eEnabling Business

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e-Enabling Business

• Barbara A. Pellow, Group Director, InfoTrends
• Joe Metzger, President, Metzgers

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Topics

• InfoTrends e-Enablement Research
• The Opportunity
• The Challenges
• e-Enablement at Work Metzgers
• Conclusions and Recommendations

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InfoTrends e-enablement Research

• Understand the impact of e-enablement on the
  graphic communications value chain today and in
  the future
• Corporate buyers and service providers
  perspectives
• Adoption since the dot-com era
• InfoTrends conducted a similar Print
  e-Procurement study in 2000
• Confirmation of benefits
• Deployments, business models, selection criteria
• Future directions

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Primary Research Methodology

• Structured Web Surveys
• 179 document owners, print/media buyers in the
  U.S.
• 188 print service providers in the U.S.
• Personal Phone Interviews
• 10 document owner or print/media buyers in
  mid-sized/large enterprises
• 15 print service providers (incl. in-plants) in
  the U.S.

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The Internet Changes Everything!

• How we work
• How we play
• How we communicate
• How we run our businesses
• How we are entertained
• How we play games
• And how print service providers interact with
  customers!

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e-Enablement Terms of Endearment
ftp upload
Web Storefront/Portal
print e-procurement
Online printing
Web-to-Print
print e-catalog
print e-business
Multi-channel Web services
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e-Enablement e-Everything in Todays Market
Service Provider

• Expanding Customer Relationships
• New markets/applications
• Global reach
• Interface link for existing Customer transactions

• Process Automation
• Plant operations
• Participation in supply chain management networks
• Marketing services

Transaction Focus
Process Focus

• Transaction Management
• Order entry
• Job tracking
• Spec and bid sites

• Process Management
• Supply chain management
• Marketing services management

Corporate/Enterprise
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e-Enabled Corporate Buyers
How often do you conduct the following activities
via the Internet?
N 163
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e-Enablement Print Service Providers
Which of the following are part of your company
print e-business service offerings? These are
services that are enabled through the Internet.
N 187
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The Opportunity for the Print Buyer/Print Service
Provider
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Adoption Rates Accelerating

• Print Service Providers
• Nearly half offer Web-to-print services
• Another third intend to offer within the next 24
  months
• Less than 5 of PSPs were Internet- enabled in
  2000
• Average 14.3 of volume via Internet (excluding
  e-mail FTP)
• Up from 3 in 2000
• Anticipate up to 45 of volume via the Internet
  by 2010

• Corporate Print Buyers
• Two-thirds report using Web-to-print services
  offered by internal or external providers
• Up from only 11 in 2000
• Average 14.2 of print spending via the Internet
  (excluding e-mail FTP)

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The Benefits Are Clear!

• Print Buyers
• Corporate buyers report increased efficiencies as
  result of e-enabled print procurement
• Lower printing costs, shorter turnaround times,
  better tracking, less unnecessary printing,
  better brand management
• Mean savings of 14.4 as result of implementation
  
• Additional savings and efficiencies can be
  achieved
• Consolidation of Web portals
• Integration with enterprise systems (if any)
• e.g., general procurement, accounting/billing,
  MIS, ECM, CRM, etc.

• Print Service Providers
• 60 indicated that Web-enabled services improved
  their revenue
• Average 8.1 increase in revenue
• 25 reported greater than 10 of revenue growth
• 54 indicated margin and volume improvements
• Margin up an average of 7.4 volume up an
  average of 8
• 60 reported that Web-enabled services are more
  or equally profitable versus other services
• 60 believed that Web-enabled services improved
  production efficiency, customer acquisition, and
  retention rates

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Applications Abound

• InfoTrends expects e-enablement growth to shift
  from lower-margin applications to higher-margin
  applications
• Significant portions are digitally printed
• Corporate identity documents (e.g., business
  cards and stationery) are most mature e-enabled
  applications
• Corporate buyers reported that 20 of these items
  areprocured via the Internet
• PSPs reported that 26 of business card volumes
  and 24 of stationery volumes came via the
  Internet
• Other applications not far behind
• Postcards, marketing collateral, proofs, direct
  mail

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Percentage of Print Jobs by Method
What percentage of your print jobs come through
the following methods?
N 187
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Print e-Business Service Offerings Moving Up
the Value Chain
Which of the following are part of your company
print e-business service offerings? These are
services that are enabled through the internet.
N 187
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Emerging Printer Class Marketing Service
Providers

• 16 of 188 PSPs identified themselves as Marketing
  Service Providers (MSPs)
• Print is only one output optionutilize other
  options like e-mail, personalized URLs, etc.
• Highly e-enabled services
• e.g., Web-driven variable data printing, digital
  asset management, and multi-channel campaigns
• Half of these MSPs reported revenue growth in
  excess of 20 annually

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Movement to One-to-One Integrated Marketing
Solutions

• More than half of corporate buyers considered
  multi-channel capabilities in e-business
  solutions to be important
• 20 of work submitted via the Internet today is
  considered variable data
• 25 of PSPs offer online personalization
  services, another 37 planning to offer in next
  24 months
• 23 of PSPs offer multi-channel marketing
  campaigns, another 25 planning to offer in next
  24 months

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North American Print E-Business Software
Solutions Market
CAGR 18.0
Excludes General e-procurement internally
developed solutions Include software license,
maintenance hosting fees, professional services
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The Challenges
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Challenges in Print E-Business Implementation
To what extent do you consider the following to
be challenges in implementing an e-business
system?
N 177
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Extracting Value from e-Enablement Services

• Reticence of print service providers to charge
  for access/usage of e-business system discretely
• 37 of print service providers do not charge
  clients for access/usage of Web storefront
• Various pricing models for related e-business
  services
• e.g., creative/design, archiving, templates
  set-up, digital asset management, database
  management, data analytics, etc.
• Bundled, itemized (flat fee), itemized (hourly
  rates), itemized (per piece/template, etc.)

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e-Enablement Requires Investment
Roughly how much did you spend (or do you expect
to spend) on your print e-business system to get
started? Roughly how much do you spend (or do you
expect to spend) on the print e-business system
on an annual basis?
Mean Spend 38K 24K
N 140
N 138
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System Integration is Key to Efficiency

• A third of PSPs have print e-business integration
  with accounting/billing, workflow management, and
  MIS systems
• Another third have plans for integration in next
  24 months
• About 70 of PSPs agreed that linking external
  internal production workflow is a challenge

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Skill Set Gaps in Supporting e-Enabled
Services

• 72 of PSPs agreed IT skill-set relating to
  Internet is a challenge for e-business
  implementation
• Only a quarter of PSPs claimed to have advanced
  skills for Web-to-print and multi-channel
  communications
• The rest were divided between intermediate,
  basic, and no expertise

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E-enablement is not the wave of the future for
the graphic communications industry It is
here today and will only continue to increase in
power and robustness!
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e-Enablement is

• A pathway to automating business processes and
  super-efficiency for buyers and sellers of
  print
• The key to effective utilization of procurement
  networks for more efficient print supply chain
  management
• A critical step toward transforming traditional
  print service providers into marketing service
  providers
• An important means of delivering affordable
  global access to customers for the graphic
  communications service provider
• A launching pad for participation in new market
  niches or evolution into a totally new business

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e-Enablement at Work Metzgers
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Metzgers Reinventing Itself

• Started as a Typesetting shop in 1976
• 1987 A desktop publishing service bureau
• 1994 Installed printing presses
• 1997 First online Stationery Store
• 1998 Opened mailing and fulfillment center
• 2005 Added PageFlex to replace homegrown
  Web-to-print applications
• 2008 Has grown business by an average of 11
  per year for the past five years
• Web-to-Print and e-fulfillment are a critical ice
  breakers

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Getting Started Stationery/Brand

• Customized Web site that maintained corporate and
  brand identity
• A partnership with clients

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From Stationery to e-Fulfillment
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And e-Ads
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The Business Impact Customer Service

• The end-user at the storefront has access to view
  EVERY possible marketing or training piece that
  is available
• The customer can customize and proof online, 24/7
• The customer doesnt have to be local

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The Business Impact Workflow and Production

• Web-to-print items go directly into the proper
  workflow server
• The print order occurs at the RIP, before job
  documentation is sent
• Lights-out imposition and RIPPING
• Employee reads instructions, loads the proper
  paper, and prints
• Bindery and packaging and shipping instructions
  are ALL included WITH the orderwhens the last
  time you got all that with a standard order?
• Pricing for the purchase is predetermined and the
  user has no question about the price per piece or
  for the total order
• Invoices are approved at the time of the order

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Implications of Repetitive Print Programs

• Now that we have this in place, the length of the
  sale process is much quicker
• Customers get it now and its easy to put in
  place
• The software and systems are much easier to use
  and more powerful
• New orders and repeat orders happen more often
• Business is growing with each site launched
• Costs to the customer are fixedthere are no
  surprises to slow down the payment or delivery
  process

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Selling Strategies

• UNSEEN UNTOLD UNSOLD
• Demo as often as possible
• Provide proposal
• Educate salespeople that they get orders while
  they are sleeping and compensate them
  appropriately

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The Challenges

• Obtaining meetings with clients to show them this
  exciting new service
• Narrowing the choices of items on the Web site
  for the initial launch
• Keeping the site updated and keeping users
  informed when new stuff is added and available
  for order
• Managing the pick and pack process and orders
  during peak days or weeks
• Pricing and costing the sites and solutions
• Customers budgets tightening and they may not
  see the cost-saving, time-saving,
  quality-increasing benefits of StoreFront
  solutions

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The Bottom Line (1)

• Weve been profitable for 7 straight years
• Weve been growing top-line sales for 7 straight
  years
• Weve been adding customers and storefront sites
  for 11 years
• We continue to add employees and provide a good
  living for many people

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The Bottom Line (2)

• Year Sales
• 2003 4,750,000
• 2004 6,385,000
• 2005 7,500,000
• 2006 8,850,000
• 2007 12,150,000
• 2008 (expected) 13,500,000

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Recommendations for Peers

• Dont participate in bad economic news or in any
  downturn in the economy
• Work smarter and harderfind unique ways for
  customers to see the value in a relationship with
  your business

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• Recommendations and Conclusions

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Recommendations for Corporate/Enterprise Buyers

• Its time to recognize the benefits of
  e-enablement for your business
• Efficiency
• Re-engineering for business processes
  (multi-channel marketing, supply chain
  management, support for distribution channels)
• Brand integrity and effective management of
  digital assets
• Reduced obsolescence and waste
• Identify print service providers/marketing
  service providers that offer robust multi-channel
  Web services
• Integrate e-enabled print solutions with
  corporate systems (i.e., supply chain
  management, CRM, sales force automation,
  marketing performance measurement) to maximize
  value

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Recommendations for Print Service Providers

• Its time to catch up if you arent in the
  e-enablement game
• Clearly define target markets and e-enabled
  applications to benefit from order entry and
  production efficiencies
• Evaluate software solutions based on client
  needsmake sure that the solution you select is
  modular and grows with your business
• From simple order entry to complex multi-channel
  solutions
• Be prepared to invest not just in software and
  infrastructure, but in re-tooling your
  organization with the right skills to drive
  change
• Educate print buyers on the efficiencies and
  benefits to their organization and distribution
  channels

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Recommendations for e-Business Software
Solution Providers

• Print service providers and print buyers are
  looking for more than order entry and job
  tracking solutions. Software providers need to
  offer tools that are modular, scalable, and
  designed to re-engineer marketing/supply
  chain/plant operations.
• Software providers need to offer professional
  services capability to support service provider
  implementation as well as integration into the
  enterprise infrastructure.

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• Questions ?????