Commentary & Analysis
InterQuest: Private Sector Talent Transforming Government In-plants
This sixth annual InterQuest continued the theme of most all printing conferences for the last decade: digital printing and electronic workflows must be in your future. This DC gathering featured successful case studies by the general managers that led their transition.
By Clint Bolte
Published: December 7, 2011
This sixth annual InterQuest continued the theme of most all printing conferences for the last decade: digital printing and electronic workflows must be in your future. This DC gathering featured successful case studies by the general managers that led their transition. In many cases it was out of the doldrums of obsolete and antiquated equipment to include a more enlightened management style of involving the entire staff in helping design the new workflows using proven automated softwares. An underlying theme is the success of professionals who have been hired from the slumping private sector. Skills that have been honed over the past decade or more are now coming into their own with Government in-plants.
USA Today published two of their compensation studies comparing public with private sector. The most recent was published in early 2011. At every position the public sector is a full 100% higher than the private sector, i.e., double the private sector package. The result is that Federal Government in-plants are able to hire talent out of the private sector printing industry with extremely attractive compensation packages.
It is ironic that the private sector employees may move to the public sector for much less money because there are jobs available in the public sector and the working hours are typically less than being demanded of key employees in the private sector.
Public sector wages have been frozen for the past two years. This would have to continue for a couple of decades for parity to be restored versus the private sector. And that, of course, is not expected to happen.
Case Study: Defense Logistical Agency’s Document Services
Shawn Magill, Director of Strategy & Development for the Defense Logistics Agency’s Document Services Headquarters suggested their organization is evolving from a print producer into an IT-based document management model as suggested by their new name. They formally had 4,000 full time employees worldwide in their print shops alone and are now down to 800 in both businesses.
He described the two separate facits of DLA’s Document Services business as being printing and equipment procurement. Neither of which receives any appropriated funds, but both are dependent upon revenue from Department of Defense client services. They operate 61 print shops in six countries. All are in DOD facilities. The aggragate equipment complement is 179 monochrome devices, 154 color pieces, and 45 wide format units.
The second facit of their business is equipment procurement entitled Equipment Management Services, which is a classic managed print services concept involving digital copiers, MFDs, and software linking units to help monitor and manage several plants each of which have their own networks.
They have 35,000 devices installed around the world. All are on standard 48 month leases and typically realizing 20-25% savings over the former isolated installation negotiated arrangement. Magill attributed much of the savings to well written RFQs bid on by several of the digital print manufacturers. (There are actually 26 mamnufacturers servicing this market niche in most countries.) The bidding follows areverse auction formatwhich results in a 40-45% savings off typical one-off package prices offered by these manufacturers.
The overwhelming operational savings realized by most managed print services networks in the private sector are generated by the wise, effective, and desciplined use of the software linked to all units within a single network. When asked what standard software DLA used throughout these 35,000 devices, Magill responded that the various networks were not linked because of the firewall protection in place at all of the DOD installations. He added that the largest network of about 1,000 digital print units had proprietary software installed by the digital equipment manufacturer.
While the firewall situation is not going to change and in fact does not need to change, a key initiative of implementing his IT-based strategy would be expected to be the installation of DLA’s own standard software on each and every network. In other words each software is inside each firewall. Periodic reports of detailed utilization will then allow each installation to be benchmarked one against the other. No defense-related confidential information will be included in any of these reports.
There is excellent off-the-shelf managed print services software available at modest prices. Utilizing DLA’s reverse auction technique, which would include several hundred identical packages to be purchased, will make this vital acquisition very inexpensive for DLA and its clients.
Manufacturer’s own proprietary software shouldnotbe used as most examples do little to measure the effectiveness of the manufacturer. Manufacturers all claim to include their own software as a free value add. But this simply is not the case when the IT customer realizes the extraordinary amount of data available that will measure the efficiencies and promise fulfillment of the manufacturer. As customers, such as DLA, become more mature in their use of this software they will naturally include select parameters of performance in the 48-month lease contracts.
After a few years’ experience with this standard software installed across a series of different networks, Mr. Magill would have a most interesting presentation to a future InterQuest forum in describing the maturation curve and on-going efficiencies of managed print service networks. This year over year improvement is not based up the new equipment but rather the evolving buyer behavior in learning how to better utilize MFD capabilities while getting rid of the legacy desktop scanners and printers which seem to proliforate. Benchmarking one network client against another utilizing the same software though potentially different digital manufacturers’ equipment has its own benefits as described in Part I of this article.
Case Study: World Bank’s Off Site Move – Lessons Learned
Jane Bloodworth, recently retired General Manager of the World Bank’s Document Services, described the steps her staff followed in moving the manufacturing portion of their operation to Landover, Maryland and the lessons they learned. From the beginning they involved the entire team in mapping each process and workflow so that they could analyze potential problems in detail.
One of the early delightful surprises was that some of the solutions to resolve anticipated problems would required no capital investment. The World Bank had purchased numerous software packages which were onlypartially installed. AGFA’s color management capability could also provide soft proofing, JDF workflow would offer some additional automation features, and digital asset management could also be used to help manage inventory better. This is a common phenomena realized throughout the private sector.
During the move and even today the two locations utilize Skype video webcam capability for daily production meetings between customer service group, still located in downtown DC with their World Bank clients, and the production entity in Maryland. They can easily patch in a client located several floors up stairs if need be.
Case Study: Defense Intelligence Agency’s (DIA) Recapitalization
Scott Sigwalt, Section Chief for DIA’s Print and Media Services, described his three year journey in helping his section move from antiquated equipment to a PRINERGY workflow installed in February 2011. He had spent 22 years with Smith Litho in Rockville, Maryland ultimately heading up their electronic prepress and installing Smith’s successful PRINERGY application.
With PRINERGY’s rules-based automation, a couple of quarter century old Heidelberg MO presses were slavaged on a temporary basis. As part of the transition Sigwalt devised a new business model based upon a customer-centric approach. Consistent with that PRINERGY initiative and realignment of organizational priorities, digital store front software has come on line.
All of this technology (and more) were instantly paid for by the labor cost savings of DIA’s Print and Media Services’ full time employee count falling from 48 to 12. All of these 36 people left with early retirement packages. Though Mr. Sigwalt did not mention the cost savings realized, it is conservatively estimated to be over $100,000 per employee per year or $3.5-4.0 million each year on into the future.
Sigwalt hopes to complete the recapitalization transition by replacing the Heidelbergs with digital inkjet equipment within the next 3-5 years.
Federal Capital Funds Not Available???
While capital budgets are reported to be frozen in most public sector arenas, there appears to be two reasons why in-plant printing is often getting the money they need. First, there is often an immediate labor cost savings, which shows an attractive return on investment. Secondly, the level of investment in primarily software is modest by Federal Government norm, which is preceived to be very modest risk for making such a decision.
Those Federal in-plants that want to add new equipment without showing any reduced FTE despite the claims of improved quality, service, etc. don’t seem to be getting the capital approvals.