Publisher Finds Substantial Cost Savings ... in India

Eran Salu, managing director of Business Leader Media, says that ever since the company began outsourcing work to India, it has cut significant costs, allowing for reinvestment in its business.For more than two years, Business Leader Media -- which provides local market intelligence to C-level executives -- has been outsourcing to India, where 65 percent of its workforce is now located.The company publishes monthly magazines, Web sites and e-mail newsletters that provide profiles of businesses and leaders making an impact in their region. Business Leader Media hosts more than 70 business events annually and manages a daily newswire that provides local business news updated continuously. It also publishes national newsstand business-opportunity magazines and hosts the Web's most active small business forum. Publishing Executive Inbox spoke with Salu to discuss the opportunities that overseas outsourcing can provide for publishers.Inbox: Why did your company decide to outsource work?Eran Salu: Our company began outsourcing projects to India about two-and-a-half years ago. Initially, we used overseas labor to digitize 50 years of magazine content onto our Web sites. We then hired programmers and Web designers to support our U.S. Web team. Gradually, we have replaced most U.S. positions in technology, administration, marketing, circulation and accounting/billing with equally talented labor in India.Inbox: Why specifically are you outsourcing to India?Salu: India has a tremendously educated and motivated work force. We typically have at least 10 qualified candidates for each open position. Labor rates in India are about 15 to 20 percent of what they would be in the U.S. Examples include:• 10-year CPA: $16,000 annually• Senior Net Programmers: $15,000 to $18,000 annually• Writers/Editors: $4,000 to $8,000 annually• Circulation/Admin $2,000 to $4,000 annuallyInbox: What has your company's outsourcing experience been like?Salu: We started with six employees and have grown to more than 100 employees in our Mumbai office. We run three daily shifts that span a 20-hour workday. Administration, circulation and accounting all work during U.S. nighttime hours, which is daytime in India. Our tech and marketing teams work a half-Indian, half-U.S. day. Writers and creative staff work U.S. hours. Outsourcing to India has made an aggressive growth plan possible. We primarily use Web and e-mail-based marketing efforts to grow our audience. These efforts would not be possible without utilizing a sizable overseas labor force.Inbox: What benefits does outsourcing provide to publishers? Why is outsourcing particularly important in publishing? Salu: Web development, Web design, creative design, editorial research, circulation, marketing list development, accounting, billing and administrative functions can all be outsourced to India. We have not outsourced any sales functions to India other than lead generation. Our Indian writers provide mostly Web content for us; they are unable to provide magazine-quality content.Inbox: What is the process publishers would follow to start outsourcing?Salu: The best advice is to start slow and find an experienced overseas manager. Start by hiring a small team and outsourcing defined non-mission, critical projects. Once you have developed a comfort level, you may start hiring Indian employees directly into U.S. departments. Finally, complete outsourcing of whole U.S. departments is possible if desired. Inbox: Are there other regions/countries you could point to as outsourcing opportunities for publishers?Salu: Our experience is solely in India. However, we are considering both Israel and the Philippines for future outsourcing of sales functions.Inbox: What are some challenges involved with outsourcing?Salu: There are two big challenges in outsourcing overseas. The first is language and cultural barriers which create management challenges. The second is selling your U.S. team on outsourcing. Our U.S. executives and managers all are trained in how to manage our Indian counterparts and are provided primarily Indian resources. You cannot succeed at our company without embracing and utilizing our Indian counterparts.Inbox: How do publishers overcome these challenges?Salu: You must have a U.S. manager or executive who lives and breathes India. They must be the "India champion" within the company and ensure utilization and performance. They must also evangelize India to the U.S. workforce and make sure that U.S. team members understand that not utilizing India is not an option. This person must be willing to work off hours. Without an "India champion" internally, there is no chance of outsourcing successfully.Inbox: Any other advice you would give to publishers about outsourcing?Salu: My advice would be to find a qualified manager who you feel could ultimately be a member of your company's senior executive team. This person will help you find space and hire employees. I would also advise choosing a location where there is a good labor pool while avoiding the "hot" markets. We chose Mumbai over some of the more common outsourcing locations because we felt we would have less competition for labor from other U.S. companies. This has proved true. Additionally, our policy has been to pay about 15-percent higher than the local market to attract talent. This has led to very low turnover. Finally, we have not tried to Americanize the office culture in India. We respect local customs.

General

Publisher Finds Substantial Cost Savings ... in India

Missy Smith

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Missy Smith