Just prior to On Demand, with drupa approaching and the Moore Wallace acquisition being finalized, WhatTheyThink spent time with two key players at RR Donnelley in a rare inside view of the firm's premedia and prepress operations, gaining insight into where this industry giant is today and where it is heading. Ronnie Sarkar, Senior Vice President of Operations at RR Donnelley's Premedia Technologies; and Sue Wassman, Director of Prepress Technology, spoke with WhatTheyThink Senior Editor Cary Sherburne in the midst of a very busy time for the company, as the finalization of the Moore Wallace deal was being announced.

WTT: Thank you both for taking time to talk with us, and congratulations on the finalization of the Moore Wallace deal.

RS: This is an exciting move for RR Donnelley, and the best part is that Moore Wallace brings business to us in areas that we were not in before. Moore Wallace has a lot of sheetfed printing, digital printing, forms and labels manufacturing, and serves corporate customers in different market segments and different area of printing from our traditional markets. The fact that it is so complementary is the most exciting part.

WTT: Perhaps you could share with our readers what is encompassed by your respective groupswhat your charters areas a backdrop to our discussion today.

RS: The Premedia Technologies business unit is a standalone business unit of RR Donnelley, with its own P&L. Mary Lee Schneider is my boss and the President of the business unit. Our charter is twofold:

• We are a business, so we sell services, including photography, creative, prepress, and of course underlying everything is digital asset management and dynamic publishing. We also offer digital printing in conjunction with content management services
• The other part of our operation are the Digital Solution Centers, very large, very highly automated centers that accept files and prepare them for our offset printing plants. We have two of these centers currently, one based in Pontiac IL, and one in Glasgow KY. We are planning to develop centers for other areas of our business. These Centers take in content, preflight it, and produce a normalized PDF that can be sent to four, five or six print plants depending on the needs of the particular project. This single point of entry approach has been very beneficial.

So in the Premedia business, our charter is to help our customers create, manage and deliver their content. We operate 17 premedia centers located close to our customers, in addition to the two Digital Solution Centers.

We believe our solution centers are unique in the industry. Our customers love them. They can interact with the centers via the Web: view soft proofs, get status updates and make last minute changes. That means that our print plants can focus on being a manufacturing operation. Imposition and plating is still done at the print plant, and all of our plants, of course, use CTP, although production configurations vary from plant to plant.

SW: The Prepress Technology Center is a corporate function that supports the entire company. The mission in life for our staff of 48 is to drive breakthrough improvements with advanced technologies, and to create the next generation platform for RR Donnelley. It's a pretty broad mission. Since we don't report into any specific business unit, we are in a good position to look across the entire platform, developing strategies and implementing solutions that can impact multiple businesses within the company. The Digital Solution Centers Ronnie spoke about are one example of this. We look at both our short-run and long-run platforms, and we consolidate and standardize as appropriate, and develop tools for our customers to help them be more successful.

We are also responsible for developing standards for ink and paper in addition to the prepress technology and digital workflows that feed our offset and gravure platforms. And finally, we focus on the back end of print and bind, streamlining that platform for both offset and gravure.

WTT: RR Donnelley has historically done a lot of in-house development of applications, largely, I would assume, because you tend to be out ahead of the market on advanced applications, and because you have the resources to do it yourself. Can you talk a little about your philosophy in this regard?

RS: Over the last five to seven years, we have moved away from the concept of doing our own development in a fairly significant way. There was a time in the 1990s that we even had our own image retouching systems with proprietary software. These days, in terms of ground-up development, we do very little. The one area where we still do significant work is in the area of digital asset management, with customization of the user interface and metadata schemas. A cataloger wants to see digital images in one way, and an ad producer, with a different business model, wants to view their materials in a certain way.

We use Creo Prinergy in a big way, Oracle, MediaBank, and even Canto Cumulus. But we add a final level of value-added customization to almost everything we buy in a way that truly enables customers to feel like they have their own special application. You want a large client like a Time Magazine to feel like they get exactly what they need when they launch the RR Donnelley application.

SW: Ten years ago in the Technology Center, we had ten software developers doing development of proprietary applications to meet RR Donnelley needs. As we have evolved, we have looked at the core technology available in the market, and where there are gaps or white spaces, we will enhance the overall technology or provide a tool or service to the customer to differentiate ourselves.

WTT: Since everyone seems to be tagging 2004 as The Year of JDF, what role do you see JDF and the CIP4 set of standards planning in RR Donnelley's technology infrastructure?

SW: JDF is still in its infancy. The CIP4 specification for JDF is some 600 pages long. From a RR Donnelley perspective, we are looking very closely at JDF, but we see it today as primarily a print specification. We want to make sure we understand where premedia and prepress fit in and automate the entire function. If you automate the back end only, but have a breakdown in linkages between the processes, you will not gain the synergies that come from streamlining the end-to-end process.

WTT: Is RR Donnelley a member of CIP4 and a participant in JDF InterOps? If not, is there a plan to do so?

SW: If you looked across the industry standards bodies and counted the number of scientists from RR Donnelley that are involved, you would definitely say that we are proactive in both promoting standards and in helping to develop them. RR Donnelley has made a huge commitment to helping to bring standards to reality. Our driving concern is to make sure the standards are as open as possible so we can easily exchange content across the industry. We want to make sure, for example, that asset management talks to soft proofing, or that ad management can be integrated into our customers' workflows and downstream into systems such as Creo Prinergy.

Even though we are a big Creo user, we have not joined NGP. We are, however, a member of CIP4. We want to remain objective, and we also believe that Creo is trying to do something good for the industry. But from an RR Donnelley perspective, Creo is creating connectors for Creo devices and we want to put our resources behind initiatives that have a larger perspective than that.

In terms of the JDF InterOps, we are not participating yet, but we are always looking at the results. And we have been looking at how we can get more involved with CIP4 from a strategic perspective.

WTT: What are the types of things you will be looking for from vendors at On Demand and drupa?

SW: The Technology Center has typically not spent a lot of time in the On Demand segment, but we know that Moore Wallace has a different type of print platform than RR Donnelley, and we will have a lot more services and products in that area when the integration is complete.

As far as drupa, we will be sending teams to concentrate on different focus areas, including offset, gravure, print and bind, prepress, premedia and digital print. Personally, at drupa, I will be focused on prepress, premedia, and looking for ways to make workflows more optimized and efficient, as well as ways to offer more tools, solutions and services to our customers that help them better integrate and interact with our workflows.

RS: As far as digital print, its value is that it is cheaper and faster, it really comes down to that. The cheaper portion is still holding digital print back from much more widespread adoption, though. Compared to three or four years ago, digital print volumes have grown, but are not yet even making a dent in offset printing. When you are printing in quantities of 3,000 to 5,000, it is still more cost effective to print sheetfed and store in inventory than to print in units of 30, 40 or 50 with digital print in a true on-demand model.

The other big issue we are all facing is the lack of good tools and processes to deliver variable content to digital presses. You do not want to be sending static content to digital presses. The real power of digital lies in the ability to produce dynamic content, in units of one or in very segmented runs. There just aren't too many products you can buy off the shelf that do that well. Companies that are producing these applications have had to develop their own schemes.

At On Demand, I am hoping to see some commercial products within that arena. There are a number of applications using image-rich content that need to be addressed. For example, when you buy a book at Amazon, you are presented with information about what other books were bought by readers that bought the same book. They do this on the Web, and with dynamic publishing, they can put a sheet containing the same information in the package you get sent, with images of the books being recommended, thus increasing the opportunity to sell you additional books.

Another example is the custom textbooks we produce in our Allentown PA operation, allowing a professor to combine three chapters from one book, two from another, and his own notes in Microsoft Word, to create a custom text book. We have tools that allow them to create a totally new text with its own table of contents, pagination, index, etc. Then we just produce the necessary quantity for each class.

So on the one hand, you have retail and advertising oriented content; and at the other extreme, you have applications like custom books. There are two shared components that need to be considered in developing these solutions:

• Do you accessible content and databases, and do you have the right software to efficiently process the content to create new materials.
• Secondly, can you manufacture the materials efficiently with digital presses.

Both at On Demand and drupa, we will be looking for commercially available solutions that will address these needs in a more effective manner. I'm going in to the shows thinking that there is still very little available and that what is there is still in pieces, rather than being an integrated end to end solution. Getting to the integratedand opensolution is very important to our customers. Think about a large corporation that wants to advertise on a one-to-one basis using five different vendors around the country. It is not that easy, with the state of technology today, to simply send the data to all five printers, and print and mail reliably. Just interacting with those five vendors is a nightmare for most customers. This is where standards like JDF will ultimately play a huge role.

WTT: What do you see as the biggest obstacles to widespread adoption of CIM within the printing industry?

RS: We were just talking this morning about how quickly PDF has become a standard in our industry. I believe that what really pushed PDF to a defacto standard was the strong backing of Adobe and Apple. I believe the same will be true with JDF and CIMhow quickly the dominant players build these capabilities into their systems will dictate how quickly they become pervasive in the market. If three or four of these important players, like the Heidelbergs and Creos of the world, make JDF/CIM capabilities base level in all of their systems, it will be quick. Just like PDF, it will be a natural part of the solution, and not something you have to pay extra for. Otherwise, adoption rates will be slow because the users will not pay a lot of money for these capabilities or expend the effort to implement them.

Our customerspublishers, catalogers, corporationsare big influencers in the adoption of standards. With PDF, implementation is affordable and it doesn't take a lot of training; it is easy for them to participate. Standards need to extend to the content owners and be easy for them.

SW: I believe the standards bodies are going to be even more influential going forward, and adoption rates among customers will also send a huge message to the industry. Rather than creating proprietary systems and solutions, we should be able to plug and play technologies from a foundation of industry standards going forward. For RR Donnelley, being part of the standards bodies offers a printer's perspective across the entire workflow of printprepare produce deliver. We believe the participation of printers in these deliberations will also be very important going forward.

WTT: Are there any new initiatives planned at RR Donnelley that you can share with us?

RS: Two initiatives in the premedia area include soft-proofing and dynamic publishing. We are continuing to aggressively develop and pursue color managed soft proofing solutions. We launched ShareStream last year, the first soft proofing service to be SWOP certified. We will be announcing a significant enhancement to that offering within the next few weeks. The big thing this year will be adding workflow and approval functionality so it is even more integral to our customers' workflow. The second thing is that you will hear us talking a lot about is dynamic publishing. We will be making an announcement in the April/May timeframe in this area.

In terms of remote proofing, we would also like to expand our services to encompass better control of remote hardcopy devices so that we are offering turnkey softcopy/hardcopy proofing service that requires no management on the customer's part. But the pricing has to be right and as we have been saying throughout this discussion, it has to be easy to implement and use from the customer's perspective.

KPG's Matchprint Virtual Proofing solution was interesting for us, but it is still too expensive and requires hardware and software that isn't part of what most customers do day to day. We have utilized RealTime Image technology in our ShareStream offering, incorporating the ability to stream high resolution images. With KPG's acquisition of RealTime, we look forward to seeing a wider spectrum of products from KPG in this area. There is a lot of real estate between Matchprint Virtual and basic RealTime Image solutions.

WTT: Any final thoughts you would like to share as we head into On Demand and drupa?

RS: Cheaper and faster is my mantra. I'll be looking for those turnkey solutions that enable true dynamic publishing.

SW: I'm looking forward to drupa. As the press has been saying, I think JDF will be the big push from an industry perspective. We are in the midst of determining which vendors we need to focus on for drupa and doing some of the necessary prework to make our trip more productive.

WTT: Thanks to both of you for taking time to speak with us. We will look forward to speaking with RR Donnelley again over the next few months, especially as the Moore Wallace integration efforts get underway.