By Barbara Pellow The fourth trend is an emphasis by successful graphic communications firms on being a full service providers. February 11, 2005 -- Last week, in Part One of this series on Digital Transformation in the Graphic Communications industry, we looked at three of the six converging trends I have been seeing over the last several months: More focus on color Increased re-engineering of business applications Demand for ROI on marketing investments This week we'll look at three more converging trends and tie it all together in terms of what this convergence means for today's graphic communications service providers: Heavy emphasis on being a full service provider New pricing models and new products A focus on efficient workflow The fourth trend I have noticed is a heavy emphasis by successful providers of graphic communications services on being a full service provider to customers. This means that print service providers want to offer their client base traditional offset printing, digital color and black and white printing, and large format, and they want to have workflow that streamlines their operations from order entry through to kitting, fulfillment and distribution. The Johnson Group, founded in 1957, is a family-owned printing enterprise located in Rockford, Illinois. Over the years, this organization has retained the vision of its founder, Harry C. Johnson. His commitment to serve the customer with superior quality, service and fairness has held up to the test of time. And while that original vision has now grown to include multiple locations and clients across the nation, the family still has a renowned passion for quality. Sons Dale and Dennis followed in their father's footsteps in running the business. Today, there are seven members of the Johnson family on the executive management team. The firm has a staff of more than 150 people focused on evolving and embracing new technologies and enhancing partnerships to accomplish a simple objective--becoming a full service provider to its customer base. Thanks in part to this focus, revenues have climbed to in excess of $25 million dollars. The Johnson Group recently invested in both digital black and white and color technology to compliment its traditional offset operations. According to Vice President Tonya Meister, full service is critical to the company's future. She said, "Listening to our customers and responding makes us unique. The complementary digital service with the rest of the Johnson Group differentiates us. We are truly a one-stop shop. We are not just providing the front end or digital printing, but we also do everything from mailing to kitting, fulfillment and inventory management, including Web-to-print. There are very few organizations that can offer that breadth of one-stop shopping experience." According to TrendWatch Graphics, shrinking margins and the practical elimination of geographical barriers by the Internet have many commercial printers on a constant search for new revenue streams. Given the market migration to full service, their search should include large format. The large format market has also been positively impacted by the desire of graphic communications service providers to become a single source for all of their customers' output needs. According to a recently published report from TrendWatch Graphics, shrinking margins and the practical elimination of geographical barriers by the Internet have many commercial printers on a constant search for new revenue streams. The report's perspective is that given the market migration to full service, their search should include large format. Mark Wenger, President of 291 Digital, reinforced this perspective when he said, "About ten years ago, we decided to begin investing in medium- and large-format inkjet technology based on the desire for this company to be full service under one roof…to offer our creative clients, such as ad agencies and the very high-end retail operations, a full scope of products to supplement their creativity. And inkjet offers far more diversity in substrates than photographic imaging did. So our decision to go into inkjet was twofold. One, we were handling and retouching a lot of CMYK files and to go directly to medium or large format without converting to RGB was a benefit. And two, we were attracted by the diversity of substrates and the quality of adhesives available for inkjet products." Today, 291 Digital is producing an array of new applications. On example, according to Wenger, is "out-of-home advertising." Wenger explains, "A current trend in New York City, out-of-home advertising has been what they're calling station blitzes or domination campaigns. For example, a client will take over the entire Penn Station for three days. And from hanging banners to floor graphics to two- and three-sheet posters to backlits, they will dominate that station with that campaign for a few days. And we have gotten the real upper hand, thanks in part to our wide format inkjet printers, in securing a lot of these jobs because it allows us to print on all the substrates necessary for one of these campaigns--from the floor graphics to the backlits to the hanging vinyls. All of these can be produced on our Encads and we have done quite a few of these blitzes successfully." The fifth trend is pricing models and the fact that the affordability of digital color is opening markets for new products--applications that have not previously been viable based on production costs. The fifth major trend is pricing models and the fact that the affordability of digital color is opening markets for "new products"--applications that several years ago would not have been viable based on production costs.Dynamics like the combination of digital cameras and photo rich applications are opening new market opportunity for digital color. Specialty photo merchandise is forecast to represent 40 percent of on-line photo revenues by 2008, up from 20 percent in 2002. Applications like photo books, personalized calendars and greeting cards are opening tremendous opportunity for digital color printing, especially given the growth in digital cameras. On-line photo services like Ofoto and Shutterfly are successfully using digital color printing technology to meet this revenue growth opportunity. In addition, self-service digital photo kiosks in malls and big-box retailers such as Wal-Mart offer consumers numerous options for digital photo output, while Apple Macintosh users can use iPhoto to create personal albums at home and submit the album for remote printing over the internet, and receive a finished album or book in a few days. Another example is European based Polestar Wheaton's addition of digital color technology to focus on the short-run book market. According to Robert Brown, Managing Director of Polestar Wheatons, "We are a book printer and have always been a book printer. The rationale for investing in digital color was that we identified customers in our market segments that were looking for something different than what we already produced. They wanted shorter run lower cost publications. We could do this with the NexPress. It gave us the ability to affordably deliver these publications." Graphic communications service providers are rapidly reaching the realization that streamlined business processes that blend traditional and digital technologies are essential to success. Finally, digital and traditional print service providers are focused on workflow and streamlining their production operations. Graphic communications service providers are rapidly reaching the realization that streamlined business processes that blend traditional and digital technologies are essential to success. New York City based TanaSeybert, a leading provider of commercial and digital print, prepress, bindery and fulfillment services, as well as custom software packages for graphics applications, recognizes the criticality of workflow in the overall operation. Cheryl Kahanec, President of its Digital Now subsidiary said, "Good workflow is mandatory. If we don't figure out how to make everything work together, we can't make money. We implode. We have to be able to have multiple devices. We are in an environment that is hybrid where some of our work is offset, some of our jobs are completely digital and some are a combination. More and more are combinations." Given the importance of workflow, it is an area where graphic communications service providers are focusing their investments in 2005. 2005…Looking Forward 2005 is poised to be an exciting year in the world of graphic communications. Marketers are accepting color and customization. The affordability of the technology is opening the door for new products, including photo rich applications and full color publications on demand. Corporations are limiting their supply sources, opening the door for graphic communications service providers that can deliver full service. 2005 could well be the year that the stars are aligned for technology leaders in the graphic communications market. The graphic communications service providers will need support from equipment and software vendors to be more successful in this new world. It will require assistance on application re-engineering and delivery of end-to-end workflow support. Service providers will need help in integrating the various technologies to streamline operations. 2005 could well be the year that the stars are aligned for technology leaders in the graphic communications market. Agencies, marketers, and corporate clients are seeing the value in a targeted approach to the world of communications. Graphic communications service providers are assessing the investments required to fully participate. Equipment and software suppliers are working to deliver ease of use technology to support the market. I guess we will all have to wait until January 2006 to see if this industry pundit picked the right year.