Smoothing the Transition to Digital
by Gina Testa
June 12, 2007 -- PrintManagement LLC got into digital printing because it had to. In 2004, the company signed an outsourcing contract to handle a large customer's internal printing, which was almost exclusively digital. But PrintManagement wasn't.
At the time, Cincinnati-based PrintManagement had no digital equipment, but brokered those services, while running six offset presses, including a six-color Komori. Working with a consultant, PrintManagement quickly acquired a digital color press and a monochrome production printer to begin servicing the anxious client just a month after signing the contract.
"We saw potential applications with other customers and started to look at digital printing as a growth engine."
When the dust settled, the company liked what it saw using digital printing: streamlined workflow, strong integration with the Web and new personalization and short-run printing capabilities. The offerings fit well with the company's strategic direction of providing integrated creative, print and distribution services for a diversified customer base.
"We saw that we could continue to slog in a market with a lot of offset capacity or start to differentiate ourselves," explains Brian Frank, president, PrintManagement. "We saw potential applications with other customers and started to look at digital printing as a growth engine."
Thus began a journey that has led the company to more than double in size to about 50 employees and $7 million in 2006 revenues. It was the fastest growth spurt in the company's nearly 10-year history. And it was achieved with support from key partners who are helping PrintManagement be a partner to its customers.
Seeking a Press and a Partner
At the heart of PrintManagement's transition to digital is its effort to build integrated services, from creation to distribution, that improve the businesses of its clients. "It's about more than being a one-stop shop," says Frank. "It's partnering with people to make them more efficient and to make their communications more effective."
"It's about more than being a one-stop shop. It's partnering with people to make them more efficient and to make their communications more effective."
To build that business, though, the company needed more digital printing capacity. Within six months of acquiring its initial digital equipment, Frank and PrintManagement Chief Executive Officer Joe Desch began assessing higher-end digital color presses. During that process, they attended a workshop on making the transition from offset to digital at Xerox Corporation's Gil Hatch Center for Customer Innovation on its manufacturing and engineering campus in Webster, N.Y.
The event gave them insights into the market opportunity --and introduced them to a financial modeling tool, ProfitQuick, one of the resources provided in the Xerox ProfitAccelerator catalog of tools and resources, which helped them assess their chances of success with digital color. "Financially, we saw it made sense," Frank says.
However, meeting profitability targets was only part of PrintManagement's concern. "A big challenge we have is that the industry is moving pretty fast," Frank said. "When you think you've got things figured out and get too comfortable, you've probably missed the boat. We wanted not only a press, but a partner who would help us succeed."
The workshop also showcased of the company's manufacturing, engineering and marketing resources and helped convince PrintManagement that Xerox could be that partner. Soon thereafter, in mid 2004, the company acquired an iGen3 110. Now, Frank said, "We're closely aligned with Xerox and count on them to innovate with their technology and to help us identify trends and opportunities. Then it's up to us to capture it by developing a plan to create market share."
Building the Business
Acquiring the iGen3 was one in a series of steps PrintManagement took to build its digital business, developing new skills and capabilities in nearly every functional area, usually with the help of partners.
- On the creative side, designers helped evaluate the press's image quality prior to acquisition, then began learning how to optimize designs for the press at a two-day workshop on designing for digital.
- With new requirements for working with data, PrintManagement established its first data department in 2005, with three members of its tech savvy pre-press department and a new hire, who brought postal expertise. They develop variable information pieces primarily in software from XMPie, but also use the VIPP Interactive Development Environment (IDE) and software from Lytrod Software, all of which output VIPP code for variable imaging. "Our biggest 'Ah-ha!' was learning how much guidance our customers wanted in sourcing and working with their data," relates Frank. So we developed an alliance with a local data company, Customer Contact Insights, for cleansing data and analyzing it for better targeting.
- In sales, the staff has more than doubled since 2005, from five to 11. The new hires tend to have digital affinities, including one with a direct mail background. "Those who came from offset know the challenges they face in learning the digital business, and we try to give them new skill sets and play to their strengths," Frank said. Training has included webinars from industry organizations, such as PODi, and through ProfitAccelerator resources and other conferences at the Gil Hatch Center. "We probably spent more than 20 days of staff hours at workshops last year," said Frank.
- In marketing, the company recently put a finer point on its branding with a new focus on its creation, production and distribution services, helping the sales staff more easily communicate PrintManagement's value. The company also stages occasional seminars for customers on topics such as one-to-one marketing.
Our biggest 'Ah-ha!' was learning how much guidance our customers wanted in sourcing and working with their data
The efforts are paying off. PrintManagement added a second iGen3 in December 2006 and now runs monthly volume of 800,000 to 900,000 pages. About a quarter of the company's volume is variable and about 35 percent is Web-to-print -- all new applications for the firm. A second shift has been added to produce the automated Web-to-print applications, including a fledgling on-demand book manufacturing operation to support a client's self-publishing initiative.
With effective partnerships now in place, Frank projects continued growth at PrintManagement, conservatively, at 10 to 15 percent annually for the foreseeable future. "What an entrepreneur wants to see is growth and profit," Frank said. "We've experienced both since digital printing came in the door, and at end of day that's what we evaluate.
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