Working out of a small Greenwich Village apartment in New York, DeWitt and Lila Wallace would never have thought that their magazine, Reader’s Digest, which was first published in 1922, would become the largest-selling magazine in the world. Priced at 25 cents then, they circulated the magazine exclusively by mail. During the earlier days, the Wallaces edited and printed 5,000 copies at their apartment. Since then, the Reader’s Digest Association (RDA) has grown to become one of the world’s pre-eminent publishers and direct marketers.

Over the years, the company built a global customer base that ranks among the world’s largest. And RDA expanded that reach by working with a number of partners, licensees, alliances and providers around the world.

After acquiring a public status in 1990, RDA returned to private ownership status after 17 years in 2007. It so happened on Mar. 3rd, ’07, when an investor group led by Ripplewood Holdings, a New York-based venture capital company, completed a historic transaction resulting in the acquisition of RDA.
The acquisition, however, instilled an immediate focus on increasing long-term profitability, and making lowering of costs a primary component of the strategy.

As a core competency, RDA had already achieved significant savings on print through the deployment of specialist production teams, innovative processes and robust procurement practices, leaving minimal visibility of further significant savings.

However, the challenge was to build a solution that would have delivered a further cost cut.
“Our cost-reduction initiatives revealed had helped in reducing our market spend. This very fact pushed us to leverage our ability to further negotiate cost reductions,” says Mary Berner, President and CEO, RDA.
Similarly, the investors too had no visibility of direct mail spend in other divisions or markets, limiting their ability to proactively co-source.

Publishing Offshoring: Who is in it?

Content services are being outsourced not just by publishers but equally by corporates that are sending out content work such as editing, proofreading and data collection for company reports. Below is an indicative list of companies that are currently outsourcing content-related functions. The names of the providers are mentioned first, followed by their customers.

Oce Business Services: Rolls Royce, Telefonica, Rechenzentrale Bayerischer Genossenschaftsbanken, Pfizer, Eurotunnel, DSM, Luminus, The Consortium

PitneyBowes: Pennsylvania Higher Education Assistance Agency, The Student Loans Company

Xerox: BP Canada, Brooklyn Public Library, Continental Airlines, DaimlerChrysler, Holman Insurance, Honeywell, Intercontinental Hotels, Kennedy Health System,  Sun Microsystems, United Kingdom Patent Office, University of Missouri Health Care

BancTec: Scan One, Valldata Services, Alogent, The Bakery Company, Danish Post, Symcor

DataCraft-India: Cambridge University Press India, Pearson Education (India)

OfficeTiger (acquired by RR Donnelley): U.S. Postal Service

Aptara (formerly TechBooks): Houghton Mifflin, Harcourt Education, Reed Elsevier, Scholastic, Blackwell Publishing, Morgan Stanley, Bausch & Lomb, American Express, Merck, AstraZeneca, Bowne, Microsoft, Motorola, Nokia, Morgan Lewis, Deloitte Consulting, Hewitt, Booz Allen Hamilton, Cisco, Applied Materials

Newgen: Airtel, Asian Paints, BNP Paribas, Ministry of Railways (Government of India), Reliance Infocomm, Patni Computers, The Press Trust of India, Wockhardt

Integra: Pearson Education, Thomson, Elsevier, Oxford University Press, Springer, Taylor & Francis, Wiley, Palgrave, University of Chicago Press

Infomedia India: Thomson Learning, Wolters Kluwer, Pearson, Taylor and Francis, World Bank

BeaconPMG: McGraw Hill, Houghton Mifflin, The American Physical Society

Q2A Solutions: Disney Learning, Harcourt Education, Oxford University Press, Scholastic, HarperCollins, Robert Frederick

Datamatics Technologies: Cadmus, LexisNexis

Express KCS: San Jose Mercury News, Crown Dublin, News International, Timeout Movies, The Sunday Times, JWT, Ogilvy, Publicis, TBWA, Hyatt, GlaxoSmithKline, Williams Lea

Cengage Learning (formerly Thompson): Evans Publishing Group, Sweet & Maxwell, Taylor & Francis Books

Pearson: Microsoft, Cisco, IBM, HP, Intel, Adobe, Macromedia

Cyber Media Services: Encyclopedia Britannica, Marshall Cavendish, Pearson, Dorling Kindersley, Thames & Hudson

Innodata-Isogen: The New Yorker, Barnes & Noble, University of Virginia, John Wiley & Sons, The Federal Reserve Board, State of Texas, Nortel, Lockheed Martin, Amazon.com, The British Library, United Postal Service, The New York Times, Reuters

Williams Lea: Reader’s Digest, Norwich Union, Royal & SunAlliance, BMW Group, Microsoft, Prudential Financial.