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Commentary & Analysis

It's a Flat World After All

By Barbara Pellow March 29,

By WhatTheyThink Staff
Published: March 29, 2006

By Barbara Pellow March 29, 2006 -- In 1492, Columbus set sail with the Niña, Pinta and Santa Maria, and discovered that the world was, in fact, round. This past week, I had the opportunity to read Thomas L. Friedman's bestseller, " The World is Flat." He looks at how technology is changing business dynamics on a global basis. The book describes how the interconnected world facilitated by information technology and trade liberalization that connects people around the globe even more closely. Friedman cites examples of how technology has enabled key business functions like call centers and income tax preparation to be outsourced to India and China. "Those that get caught in the past and resist change will be forced deeper into commoditization, notes Friedman. "Those who can create value through leadership, relationships, and creativity will transform the industry as well as strengthen relationships with their existing clients. Any activity where we can digitize and decompose the value chain and move the work around, will get moved around." The ten flatteners have converged creating a global playing field for multiple forms of collaboration. Friedman identifies ten key forces that have flattened the world. These include: 1. The Berlin Wall coming down and IBM PCs and Windows coming up--opening the door for horizontal communication 2. The emergence of Netscape, which moved us from a PC platform to an Internet platform for communications. The ability to retrieve documents or Web pages stored on Internet Web sites and display them on any computer screen really captured the imagination 3. Workflow software that enabled seamless interoperability. A sales person could take an order in New York for a product being shipped from China. The sales department could be seamlessly connected to the supplier's inventory department. 4. Open-sourcing: self organizing collaborative communities that make things available for free, from software to encyclopedias, that millions of people would have had to buy in order to use. 5. Y2K which caused America and India to establish stronger outsourcing relationships. The result was that any service, call center, business support operation or knowledge work that could be digitized could be sourced globally to the most efficient provider. 6. Off-shoring to produce the same product with cheaper labor and lower taxes in another country. 7. Global supply chain management for just-in-time inventory to reduce carrying costs 8. In-sourcing, or a whole new form of collaboration and horizontal value creation. The example Friedman uses is UPS. Many companies can't afford a global supply chain management solution. Nike wants to spend its cash on designing better athletic shoes, not supply chains, so it has engineers from UPS come inside the company and analyze manufacturing, packaging and delivery processes and then redesign the global supply chain. 9. Universal access to information through tools like Google 10. Technology steroids, including more powerful laptops, wireless technology, Blackberry devices, and VoIP (Voice over Internet Protocol). These ten flatteners are blended with three convergence concepts. First, the ten flatteners have converged creating a global playing field for multiple forms of collaboration. Secondly, executives are getting comfortable with horizontal collaboration to increase value. One of the better examples of horizontal collaboration was the relationship established between HP, Cisco and Nokia to develop a camera cell phone that beams digitized pictures to an HP printer. And finally, there are three billion people from China, India, Russia, Eastern Europe, Latin America and Central Asia who had been frozen out of the playing field and are now ready to plug and play. In the world of business communications and print, it is clear that the ten flatteners and convergence factors are part of our everyday lives. Of equal interest is the way that business communications service providers have responded to the challenges of a global economy and are working on participation in the even bigger market opportunity. One of the organizations that started well before Y2K, high speed Internet connections and wireless technology was the International Printers Network (IPN). IPN members made an investment to build close working relationships to have the confidence and trust to offer a truly global service. It was an idea born in the early 1990s and grew from an amalgamation of the European and American Print Advisory Councils that had been set up by Xerox. Xerox brought together a number of industry leaders so they could better understand commercial print and graphic arts customer needs. It didn't take long before those taking part started to realize the full potential of the combined group. They decided to meet independently and form an organization that could utilize their combined knowledge, skills and production capability to offer a truly global service to their customers. In the summer of 1993, IPN was formed. IPNs charter is simple. The organization is designed to provide unique service where clients have access to a worldwide solution for the distribution of their visual and printed communications using people that care and that are both local to where the business originates and where it is finally needed. According to IPN Chairman, Roger Gimbel, "The value of this structure is that major corporations have a single source for print solutions that can deliver globally. The local IPN member is responsible for the customer relationship, ranging from project initiation, management of the process, currency exchange, and coordination with other IPN members. The customer makes one call and can have materials simultaneously printed and delivered in any number of locations around the globe." Today, there are more than fifty member companies and one hundred and fifty locations worldwide. Members include firms like Alexander's Print Advantage in Lindon, Utah; ABCO in Dallas Texas, CPI IT-IQ Global LTD in London, England; Shanghai Computer Printing Co. in Shanghai, China; Basingstoke Press in Hampshire, England; McKay Press in Midland, Michigan; Houston Datum Corporation, in Houston Texas; First Impressions Graphics in Ontario, Canada; Allkopi-Thrane in Hovik, Norway; Dupli-Print in Domont, France; and a host of other business communications service providers on every continent. The IPN organization meets two times a year. The members devoted time and made an investment to build close working relationships in order to have the confidence and trust to offer a truly global service. According Gimbel, "We do business together under the heading of global friends." IPN--Working for Its Members and Major Corporations The tight affiliation between IPN members is working for both the member organization and, most importantly, global corporations. There are a number of examples of their successes in the market. Guess, an international fashion company, needed an advertising brochure distributed across Asia and Europe. McKay Press, working with Guess' advertising agency, Callanen Inc., electronically sent production files to IPN members C&C Printing (China) and Elanders (United Kingdom). 160,000 brochures were printed simultaneously in two continents and then drop-shipped to 64 distribution centers in more than 50 countries. Inertia is starting to give way driven by customer demand. The Dow Chemical Company required distribution of its Material Safety Data Sheets (MSDS). Required by law, MSDS documents contain life-saving data on proper handling techniques and safety precautions for volatile products. Document accuracy and timely receipt by end-users are of paramount importance. Dow contracted McKay Press to orchestrate a world-wide on-demand digital distribution system for its critical MSDS program. With assistance from IPN members Printerette (Amsterdam) and First Impressions Graphics (Toronto), MSDS documents are stored digitally in multiple facilities, printed on demand and delivered to Dow customers around the world within 24 hours after a purchase order for a particular product has been received by Dow. According to Dean Baxendale, Vice President and Director of Strategic Sales and Marketing at CJ Digital (recently merged with First Impressions Graphics), "IPN has provided an opportunity to move to the world stage. It has also helped me learn from others. It has educated me on innovative ways to add value to print and migrate to information management versus simply ink and toner on paper. I have seen the depth and breadth of new solutions afforded by the Internet as well as developed a view of how much is left to be done. It has given me access to technology that I would not have had access to as a small business owner. IPN members are sharing technology, systems, people and processes. We can guarantee what gets delivered in Canada can be delivered consistently worldwide. Inertia is starting to give way driven by customer demand. In the last two years the IPN has gone from concept to reality. When customers look at the IPN model, it is perceived as a sound best practice to deliver print communications around the world." So it's a Flat World After All IPN has focused on the principles articulated by Friedman in The World is Flat. Technology is letting IPN members participate on a more level playing field. Suddenly, the business communications service provider that was serving a local market can have the same scale advantages that the "bigger guys" have. It is letting the IPN participants focus on delivering a higher level value proposition. Gimbel summed it up when he said, "In the future, we will no longer simply be measured on the quality of output. We will be measured on the quality of the outcome." "In the future, we will no longer simply be measured on the quality of output. We will be measured on the quality of the outcome." While all of these organizations offer commercial print services, fulfillment and distribution, creative design, personalization, on-line order entry and digital print to local markets, they are now also providing global dissemination of business communications for customers. IPN can blend this with translation services and offer all the benefits associated with improved supply chain management, including inventory containment, lower obsolescence costs, reduced warehousing, no shipping charges and simultaneous global reproduction and manufacturing. The combined entities can manage data and provide global personalized marketing campaigns. The end result in the "flat print" world is improved ROI for customers. IPN was ahead of its time from a visionary perspective. They were what Friedman would categorize as strategic optimists and a new generation that saw where the market was headed, and they positioned their organizations to play globally. Friedman says the next generation needs to be one of strategic optimists. It needs to be a generation with more dreams than memories; a generation that wakes up each morning and not only imagines that things can be done better, but acts on that imagination. The next generation needs to be one of strategic optimists. May this generation and the next generation of business communications service providers understand that "The World is Flat" and act accordingly!



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