Joint Managed Services Venture Shares Risk, Reaps Rewards

risk, reward, joint venture.Outsourcing Excellence Awards 2014

Morris Communications and NIIT Technologies

Best Managed Services

 

 

“In just three and a half years, our NIIT Media Technologies joint venture has optimized our processes and cut our costs by 15 percent, achieving exactly what we set out to do.”

Steve Stone
Senior Vice President/CFO
Newspapers and Shared Services

Morris Communications is a 200-year-old, mid-sized private media company headquartered in Augusta, Georgia. Primarily a newspaper publisher, the company is also active in radio, magazines, book publishing, broadband, event marketing, and associations and facilities. Faced with a rapidly shrinking industry and a volatile business environment, Morris recognized the need to significantly reduce operating costs. The company made the strategic decision to outsource in 2010 and initiated the RFP process. Morris was particularly intrigued by the innovative possibilities offered by NIIT Technologies.

NIIT Technologies is a global IT services organization that provides end-to-end technology solutions throughout Asia, the Middle East, Australia, North America and Europe. Steve Stone, Morris Communications’ Senior Vice President and Chief Financial Officer of Newspapers and Shared Services, says, “We saw that they also had marketing expertise, and together, we envisioned a scenario in which Morris would provide the human capital and assets onshore while NIIT Technologies would handle transaction processing and marketing as well as run the organization. And of course, they knew that working with us would enable them to do get into the media industry and expand their footprint there.”

Stone adds that the two companies definitely clicked early in the RFP process. Morris saw the writing on the wall and recognized that to adapt to the sweeping changes confronting the media industry, it would need to find creative ways to dramatically cut costs. Stone says, “So we decided to outsource as many of our non-core processes as we could…Basically, we saw we couldn’t do more than what we had already done, so we explored offshoring and lift-and-shift, and we even considered creating a captive outsourcing unit.” Morris down-selected three companies, but NIIT Technologies’ right-shore strategy ultimately proved to be the right fit.

Morris had other selection criteria as well and liked what it saw in NIIT Technologies’ willingness to invest its own resources up front, as well as the company’s sustained, proven successes with their clients over time and its overall value proposition. “NIIT Technologies’ value proposition was particularly attractive: we get offshore pricing, but the call center work stays here. It’s the ‘factory,’ or transactional work, that goes offshore.” Stone emphasizes that the face of the Morris organization, including all of its customer service function, remains onshore. Stone also cites NIIT Technologies’ unique transactional pricing model and ability to scale quickly as key considerations that influenced Morris’ decision.

The two companies decided to create a partnership—rather than a traditional outsourcing contract—and the result is NIIT Media Technologies. It’s clearly proven to be the best arrangement for both organizations. “We’ve optimized our headcount, ultimately reducing our cost significantly. We contributed the human capital and the physical resources, and NIIT Technologies manages the IT infrastructure, back office functions, call center and ad operations, including digital ad placement and management. This frees us to focus on content generation and sales, our true core business.”

This novel approach has been effective and has delivered impressive results.

NIIT Media Technologies (NIIT Technologies’ Media vertical), provides end-to-end services across all IT and BPO service lines to support Morris Communications’ businesses. In a bold spirit of collaboration, NIIT Technologies established an integrated media business platform that encompasses online advertising, financial services, call center facilities, data center infrastructure and applications services. The joint venture also absorbed Morris’ employees involved in these services by rebadging them, thus setting the stage for the launch of NIIT Media Technologies amidst an atmosphere of trust and partnership. Leveraging NIIT Technologies’ proven right-shore approach, NIIT Media Technologies created a combination of onshore and offshore resources, featuring a service center in the U.S. and additional resources in India and the Philippines.

“NIIT Technologies made it as smooth a transition as any company could hope to achieve.” Stone adds emphatically. “With an outsourcing deal, communication is always key, and it is even more important when there is a transfer and rebadging of employees.” Noting that Morris has newspaper and other operations in 38 states, Stone admits that the company highly valued the emphasis NIIT Technologies placed on open communications in getting the new joint venture off the ground. The most senior executives and top management of Morris Communications conduct regular strategic review meetings with NIIT Technologies executives to ensure that every avenue for enhancing collaboration and improving business processes is thoroughly explored.

“NIIT Technologies’ response has been very positive in every instance…It’s been a good experience for all of us, and overall we’ve been very pleased,” Stone remarks. Stone sits on the board of NIIT Media Technologies, as does Lalit Dhingra, President of NIIT Technologies, Inc. Stone says, “I’ve been to India, and their people in India have been over here. They’re very willing to engage us, and we get together regularly, so we have very open lines of communication.”

The enterprise spawned by the two entities has a lot of moving parts, and NIIT Media Technologies manages them very closely. On a monthly basis, NIIT Media Technologies processes:

  • 10,000 digital online ads per month
  • 25,000 print ads including trafficking
  • 180,000 various types of calls including inbound, outbound, chatterbox, and retention
  • 200,000 different transactions in the Shared Services Support Center, including P2P, O2C, H2R, and Sourcing and Asset Management

When Morris first decided to outsource, says Stone, “We wanted to find a partner who could help us commercialize our organization and reduce our costs. In just three and a half years, our NIIT Media Technologies joint venture has optimized our processes and cut our costs by over 15 percent, achieving exactly what we set out to do.”

That’s impressive, especially considering the fact that, according to a case study published by the Cambridge Central Asia Forum in April of 2013, entitled “NIIT Technologies: A Case Study in Change Management,” international joint ventures are generally unstable, frequently being liquidated, sold or absorbed by one of the original entities in fairly short order.

Since its creation in 2011, NIIT Media Technologies has been an enabler for Morris, while consistently meeting or exceeding its service level agreements in every area, despite the fact that the scope of the work has grown over time. “Their initiative and their ability to deliver have really impressed us,” Stone adds. “We hear their new ideas, and we offer our own, but execution is up to them.”

Equally impressive is the fact that the joint venture has enabled both parties to realize their objectives. Morris has significantly reduced costs and enjoyed increased freedom to focus on its core business, while NIIT Media Technologies has gained a foothold in the media industry. NIIT Technologies has demonstrated the considerable value it can bring to organizations in that vertical by adapting and leveraging the integrated media platform it created for Morris.

Bottom line: NIIT Media Technologies has helped enable Morris Communications to achieve financial stability in an industry that, in recent years, has reinvented itself at breakneck speed. By any measure, this is an outsourcing relationship that works—for everyone.

2014 Outsourcing Excellence Awards Winners

Post a Comment

Your email address will not be published.

( required )

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>