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November 25, 2008
Starting A Print Production Optimization Program.
According to analyst InfoTrends, the total cost for document production/distribution in corporations, when accounting for both internally printed (i.e. office documents) and commercially printed documents, averages over 6% of total revenue, with industries such as healthcare (>8%), computer/data services (>10%), advertising/marketing (>14%), and government (>15%) even higher.* So, in budget pressured times, document production is a place people look closely for savings. All too often, however, the focus for savings is not correct.
The process costs associated with document creation and distribution far outweigh the print production costs. The data supporting the graphic to the left is drawn from InfoTrends' Michael O'Leary who presented at GraphExpo 2008 citing the InfoTrends report "Cost of Business Communications: A Look At The Business Document Lifecycle." This 6:1 cost ratio is a stark reminder that the real costs in those documents are not at the press or printer.
Using online display and e-delivery techniques helps reduce document costs...and companies are quickly looking at how to leverage Web tools to cut hard-copy costs. Another technology that has been growing rapidly because of its potential to address this cost issue, is digital printing. Using strategies such as "on-demand replenishment" (print a larger quantity that you know will be used, then do shorter replenishment runs via digital) or on-demand fulfillment (producing doucments in real-time as they are requested) can indeed produce measureable savings. However, neither technique is a universal solution, especially in a market where end-users truly define the best medium for communicating with them.
In fact, as we see daily in our work with clients, to really begin to optimize print production costs requires a wholistic view of document needs from the end-user perspective coupled with integration of all available production and distribution technologies. Getting the balance right can not only reduce costs, but also create measurable improvements in communication effectiveness by enhancing personalization and relevance of the delivered content.
We will explore this topic in more detail over the coming months, but an immediate takeaway is the need to establish a basic framework for assessing document use and production options, especially when the established production process involves large press runs or any inventory costs. Creating long-term optimization begins by creating near-term understanding of end-user rquirements and costs. By defining some low-hanging fruit opportunities for optimization (in marketing, customer support, internal communication, etc.), you can begin to establish the disciplines needed for broader optimization strategies.
* InfoTrends/CAP Ventures. Costs for Major Organizations Worldwide: Perception 3% vs. Reality 6% (http://www.capv.com/home/Press/2005/9.28.05.html)
Posted by jcioban at November 25, 2008 8:54 AM
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