Making it Happen
The solution was to build a global “print utility” under a single reporting structure. And that’s how the “never-seen-before” outsourcing contract was signed between RDA and Williams Lea, a corporate information solutions provider. Under the terms of the contract, Williams Lea will deliver outsourced print procurement and marketing solutions to RDA’s global operations.
“The publisher decided to put its procurement out to tender for the first time because we realized as a business we weren’t leveraging supply as well as we could do,” says Lynn Diplock, Director, U.K. Operations, RDA. “We can add our spend capabilities into what Williams Lea already has. It comes down to economies of scale.”
The exclusive partnership put the 10,000 staff print manager at the helm of outsourced print procurement and marketing for the world’s largest publisher across 19 countries in Europe, Middle East, Asia and America.
Six of the 19 sites, including the U.K., went live on Oct. 18th, ’07 with Reader’s Digest moving 54 of its 100 print buyers over to Williams Lea.
| What's Outsourced in Publishing |
- Author liaison and mgmt.
- Composition
- Converting and
formatting content
- Copy editing
- Design and layout
- Fact and data
checking
- Indexing
- Localization
- Photo research
- Photography
- Photo research
- Project mgmt.
- Specialist editing
- Translation
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Source: ValueNotes
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“Not only is this deal a landmark in the publishing industry, it also demonstrates the larger trend of companies outsourcing non-core ‘management functions’ as well as pure supply and service contracts,” notes John K. Halvey, Head, Strategic Sourcing and Technology Group, Milbank Tweed Hadley & McCloy. Halvey led the legal team advising RDA in developing, structuring and negotiating a global business-process outsourcing arrangement with Williams Lea.
To come to the conclusion of selecting Williams Lea, RDA conducted a global review of outsourcing service providers. It was the print manager’s “expertise” that helped it outpace several other hopefuls following the worldwide procurement review at RDA that aims to cut $130 million in costs over the first three years of the contract.
“From our perspective, being awarded this contract re-affirms the considerable cost and operational benefits that a global organization can achieve by managing its promotional printing within a truly
integrated process,” confirms Tim Griffiths, CEO, Williams Lea.
RDA’s $218 million print spend was aggregated with Williams Lea’s $800 million, creating the largest independent print sourcing entity in the world. This enabled RDA to benefit from unprecedented leverage.
“The project reflects RDA’s firm commitment to reduce costs and improve our business processes worldwide in support of our plan for sustainable, long-term growth,” says RDA’s Berner.
The Trends
Traditionally, when publishing companies have outsourced, it has been mostly IT applications and infrastructure services (for circulation and fulfillment services). On the editorial side, mostly design, typesetting and conversion work has been sent out.
But gradually, with a burst of knowledge centers across the globe, the conservative publishing industry has started sending out more knowledge-oriented work, such as copy editing, reporting, research and photography.
However, unlike other outsourcing deals “in the RDA-Williams Lea relationship the “management” of functions [like document management] will now be outsourced to Williams Lea,” says Jane Parkhurst, Senior Associate, Milbank Tweed Hadley & McCloy. “In some cases the functions will be performed domestically, and in others they will be done offshore.”
This unusual deal has not only retained all the 100 print buyers of RDA but has also added 70 others funded through savings, thereby reducing the risk in the change management and focusing more on the process-related enhancements.
