Alleviating Publishing Pain Points At Their Source. Options and tips for successfully addressing publishers’ need to balance the resource demands of books with the investment needs of digital. The study was conducted by Book Business magazine on behalf of SPi Global in November 2011. More than 150 publishers provided data on their biggest challenges, current outsourcing practices and budgets, as well as future outsourcing needs.

1. Alleviating Publishing
Pain Points at Their Source
Options and tips for successfully addressing
publishers’ need to balance the resource demands
of books with the investment needs of digital.
This whitepaper was completed on January 3, 2012.
Maximize the Value of Your Content

2. Table of Contents
Strategic Shifts: Significant Challenges and Opportunities ….......................................... 1
Solutions for Surviving the Perfect Storm ……………………........................................................ 3
What Publishers Are Outsourcing and What They Look for,
or Should Look for, in a Partner ………………............................................................……………......… 7
Conclusion: The Only Constant Is Change ……………................................................................. 9
*About the study
The study was conducted by Book Business magazine on behalf of
SPi Global in November 2011. More than 150 publishers provided data on
their biggest challenges, current outsourcing practices and budgets,
as well as future outsourcing needs.

3. Strategic Shifts:
Significant Challenges and Opportunities
The transformations that have taken place in the publishing industry over the
past decade, let alone the past year or two, and the impact those changes are
having on publishing companies worldwide are nearly impossible to summarize.
A comment reported in Book Business magazine five years ago from Will Pesce—
According to a new then-President and CEO of John Wiley & Sons—demonstrates the effects of what
study of 150-plus many analysts have called “the perfect storm” plaguing the industry: “Over the
past five years, we have introduced more new business models than we had in the
senior-level publishing previous 193 years, in part because we are no longer limited by the physicality of
executives, the biggest books or journals.”
growth opportunities The perfect storm has gained momentum in the years since, and has carried
with it the winds of change in, obviously, the increasing availability of online
in the industry are content (free and paid), eBooks, smartphones, tablets, apps, a historic economic
perceived to be in recession, declining government, academic and library budgets, a drastically
evolving retail landscape, and shifting consumer behavior towards book content.
eBooks, digital content Illiteracy continues to plague the country as well as the industry, and the industry
and delivery, as well as must continuously reckon with the force of technological change. However,
as with most storms, breaks in the clouds have emerged, through which new
new titles. opportunities have shined brightly. As Pesce said, “Our investments in technology
are enabling us to make our must-have content available to our customers to
use in their professional and personal lives with greater immediacy, utility, and
flexibility than ever before.”
Dominique Raccah, Publisher and CEO of independent publisher Sourcebooks, said
at the Book Industry Study Group’s 2009 Making Information Pay event that “the
‘content continuum’—the potential for expanding content and author brands
into eBook, mobile and other digital content products—presents the largest
opportunity I’ve seen in 22 years as a book publisher.”
Since then, this somewhat early optimistic outlook on e-content has spread like
wildfire across much of the industry. Especially in segments such as the academic
publishing market, where the price of print textbooks has increasingly become
an issue of great consumer focus, the prospect of lower-cost digital solutions
has presented both ample new competitive hurdles, as well as opportunities in
providing custom textbooks, enhanced digital and data products, licensing, and
more frequent updates, among others.
According to a new study* of 150-plus senior-level publishing executives
(conducted by an outside party on behalf of SPi Global), the biggest growth
opportunities in the industry are perceived to be in eBooks, digital content and
delivery, as well as new titles.
Print continues to stand sturdy as the foundation of publishing behemoths as
well as mid-size and smaller companies. However, the growth in eBooks and other
digital content formats likewise continues to weigh heavier each year. Stalwarts,
such as Scholastic, the world’s largest publisher and distributor of children’s
books founded nearly a century ago, are undergoing unprecedented strategic
Alleviating Publishing Pain Points at Their Source 1

4. transformations. “The big strategic decision for Scholastic in 2011 was to drive forward with the transition to technology-
enabled reading in our children’s consumer book business, estimating that one-third of Scholastic revenue will be digital by
2015,” said Richard Robinson, Chairman, President and CEO of Scholastic Inc., in a November 2011 article in Book Business.
Publishers have increasingly focused on and invested in growth opportunities in their respective markets and repeatedly
reinvented their business models. New challenges have arisen. According to the study, the No. 1 challenge publishers face
today is developing a strategy around the industry’s growth in eBook sales, which is the primary challenge by almost half
(48%) of survey respondents.
Close behind are the challenges of marketing (print books, eBooks, or both) (45%), and eBook conversion/streamlining internal
processes for output to multiple platforms (39%).
What Is Your Company’s Biggest Challenge?**
48%
Developing a strategy around the industry’s growth in eBook sales
45%
Marketing (print books, eBooks or both)
39%
eBook conversion, streamlining internal processes for output to multiple platforms
35%
Balancing the resource demands of the print business with investment in digital
30%
Negative effects of the economy/budget cuts among customers
29%
Adapting to shifts in the book retail landscape
25%
Cutting costs
23%
Finding the right eBook conversion partners
17%
Staffing internally to adapt to industry shifts
7%
Others
** These results were from a study conducted by Book Business Magazine on behalf of
SPi Global in November 2011.
2 Alleviating Publishing Pain Points at Their Source

5. The underlying implications of such exigency have permeated the farthest corners
within virtually every publishing company. From publishers to editors, manufacturing
and production managers to the more recently developed posts in digital strategy and
implementation, no executive is left unaffected.
According to the survey, individual companies’ primary challenges in evolving
successfully amidst the Sturm und Drang of the industry, include:
• balancing the resource demands of print books with investment in digital;
• staying on top of the digital landscape, and all of the various new formats
and players in the field;
• eBook conversion, streamlining internal processes for output to multiple
platforms;
• finding the right eBook conversion partners; and
• staffing internally to adapt to industry shifts.
The e-reader market
These challenges and their discernible solutions are virtually inseparable
began to fully erupt, and the
from every strategic decision made with an eye toward a future whereby book “era of eBooks” has arrived.
publishers can continue to provide the world with invaluable content, in any
format, while remaining sustainable.
Solutions for Surviving the Perfect Storm
In what could be considered the heart of the economic recession, news headlines were fraught with stories of restructuring,
cost-cutting, and painful layoffs. Those executives fortunate enough to keep their jobs during this national crisis were faced
with seemingly insurmountable new hurdles: Doing the work of several key positions folded into one. Time became far
beyond a luxury, and navigating the swiftly evolving technological landscape around them became their greatest need and
biggest challenge.
The e-reader market began to fully erupt, and the “era of eBooks” has arrived. In the course of several years, dozens of
e-readers emerged onto the market, often with proprietary content formats, leaving publishers with many choices to make,
and a seemingly unmanageable array of formats to navigate and for which to prepare content.
Processes developed over decades upon decades for manufacturing print books were difficult and costly to transform, if new
processes could even be designed for maximum results and efficiency.
Three possible solutions have surfaced, presenting publishers with choices for how to successfully respond to the new
demands of the marketplace and the current economic environment in which they are operating:
A. Hire staff and build a new internal infrastructure.
B. Hire a consultant to guide publishers in their evolution.
C. Hire a strategic partner.
A. Hiring Staff and Building a New Internal Infrastructure
Some ambitious publishers quickly invested heavily in developing new internal infrastructures and training or hiring staff
to help implement this behemoth initiative. The pros to such a decision include maintaining control over the processes, and
being able to customize and improve as the new infrastructure is put into place. Ideally, the publisher would then own its
system and could spread the costs of the project over the new projects launched companywide for many years.
Alleviating Publishing Pain Points at Their Source 3

6. ON HER COMPANY’S DECISION TO However, in addition to investing significant upfront capital to acquire
OuTSOuRCE E-PuBLISHING SERVICES
leading-edge technology and maintain it over time, such projects are almost
always a significant drain on time and staff resources, from shopping for such
“It’s purely a resource solutions, implementing a plan, educating staff, troubleshooting during the
implementation process, etc.
issue. We can’t hire “It’s purely a resource issue,” says Anne Spencer, Vice President of Design and
more people to scale Production for Jones and Bartlett Learning in Boston, about her company’s
up to the extent we decision to outsource e-publishing services versus trying to handle them in-house.
“We can’t hire more people to scale up to the extent we must. Furthermore, many
must. Furthermore, of the skills are relatively easy to ‘commoditize,’ to free up in-house resources for
many of the skills more higher-level tasks.”
are relatively easy “The costs are somewhat compelling as well [to try to manage processes
in-house], but they get significantly nullified or reduced by initial ramp-up tasks,
to ‘commoditize,’ document preparation, quality assurance, and ongoing vigilance on our part to
to free up in-house ensure product integrity,” she adds.
It is not unheard of, unfortunately, for publishers to invest in a technology solution
resources for more only to experience difficulties, as well as significant additional, unanticipated
higher-level tasks.” costs in integrating those technologies effectively and efficiently with their
current hardware, systems, and processes. Projects have even been abandoned
Anne Spencer mid-implementation, leaving the publisher with an ineffective infrastructure—
Vice President of Design and Production
Jones and Bartlett Learning back at square one—and a big dent on their P&L.
Dave Morris, Co-founder and Publisher of New Year Publishing in Danville,
California, says his company faced challenges with modifying its current
workflows and formats. “Our existing resources were not up to speed on
how to modify our existing .indd files into ePub and .Mobi, since they were
not originally designed with those outputs in mind. They basically required a
restart of the designs,” he said, leading to his company’s decision to seek help
with the transition.
For those who are successful in implementation, they face other risks. By the
time many publishers (those who can afford to even attempt such momentous
initiatives) can shop for, design, and implement new processes and costly new
infrastructures, new devices and platforms are likely to be rapidly transforming
market. This requires additional new processes and, often, technology.
B. Hiring a Consultant
Consultants are a staple in most industries, and, especially during periods of
significant change, their expertise can be a valuable asset to companies seeking
guidance. Consultants often have an objective view of multiple, similar projects
that have been implemented, and may know the pain points in selecting partners
and implementing new infrastructures, as well as best practices for training and
hiring new staff.
4 Alleviating Publishing Pain Points at Their Source

7. Among the primary challenges that can occur in working with consultants is that consultants also can be costly, as can
their suggestions for solutions to your company’s hurdles and strategic goals. Another is that, while their expertise may
be significant, every publishing company is unique in its processes, its business objectives, its resources, and its internal
structure. A consultant’s expertise is limited, in that sense, to the projects on which he or she has done and the companies
with which he or she has worked.
Another consideration is that consultants are usually working on more than one project at a time, and your company can
be subject to the consultant’s schedule and other commitments. Because publishing is such a time-sensitive business, and
capital investments accrue each day that new processes cannot yet be implemented effectively, working with consultants
may not be the best option when speed-to-market and costs are a concern.
Related to this, consultants often are constantly seeking new business and working to complete projects, and may not
necessarily be spending the time to stay up-to-date on new technologies or forge long-term relationships with clients.
To gain maximum return on their investments, publishers who instead source work to vendors should consider (and put to
task) their vendors as partners who can serve them in a consultative manner.
C. Hiring a Strategic Partner
Vendors offering solutions such as digital conversion and other e-publishing services, among others, will, almost without fail,
tell you that this option is the most cost-effective and sustainable long-term solution for quality product development and
distribution, as well as strategic growth. This is a sound business proposition.
The result of the perfect storm for many publishers has been to batten down the hatches to survive—in other words, to focus
on their core competencies: finding, working with and developing spectacular authors and content. Anything and everything
is being evaluated—with a number of publishers deciding to outsource non-core functions. For example, publishers have
increasingly outsourced distribution and fulfillment (including the ground-breaking decision in 2011 by HarperCollins to have
RR Donnelley handle fulfillment of all HarperCollins’ new releases, and of its Zondervan division’s frontlist and backlist titles).
“Internal staff should be reserved for key tasks and processes that are core to the publisher’s business. If a process or task can
be better done by a vendor, or done for less with no loss of quality, these are very low risk items to outsource,” agrees
John Wheeler, Vice President, Strategy and Emerging Technologies, for SPi Global—which provides publishing, ePublishing and
digital solutions, among other services, to the publishing industry.
“Non-traditional areas like e-publishing and conversions are two areas where most publishers lag behind the vendor
community as far as process and technologies are concerned, and in most cases these are areas where the publisher cannot
add value beyond the vendor’s when it comes to execution.”
Cost-management has been an increasing concern, with promises of the post-recession rebound wavering and uncertain,
as well as the impact of eBooks and other digital content on traditionally print-centric businesses. Investment decisions are
made increasingly carefully and cautiously.
Lower costs, says Morris, is one of the biggest benefits in working with an outside partner. “It’s a lot cheaper, and they work on
a set fee basis after reviewing the project.”
Price will always play a factor,” says Wheeler. “As publishers are getting squeezed by the economy, they try to save money
when negotiating with their partners.”
Other substantial benefits of partnering with a third-party provider include access to leading-edge technologies and
staff expertise.
Alleviating Publishing Pain Points at Their Source 5

8. This is of “primary and key importance,” says Ratan Datta, SPi Global’s Executive Vice President, Operations. For example, he
says, “SPi itself symbolizes ‘Solutions, People, Innovation.’ [We have a] dedicated technology team, a process re-engineering
team and an Innovation Lab, working on process improvement, automation and cutting-edge technological solutions. This
becomes one of the many key differentiators, not only between in-house efforts and outsourcing, but between various
vendors with which publishers can choose to partner.”
As technologies change (especially at their current pace), vendors provide publishers with access to those new technologies,
without the requirement of additional capital investment—and potentially the loss suffered from having invested in costly
and now-obsolete technology.
“A partner who stays up-to-date with the latest technology trends will be worth their weight in gold because they can
provide new direction for a company. Publishers are all looking to go online and maximize their presence in the digital world.
They’re not sure of the roadmap, to get where they want to go. A partner can certainly help create that roadmap and provide
new ideas, which the publishers may not have envisioned,” Datta adds.
“A strong partner is looking to develop a relationship, which will move past the end of the current job,” notes Datta,
addressing the benefit of vendor-partners that function as an extension of your in-house team. One-off jobs are not usually
what outside vendors are in business for—so your success (and continued work with them) is their success. “A good vendor
doesn’t simply perform a service; they will provide innovative ideas to further grow a business,” he says.
Reflective of that, as well as of the premise of serving as an extension of your internal team, is the goal of many outsource
partners to help publishers set up or improve their internal processes. This also can be a benefit in terms of combating staff
turnover at a publishing company. If a publisher invests significantly to build the expertise of one or a few key staff members,
and any of those staff members leave, the expertise leaves with them; not so when dealing with an outsource partner, whose
whole team is dedicated to expertise in specified areas.
“The goal of any partner is to provide leadership in operational excellence and ease the burden
on publishers of today. From pointing out bottlenecks to advising on a new technology, it’s up
to the partner to add as much value as they can – all these while providing a competitive price and
top-notch quality,” says Datta.
As technologies change, vendors
provide publishers with access
to those new technologies,
without the requirement of
additional capital investment—
and potentially the loss suffered
from having invested in costly and
now-obsolete technology.
6 Alleviating Publishing Pain Points at Their Source

9. Another related benefit is scalability, notes Wheeler. “Service providers, by the very nature of working with a number of
publishers across the industry, are able to bring a wealth of best practices to the table along with the organizational muscle
and resiliency to get the biggest jobs done,” he says.
What Publishers Are Outsourcing and What They Look for,
or Should Look for, in a Partner
Coinciding with what publishers have reported as their greatest challenges today—developing successful strategies
around the growth in eBook sales, and eBook conversion/streamlining internal processes for output to multiple platforms—
the largest area that publishers outsource is ePublishing and Digital Solutions (58% of respondents), according to the
SPi Global study.
Which Services Do You Outsource?**
ePublishing and
8% 20% Digital Solution
24% Publishing Solutions
5% Content Platforms
and Technologies
Others
15%
Marketing Services Support
58%
Content Enrichment
21% Customer Support Services
** These results were from a study conducted by Book Business Magazine on behalf of SPi Global in November 2011.
The highest percentage of publishers by far (40% of respondents) are looking for ePublishing and Digital Solutions partners,
followed by general publishing solutions (13%) and content platforms and technologies (13%). Almost a third of publishers
indicated that their outsourcing budget will grow next year, with 35% reporting that it will remain the same.
While many publishers report that one of the biggest benefits of working with a third-party partner is cost savings, cost takes
a back seat when it comes to publishers’ top priorities when searching for a partner. Product quality ranks at the top of the
list, with 93% of respondents to the survey indicating this as highest priority. Cost of services ranks next (91%), followed by
retaining control over content (87%) and customer service (86%). Other factors of significant priority are: ability to leverage a
partner’s technology and expertise (79%), speed to market (76%) and improving current processes (75%).
Alleviating Publishing Pain Points at Their Source 7

10. Seeking vendors that
have a track record What Are Your Priorities When Looking For A Partner?**
of quality clients and
93%
projects, therefore, Product quality
is recommended.
91%
Publishers also would Cost of services
be wise to evaluate 87%
a potential partners’ Control over content
direct experience 86%
within the publishing Customer service
industry. 79%
Ability to leverage partner’s technology and expertise
76%
Speed to market
75%
Process improvement
** These results were from a study conducted by Book Business Magazine on behalf of
SPi Global in November 2011.
“While most publishers claim quality to be the highest concern, time-to-market
and price rank very high as well,” says Wheeler. “The uncertainty and confusion
around the push into ‘e’ from ‘p’ (electronic from print) further muddies the waters,
since processes, procedures and technologies are not mature enough for the key
metrics required to manage the cost/quality/time triad.”
Still, “Quality is always most important,” continues Wheeler. “If you do the job at a
lower cost, but the quality is compromised, the brand will suffer.”
“Product quality will be the primary criterion since this will play a major role in
enabling customers to retain and enhance their customer base and market share,
despite the negative effects of the economy and budget cuts. The objective would
be to provide the best quality and in a cost-effective way,” stresses Datta.
Seeking vendors that have a track record of quality clients and projects, therefore,
is recommended. Publishers also would be wise to evaluate a potential partners’
direct experience within the publishing industry. “We find that a number of
vendors have little publishing experience, but lots of programmers, developers
and willing hands who lack the context of publishing experience,” says Jones and
Bartlett Learning’s Spencer.
8 Alleviating Publishing Pain Points at Their Source

11. Datta suggests publishers look for a partner with “a global reputation, experience, as well as market information.”
With another major benefit of working with third-party partners being access to the latest technology, and knowledge of
best practices and cutting-edge processes, publishers should seek partners that have in-house technological development
teams, who may also specialize in workflow solutions, understand their clients’ objectives, and help develop better processes.
“Publishers are looking for their vendor partners to move from ‘What’ organizations, meaning ‘what do you want us to do’, to
‘How’ and ‘Why’ organizations. These are vendor organizations asking the questions of publishers about ‘how are you doing
this’ and ‘why are you doing this’,” shares Wheeler. “The gap is widening between vendor partners. Publishers are looking far
beyond competitive pricing, which is a basic expectation today. They are expecting vendors to understand their business and
processes and look for continuous improvement to processes and content.”
“Even though the times are changing, the publisher’s goal is to acquire and validate content and to work with the consumer
to understand the best way to offer content . Smart publishers partner with vendors that can support these key roles and
help them in the manufacture and distribution of the final product,” adds Datta. “To be sure, the publisher needs to have a
handle on emerging trends and technologies, but should use that as a gauge to choose the right vendor partners rather than
to attempt to perform functions that are better done by others.”
Along those lines, publishers also should seek partners who have “expertise and ability to offer a complete gamut of services,”
and who have significant “capabilities and infrastructure available,” says Datta.
The primary means by which publishers can ensure a successful relationship with vendor partners—in addition to doing
the preliminary research into a potential vendor’s credentials and relevant expertise—is to be explicit about their goals
and expectations from the vendor, to ensure that the vendor truly will function as a partner in achieving the desired goals.
Reliable vendors have ample incentive to perform as expected or better than expected in such relationships in order to
maintain a long-term relationship and utilize the vendors’ assets, including technological prowess and accessibility, expertise,
and manpower.
Conclusion: The Only Constant Is Change
In today’s publishing marketplace, the only thing publishers can rely on is constant change. Strategic decisions must be
made to enable publishing companies to maximize their strengths and core competencies.
The challenge of keeping up with new technology and content output options is fluid and fast. By the time a publishing
company hires a knowledgeable team or trains staff, and invests in and implements new technologies for new internal
departments responsible for pursuing emerging opportunities, current technologies may already be obsolete.
In order to avoid the publishing equivalent of swimming upstream, the publishers’ best option is to find a strategic
partner—a partner who not only provides leading-edge knowledge of developing technologies, but also a roadmap for
the future.
Alleviating Publishing Pain Points at Their Source 9

12. About SPi Global
SPi Global partners with companies to maximize the value of their content
online and offline. With escalating costs of production and printing, changing
customer preferences, and the need to adapt, SPi Global enables organizations
to exploit and invest in new media technology. With a complete suite of digital,
publishing, content enrichment, marketing and customer support services,
we help companies gain a competitive advantage through our unique and
innovative solutions.
For over 30 years, SPi Global has been helping leading publishers, not-for-profit
organizations, information providers, and Fortune 1000 companies increase their
revenues, reduce costs, improve time-to-market, and automate operations. With
over 500 clients and 7,000 content specialists, no job is too large for us.
For more information on how SPi Global can help you
maximize your content online and offline, please contact:
Jamie Israel
Director of Marketing, Content Solutions
M 732 662 8345
jamie.israel@spi-global.com
www.spi-global.com
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