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Page 1: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

Whitepaper

December 2014

The Strategic Value of an In-Plant

Comments or Questions?

Page 2: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

2

Table of Contents

Introduction ................................................................................................................................ 3

In-House Operations: Meeting Customers’ Shifting Demands ............................................... 3

Offering Services Beyond Ink on Paper .................................................................................... 5

Helping User Departments with One-to-One Messaging ........................................................ 7

Investing in the Right Technologies to Meet Customer Needs ................................................ 9

The Right Mix of Digital and Traditional Printing Technologies ........................................ 9

Productivity Reigns ................................................................................................................ 10

Easy Access for Users ............................................................................................................. 11

Leaders Focus on Print Management and Insourcing ............................................................. 13

Summarizing the Value of In-Plants ......................................................................................... 15

About the Authors ...................................................................................................................... 16

List of Tables and Figures

Figure 1: Efficiency and New Services Guiding In-Plant’s Strategic Direction....................... 4

Figure 2: Services’ Contribution to Income .............................................................................. 5

Figure 3: In-Plant Service Expansion Plans ............................................................................. 6

Figure 4: Audience Targeting Approaches ................................................................................ 7

Figure 5: High Demand for Variable Data Prining ................................................................... 8

Table 1: Purchasing Drivers for Digital Color and Black & White Devices ............................. 9

Figure 6: Print Production Software Use .................................................................................. 10

Figure 7: Volume of Print Work Submitted Via the Web Increasing ..................................... 11

Figure 8: For Those that Invest, the Benefits Are Substantial! ............................................... 12

Figure 9: High-Performance In-Plants Have the Right of First Refusal ................................. 13

Figure 10: High-Performance Operations In-Source Work ..................................................... 14

Page 3: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

3

Introduction

In-house printing operations offer their parent organizations many valuable benefits,

including cost savings, faster turnaround time, convenience, and control. On-site printing

facilities can lower the cost of printing on an array of offset and digital devices, and can

also keep related personnel expenses to a minimum. Aggregated volume produced on

faster, more capable devices almost always costs less than sending print work to external

vendors.

Having an on-site printing facility also offers convenience to end-user departments.

Walking down the hall or to another office in the same building is generally more

convenient than outsourcing to a third party. In-house printing operations typically

understand corporate priorities and brand, and can meet the challenge when turnaround

time is critical for specific applications. The final issue is control. In-house facilities

provide a level of security that is important to many companies, and they enable more

unique configurations that can better meet the needs of parent company.

This whitepaper explores the value that in-house printing operations deliver in today’s

very dynamic communications market.

In-House Operations: Meeting Customers’ Shifting Demands

In-house printing operations, also commonly referred to as in-plants, understand the

importance of establishing long-term business relationships with constituents. Meeting

or exceeding the requirements of end-user departments, with precision, time and time

again, is a core mission of a thriving in-plant operation. Corporate and enterprise

communication requirements are changing, and in-house printing operations are aligning

their operations and services to meet new demands and fulfill customer needs.

In-plant operations are also expanding their services and focusing on operational

efficiency to enhance the value that they provide to their organizations. Efficient

operations that yield speed, quality, efficiency, sustainability, and high levels of customer

service are table stakes for serving parent organizations. The differentiating factors are

offering innovative products and services that deliver value to end-customers.

InfoTrends’ research finds that in-plant operations are striking a balance between

efficient operations and innovative services. InfoTrends’ survey of in-plant operations for

its most recent software investment outlook reveals that improving efficiency, reducing

production costs, and expanding services are top strategies for steering operations over

the next five years. This finding indicates that in-house printing operations are taking

action to deliver value that spans a wide range of end-users’ needs, from managing to

efficiently delivering communications.

Page 4: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

4

Figure 1: Efficiency and New Services Guiding In-Plant’s Strategic Direction

In-plants are taking action to expand their products and services to better serve

customers and enhance their relevance within parent organizations. An in-house printing

operation offers an advantage in understanding and meeting its organization’s unmet

needs because it is a part of that organization. It is this underlying understanding of an

organization’s mission and communication processes that differentiates the in-plant from

outside competitors. Knowledge about internal customer communication needs and

processes (print or digital media) gives in-house printing operations an edge in offering

the right services. In addition, the use of an outside print provider (e.g., commercial

printer, quick printer) can add an average markup of 35% to the cost of a print job.

4%

2%

2%

6%

24%

32%

30%

30%

58%

74%

0% 20% 40% 60% 80%

Don’t know

Other

Merger and acquisition

Expand geographic reach

Focus on growing existing core offerings

Expand to new non-print services

Expand to new customer verticals/industries

Focus on more effective sales and marketing

Expand to new print applications or services

Reducing production cost/improving efficiency

N = 50 In-PlantsSource: U.S. Production Software Investment Outlook, InfoTrends 2014

Multiple Responses Permitted

Which of the following initiatives best describes your strategic business direction over the next five years?

Page 5: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

5

Offering Services Beyond Ink on Paper

In an effort to enhance customer value, today’s in-plants are expanding their service

offerings. This increased repertoire of offerings includes creative services, enhanced

finishing capabilities, online ordering options, personalized printing, e-publishing, and

digital media applications. According to InfoTrends’ study entitled The Production

Printing Industry in North America: Understanding Industry Transformation, value-

added services generate 16% of in-plant operations’ income. This study surveyed almost

300 in-plants to uncover plans for equipment and software investments, services

expansion, and improving operations.

Figure 2: Services’ Contribution to Income

What percentage of your income is attributed to the following types of services?

Digital Printing25%

Offset Printing22%

Value-Added Services

16%

Flexo, Gravure, Screen

13%

Wide Format Digital12%

Finishing12%

N = 289 In-PlantsSource: The Production Printing Industry in North America: Understanding Industry Transformation, InfoTrends 2014

Page 6: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

6

When asked to identify their services, most in-plant survey respondents reported offering

creative design and data-related services. Over the next two years, in-plants plan to ramp

up the services related to mobile communications and social media to power efforts to

offer cross-media services. Expanding communication services beyond print enables in-

plants to offer more communication options to internal departments. Offering multi-

channel communication services provides parent organizations with a more streamlined

process for managing, integrating, and controlling their communication efforts.

Figure 3: In-Plant Service Expansion Plans

This study finding is a signal that in-plant operations are expanding their services to meet

the ever-changing requirements of their parent organizations. InfoTrends’ study entitled

Understanding Vertical Markets: Enterprise Communication Requirements surveyed

more than 1,000 communication decision-makers in large enterprise firms with 500+

employees. Many large enterprises have in-plant printing operations. When asked what

was important to them in the selection of a print services provider, the top criteria

included a broad range of services, competitive pricing, and the ability to deliver within 1-

2 days.

Which of the following services do you offer today, and what do you plan to offer in the next 2 years?

8.0%

9.9%

12.9%

8.4%

9.5%

11.0%

19.4%

20.5%

13.7%

15.6%

19.0%

8.4%

18.3%

14.1%

20.9%

8.7%

11.5%

3.5%

3.8%

5.2%

6.6%

8.7%

11.8%

13.8%

15.9%

17.3%

19.0%

19.4%

19.7%

23.2%

27.3%

27.7%

34.3%

40.5%

0% 10% 20% 30% 40% 50%

Digital Asset Management

Personalized URL (pURL) MicrositeGeneration

Social Media Marketing Services

Personalized Variable Data Print

e-Publications with Turn-Page Technology

Website Development, Design, Hosting

Mobile 2D Barcode Generation & Tracking

Mobile/SMS Messaging

e-Mail Marketing, Page Design

Personalized URL (pURL) Tracking

Setting Up a Campaign Dashboard

Project Management

Campaign Response Tracking & Management

Data Analytics

Database Programming

Data List Acquisition/Preparation

Graphic Design

Today In 2 Years

Multiple Responses Permitted

N = 289 In-PlantsSource: The Production Printing Industry in North America: Understanding Industry Transformation, InfoTrends 2014

Page 7: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

7

Helping User Departments with One-to-One Messaging

In-plant operations are expanding their data capabilities to support the marketing efforts

of their parent organizations. One of the most essential services is the ability to deliver

customized messaging to the end customer. Enterprises participating in InfoTrends’

survey reported that more than 60% of campaigns were either versioned (one-to-few) or

personalized (one-to-one).

Figure 4: Audience Targeting Approaches

The ability to personalize a document is a key aspect of making the content relevant. This

can range from simple address and salutation to fully-personalized promotional or

transactional documents. InfoTrends’ research indicates that half of in-house printing

operations own variable data software that is capable of personalizing documents.

What percentage of your customer communications/marketing campaigns fit into the following categories?

Segmented

marketing

(One-to-few)

33.4%

Personalized

marketing

(One-to-one)

29.2% Mass marketing

(One-to-many)

37.4%

N = 1,026Source: Understanding Vertical Markets: Enterprise Communication Requirements; InfoTrends 2012

Page 8: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

8

A best practice among successful in-plants is meeting end-user departments’ needs to

produce more personalized communications tailored to individual recipients. InfoTrends’

research finds that successful in-plants are experiencing high-demand for personalized

print. These in-plants are creating the infrastructure to deliver digital color solutions that

support communication with customers on a one-to-one basis

Figure 5: High Demand for Variable Data Prining

0%

10%

20%

30%

40%

Total Declined Remained Flat Grew 1% to 4.9% Grew 5% to 9.9% Grew 10%+

Percentage of Volume on Digital Devices that is Variable Data (Means)

Digital B/W Digital Color

N = VariesBase: 240 In-PlantsSource: Production Print Services in North America: Understanding Industry Transformation, InfoTrends 2014

Page 9: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

9

Investing in the Right Technologies to Meet Customer Needs

Over the years, graphic arts in-plants have been at the leading edge of the digital print

revolution. Those that are thriving have been innovative, adaptable, and central to the

ongoing mission of the institution in which they operate. Responsiveness to customer

needs is the bedrock upon which successful in-house printing operations are built.

The Right Mix of Digital and Traditional Printing Technologies

In-plant operations participating in InfoTrends’ study The Production Printing Industry

in North America: Understanding Industry Transformation supported a mix of

technologies to respond to diverse customer needs. In-plants reported having a blend of

digital black & white, digital color, and large format devices as well as offset presses.

High-performance in-plants supported a portfolio of equipment and services that enabled

their organizations to become one-stop shops for end-user departments.

The study also identified various drivers for purchasing digital devices. More than half of

the respondents that are planning on acquiring digital color and black & white digital

devices were doing so to replace an existing unit with a faster device or to

replace/upgrade an older unit with more reliable technology.

Table 1: Purchasing Drivers for Digital Color and Black & White Devices

Black & White (N=201) Color (N=206)

Current device too slow; need faster capabilities 30.6% 36.7%

Current devices old/unreliable; need to be replaced by new devices with similar capabilities

30.2% 20.6%

Volumes increasing; need additional capacity 11.5% 17.2%

Need newer machines to address current volume 10.1% 7.4%

Need devices with new capabilities (beyond speed) that we don’t currently have (e.g., image quality, inline finishing, paper handling)

11.0% 10.8%

Lower operating costs 6.6% 7.4%

Base: In-Plants with Investment Plans Source: The Production Printing Industry in North America: Understanding Industry Transformation, InfoTrends 2014

From a digital color perspective, in-plant investments are continuing. While there is a

need for faster devices and replacement units, 17% of the respondents indicated that

volume growth was a critical driver. Another 10% wanted digital color devices that would

open up new application opportunities. These in-plants are exploring technologies that

can handle more substrates as well as an expanded color gamut, specialty inks, and new

finishing capabilities.

Page 10: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

10

Productivity Reigns

Workflow automation is a key priority for successful in-plants, and many operations are

investing in software to automate processes, eliminate manual touches, and reduce costs.

More and more print buying is shifting online, driving higher volumes of short-run work.

There has never been a greater need for workflow automation to streamline labor-

intensive processes, maximize the return on existing assets, and reduce production costs

for both digital and conventionally printed jobs. This is a key focus area for in-plants.

Over 50% of in-plants surveyed have invested in critical workflow software tools,

including creative layout, digital and conventional production workflow, print MIS, and

output management.

Figure 6: Print Production Software Use

54.6%

54.2%

53.7%

52.9%

50.5%

52.6%

43.3%

42.5%

43.3%

42.1%

46.3%

43.3%

0% 20% 40% 60% 80% 100%

Creative/Layout Software

Production Workflow Mgmt. -Digital

Production Workflow Mgmt. -Conventional

Print MIS

Web-to-Print (W2P)

Output Management

Own Do Not Own Don’t know

N = 240 In-plantsSource: Production Print Services in North America: Understanding Industry Transformation, InfoTrends 2014

How would you describe your ownership of the following software solution categories?

Page 11: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

11

Easy Access for Users

One of the keys to automated workflow is a connected system that enables user

departments to submit jobs via the web. This requires an easy-to-use interface and 24/7

access to a catalog of materials for user departments. In an environment where speed is

everything, the ability to submit jobs through a web portal 24 hours a day, 7 days a week

is important to end-users. Enterprises participating in InfoTrends’ research confirmed

the importance of ordering printing via online platforms. Respondents predicted that by

the end of 2014, the volume of print jobs submitted via the web would climb from 31.9%

of overall volume to 40%.

Figure 7: Volume of Print Work Submitted Via the Web Increasing

31.9%

40.0%

0%

10%

20%

30%

40%

50%

Last Twelve Months Next Two Years

What percentage of your business’ total print spend has been/will be ordered over the Internet?

N = 896 Enterprise Communication Decision-MakersSource: Understanding Vertical Markets: Enterprise Communication Requirements, InfoTrends 2012

Page 12: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

12

Online ordering is key requirement for enterprises, and in-plants are investing in

technology to accommodate customer needs and reap operational benefits. In-plants that

invested in online ordering systems (often referred to as web-to-print) reported efficiency

gains, the ability to develop new services, and the opportunity to pursue niche markets.

Figure 8: For Those that Invest, the Benefits Are Substantial!

3.6

3.9

4.0

4.3

4.4

1 2 3 4 5

Web-to-print has increased my print volumes

Web-to-print has enabled me to go after new marketniches

Web-to-print has enabled me to develop new services

Web-to-print is critical for my business

Web-to-print has made my operation more efficient

To what extent do you agree or disagree with the following statements?

N = 65 In-Plants who offer online print ordering or request for quote/estimate formsSource: Emerging Trends in Web-to-Print, InfoTrends 2013

Disagree Completely Agree Completely

Page 13: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

13

Leaders Focus on Print Management and Insourcing

High-performance in-plant operations have control over their destinies. In-plants with

the right of first refusal on print work and are parlaying their expertise to improve

organizational print buying.

Figure 9: High-Performance In-Plants Have the Right of First Refusal

Several of the high-performance in-plants have established a print sourcing department

to handle print buying for the entire company—whether that means printing in-house or

outsourcing. While they have right of first refusal, lending their expertise and knowledge

to the buying process for externally sourced materials has provided significant value.

50%57% 57%

38%

64%

50%44% 43%

62%

36%

0%

20%

40%

60%

80%

100%

Declined Remained Flat Grew 1% to 4.9% Grew 5% to 9.9% Grew 10%+

Yes No

Do you have a right of first refusal for all print work prior to it being outsourced to an outside print vendor?

N = 240 In-PlantsSource: Production Print Services in North America: Understanding Industry Transformation, InfoTrends 2014

Page 14: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

14

The leaders of these in-plants recognized an organizational benefit in assuming the dual

roles of print provider and buyer. Who better to decide the most efficient and cost-

effective method for producing printed materials than experts that understand all the

elements of the production process? In addition, several in-plants have found a way to

better utilize production capacity by taking in work from external customers. By

insourcing, they can use up extra equipment capacity and generate income to fund

investments that benefit their internal customers.

Figure 10: High-Performance Operations In-Source Work

Do you take in work from customers outside your company or organization (i.e., perform insourcing)?

67%

53%64% 66%

76%

33%

47%37% 34%

24%

0%

20%

40%

60%

80%

100%

Declined Remained Flat Grew 1% to 4.9% Grew 5% to 9.9% Grew 10%+

Yes No

N = 240 In-PlantsSource: Production Print Services in North America: Understanding Industry Transformation, InfoTrends 2014

Page 15: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

15

Summarizing the Value of In-Plants

In-house printing operations are evolving their services to support their customers’

continually changing communication requirements. Their efforts can be summarized as

follows:

Responsiveness to customer needs: The most successful in-plants focus on

providing the best possible services for clients. Historically, this has linked to being

responsive to internal requirements for quick-turnaround documents. Savvy

providers are cognizant that the end-user dynamics are changing, so they are

delivering more than high-quality print services.

Automation to remain the low-cost producer: Successful in-plants are

investing in automation. They recognize that from web-based order entry through to

in-line finishing, minimizing the number of touches is critical to remaining the low-

cost provider.

Developing new areas of expertise: In-plants are expanding into new service

areas. They led the charge in the adoption of digital color and black & white devices

and are aggressively implementing large format. The successful providers are adding

incremental value ranging from web-based submission to the delivery of personalized

documentation in print and electronic formats. This is trend is prompting operations

to expand skill sets to include database expertise, an understanding of web-based

solutions, and mobile and social technologies.

A commitment to continual assessment of new technologies: In-plants are

close to their internal customers. They have a unique advantage in understanding the

communication needs and requirements of their parent organizations, and this

enables them to make the necessary technological investments to meet the needs of

end-user departments.

This material is prepared specifically for clients of InfoTrends, Inc. The opinions expressed represent our interpretation and analysis of information generally available to the public or released by responsible individuals in the subject companies. We believe that the sources of information on which our material is based are reliable and we have applied our best professional judgment to the data obtained.

Page 16: Whitepaper - Xerox · more than 1,000 communication decision-makers in large enterprise firms with 500+ employees. Many large enterprises have in-plant printing operations. When asked

WHITEPAPER The Strategic Value of an In-Plant

© InfoTrends 2014

16

About the Authors

Barb Pellow

Group Director

[email protected]

+1 781-616-2161

A digital printing and publishing pioneer as well as a marketing expert, Barbara Pellow

helps companies develop multi-media strategies. She assists companies in creating

strategies to launch new products, building strategic marketing plans, and educating their

sales force on delivering value.

Lisa Cross

Associate Director

[email protected]

+1 781-616-2192

Lisa Cross is the Associate Director for InfoTrends’ Business Development Strategies

service. She is responsible for conducting market research, advising clients on

communication strategies, managing custom consulting projects, and reporting on

industry trends.