging the cultural
Currently, the newspaper industry in many divide – a key factor for the newspaper
countries is at a point in which “everyone industry that thrives on its ability to connect
climbs on the band wagon,” said Ken with the masses,” according to ValueNotes.
Swanson, CEO of offshoring company Affinity
Express. “In the last two years (newspaper This means that while functions such as ad
outsourcing) went from experimentation, and imaging, content management and pagination
they kind of had a choice, to 'we have no have high offshore potential, functions such as
choice. We have to do this, and do it right ad ideation, copy editing and copy writing
away. Forget experimentation, it's part of our have low potential for offshoring success, the
strategy.'” report states. Functions that go outside learned
skill sets, such as design or digitisation, and
To understand how costs might be cut through venture into areas that require knowledge and
outsourcing or offshoring a function, Swanson understanding of local culture are more
advises clients think of cost in three ways: difficult, as they cannot be taught.
1. Direct costs: Everything associated with
that function. Achieving Long-Term Success
2. Indirect costs: The building, equipment,
utilities, human resources, etc. The impetus to outsource is nearly always
3. Activity: Labour, time and resources related financial, but along the way, outsourcing can
to the function. For example, managers needed lead to efficiencies in other areas and position
to oversee that department, time it takes to newspapers to better compete in an
plan that function in a meeting, etc. increasingly crowded information
marketplace.
“For a typical newspaper publishing operation,
the direct costs form approximately 81 percent “Newspapers are beginning to see there is a
of the total costs. Amongst the direct cost trade-off, and they need to protect their
heads, production constitutes 34 percent of the investments and refocus on creating unique
key cost components,” ValueNotes Research and compelling content,” said Tony Joseph,
states in ch. 2. CEO and co-founder of offshoring company
Mindworks Global Media Services. “We
believe all (cost-cutting) solutions, in some
Lessons Learned places have diminished newspapers, in a time
Newspapers incorporating outsourcing into when the core should be strengthened – and
their business plans are finding that that core is compelling and unique local
outsourcing is a piece of the strategy puzzle, content.”

8


1. 2009 WAN Outsourcing Survey

The World Association of Newspapers
conducted an online survey from November Survey Responses by Region
2008 to February 2009, aimed at Total responses: 59
understanding the outsourcing and offshoring Latin
efforts in different functions of newspaper America
North 10.2%
publishing companies around the world, America
including: 23.7% 6
14
• Levels of outsourcing
• Performance measurement post outsourcing
• Decision making for outsourcing or not
outsourcing Africa 3
5.1% 23 Europe
Among the 59 respondents who completed 39.0%
the survey, 39 percent are from Europe, 23
11
percent are from North America and 18
percent are from the Asia Pacific region. Asia 2
Another 10 percent came from Latin 18.6%
Australasia
America, while only about 5 percent and less 3.4%
than 3.5 percent are from Africa and Source: WAN Outsourcing Survey 2009
© World Association of Newspapers 2008-2009
Australasia, respectively.

According to the survey, IT, printing and partially or fully. The lowest levels of
circulation are the functions with the highest outsourcing went to accounting and editorial
outsourcing levels, with more than half of the functions, with more than 50 percent of the
companies outsourcing those functions responding companies not outsourcing them.

9


Outsourcing Level
Fully Partially Will be outsourced Will be outsourced in the No plans Don't know/NA
outsourced outsourced within next two years future; but no timeline yet

Accounting 5.08 20.34 6.78 8.47 54.24 5.08

Administration 5.08 44.07 3.39 3.39 40.68 3.39

Advertising 3.39 38.98 1.69 8.47 42.37 5.08

Circulation 8.47 45.76 5.08 5.08 27.12 8.47
8.47

Customer service 6.78 27.12 6.78 5.08 47.46 6.78

Editorial 35.59 1.69 5.08 52.54 5.08

HR 3.39 32.20 8.47 49.15 6.78

IT 5.08 55.93 3.39 11.86 20.34 3.39

Printing 25.42 30.51 1.69 6.78 32.20 3.39

% 0 10 20 30 40 50 60 70 80 90 100
Source: WAN Outsourcing Survey 2009 © World Association of Newspapers 2008-2009

The most satisfactory post-outsourcing The majority of companies still chose not to
performance measurement went to editorial – offshore across functions. However,
more than half of the companies said the companies named advertising, circulation,
quality and efficiency of outsourced editorial customer service, editorial and IT as
work has improved. More than 50 percent said functions they are more likely to offshore –
efficiency has improved on administration, at least two out of 10 said they have
advertising and printing functions after offshored those functions either fully or
outsourcing. partially.
However, less than one-fourth said the quality
of circulation and customer service has
improved after outsourcing, according to the
survey.

Percentage of Companies with Improved Performance
after Outsourcing
39.10
Accounting Quality
47.80
Efficiency
40.00
Administration
53.30
40.00
Advertising
53.30
21.60
Circulation
40.50
23.80
Customer service
47.60
52.20
Editorial
60.90
33.30
HR
42.90
IT 35.10
43.20
37.10
Printing
51.40
% 0 10 20 30 40 50 60 70

10


Offshore Outsourcing Level by Function
Yes, totally offshore Yes, partially offshore No Don’t know/NA

Accounting 3.60 7.10 78.60 10.70

Administration 11.80 79.40 8.80
Advertising 2.70 27.00 67.60 2.70

Circulation 2.30 18.60 72.10 7.00

Customer service 10.00 10.00 70.00 10.00

Editorial 3.60 28.60 64.30 3.60

HR 11.50 80.80 7.70

IT 21.30 68.10 10.60

Printing 10.00 87.50 2.50
% 0 20 40 60 80 100

Accounting Function
OUTSOURCING LEVEL
Of all the respondents, more than half said To break down by region, the survey shows at
they have not and do not plan to outsource least half the respondents across all regions
accounting work, while more than 20 do not outsource accounting. In Asia, more
percent have already partially outsourced than 35 percent partially outsource the
accounting. accounting function.

Outsourcing Level: Accounting Function by Region
Africa Asia Australasia Europe Latin America North America
Fully outsourced
count 0 0 0 3 0 0
% of all companies
in the same region 0% 0% 0% 13% 0% 0%
Partially outsourced
count 0 4 0 5 1 2
% of all companies
Will be outsourced within next two years
count 0 0 1 1 0 2
% of all companies
Will be outsourced in the future; but no timeline yet
count 1 0 0 2 1 1
% of all companies
No plans
count 2 6 1 12 4 7
% of all companies
Don't know/NA
count 0 1 0 0 0 2
% of all companies

11


FACTORS LEADING TO OUTSOURCING
Outsourcing Level: The most popular accounting functions
Accounting Function outsourced by the responding companies include
Don't
know/NA recording, classifying and summarising financial
Fully
5.08% outsourced information, interpreting the financial results and
5.08% invoicing and receipting. Cost savings was the
3
3 Partially main factor in the decision making process on
outsourced
20.34% whether to outsource accounting, followed by
being able to focus on core competency. Lack
12
of in-house expertise and sharing risks are
No considered less important factors, according to
plans 32
54.24%
the WAN outsourcing survey.
4 Will be
outsourced
within next
Most Important Reasons
5
two years for Outsourcing
Will be 6.78% the Accounting Function
outsourced
in the future; (5-point scale, 1 means least important,
but no timeline yet and 5 means most important)
8.47%
Source: WAN Outsourcing Survey 2009 Sharing Risks 1.79
Lack of In-House 2.48
Expertise
Quality
POST-OUTSOURCING PERFORMANCE Improvement
2.96
MEASUREMENT Focus on Core 3.50
Competency
Among the companies that have partially or Cost Savings 4.07
fully outsourced the accounting function, more
0 1 2 3 4 5
than 55 percent said the performance has Source: WAN Outsourcing Survey 2009
remained the same in terms of quality, while © World Association of Newspapers 2008-2009
nearly 40 percent said it has improved after
outsourcing. Four percent said it has deteriorated. OFFSHORE VS. ONSHORE/DOMESTIC
OUTSOURCING
In terms of efficiency, 47.8 percent of
Nearly four out of five companies that
respondents said performance has remained
outsourced accounting did so domestically.
the same or improved.
Only 7 percent partially offshored the function,
while another 3 percent did so completely
offshore.
After outsourcing,
has the performance
of the accounting function in your Is the outsourcing of the
company improved, deteriorated, accounting function offshore?
Yes,
or remained the same totally
Don’t
know/
in terms of quality and efficiency? offshore NA
3.60% 10.70%
% Yes,
60 Quality partially
Efficiency offshore
56.5
50 7.10%
47.8 47.8
40
39.1
30

20

10
No
0 4.3 0.0 0.0 4.3 78.60%
Deteriorated Remained Improved N/A
the same
Source: WAN Outsourcing Survey 2009 Source: WAN Outsourcing Survey 2009
© World Association of Newspapers 2008-2009 © World Association of Newspapers 2008-2009

12


Cheaper labour costs was listed as the biggest Administration Function
reason to offshore the function, as opposed to
outsourcing it domestically. OUTSOURCING LEVEL
DECISION MAKING FOR NOT About 45 percent of respondents partially
OUTSOURCING
outsourced the administration function at their
publications, while another 40 percent did not
The companies that decided to not outsource outsource or plan to do so at all. Only about 5
any part of accounting said they made their percent fully outsourced the administration
decision based on existing adequate in-house function.
expertise. Other top factors include a loss of
control, as well as the cost to outsource would
be too expensive. Outsourcing Level:
Administration Function
Don't
Most Important Reasons know/NA Fully
3.39% outsourced
for Not Outsourcing 5.08%
the Accounting Function 2
3
(5-point scale, 1 means least important,
and 5 means most important) No
plans
40.68% 24
Adequate
In-House 4.02
Expertise
Loss of Control 3.49
26
Too Expensive 3.14 Partially
Political outsourced
Sensitivities 2.51 44.07%
2
2
Organisation 2.33 Will be
Resistance outsourced
Lack of in the future; Will be
Outsourcing 2.33 but no outsourced
Experience timeline yet within next
3.39% two years
0 1 2 3 4 5 3.39%

Outsourcing Level: Administration Function by Region
Fully outsourced
count 0 0 0 3 0 0
% of all companies
count 1 6 0 9 3 7
% of all companies
count 0 0 0 2 0 0
% of all companies
count 1 1 0 0 0 0
% of all companies
No plans
count 1 3 2 9 3 6
% of all companies
Don't know/NA
count 0 1 0 0 0 1
% of all companies

13


To break down by region, the survey found
that in Europe, Asia, Latin America and Most Important Reasons
North America, the outsourcing level of for Outsourcing
administrative functions were especially high the Administration Function
– at least half of respondents from these (5-point scale, 1 means least important,
regions said they partially or even fully and 5 means most important)
outsourced the function.
Focus on Core
Competency 4.24
POST-OUTSOURCING PERFORMANCE
MEASUREMENT Cost Savings 4.09

More than half the companies that Quality
Improvement 3.56
outsourced administrative work said the Lack of In-House
efficiency has been improved after 3.38
Expertise
outsourcing, while another 43 percent said it Sharing Risks 2.40
remained the same. In terms of quality, 40
percent said it has improved, while over half 0 1 2 3 4 5
Source: WAN Outsourcing Survey 2009
said it remained the same.

After outsourcing, OFFSHORE VS. ONSHORE/DOMESTIC
has the performance of the OUTSOURCING
administration function in your
Nearly four out of five of those surveyed said
company improved, deteriorated,
they chose to outsource administrative
or remained the same
functions domestically, while 11 percent chose
in terms of quality and efficiency? to do so partially offshore. Cheaper labour
%
60 Quality costs and lower taxes were the top reasons to
Efficiency outsource the administration function offshore.
50 53.3 53.3

40 43.3
40.0 Is the outsourcing of the
30 administration function offshore?
20 Don’t
know/NA
8.80%
10
Yes, partially
0 3.3 0 3.3 3.3 offshore
Deteriorated Remained Improved N/A 11.80%
the same

DECISION MAKING
FOR OUTSOURCING
No
79.40%
The administration functions most typically
outsourced include maintaining Source: WAN Outsourcing Survey 2009
photocopiers, fax machines, and postage
meters; maintaining established
shipping/receiving procedures; and ordering, DECISION MAKING FOR NOT
storing and distributing supplies. OUTSOURCING

The most important reasons for publishing When asked why they chose not to outsource
companies to outsource the administration the administration function, these companies
function is to focus on core competency. said it was because they had adequate in-house
Cost savings is also another important factor, expertise, and were afraid the outsourcing
according to the WAN Outsourcing Survey. would cause a loss of control.

14


Most Important Reasons Outsourcing Level:
for Not Outsourcing Advertising Function
the Administration Function Don't know/NA Fully
(5-point scale, 1 means least important, 5.08% outsourced
and 5 means most important) 3.39%
3
2
Adequate
In-House 3.88 No
Expertise plans
Loss of Control 3.23 42.37% 25
23
Too Expensive 2.9
Organisation
Resistance 2.63
Political Partially
Sensitivities 2.31
outsourced
Lack of 38.98%
Outsourcing 1.96 5 1
Experience Will be
outsourced Will be
0 1 2 3 4 5
in the future; outsourced
Source: WAN Outsourcing Survey 2009 but no within next
© World Association of Newspapers 2008-2009 timeline yet two years
8.47% 1.69%

Advertising Function To break down by region, both of the two
responses in Australasia chose to partially
OUTSOURCING LEVEL
outsource the function, while in North
More than 40 percent of the publishing America, nearly 60 percent did so. In Africa,
companies surveyed said they have not and do two of the three respondents said they have no
not plan to outsource advertising, while plans to outsource advertising, while the third
another 39 percent said they have partially said although there are plans to do so in the
outsourced that function. future, there is not yet a timeline.

Outsourcing Level: Advertising Function by Region
Fully outsourced
count 0 0 0 2 0 0
% of all companies
count 0 3 2 8 2 8
% of all companies
count 0 0 0 1 0 0
% of all companies
count 1 2 0 2 0 0
% of all companies
No plans
count 2 5 0 9 3 6
% of all companies
Don't know/NA
count 0 1 0 1 1 0
% of all companies

15


POST-OUTSOURCING PERFORMANCE OFFSHORE VS. ONSHORE/DOMESTIC
MEASUREMENT OUTSOURCING

More than half of the companies that have Compared to the accounting and
outsourced advertising functions said administrative functions, more companies
efficiency has been improving, while 40 chose to outsource advertising offshore –
percent said the quality has become better. nearly 30 percent partially outsourced it
Fifty percent said the quality remained the offshore, while about 3 percent did so
same after the outsourcing, while 36.7 percent completely. However, 67 percent of companies
said so in terms of efficiency. However, 6.7 said they outsourced the advertising function
percent of the companies said both quality and domestically only.
efficiency became worse after outsourcing.
A majority of the companies choosing to
outsource advertising offshore picked India,
After outsourcing, due to the cheaper cost of labour there, the
has the performance survey found. Other options include Egypt and
of the advertising function in your the United Kingdom.
in terms of quality and efficiency? Is the outsourcing of the
%
Quality
advertising function offshore?
60 Yes, Don’t
Efficiency
totally know/
50 53.3
50.0 offshore NA
2.70% 2.70%
40
40.0
36.7 Yes, partially
30 offshore
27.00%
20

10
6.7 6.7 3.3 3.3
0
the same
No
67.60%
DECISION MAKING FOR OUTSOURCING
According to the survey, the top reasons © World Association of Newspapers 2008-2009
companies outsource advertising functions are to
improve quality, as well as to save on costs. Another
important factor is to focus on core competency.
for Not Outsourcing
Most Important Reasons the Advertising Function
for Outsourcing (5-point scale, 1 means least important,
the Advertising Function and 5 means most important)
(5-point scale, 1 means least important, Adequate
and 5 means most important) In-House 4.48
Expertise
Quality 3.65 Loss of Control 3.74
Improvement
Political 2.59
Cost Savings 3.64 Sensitivities
Focus on Core Too Expensive 2.45
3.31
Competency Organisation
Resistance 2.22
Expertise Lack of
Outsourcing 2.10
Sharing Risks 2.26 Experience
0 1 2 3 4 5
0 1 2 3 4

16


DECISION MAKING FOR NOT
OUTSOURCING Outsourcing Level:
Circulation Function
Of the companies choosing to not outsource
advertising, the top reason is that they have Don't Fully
know/NA outsourced
adequate in-house expertise. Loss of control is 8.47% 8.47%
another concern. 5 5

No
plans 16
27.12%
Circulation Function
OUTSOURCING LEVEL
27
Compared to the accounting, administration, Partially
Will be 3 outsourced
and advertising functions, more companies outsourced 3 45.76%
chose to outsource the circulation function, or in the future;
but no Will be
plan to do so in the future. More than 8 percent timeline yet outsourced
of the responding companies fully outsourced 5.08% within next
it, while another 46 percent did so partially. two years
5.08%
More than 10 percent said they will do so in Source: WAN Outsourcing Survey 2009
the future, while less than 30 percent said they © World Association of Newspapers 2008-2009

have no plans to do so.
To break down by region, Asia and Latin
America are the areas with the highest
percentage of outsourcing. More than 60 Less than 10 percent in Asia chose not to
percent of companies in Asia and Latin outsource. The percentage is much higher in
America have outsourced the circulation Australasia, North America, Africa and
function fully or partially. Europe, with at least 30 percent saying so.

Outsourcing Level: Circulation Function by Region
Fully outsourced
count 0 1 0 4 0 0
% of all companies
count 1 6 1 8 4 7
% of all companies
count 0 0 0 1 1 1
% of all companies
count 1 1 0 1 0 0
% of all companies
No plans
count 1 1 1 7 1 5
% of all companies
Don't know/NA
count 0 2 0 2 0 1
% of all companies

17


POST-OUTSOURCING PERFORMANCE function. Focus on core competency and quality
MEASUREMENT improvement are also important, they indicated.
More companies (40.5 percent) said efficiency has OFFSHORE VS. ONSHORE/DOMESTIC
improved after outsourcing, compared to quality OUTSOURCING
(21.6 percent). However, nearly 19 percent Among those who outsourced the circulation
said both efficiency and quality became worse. function, 72 percent chose not to do so
offshore. Meanwhile, 20 percent either
partially or fully outsourced it offshore.
After outsourcing,
has the performance The destinations of offshore outsourcing
of the circulation function in your included Saudi Arabia, United Arab Emirates,
company improved, deteriorated, Philippines, India, El Salvador and China.
or remained the same Cheaper labour costs and being able to penetrate
in terms of quality and efficiency? the foreign market more easily are the top two
%
Quality
reasons for outsourcing circulation offshore.
60
Efficiency
50 45.9
40.5
40 Is the outsourcing of the
30 29.7 circulation function offshore?
Yes, Don’t
21.6 totally know/
20 18.9 18.9
offshore NA
13.5 2.30% 7.00%
10 10.8
Yes,
0 partially
Deteriorated Remained Improved N/A offshore
the same 18.60%

DECISION MAKING FOR OUTSOURCING
Delivering newspapers to the subscribers,
dealers and newsstands were the most No
popularly outsourced functions – more than 80 72.10%
percent of respondents who have outsourced
said they chose to outsource this function. Source: WAN Outsourcing Survey 2009
Cost savings is the most important reason
companies chose to outsource the circulation

Most Important Reasons for Not Outsourcing
for Outsourcing the Circulation Function
the Circulation Function (5-point scale, 1 means least important,
and 5 means most important)
and 5 means most important) Adequate
In-House 4.0
Expertise
Cost Savings 4.33
Loss of Control 3.5
Focus on Core 3.59
Competency Too Expensive 3.0
Quality 3.39 Political
Improvement 2.61
Sensitivities
Lack of In-House Organisation 2.39
Expertise 2.69 Resistance
Lack of
Sharing Risks 2.53 Outsourcing 2.11
Experience
0 1 2 3 4 5 0 1 2 3 4 5

18


DECISION MAKING FOR NOT OUTSOURCING has improved, while about 23 percent said
customer service has improved in terms of
The main reason companies chose to not quality. However, there were still 19 percent
outsource circulation is that they have who said the performance, either quality or
adequate in-house expertise. Loss of control is efficiency, has deteriorated.
another concern.

Customer Service Function
Outsourcing Level:
OUTSOURCING LEVEL Customer Service Function
Although about half of the respondents said Don't Fully
know/NA outsourced
they have no plans to outsource customer 6.78% 6.78%
service functions, another 30 percent said they 4 4
have outsourced customer service either fully Partially
outsourced
or partially. 27.12%

The outsourcing level of customer service is 16
relatively low in Asia and Latin America – more
than 60 percent of respondents said they have no
plans to do so. In Europe and North America, No 28
however, a higher percentage of companies have plans
47.46%
chosen to outsource it – more than 40 percent 4 Will be
outsourced
have done so either fully or partially. 3
within next
Will be two years
POST-OUTSOURCING PERFORMANCE outsourced 6.78%
MEASUREMENT in the future;
but no timeline yet
5.08%
Nearly 50 percent of companies that have Source: WAN Outsourcing Survey 2009
outsourced customer service said efficiency © World Association of Newspapers 2008-2009

Outsourcing Level: Customer Service Function by Region
Fully outsourced
count 0 0 0 2 1 1
% of all companies
count 1 2 0 8 0 5
% of all companies
count 0 0 0 1 1 2
% of all companies
count 0 1 0 2 0 0
% of all companies
No plans
count 1 7 2 8 4 6
% of all companies
Don't know/NA
count 1 1 0 2 0 0
% of all companies

19


OFFSHORE VS. ONSHORE/DOMESTIC
After outsourcing, OUTSOURCING
has the performance of the
Among the respondents who have outsourced
customer service function in your
customer service, seven out of 10 said they
company improved, deteriorated, only did it domestically. Ten percent said they
or remained the same completely offshored it, while another 10
in terms of quality and efficiency? percent did so partially.
%
60 Quality
Efficiency
Philippines is the most popular destination for
57.1 sending customer service work offshore,
50
47.6
according to the survey. India is another place
40 respondents mentioned.
30 33.3 Cheaper labour cost is the top reason for
companies to outsource customer service
20 23.8
19.0 19.0 offshore, according to the survey.
10

0 Is the outsourcing
Deteriorated Remained Improved
the same of the customer service
Source: WAN Outsourcing Survey 2009 function offshore?
Yes, Don’t
totally know/
offshore NA
DECISION MAKING FOR OUTSOURCING 10.00% 10.00% Yes,
partially
Starting, stopping or suspending delivery of offshore
10.00%
the newspaper is the most popular customer
service function to outsource, according to the
survey, with nearly 85 percent responding that
they outsourced it. Web site and billing
information/questions is another popular
function to outsource – six out of 10 said they
have done so.
No
The most important reason to outsource 70.00%
customer service is to cut costs. Focusing on Source: WAN Outsourcing Survey 2009
core competency and improving quality are © World Association of Newspapers 2008-2009
also important.

for Not Outsourcing
Most Important Reasons the Customer Service Function
for Outsourcing (5-point scale, 1 means least important,
the Customer Service Function and 5 means most important)
and 5 means most important) Adequate
In-House 4.14
Expertise
Cost Savings 4.20 Loss of Control 3.78
Focus on Core Too Expensive
Competency 3.55 2.92
Quality Organisation 2.09
Improvement 3.31 Resistance
Lack of
Lack of In-House Outsourcing 2.09
Expertise 2.81
Experience
Political 2.05
Sharing Risks 2.54 Sensitivities
0 1 2 3 4 5 0 1 2 3 4 5

20


DECISION MAKING FOR NOT
OUTSOURCING Outsourcing Level:
Editorial Function
According to companies that chose to not
Don't
outsource circulation, the most important know/NA
reasons are adequate in-house expertise, as 5.08%
well as loss of control. 3
Partially
outsourced
35.59%
21

Editorial Function
No
OUTSOURCING LEVEL plans 31
52.54%
Outsourcing levels for editorial functions are Will be
1 outsourced
relatively low compared to other functions. 3 within next
More than half of the respondents said they two years
1.69%
have no plans to let go of editorial work. About Will be
outsourced
35 percent said they have partially outsourced in the future;
some editorial work, but no respondents have but no
timeline yet
fully outsourced this work. 5.08%
Asia is the region with a high percentage of Source: WAN Outsourcing Survey 2009
editorial functions outsourced – 55 percent © World Association of Newspapers 2008-2009

have done so partially. American respondents,
however, have a relatively low percentage –
more than 80 percent from Latin America and
nearly 65 percent from North America said In Europe, more than half of the respondents
they have no plans to do so. said they chose not to do so.

Outsourcing Level: Editorial Function by Region
Fully outsourced
count 0 0 0 0 0 0
% of all companies
count 0 6 2 9 1 3
% of all companies
count 0 1 0 0 0 0
% of all companies
count 1 0 0 0 0 2
% of all companies
No plans
count 2 3 0 12 5 9
% of all companies
Don't know/NA
count 0 1 0 2 0 0
% of all companies

21


POST-OUTSOURCING PERFORMANCE Design, layout and pagination are also
MEASUREMENT outsourced by about six out of 10 companies
that chose to outsource editorial.
Compared to other functions, post-
outsourcing performance measurement of Unlike other functions, quality improvement is
editorial is more satisfactory than other the top reason for companies to outsource an
functions – more than half said quality has editorial function, while cost savings is the
improved, while more than 60 percent said number two reason.
efficiency has improved.
OFFSHORE VS. ONSHORE/DOMESTIC
OUTSOURCING
After outsourcing,
has the performance Nearly 65 percent said they outsourced
of the editorial function in your editorial work domestically only, while nearly
30 percent did so partially offshore, according
to the survey.
in terms of quality and efficiency? Reasons companies gave as to why they
% outsourced editorial work offshore include
70 Quality
Efficiency more choice and range and writers with more
60 expertise.
60.9
50 52.2 The destinations for outsourcing offshore are
40 quite diverse – including the United States,
Canada, the United Kingdom, Spain, France,
30 34.8
Jordan, India, Egypt and China.
20 21.7
10
8.7 8.7 8.7
4.3
0 Is the outsourcing of the
the same editorial function offshore?
Source: WAN Outsourcing Survey 2009 Yes, Don’t
© World Association of Newspapers 2008-2009 totally know/
offshore NA
3.60% 3.60%
DECISION MAKING FOR OUTSOURCING Yes,
partially
Reporting and writing are the most popular offshore
28.60%
functions to be outsourced, with more than 65
percent of the outsourcing companies choosing
those areas to be done under another roof.

Most Important Reasons No
64.30%
for Outsourcing
the Editorial Function
(5-point scale, 1 means least important, Source: WAN Outsourcing Survey 2009
and 5 means most important) © World Association of Newspapers 2008-2009

Quality 4.00
Improvement

Cost Savings 3.70

Focus on Core
Competency
3.15 DECISION MAKING FOR NOT
OUTSOURCING
Expertise
According to the companies that chose not to
Sharing Risks 2.24 outsource editorial functions, the most
important reasons are that they have adequate
0 1 2 3 4 5
in-house expertise, and do not want to lose
© World Association of Newspapers 2008-2009 control over this aspect of their businesses.

22


Most Important Reasons Outsourcing Level:
for Not Outsourcing HR Function
the Editorial Function Don't Fully
(5-point scale, 1 means least important, know/NA outsourced
and 5 means most important) 6.78% 3.39%
4 2
Adequate Partially
In-House 4.77 outsourced
Expertise 32.20%
Loss of Control 4.17 19
Political 3.24
Sensitivities No
Organisation plans
2.87 49.15%
Resistance
29
Lack of
Outsourcing 2.59
Experience
5
Too Expensive 2.48 Will be
outsourced
0 1 2 3 4 5 in the future;
Source: WAN Outsourcing Survey 2009 but no timeline yet
© World Association of Newspapers 2008-2009 8.47%

Human Resources Function
OUTSOURCING LEVEL
The outsourcing level in Latin America is
About half of the companies said they have no relatively high – half of the companies chose
plans to outsource human resources. More to outsource HR partially. However, the
than 30 percent, however, chose to outsource situation in Europe is quite different – nearly
HR partially, while less than 5 percent chose to six out of 10 respondents have no plan to
fully outsource it. outsource it.

Outsourcing Level: HR Function by Region
Fully outsourced
count 0 0 0 2 0 0
% of all companies
count 0 4 0 7 3 5
% of all companies
count 0 0 0 0 0 0
% of all companies
count 1 1 0 1 1 1
% of all companies
No plans
count 2 4 2 13 2 6
% of all companies
Don't know/NA
count 0 2 0 0 0 2
% of all companies

23

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