Content: Outsourcing Creativity

When cell phone and video games company, Global Wireless Entertainment (GWE),
needed to create a new motor-racing game, it contracted the services of Paradox
Studios in Mumbai, India.

The San Diego-based video-games publisher owns the rights to a game based on
the exploits of legendary race driver Mario Andretti. Using Paradox, GWE could
save 40%—50% from its production budget. “People think of India as a place
with good programmers, but they don't realize that we have a very large pool
of creative people as well,” says Salil Bhargava, CEO, Paradox Studios. “We
have a movie industry that is larger than Hollywood.”

The trend of large corporations outsourcing repetitive production tasks such
as data processing, accounting or even computer programming to offshore
facilities is now seeing a change to them outsourcing the creative aspects of
their business such as content creation, video editing and video-games
production. Some of the world's largest media companies have begun the
process, and are outsourcing content creation and journalism to India and the
Philippines.

Creative content is now the new frontier in the outsourcing business.
CNet's Builder.com, a Website for software developers is outsourcing about 40%
of its content, while Reuters has hired over 300 journalists to cover 3,000
small and medium sized U.S. companies from its offices in Bangalore, India.
These efforts, largely unreported by mainstream media, are blazing new territory
in these service-delivery areas; yet paradoxically enjoy the benefits of
trailing edge adoption curve when it comes to governance. In short, no one is
having to re-invent the wheel when it comes to managing these processes.

Seeking Contentment

There's a bevy of so-called big media companies such as Reed Elsevier,
McGraw-Hill and LexisNexis that have been looking abroad for more and more of
their content-creation needs. Now cellular companies, television production
companies and even video-games developers are outsourcing everything from mobile
content for the cell phone, to video editing to companies in India. Most are
characteristically shy about talking about outsourcing their content, lest
customers and investors regard them poorly.

Even so, the advantages outweigh the disadvantages, and the cost savings can
be great. “Companies can save between 40%—60% from their production cost,
streamline their production process and mitigate the risk of relying too heavily
on one region for all their content needs,” says Mike Maziarka, director,
InfoTrends, a consultancy in Weymouth, Mass.

For example, GWE contacted Paradox last year, and the Indian wireless company
gave its employees the task of researching on the life of Mario Andretti. Two
weeks later, there was a proposal in San Diego.

Once that was approved, a game-design document was drawn up by Paradox. “In
the alpha stage, we do the basic programming and develop the graphics,” says
Paradox's Bhargava. “Then by the beta stage, we have a playable demo.”

The whole process takes between three to six months. Now Mario Andretti is
available on the Verizon platform.

Bhargava stresses on companies securing their intellectual property by
working with reputed companies when outsourcing creative content. “Our
computer labs have no USB ports, zip drives, CD burners or access to the
Internet,” he says.

The editorial services outsourcing (which includes editing) market is also
growing, and is pegged at about $500 million in 2006. This is expected to grow
to over two billion dollars within five years, according to InfoTrend's
Maziarka. Of that sum, about $300 million is in the scientific, technical,
medical and text book market place, a sector well suited to regions such as
India and the Philippines.

Dealing with Challenges

Donald Mazzella, editorial director, Information Strategies, an
editorial-services company based in Palisades Park, NJ, is not a fan of
outsourcing content offshore. “English is tribal language,” he says.
“It's best to find writers from your target audience.”

His company provides Website content and corporate newsletters for small to
medium sized companies.

Mazzella says that he looks closer to home when finding his writers. He has a
stable of about 30 freelance writers. Many are former journalists and
stay-at-home moms.

While they charge higher rates than their Asian counterparts, Mazzella
believes that he saves money in the long term. “They know the business, never
plagiarize and know the difference between cents and pence,” he says. Mazzella
cited a recent case where an advertising agency in New York was sued for a
million dollars, because one of its advertising copywriters had plagiarized an
entire ad. Content purchasers should therefore ensure that their contracts
indemnify them from plagiarism.

Mazzella also advises that the customer develop a clear idea of what they
hope to achieve by adding content to their Website. “The editorial product
should enhance the company's message. Most companies want to post content that
benefits the company, when they should really be posting content that benefits
the customer,” says Mazzella.

Once the message is established, a clear editorial procedure needs to be
specified: Who approves the copy? Should the content be permanent,
semi-permanent or updated regularly? An editorial style guide needs to be
developed specifying how the message should be communicated. An animation
company may employ humor, whereas, this would be inappropriate for a military or
medical devices company. Finally, a budget should be allocated and a publishing
schedule should be established.

Depending on the type of business, Mazzella recommends that companies turn
their customers and prospective customers into a newsletter list. This builds
brand loyalty and keeps the company on the customer's radar.

Familiar Territory

Innodata Isogen is a Hackensack-based outsourcing and technology provider
that caters to the media and information services market sector. Its customer
base ranges from the New York Times, to the McGraw-Hill publishing company and
the Library of Congress. It provides a range of editorial services from data
entry to XML-tagging from any one of its nine facilities in India, the
Philippines and Vietnam. Recently, it finds that its customers, who at one time
only required data-entry services have moved up the production line, and are now
requesting data analysis, synopsis of technical documents and content creation.

“We're working with a number of magazine and journal publishers to
produce rich data products,” says Jack Abuhoff, Chairman and CEO, Innodata
Isogen. “In most cases we can provide cost savings of somewhere between
40%—60%.”

A proportion of that can come from lower wages and less costly real estate.
However, with 10%—15% wage inflation in Bangalore, according to a report by
DiamondCluster International, a consulting firm based in Chicago, wage
advantages while significant may be short lived.

In fact, Abuhoff says that wage savings are only part of the equation. “We
re-engineer the content-production process,” he says. Innodata Isogen turns a
production process into a manufacturing process by breaking it down into its
individual parts, eliminating any unnecessary stages and introducing new
technology.

The first stage examines the current production process at the level of
individual steps. For content creation, the company examines how the editors
assign a topic to the writers; how the employees collect data; how they source
subjects to be interviewed; how they analyze the data; what are the constituent
parts of an article or essay such as the introduction, statistics, body of the
essay or article and conclusion; how is the article edited and who carries out
quality control. These steps need to be documented so that the knowledge can be
transferred to workers outside the company.

The next step is skills remediation. For example, what skills are needed to
write an article on Java, and how is it possible to bring the new employees up
to speed; do they need to be re-educated; can existing employees train them and
so on.

Shipping back content electronically from anywhere, makes more sense than getting pullovers in containers from China

A project-management methodology is then defined. Then the whole process
needs to be examined to see if there are ways to streamline the production,
eliminate any unnecessary stages so that costs can be cut. Once this process is
complete, the technology platform can be re-designed to suit the application. So
it's not just the cost saving but also the manufacturing process and risk
mitigation that attracts major publishers.

In short, the outsourcing companies are attempting to do for content
production what Henry Ford did for automobile production.

Furthermore, following the Asian Tsunami disaster, many large companies do
not wish to locate all of their content creation in an earthquake or
natural-disaster area. For example, one technique is to “co-locate work” in
India and the Philippines.

Multimodal Strategy

InfoTrends' Maziarka, adds that these days companies also need to realize
that the creation and delivery of content are inextricably linked. “Content
creators need to understand that the content has to be used across a number of
platforms such as the Internet, DVDs and smaller devices such as cell phones,”
says Maziarka. “It's incorrect to think of the cell phone as just another
Website. It requires different navigation, and one has to be conscious of
creating verbose content.”

He suggests that companies consider moving toward a single source or
repository so that a technical manual is repurposed for the Web, repurposed
again for DVD and repurposed yet again for a PDA or cell phone.

The offshore content companies such as Innodata Isogen have made it their
business to develop these content repositories. In the television and film
production business, however, the process is a little different. Dean Thompson,
President of OMI Business Communications says that his company will frequently
work with a producer or production company in other parts of the world. OMI
produces Internet, DVD and video content for the large corporations such as
American Express. However, OMI always sends one of its own people from its head
office in New York. “British production companies tend to be the easiest for
us to work with but we always send one of our own people to oversee the
production.

There seems little doubt that cities like London, Paris, New York and Los
Angeles will retain their positions as the major hubs for content creation, but
we are certainly beginning to see these functions traveling to other parts of
the world. And why not? Surely it makes more sense to write a story in Scotland
or create a video game in India, and ship the bits electronically back to the
USA, than it does to manufacture a pullover in China, pack it in a container and
drag it 3,000 miles across the ocean.

The bottomline remains that corporations should go beyond cost arbitrage to
re-engineer the content-production process, mitigate risk by dispersing the
creative regions geographically and re-design the technology. That way, a
long-term benefit can be achieved.

Niall McKay

vadmail@cybermedia.co.in

Republished with permission from Global Services

(www.globalservicesmedia.com)