By WTT Contributing Columnist Gail Kailing September 5, 2002 -- Printcafe Software, Inc. (NASDAQ: PCAF), the newest public company in the graphic arts and printing industry, has announced that they are reorganizing. Changes in service and support functions, shifting development resources, product realignments, and reduction in staffing were announced last week. (see the release) Today, the company named Tim Daisy, product manager for cross-platform computer integrated manufacturing (CIM) solutions and said that the corporate reorganization is substantially complete. (see the release) New Responsibilities So what does Printcafe look like now? By moving its whole product portfolio to Bob Bierwagen, senior vice president of product management, the company can coordinate development and product planning across its entire range of products. By breaking down silos of development and allowing cross-pollination, the company can support development of modular applications designed to work across several management systems. Consolidating all customer service and support functions under Bob Rothschild, vice president of global services, allows Printcafe to get a company-wide, cross-product view of their customers and services. Matrix management such as this brings both horizontal and vertical views of customers and products. While it is a more challenging management structure, it is clearly beneficial in strengthening the company’s ability to capture trends, cross-sell and up-sell products, and develop a broader range of functionality. Shifting Resources Concentrating development resources on the commercial print management system and new add-on modules, such as its PSI print management system platform means shifting some of those resources from other applications. While Printcafe’s Prograph is well positioned in the high-end publishing industry, it is a mature and saturated market, and as a result the company can apply resources toward other growth areas in the print market. Printcafe is looking to leverage other technology in their portfolio together with PRIME, their next generation production planning tool being developed by the Prograph group, and apply it to the publication printing industry. When Printcafe was created from a number of related but very different companies in early 2000, it looked like the resulting management team had departed on a crusade for the holy grail – to "weave together" very disparate technologies into something that could be maintained and improved efficiently. Many in the industry expressed considerable doubt around such a strategy. Now Printcafe’s strategy is playing out, and it is clear that four or five separate print management systems cannot, and should not, be merged into one or two systems. However, investing in cross-platform, hardware-independent design and development clearly builds on the existing customer base and allows for incremental improvement of all applications. It is much more efficient to add functionality in modules rather than upgrading and modifying each application. Modular Development Printcafe’s "Operating System for Print"™ is conceptually similar to Microsoft’s approach. Think of Microsoft Windows® XP, for example, which consists of plug-in applications with consistent interfaces that share information across applications. True, Printcafe is NOT Microsoft, and the technology is not there yet, but as a development strategy it makes sense. Three modular developments intended to work across all of Printcafe’s management systems are: - PrinterSite Internal: Designed as a sales and customer service interface across all management systems. This web front-end, combined with wireless technology such as a cell modem, can speed up estimating by transferring data digitally directly to the estimating department. Thus eliminating errors from data entry, and turning estimates quicker. - PrintFlow: Built on the theory of constraints, allows for development of "what if" scenarios to make schedules and operations more efficient. - Auto-Count: Based on Printcafe’s proprietary direct machine interface (DMI) technology, it is for collecting information from web or sheet presses and finishing equipment, and it can provide information by press, by shift, or by individual. As outlined by Marc Olin, CEO at the company’s user conference in June, the three legs of the Printcafe product strategy are CIM, E-Business, and Core MIS Platforms. The resources being re-deployed to the PSI platform are in keeping with this plan. Additional steps in meeting the strategy include: Application-based Improvements Some of the improvements coming out of Printcafe’s development strategy are still application-based. For example, Hagen 7.0, the company’s flagship product for high-end medium and large commercial printers, particularly those with multiple plants, is now multi-lingual. Language interfaces in English, Spanish, and French are now available, with others planned for 2003. Global trade is not limited to language; Hagen 7.0 also offers multiple currencies. Other application-based improvements have been made to Printcafe’s Logic, originally designed as a turnkey UNIX-based hardware/software solution. Migrating from UNIX to SQL, the new application, Logic SQL, is more user friendly, faster and hardware independent. Improvements to PrintSmith, targeted toward the somewhat hard to define "quick print" market, includes PrintSmith Site. While the ability to build personalized interfaces and custom catalogs sounds like many applications that have come and gone, the difference here is that the information from the user interface flows directly to the PrintSmith estimating, planning/scheduling and invoicing functions, as well as print production. Reducing Headcount When a company "concentrates resources" the result is generally a reduction in headcount, and that is the same here. When Printcafe launched their public offering in June, they indicated that as of April 30, 2002, the company consisted of 369 full-time employees. After the latest reorganization, the headcount is approximately 325. A company spokesperson said that Printcafe didn’t have to reduce staff by much due to attrition. In total, the number of people affected was approximately 40. When asked where the reductions were made, a Printcafe spokesperson said that all areas of the company were affected. As an example, the company consolidated their support groups into two, eliminating redundancies. In product management, Printcafe consolidated their two DMI groups into one and trimmed other areas. The company is also in the final stages of rolling out Siebel’s CRM software which should reduce costs associated with customer support while improving customer service. Conclusions? Printcafe Software has a tough challenge. The company’s stock launched at $10 per share, and quickly dropped and has stabilized at around $3. A number of reorganizations and restructurings has kept the company focused internally and on traditional markets. Printcafe seems to be moving into a much more logical structure, with a development strategy leveraging skills and abilities across all applications. Clearly, it’s hard to turn a battleship but it looks as if the company is starting to come around to a better focus with all hands pulling in the same direction.