This paper is about a publishing business which aims to reduce its costs by outsourcing some functions of its business. It is an analysis of which areas in a business are critical for success and which areas require immense resources which make it attractive to outsource. It also deals with the contractual terms and the basis of selecting the best vendors to whom the functions can be outsourced. Introduction The TRAVEL magazine is one of a kind magazine which plans at providing information about new and different travel locations and tips to make your trip more comfortable and enjoyable.
Lately, certain economic crisis has resulted in one of the business investors to back out. As a result, we plan to reduce our costs by outsourcing certain areas of our business. This paper discusses and analyzes as to which areas are best to remain in-house and which are appropriate to outsource. A magazine publishing business consists of various kinds of functions from purchasing the paper to the distribution of the product to the consumers. The following describes major functional areas which will be part of the business. Each area is further discussed in detail. Accounting
Accounting is an essential function for any business. It helps in bookkeeping and maintaining key accounts, which assist in defining the income and expenses. As a result it helps in determining whether the business is doing well or is suffering losses. It is an area of expertise and requires highly skilled personnel which are difficult to find. Therefore it is best to outsource this area since it is a time consuming process and also requires a strong foundation which would best be established by an expert accounting firm. We will require the firm to update the company accounts on a quarterly basis.
Moreover, we will want the firm to update any changes in the accounting policies and standards. Also keep the book-keeping in accordance with the audit requirements so that no legal consequences are faced by the company. For this we plan to make a 3-year contract initially with the accounting firm, with a fixed initial fee and subsequent floating fee on a quarterly basis. The accounting firm will be chosen on the basis of its reputation and its expertise in the accounting area. Certainly low cost will be a major factor(Camenson. ,2002).
Information Technology The IT’s function in our company would be basically two fold. Firstly they would be responsible to install new computers and equipments with special emphasis to high quality software required for publishing and also to maintain these equipments on a regular basis. Secondly, they would be developing a website for our company with occasional updates on a monthly basis. This department will be outsourced in order to reduce costs. Also since it is not an essential part of our core business, we can afford to outsource it. Publishing House
This function may be the most important and critical functions of all for the publishing business. It is the core of all areas and it is the tasks that can help the business achieve competitive advantage over its competitors. Publishing section includes basically of writers, journalists and editors who will be providing the basic content for the magazine. They are the ones who will make the magazine different from other similar magazines. They will be writing various articles and covering latest travel stories. These writers would be professionals who would have done majors in publication and travel journalism.
Their information will be based on their personal experiences, the primary research conducted by them, the secondary research available on the net and books and finally the reviews of different travelers written on our site as well as other sources. This department is so critical in the magazine’s success that it is logical to keep it in-house instead of outsourcing this area. In outsourcing, we would have no control over the content’s quality and thus would be highly dependable on other editors to make the magazine interesting to read. Timeline References Camenson. C. (2002). Careers in Publishing, VGM Career Books
Hupalo. P. (2002). How to Start and Run a Small Book Publishing Company: A Small Business Guide to Self-Publishing and Independent Publishing, Blackwell Publishing Wall. T & Nathan. J. (2006), Publishing for Profit: Successful Bottom-Line Management for Book Publishers, Marketing Publishing Association Susan. C. (2004). This Business of Books: A Complete Overview of the Industry from Concept through Sales, Quality Books Inc. Epstain. J. (2000). Book Business: Publishing Past, Present, and Future, Norton Publishing House Cosmi. R. (2003), Print Perfect Business Publisher, Mackrell Publisher
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