Print Business Investments: Presses vs. Software
Successful print companies have always been re-investing in their business to remain competitors. Up until now, that investment centered around production equipment and systems. Technology in the form of software will be a primary differentiator moving forward.
For decades, it was easy to spot the growing, cutting edge print manufacturing companies. They were the ones mentioned in the vendor press releases. “JSM Printing Company, installs the very first model XYZ press in North America.” Leadership in our industry was defined by who had the fortitude to be on the cutting edge to outdo their competitors by always being faster, more efficient, produce higher quality or a combination of all three.
There are still plenty of good innovation happening in print manufacturing. Don’t get me wrong, I still think it matters. Although from my skewed perspective, your technology stack is now more important. The learning curve is the print owner realizing that the investment required to build out a competitive technology stack is equivalent to the purchase of the latest print manufacturing equipment. With the latest digital print engines, well into the seven figures, we’re talking about a level of investment that simply shocks most print business owners.
When a printer reinvents themselves by implementing an entirely new technology stack from order entry to invoice who will write that press release? There will be many vendors involved, the project has taken years, the project never ends – technologies keep moving. Many of these projects fail so writing a press release would be like throwing salt on an open wound. Your company keeps changing. Your customer keeps demanding new things. A technology stack transformation to become a modern data-driven company doesn’t have a clear beginning and end – just a very long “we’re in the middle of it.”
Calculating the ROI on a new technology stack requires more foresight, patience, and understanding about what being a data-driven company would do to virtually every aspect of your print business. I have had the pleasure of watching a print manufacturing company successfully go through this technology stack transition over the last three years. It has been a fascinating road. They have a great team. They picked solid technology. They are tough customers (demanding) to all their vendors. They know when they need help and are willing to pay for it. And for the stuff that matters to my readers the most – they have tripled their revenues over the last three years with a very moderate increase in staff (translation – they have learned how to scale profitably). There are all kinds of great things to say about this company; good people, visionary owner, but you cannot profitably scale in today’s market without a great technology stack that is optimally implemented to fit your business.
Why is the technology stack so expensive? It is a combination of things. The obvious one is the licensing of the technology itself whether that be a one-time license and annual maintenance or a monthly software subscription model. This is the start of your investment, not the end of it. The second portion of the costs are in the form of professional services help or assistance in both getting a print software package implemented or after its implemented continue building its ROI for your business. Did you know that SAP implementations are typically 2.5x the licensing costs – meaning if your SAP costs you $500,000, a typical spend on implementation services might run you 1.25 million! This area of costs varies greatly from company to company primarily because every printer has different levels of technical resources within their company and those technical resources either have zero (or less than zero) time available.
The only way to keep professional services spending down is to create experts internally for all the software packages you are running in your business. This is the exception, not the rule. Most printers treat the technology they buy as still belonging to the vendors. They recycle the same complaints year after year about “never really got it implemented, sales people said it would work perfectly, their support stinks.” If it’s been a couple years since the implementation of the software – don’t you think it’s time to stop complaining and do something about it? Does blaming the vendor get you any closer to solving the challenges?
I have met resources at printers who know the software packages better than anyone at the vendor because they took ownership. I saw that with my colleague Jane Mugford. I met Jane a long time ago when I was working for EFI and she was in charge of operations at West Canadian (a large multi-plant print business in Canada). Jane wasn’t just a customer, she was the model of what I’ll call “adopting the product as your own.” Jane didn’t wait for us to teach her anything, she simply decided that for her to succeed at her job, she needed to be an expert at the tools she was using to run the business. (MIS and web-to-print).
Jane’s company spent very little on professional services ONLY because Jane told her boss that she was working from home two days per week to learn the products. This is the deal breaker for most businesses. I’ve met lots of really smart people at printers over the years that could have done what Jane did (become an absolute expert at the software tools), the issue was they could not be spared from the daily fire hose of the business. The very businesses in dire need of technology to improve their processes are the ones that are getting jobs out the door only because of key employees doing back flips every day. A classic Catch-22, you need software to scale, the people in your company that are capable of thinking through how software could be best utilized in your business cannot be spared for even one day.
Technology costs are also high because most businesses buy software and never fully utilize it. There is a tremendous waste in technology. The other place waste is rampant is when you decide that a technology must bend to the way you do business. I can’t repeat this mantra too often. Do not try and force software to do things it was not designed to do – you will spend a lot of money, waste a lot of time, for very little return. I was working with this label and packaging printer recently who decided their MIS just couldn’t estimate exactly how they wanted to estimate – so they started estimating in another program (enter extra system #1). Then they decided their MIS couldn’t send out quote letters exactly how they wanted their quote letters to look (enter extra system #2), then they decided that the invoicing wasn’t working for them, (enter extra system #3). Where are they today? In one conversation with a CSR, she describes to me what it takes to process a re-order (an order from an existing customer that has been ordered before) – the description of the process took more than 10 minutes to describe. Change your processes to work well with your software or build this kind of crazy into your organization.
In the coming years, you need to budget more than you think for technology. You need to staff more than you think for technology, you need to learn more than you think about technology. Everything you’ve been putting off about your technology stack is going to have to be done and much more that you don’t even know about yet. The costs of this investment are going to be serious, the implications for not investing could be fatal to your business. The differentiation you’ll create by executing on technology better, faster, and more innovatively than your competitors will set your company up for success.