e-commerce: Does it make sense for In-Plant Printers?

Originally appeared in Innes Publishing's In-Plant Printer magazine
By Chuck Gehman, Chief Technology Officer, Printable.com

Corporate e-procurement has become a new hot topic in many companies. Has the discussion made it to your department yet? Have you heard IT or business staffers talking about things like Ariba or Commerce-One? These systems help companies get a handle on their purchasing activities when multiple locations and many staffers are buying products and services from many different vendors.

Basically, it’s about using Internet technologies to streamline and automate the purchasing process. These same concepts can help you to make it easier for your internal customers to do business with your operation. And it’s possible that someone upstairs in corporate is thinking about plugging your operation into the corporate e-procurement environment. So, it just might be time to start looking at some of the ways that you can use these new Internet applications to both make your life easier and to provide better service to your company in the process.

In the commercial print world, a controversy has been raging around e-commerce. Mostly, the arguments center on this new way of doing business being an evil process that turns printers into commodity providers, and removes their added value to their customers. The good news is these discussions don’t really apply to the world of the In-Plant.

The world of e-commerce and how it relates to corporate e-procurement can provide a lot of benefits for In-Plant printers. These benefits include better customer service, improved communication, fewer errors and faster turnaround on jobs. And another really important area to consider is purchasing paper and supplies online. This can be both a money saver and a way to more easily manage ordering and inventories.

Appropriate e-commerce business models

There are many different companies and almost as many business models in the e-commerce arena today. Some are appropriate for the In-Plant printer today.

Bulletin Board: Basically, a place on the Internet or your Intranet where your buyers can post RFQs and you can read them and respond. This is a very loose definition of e-commerce but one that could be valuable to an In-Plant printer; since basically, you get the ability to organize RFQs from your internal constituency and respond to them more efficiently.

Storefront: An e-commerce company provides you with a web site with e-commerce capabilities, and provides all the backend logic and processing. It makes your operation look like you have your own elaborate e-commerce system, but in fact you are using the e-commerce provider’s systems. These systems can help you implement a portfolio of jobs you’ve created for your internal customers, and let them order online. This could be as simple as business cards, letterhead or forms reorders or as complicated as variable printing jobs.

Digital Marketplace or Linked Exchange: Vendors come together in a system that provides easy buying and access to information about products and services. In addition to being the direction most corporate e-procurement is headed these days (this is where Commerce One and Ariba fit in), this model is very appropriate to an In-Plant printer by providing the ability to purchase paper and consumables online.

One or more of these business models could be appropriate for your operation. Refer to Table 1 for details on some of the companies providing e-commerce products and services to printers, and to Table 2 for more information about online paper and consumables vendors.


e-production

It could be said that the easy and fun part of printing is when it comes time to run the job on the printing press. And that’s where the printer’s money is made. But the process before the job goes on press, communicating with the buyer and collecting the files to be output, making sure you are producing what the customer is looking for, and that the job flows smoothly through the prepress department is the time consuming and error-prone part of the job. Then, after the actually printing process, you have the bindery and fulfillment issues to worry about.

The fact is, the internal customer (and possibly other vendors the customer works with, like designers and photographers) is actually a key part of the manufacturing process in our industry. The supply chain in the printing industry goes as far “upstream” as the designer working in their home studio, and as far “downstream” as the bindery, where the end product is finished for delivery to the “end user”.

Even the most efficient operation spends time on what could be considered unnecessary interaction with customers and suppliers, such as fixing problems, correcting misunderstandings, attempting to agree on color issues, “signing off” on approvals and making last minute changes.

This is where e-commerce (or really, the new buzzword “e-production”) holds the promise of bringing real benefits to printers. By integrating and automating both the workflow and the transactions that add unnecessary iterations to an already labor intensive process, your personnel are free to focus on the real manufacturing process of getting ink on paper.

If you can more easily provide status information, exchange previously paper documents and even content files, obtain approvals electronically, and generally improve interaction with your customers, everyone wins.

Some of these new services are providing useful production tools like job ticketing, job status, and even automated preflighting. Not to mention the fact that these systems can provide high-tech job estimating and job costing that can help your bottom line.

Purchasing Supplies and Paper online

One of the easiest ways to get started with e-commerce is to purchase supplies and paper online. There are now several substantial companies selling these products over the Internet. They include PrintNation.com, GraphicArtsSupplies.com and the behemoth, Xpedx.

Paper seems to be a “hot commodity” for e-commerce in our industry, with six of the nine companies listed in Table 2 focused on this segment of the marketplace (although Xpedx sells other products as well.) We’ll talk more about these companies in a later installment.

Of the other three companies, two are “click and mortar” companies (meaning they have both an online presence and a “traditional” distribution business.) Pitman and Graphic Arts Supplies have their own inventory and distribution, while PrintNation.com is an entirely online operation, with no distribution of their own (they use other companies, like Unisource, to do the heavy lifting.)

The entry of the “brick and mortar” companies, like Pitman and Xpedx, is a recent development in the e-commerce landscape and brings a lot of credibility to the concept. These companies have recognized the powerful capabilities the Internet provides, and are combining it with their vast inventory, distribution and financial capabilities to provide a truly comprehensive package.

One of the greatest benefits of ordering supplies and paper online is the ability of these systems to “remember” previous orders you have placed. Most people place similar orders with their distributors on a weekly or monthly basis. Even if you don’t have your own inventory system, these systems let you pull up your previous order, see how much you paid, make adjustments for the jobs you have planned, and “click”… you’ve placed the order without having to wade through a mountain of paperwork.

Existing Systems and Infrastructure

To really take advantage of these new applications, these services should be able to plug into our accounting and estimating systems and look at historical data from jobs that are complete. We’re going to want to upload our production data into these systems so we can use it to job cost and benchmark that data against prospective new jobs we’re going to bid on.

Beyond the accounting systems, we’ll need to have an interface to our workflow and scheduling systems that will allow us to integrate the production information we need. We need both content (i.e., production files) and context (the information about the jobs: accounting, personnel, scheduling, etc. which is sometimes referred to as “metadata”) in the systems to have them really benefit our manufacturing operations.

There are several industry initiatives that are focused on providing this interoperability. While they are all at least a few months away from providing any real benefits, it’s great to see companies cooperating to create standard interface methods that will make these new systems even more useful in the future. Some of these intiatives are CIP4 and JDF (www.cip4.org), PrintTalk (www.printtalk.com), printCafe’s PCX (www.printcafe.com), and PPML and PODI (www.podi.org). It would take me several paragraphs to explain what each of these are all about, so instead, I encourage you to check out their respective web sites if you are interested in this type of interoperability. If not, stay tuned because you are likely to hear much more about each of these in the coming year.

This is also where the Commerce One and Ariba systems can come into play. They can provide the interface between your printing-centric applications and the corporate e-procurement and accounting infrastructure.

Finally, don’t forget that these systems may require changes to your current IT infrastructure in order for you to take advantage of them. For example, do all your personnel have access to the corporate LAN and/or a robust Internet connection?

Summary

Just like a new piece of equipment you would buy for your shop, you need to do your homework and understand how these technologies will fit into your operation before you start spending money.

With the right solution and good implementation, the opportunity these new technologies and services present to the In-Plant printer mean better customer service and a more efficient operation. The result can only be happy customers and an even happier bottom line.

Demystifying Remote Proofing

Originally appeared in the IPA Prepress Bulletin magazine

November 2000

By Chuck Gehman

While remote proofing is of interest to many people, there is also a lot of confusion surrounding the process, including misconceptions about what is required to do this, and how well it works. We’ve already mentioned low cost and high quality. That alone might be enough to stop a lot of people who still think Remote Proofing requires a T-1 line, expensive, specialized hardware and software and perhaps a Kodak Approval. While that is certainly something that people are doing, there is much more to it than the very high end, and I’ll attempt to address some of the fundamental issues as well as provide some “nuts and bolts” information that can apply to both high-end users and entry level users.

We won’t spend a lot of time talking about ICC color profiles and color management, but instead will focus primarily on workflow issues and how to deliver the files to the remote site. We’re going to assume that the reader has a good working knowledge of digital proofing and the issues that surround it. The color science behind getting matching proofs on two different devices may actually be pretty close to rocket science, but fortunately, being successful with remote proofing isn’t.

Why Remote Proofing?

Remote proofing is a topic of hot debate among knowledgeable technical people in the graphic arts. Why? Perhaps because everyone has their own definition of what is considered remote proofing. We aren’t going to attempt to resolve that debate here, but to point out several applications where this technique can add great value.

The very first thing that needs to be understood about remote proofing: Unless you are already in a relationship (whether you are the service provider or the client) that has adopted digital proofing as a standard way of working, you are never going to be able to implement a remote proofing workflow. So, perhaps obviously, digital proofs first, remote proof second.

Where are the big wins for remote proofing? They are certainly in the creative process, such as between an Ad Agency and their service providers. Between a prepress house and a printer (perhaps for imposition proofs). Between a printer and a catalog publisher. Certainly, between an ad agency and their corporate client. Even between in-house creatives in a large company, or in a workflow with packaging designers for a consumer products company. I’m sure we can all think of many more useful applications for this technology. The key is that both production and creative stand to benefit from this workflow.

Workflow

Perhaps obviously, the device and the technical implementation you choose for remote proofing must match your existing workflow, and/or that of your customer. For instance, if you are using a Kodak Approval at your site, and your customer is using an Epson Inkjet, you’re going to need to generate a file that is suitable for the Epson without having to add multiple steps to the process. There are workflows and RIPs available from a number of vendors that can make that happen for you. Of course, they cost money. Some that come to mind that might be particularly useful are the Scitex Brisque, and the products from Shira Corporation and Rorke Data. We won’t discuss these products in great detail and it isn’t necessary to invest large amounts of money in these technologies to do remote proofing. If you already have this equipment and/or software, however, you’re halfway there and you may not know it.

If many additional manual steps are necessary to generate the file to be sent to the remote proofer, it has been our experience that the remote proofing project will fail. And we say “and/or”, because if you are supplying the communications lines and the proofer, you are probably going to be able to fully control the steps you will have to take to deliver the proof. This makes your life a little easier and puts you in total control of the workflow. If you supply the device and the connection, you probably won’t want your customer to use the output device for their own purposes. This will also make the whole process more expensive for you.

If the customer is using the output device for their own purposes, or let’s say, they own it and are letting you output to it from your remote site, they may want to maintain full control over the device. In that case, you may be delivering your proofs into a queue (for example, in the case of a trade shop delivering files to an ad agency’s Fiery-type device or other color digital copier front-end.) When you’ve delivered the file, you send your customer an email (we’ve implemented setups where this is done automatically) that the file is in the queue. When your customer is ready to output, they go into their screen and move your job from “hold” to “active”.


If you own the proofing device, and the communications lines, you’re going to have to decide if you want the customer to be able to print their own work on the output device. This means that you may have to keep track of how many prints the customer makes that aren’t related to your work with the customer. You’ll want to recover the costs of the supplies for any work you aren’t generating. You’ll also have a higher likelihood of media jams and service calls for the proofer, because chances are the customer will have multiple users taking advantage of the cool color printer. Finally, if the proofer becomes very popular at the customer site, you may have to wait in line to get your proofs delivered over the remote connection. This is a big issue to consider.

Communications Lines

First of all, before you say, “I’m going to use the Internet for remote proofing,” or, “Let’s use ISDN for remote proofing”, you need to consider the frequency and volume of the file transfers to the remote proofing device. The next issue will be economics: How much bandwidth can you afford to make this connection happen. This will help you determine what type of technology is right for you. After all, remote proofing at it’s most basic level is a special purpose file transfer. Fortunately, the line you put in for remote proofing can typically also be used to support other applications (i.e., a robust, high speed Internet connection will serve many purposes besides the remote proofing application.)

A rule of thumb when selecting what type and size of communication line to use is what we call “the one hour rule”. Simply put, this rule says if any proof will take more than an hour to deliver, you need to examine other options for communication. For example, with a single direct ISDN line you can deliver about 50 megabytes in an hour. A dedicated, private T-1 line (from your site to a single remote site), can deliver upwards of 600 megabytes per hour. Internet file transfer speeds can vary depending on the ISP and type of connection you have purchased, but with a Tier-1 Internet T-1, you can expect reliable delivery of over 400mb per hour.

A direct connect ISDN setup is a viable option particularly when there are strong security needs (i.e., the customer won’t let you deliver their jobs over the Internet—a rarity these days, with advanced encryption techniques and more savvy IT departments at corporations.) Combining multiple ISDN lines can achieve performance of as much as 200mb per hour.

Internet file transfer speeds can vary depending on the ISP and type of connection you have purchased, but with a Tier-1 Internet T-1, you can expect reliable delivery of over 400mb per hour.

A direct connect ISDN setup is a viable option particularly when there are strong security needs (i.e., the customer won't let you deliver their jobs over the Internet- a rarity these days, with advanced encryption techniques and more savvy IT departments at corporations). Combining multiple ISDN BRI lines can achieve performance of as much as 200mb per hour. ISDN PRI lines can provide multiples of that speed.

Dedicated T-1 lines are practical only when the customer is a relatively short distance away (private T-1 lines are priced by the distance), or the volume is so high that a line dedicated for this application just makes economic sense.

Frame Relay networks can be practical for multiple sites that are often sending to one another. A good example of this is a distribute and print type of application, but that really is a whole other ballgame. Perhaps a better example would be a greeting card company with a central design site and several manufacturing facilities. Proofs might need to be generated often at each of the manufacturing sites, or conversely at the design site from work done at each of the printing plants.

Perhaps the best communication technology of all for remote proofing applications is the Internet. Since we all need to have an Internet connection anyway (for email, digital job deliveries, research and web surfing and the emerging e-commerce applications), why not use the same pipe for this application.

For an Internet connection to work for remote proofing, it must be an “up-all-the-time” connection. Modems will not cut it, because of their low speed and low reliability. ISDN Internet services typically can’t be used, because they are “dial-up” services just like analog modems and you won’t be able to predict in all cases when to dial-up the line so the proof can be delivered.

The lowest cost of the always-on Internet services is called DSL (Digital Subscriber Line.) DSL, at this writing, is available in about 30 cities nationwide but availability is growing quickly. You’re going to want a type of connection called Symmetrical DSL (SDSL) not Asymmetrical (ADSL – the type of DSL you see advertised on a billboard for $39.00/month). The difference is that with SDSL, you have the same speed sending and receiving, which is essential for graphic arts applications. ADSL is designed for web surfing, where downloading is much, much faster than uploading because the service providers expect you to click once, then watch a web site or streaming video link come onto your screen. ADSL is perfect for home, but not useful for graphic arts file transfer or remote proofing.

SDSL is available in speeds ranging from 128K (the same speed as an ISDN line—about 50mb can be delivered in an hour) up to 1.544mbps (the same speed as a T-1 or as much as 400mb per hour.) Keep in mind that DSL availability is not guaranteed, even in the areas of the country where the service is offered. And distance and other telephone company technical issues can often prevent the service from being installed at your site at all, or may limit you to a slower speed. Typically, if available, you will get speed choices of 128K and 384K.

Cable Modems have sort of come and gone from the hype of the telecom world, with most people realizing that it’s going to be a long time before any sort of business-class, generally available service that uses broadband digital cable will be obtainable to our business locations. When and if this happens, these services do offer an “up all the time” type of service, and may be able to provide the high-performance, reliable type of service that we in the graphic arts require.

Beyond DSL, you’re looking at Internet T-1 or even multiple Internet T-1 (a popular new option called “N by T or NxT”, which combines T-1 lines into a bigger connection) lines for high performance Internet service. To do remote proofing over the Internet, you will need to use a Tier-1 Internet provider. These are the companies (typically household names like AT&T, MCI/Worldcom or Sprint) who own the large backbone networks. These companies are able to provide uncongested, reliable bandwidth for mission critical applications like remote proofing. As we discussed before, an Internet T-1 line can deliver as much as 400mb per hour to a remote site; but not if you are using a local ISP who has oversold or “oversubscribed” his bandwidth by an order of 10 to 1 (meaning he’s sold 10 times the bandwidth he has contracted for to the Internet backbone… not uncommon today.) We call this oversubscription “the healthclub model”, and isn’t going to provide great performance for your remote proofing application.

As the Internet becomes more reliable and demonstrates even higher performance than available today (something which is happening very quickly with the billions of dollars being pumped into it), we expect virtually all remote proofing applications will take place over the Internet. With new technology such as RealTimeProof (discussed later) and the Internet Printing Protocol (IPP), a new standards-based printing architecture from Hewlett-packard and Microsoft coming online, this will become easier and easier.

Delivering the Proofs

We’ve covered the most popular technologies for digital delivery. We now have a pipe to send the files from your site to the remote site. Now let’s talk about how to get the files on the output device at the remote end.

Some of the most popular and affordable proofing devices are the Imation Rainbow, the Polaroid DryJet and PolaProof (the newer, smaller format unit is especially popular for remote proofing) and the Epson 5000. Each of these units uses a different technology for imaging the proof. They all come with various software packages to handle the digital files. It is beyond the scope of this discussion to describe all the different proofing technologies and printing methods these devices use. The good news is, over the last couple of years, there have emerged three easy, standards-based ways to deliver files to these proofers.

First, is the hotfolder method. All the above units can support delivery by hotfolder, and just about every professional quality machine that we’ve investigated supports this method. This means that there is a folder on the machine that runs the RIP (whether it be a Macintosh or a Windows NT machine, or a proprietary RIP like the Fiery in the Epson.) The RIP software is monitoring that folder and when a file is dropped into it, the RIP picks it up and begins to image the file. Typically, the file that will be delivered to this hotfolder is a Postscript file. That means that at the end of the connection generating the file, the user must print to a file, and use a PPD (Postscript Printer Description) file that matches the target output device. This is extremely important, because if you do not set up the PPD to match the destination proofer, it is very possible that the print job will cause an error on the device, and you will have to re-create and re-send the file.

The second method uses the “desktop printer” on the Macintosh. Later versions of the Macintosh operating system (from system 8 on up) support this method. Basically, it is possible to drop a file onto the desktop printer, which subsequently sends the file to that device. We use a simple Macintosh-based FTP Server called NetPresenz (from an Australian software developer called Stairways Software) to deliver the files to the desktop printer. We have also used this software for “hot folder”-based applications as described above. The best thing about using this method is that you can deliver a proof to almost any output device. As long as the printer or proofer is available in the Macintosh “chooser”, you can use this method for remote proofing. This opens up a wide range of printers that can be used for remote proofing applications, from the least expensive (i.e., $199.00) InkJet on up.

There are some caveats to both of these methods. First and foremost, you need to make sure that when the file arrives and is dropped onto the hotfolder, that it is all there (i.e., a complete file transfer.) This sounds strange, but it is possible when using some software to deliver the file to the destination machine, that the hotfolder will pick up a “partial” copy of the file. This will result in the file not imaging at all, or generating an error on the proofer. A good workaround to this is to use an applescript on a Mac-based RIP proofer. Deliver the file to one folder, make sure it has been completely received, then have the Applescript drop it into the hotfolder. Applescripts that do this sort of thing are easy to create and you should be able to find one on the Internet that someone else has already created for this purpose.

Second, there isn’t a lot of error checking with either of these methods. Once the file is delivered and imaging starts, you’re pretty much holding your breath until the proof comes out. That’s the bad news. The good news is, these methods are actually very, very reliable and with a little testing you’ll generate useable proofs almost every time.

Finally, we mentioned a third method of delivering the files. This is referred to as LPR, which is a standard Unix method that has been around for many years. It is supported by the Fiery RIPs, the Windows NT-based Harlequin RIP used with the and by standard Windows NT and Windows 2000 servers with the Microsoft TCP/IP printing services (an add-on option that is free.) Any RIP that runs on a Unix machine will be able to support printing with this protocol.

Consumables Issues

Someone has to change the consumables (i.e., the proofing media, toner, ink, what have you) in the proofer. And someone has to pay for them. And someone has to maintain the device and calibrate it. This is one of the most important and neglected aspects of making remote proofing a success. Without considering this point and putting procedures in place to handle these issues, the project will fail.

If you are paying for the device at the remote end, you are probably going to have to be responsible for the consumables. You may be able to convince your customer to assign a staffer to the care and feeding of the proofer. This will be difficult, because calibration alone can take 15 minutes to half an hour on most devices. You will also have to replenish the consumables, and just getting someone at the client to tell you that they’ve run out or are getting low can be a problem. You certainly don’t want to run out of supplies when you are on a deadline. You especially don’t want this to happen on a Friday afternoon, when it’ll be next to impossible to get the supplies to the site in time for a weekend of production.



You may want to consider contracting with a graphic arts dealer to periodically visit the site. Once you have a regular workflow, and know what the frequency and volume of the output will be, you’ll be able to set up a calendar with your dealer for the visits. Keep in mind that it may be necessary to calibrate the proofer more often than you will require additional consumables. In major metropolitan areas, this shouldn’t be an issue-- the dealer personnel are more than likely in the area of your customer on a regular basis and can stop by to perform the calibration. If the customer site is more remote, you may need to go back to plan A and have someone on staff learn how to run the calibration routine.

There are going to be times when you have media jams or other problems with the device. The same dealer we talked about above can handle maintenance issues; preventive maintenance performed when the consumables are replenished can preempt certain types of problems from happening. But there will be times when the equipment breaks and you’ll need to plan for these eventualities. In a high volume, mission critical application, this might require having a second printer onsite as a standby. Or having 24 by 7 maintenance on the device, so you can dispatch a technician no matter when the failure occurs. It also might going back to using Fedex for shipping hardcopy proofs, or it might mean using one of the new product mentioned below to suffice with a softproof instead of hardcopy.

In the case of the less expensive InkJet printers, all of these issues become less important. If the printer fails, you can probably go out and buy a new one while you wait for the broken one to be repaired by the manufacturer. And it’s affordable to keep a spare onsite. Of course, what you gain in simplicity and low-cost, you sacrifice in print quality.

New products

A few new products have recently come out that should be of interest to anyone considering implementing remote proofing.

First, there is a new product called RealTimeProof (DAX currently offers this as DAXProof) from a new company called RealTimeImage, Inc. in San Mateo, California. This Internet-based service supports softproofing (i.e., on-screen proofing) including a tool set that lets you measure color (RGB and CMYK), dimensioning and to place notes on the image for discussion with other participants. It runs in a web browser with a plug-in, and is a service that you pay for as you use, rather than having to buy software or equipment. The service also delivers proofs to a remote site hardcopy proofer.

RealTimeProof has it’s own compression and encryption built-in (for speed and security, respectively), as well as support for ICC color profiles and it is very easy to use. It works with all the popular file formats (you don’t have to create postscript first… you simply upload the image or page file to the server) and virtually any output device.

Another new product of great interest is Adobe’s PressReady. The list price is only $249.00 and it is basically an Adobe RIP that runs on the Macintosh or on Windows NT. This product makes a variety of low cost InkJet printers from Epson, Cannon and Hewlett-Packard into viable postscript output devices. To quote Adobe’s literature on the product, “PressReady prints are intended to help communicate your intentions to your client and your print provider, but they are not intended to replace final/contract proofs.” Fortunately, this is one of the “big bang” applications for remote proofing: Cutting down on the iterations in the creative process.

PressReady supports ICC color profiles supporting industry standards like SWOP, Euroscale and Japan Standard, enabling you to generate output that simulates that you would obtain on a particular printing press.

Microsoft Windows 2000 also promises to provide a really great new platform for remote proofing applications. Microsoft has integrated printing with their Internet architecture in this new operating system. Printers will now have URLs, just like web sites (i.e., myprinter.mycompany.com) and you will be able to choose this URL as an output device for programs running on Windows NT. An example from Microsoft’s Window 2000 fact sheet says “a mail-order company can send its new catalog directly to the publisher's printer, provided the mail order company has permission from the publisher and the URL of the publisher's printer.” It shouldn’t be difficult to support this from Macintosh-based client computers, either, since you can already use Windows NT spoolers from the Mac, and Windows 2000 has much better support for Macintosh clients than previous versions of Windows.

In Summary

Remote Proofing is indeed a viable tool for speeding up the production cycle and cutting down on time consuming delivery of proofs via FedEx or couriers. It doesn’t take a huge amount of resources to get started using this productive workflow, and it can be a tremendous value-add in the increasingly competitive marketplace in which we find ourselves today.

On a personal note, DAX was formed on the proverbial napkin on the basis of a remote proofing project back in 1995. Back then, it was incredibly difficult to implement this type of workflow successfully. Two of the founders of DAX (one at the time working for Scitex, one a well known industry consultant) had a client who wanted to do remote proofing from New York to their customer in Boston. In those days, you really needed to be a telecom guru to do such a project. Needless to say, we’ve come a long way in 5 years!

E-commerce: positive change for the printing industry? Part 3: How do printers feel about all this?

Originally appeared in High Volume Printing magazine
by Chuck Gehman

In the first article in this series, (High Volume Printing, June 2000), subtitled “The dotcoms… who are they and what do they do,” we talked about the many “dotcom” companies that have emerged to serve the e-commerce needs of the printing industry. We provided some information about their business models and market focus.

Our second installment in the August 2000 edition of High Volume Printing, subtitled “Supply chain benefits or loss of control?” discussed in some detail the debate that rages among printers about whether or not these companies provide value to their businesses, and to what extent these companies are working to provide features and benefits that address the industry’s needs.

In this final installment, we’ll talk to some printers who are using these systems and bring to light some of the successes they have had, some concerns that they see and some of the hope they have placed in these systems.

For this article, we talked to users of the “big four” systems: Collabria, Impresse, Noosh and printCafe as well as a newcomer called Printable.com that has a different approach to the marketplace. Since the first article, a large number of new “dotcom” vendors have launched their businesses, and it wouldn’t be fair to make it seem like the five companies whose users we talked to are the only viable companies in this market space. We were readily able to find users of these systems to talk to, however, and these users can help us to understand many of the issues around selecting and using a system from any of the dotcom companies.

Who are these companies?

The companies we talked to seem to represent a pretty good cross-section of the marketplace for these services in general. They range from a single site, very specialized printer in St. Louis called NJC Printing, with 10 employees and $1.5 million in sales, to American Mailwell, a company that calls itself “the largest commercial printer in North America” with $2.5 billion in sales, about 15,000 employees and 140 facilities.

It seems that size doesn’t matter in this equation. All of the companies we spoke to found that these systems are both of great benefit to their own organizations and an important tool to help them address the demands their customers are placing on them.

Each of the companies we spoke with mentioned that they are pretty early in the deployment of their particular system, although some have been using it for over a year. They are most certainly early adopters, with many of them participating in the vendor’s pre-release or beta programs.

All of the companies we spoke with stated that they had recently received RFPs (Request for Proposal) from customers that required some sort of e-commerce or on-line ordering component as a requirement to submit a bid. This is an interesting point, because it means that our fear of being “left behind”, or losing customers because we haven’t chosen a system may be justified.

In each case, we spoke with a key decision maker for each of the companies involved. NJC Printing is a small commercial printer, described by it’s President, Mike Corson , as “having roots in the quick printer market.” NJC uses the Printable system.

Sun Printing House is a Philadelphia based printer founded in 1880. Cindy Wollman is the President of Sun Printing House, which has been family owned and operated for four generations. They specialize in printing highly regulated, specialized materials for Pharmaceutical companies. Cindy refers to her company as a “Critical Information Provider.” Sun uses the printCafe system.

Rob Wainer is the President of Sunset Stationers in Wharton, New Jersey. Sunset specializes in corporate identity materials (including report covers, pocket folders, business cards, response cards and four color sell sheets) and is a Collabria user.

Jay Carlson is president of Wallace Carlson, a Minnetonka, Minnesota-based commercial sheet fed operation, printing four, five and six color products. They are Impresse users.

ColorGraphics, Inc. has four plants in Los Angeles, San Francisco, Orange County, California and in Seattle, Washington. They specialize in annual reports, brochures and other high-end products, with both sheetfed and web capabilities. Noosh is their primary system, but they also use Impresse because of customer requirements. We spoke with Rob Fucillo, Sales Representative.

Last but certainly not least, American Mailwell describes themselves as a $2.5 billion New York Stock Exchange listed company (MWL), the largest commercial printer in North America. They print a wide variety of products at their 140 sites. We spoke with David Holt, who is CEO of PrintVentures, Mailwell’s ebusiness operation.

Company Name	Contact	No. of Employees	Revenues	Solution Chosen
NJC Printing	Mike Corson, President	10	$1.5 million	Printable
Sun Printing House	Cindy Wollman, President	33	$5 million	PrintCafe
Sunset Stationers	Rob Wainer, President	50	$6 million	Collabria
Wallace Carlson Company	Jay Carlson, President	55	$8 million	Impresse
ColorGraphics, Inc.	James Fucillo, Sales	500	$150 million	Noosh
American Mailwell	David Holt, CEO of Mailwell’s PrintVentures	15,000	$ 2.5 billion	printCafe

Choosing a System and a Vendor

All of these companies had been investigating this trend for some time. Some of the companies, like ColorGraphics and Mailwell, had been planning to develop their own system internally to address some or all of these needs.

“During the process of building our own internal system to do something similar, Noosh and Impresse launched and we took a look at their systems,” says James Fucillo with ColorGraphics, Inc. “We do quite a bit of work for Bank of America, and they were fully on board with Noosh, so that got us going with them.”

Similarly, Mailwell was in the process of developing a “branded electronic workflow,” according to David Holt. They have chosen to combine printCafe, Sprockets.com (a collaboration service) and their own internally developed ImageLink system to provide a comprehensive suite of customer focused tools. Holt says that after reviewing a large number of providers, printCafe was their choice.

Mailwell had established three criteria as the most important in their selection of the printCafe system. According to Holt, “First, it didn’t add to our cost of doing business with our customers. Second, it had good web front end tools, that made it simple for their customers, and finally, they had integrated these tools with a solid, back end ERP system” (ERP is Enterprise Resource Planning, and is an internal MIS application.) Mailwell is a consolidator, and they already had installed systems from three of the companies that printCafe either purchased or merged with: Hagen, Logic and PSI. “We’d been watching the ebusiness landscape and were well aware of the players; we began to establish relationships at Seybold Boston 2000.”

Industry consultants and trade journals can make all the difference in choosing a solution that is as important as e-commerce is for your business. And don’t forget to carefully look at what your customers are doing and what their needs are.

Sunset Stationers found out about the Collabria solution from Ira Gold, a well known industry consultant. They’ve been using the system for a year and a half now, so they were really an early adopter. Says Rob Wainer, President, “I was looking at two other systems that were also in their infancy. I thought Collabria was more robust, not only allowing my client to see a picture of their product, but [it] provided back-end reporting functions that were what the customers wanted.” One of the solutions that Wainer investigated before choosing Collabria was a software package that had been developed by a fellow printer.

According to Cindy Wollman, Sun’s choice was printCafe, because “e-commerce is customer driven. Our customers wanted ordering solutions. Taking a look at what was in the marketplace, we felt that a custom branded web site met our needs and our customers needs better than any other product.” As a user of PSI, which is another printCafe company, Wollman liked the integration of the customer web experience with her internal MIS functions. Like the others, Wollman looked at at least two other major products before making the decision to go with her choice of vendor.

Jay Carlson’s decision for Wallace Carlson was really based on both confidence in the vendor, and technical or “look and feel” considerations. “The number one reason [for choosing Impresse] was their attitude toward making it a win-win for the vendor and the customer. And their willingness to listen and respond to our needs. Also, they were price competitive and I thought it was a better program.”

Similarly, NJC’s Mike Corson says Printable really listened to their needs, and of the vendors he spoke with (which included Collabria and MediaFlex) was the most willing to change the system to fit his company’s specialized requirements. Corson had begun investigating his company’s Internet options and strategy over a year ago, with the goal to distinguish themselves from the competition.

Technical Details

All of the companies we spoke with had either just completed an upgrade of their Internet connection, and/or their workstations for other purposes. So they didn’t need to add any additional network equipment or buy new PCs or Macintosh computers to work with the new system.

NJC’s Corson said that while he didn’t need to upgrade workstations or his network to support the Printable system, the types of jobs he is receiving from customers mandated the upgrades. “A couple of years ago when I talked to clients about Print-on-Demand applications and electronic file delivery, what we saw was startled looks and [customers that were] not quite sure what we were talking about. Now those same customers are calling and asking if we can do those things.”

Some mentioned that as they extend the system further into their operation, they may need to add PCs. For example, press personnel and post-press staffers rarely have access to PCs in their work areas, and that may be necessary as these systems extend throughout the organization.

All of the companies we spoke with had detailed conversations with their vendors about security and privacy concerns. In fact, Mailwell’s Holt had printCafe’s security reviewed by an outside technology auditing firm, both from an architecture and technology standpoint, and Holt says “We are satisfied.”

Sunset’s Wainer is confident that Collabria is keeping his information secure, but pragmatically states, “Even if my competitor would know the name of the people I’m dealing with, the existing print buyers are called upon by competitors every day. My relationship is building the business, and I’m confident in our abilities.”

How Long Did it Take to go Operational?

Both internal issues and vendor software and operation challenges can significantly impact how long it takes to go operational with these applications.

According to James Fucillo, ColorGraphics experience implementing the Noosh system took six or seven months, all told. “We were trained and ready to go in a couple of weeks… the learning curve for our salespeople to become accustomed to using it (i.e., not faxing estimates, etc.)” was what really took the time.

Similarly, Mailwell’s planning process and system selection was what took the real time. According to Holt, “We’re past planning and in the deployment stage now. We have a web site going with Time Warner. Our first fourteen sites are coming up in the next six weeks. Live deployments, not beta.”

Sunset’s Wainer says “We were an early site, so it took about two months. We were [Collabria’s] first site on the east coast, and the third site for the product.” As an early adopter, things can take longer than perhaps initially expected.

Sun Printing House is still in their initial deployment of the system. Again, as an early adopter, it can take time for both the vendor and internal systems and personnel to come up to speed. printCafe was announced in February, and Sun signed on in March. Wollman says, “By mid-September, we’ll be operational. We have a system integration team [internally] that includes sales, estimating, customer service and our operations manager. PrintCafe has been onsite and spent considerable time. Marc Olin himself came to make sure things were going well.” Perhaps most importantly, Wollman adds “We’ve done a terrific job educating our workforce about what’s going on. Our company newsletter keeps people involved. Even the pressmen have seen advertisements [for printCafe] in their trade journals and are very excited about the opportunities.”

Another early adopter, Impresse user Wallace Carlson’s Jay Carlson says, “It doesn’t take long to get up and running. When we got hooked up in January, they were still in their infancy in terms of understanding what they had and what to do with it. They listened to our input and we were very impressed about their listening to our likes and dislikes.”

NJC’s Corson is still putting the finishing touches on their system. “We’ve been working with them for about 6 months. We’re developing our version of Printable’s Online Customized Printing System for our customers. It will be entirely branded NJC when we roll it out to our customers.”

Who is Using the System?

Keep in mind that both your own people and your customers are going to have to enjoy using this new system. You will need to put a process in place through which you can achieve “buy-in” from all the constituencies, both within your own organization and with your customers.

All of the interviewees told us that they were using the system with only their largest customers at this time, and that this was a conscious decision.

According to ColorGraphics’s Fucillo, “ We have five or six customers on Noosh, but 100% of their jobs come through it. As far as [total] jobs, it’s upwards of 30% of the jobs coming through. That was one of our goals… it wasn’t going to be viable until we reached 30 or 40% of the jobs coming through [the system.] We have 4 sales reps that use it on a regular basis. We have a total of 15 reps. They are the main contact point for usage, but CSRs are on the system, too and we have production filling in some voids.”

Mailwell’s Holt says initially, estimating, order entry and sales people will be using the web interface, while the backend ERP system will be used primarily by the financial, procurement and production people.

Sunset’s Wainer has 15 customers using the system at this time. “I offered it to my biggest customers first, because this is the type of solution where every one of the customers I show it to says they want it. [Because] there is a real cost to getting this up and running, the volume of the client needs has to be high enough to justify putting the system in. You’re basically setting up a custom web site that is specific to the customer”

Sun’s Wollman concurs, “Initially, we have one [customer] that it is targeted for. We’ve presented it to five others that are very excited about the opportunities. They aren’t quite ready.”

“How many are set-up versus how many are actually using it are two different things,” says Wallace Carlson’s Jay Carlson, “Getting customers to feel comfortable with it is the challenge. A large number of our customers are set up to use it, but it’s a slow adoption.”

Interestingly, the Printable system, as implemented at NJC, will at first be used primarily by pre-press personnel, which was in contrast to the other users we spoke with. Says Corson, “It’s a customer service tool, number one. This helps us move the workflow up the chain a little bit. A lot of our products are custom marketing documents for a corporation’s field sales personnel, primarily in the financial services field.” The system will enable NJC’s personnel to process files from the customer that are substantially more complete than what they receive today, saving time for the client and the prepress staffers. Financial transactions are secondary in Corson’s workflow.

What are the Benefits?

In addition to satisfying customer’s RFP requirements, all of the companies we spoke to mentioned that they felt the e-commerce solution brought some important benefits to their companies.

According to ColorGraphics’ Fucillo, the Noosh system provides a “one-stop” for the information everyone is looking for, whether it is internal personnel or customers. “We try really hard to get all the information into the system so everyone knows what is going on. Another thing is with that information comes accountability as to who is entering that information. Printers are dumped on as the people who have to store the information [about jobs], understand it, and locate it on a moment’s notice. Now customers are accountable for their own information [because they are the ones who are entering it into the system]” says Fucillo.

Jay Carlson, from Wallace Carlson, also stressed the accountability that the Impresse system brings. Not just between the printer and the customer, but also with third parties that may be involved in jobs. “It’s a time saver,” he says. “It lets the salespeople spend more time selling and gives them more opportunities for business. It’s really an asset and an advantage. We’re evangelizing more than our customers coming and asking for it… once they’ve had a chance to experience it and have a good experience, they’ll be pushing it pretty hard.”

Another important aspect brought to light by Dave Holt at Mailwell was printCafe’s user interface. “Since Mailwell was built through acquisition and has such a large number of locations, this technology helps us put one face toward our customers. We will be easier to do business with for our customers”, he says.

Rob Wainer from Sunset stresses the perception of his larger customers in using the Collabria system as extremely important, saying “The perception from the customer or prospect that we’re a leading edge company.” Adding that “the actual implementation allows me to provide better service to [them.]” Both of which are extremely important when you are a small company going after business from large, multinational corporations.

“This system is going to solidify my relationships with my clients to the extent where they are gaining added value and I’m distinguishing myself from my competition. It is important for a company of our size category to respond to competitive pressures,” says NJC’s Corson.

In Summary

Without exception, the executives we spoke with for this article feel that this way of doing business represents the future of our industry.

Not only are there many, many companies creating a wide variety of ebusiness applications for our industry, but there are just as many opinions about what is the correct way to do these things.

It appears that there may not be one application that addresses the needs of every type of company in our industry, and more importantly, we may need to embrace more than one type of technology to address the needs of our own marketplace. Just as we use many different Internet sites to accomplish our needs for things like information and communication, we may need to strategically select a toolset that we can bring to bear to address particular customer needs.

E-commerce: positive change for the printing industry? Part 2: Supply chain benefits or loss of control?

Originally appeared in High Volume Printing magazine
By Chuck Gehman

In our first installment (High Volume Printing, June 2000, page 74), we identified the types of companies that are promoting “dotcom” services to the graphic communications industry. We also highlighted some of the more prominent companies addressing this marketplace.

The one type of e-commerce company that is creating the most controversy and that is the loudest (in terms of marketing and advertising spending) is the category we described as “the Intermediaries”. These are the archetypal “business to business e-commerce” companies who want to become part of the transaction between print buyer and seller. For this article, we felt it was important to take a step back and really examine what is important to a printing company when it comes to these companies and their services.

It is interesting to note that in the time between the first installment in this series and this article, market forces have caused a number of these companies to postpone IPO plans, layoff employees and re-evaluate their business models. Keeping that in mind, it is truly amazing that still more companies have emerged since the first article who are also targeting the graphic communications industry.

Will we be able to just let this trend go by and continue doing business with the status quo, or do we need to be active participants and make decisions that will change the face of our business? It’s tempting (especially in light of recent events) to just wait and see what happens, but there may be significant benefits in making a proactive decision to work with these e-commerce companies.

Supply Chain

To understand the benefits that e-commerce can offer to printers, we have to take a closer look at the supply chain in the printing industry. I’m sure we’ve all heard the analogy of a printing company and a car company… we build the car, but use fenders and doors supplied by the customer. I think we can all see some validity in that analogy, but the supply chain really addresses broader issues than the customer bringing their own parts.

The fact is, the customer (and various vendors the customer works with, like designers and photographers) is actually a key part of the manufacturing process in our industry. The supply chain in the printing industry goes as far “upstream” as the designer working in their home studio, and as far “downstream” as the bindery, where the end product is finished for delivery to the “end user”.

Even the most efficient operation spends time on what could be considered unnecessary interaction with customers and suppliers: fixing problems, correcting misunderstandings, attempting to agree on color issues, “signing off” on approvals and making last minute changes. Talking to customers is a good thing, however I don’t think anyone disagree that time spent solving problems would be better spent avoiding them altogether.

This is where e-commerce (or really, the new buzzword “e-production”) holds the promise of bringing real benefits to printers. By integrating and automating both the workflow and the transactions that add unnecessary iterations to an already labor intensive process, printing company personnel are free to focus on the real manufacturing process of getting ink on paper.

If you look closely at your operation today, you may well discover that your company is already participating in e-commerce. The fact is that many companies have been using EDI (Electronic Data Interchange) for years to exchange purchase orders. The GCA (Graphic Communication Association) has actively promoted the use of EDI for things like paper purchasing for many years now. Using EDI, printers and their suppliers have cut back on the amount of paper work changing hands, simplified ordering and billing, and reduced errors and miscommunication. In many ways, today’s Business to Business (B2B) e-commerce is really a sophisticated “next generation” of the EDI concept.

E-commerce may not benefit every print-buyer-printer relationship. If you are a printer whose customers print one magazine with you, month in and month out for many years (interrupted by a contract negotiation, perhaps every 5 years, that takes place on a golf course), you are probably not going to execute that transaction in an e-commerce system. If this type of contract is your standard relationship, at the current state of the art, you may not see benefits from going “e”, other than perhaps electronically exchanging POs for paper purchases or other transactions between both companies.

But it is likely that “e-production” can help just about every enterprise in the graphic communications industry, by streamlining the supply chain. If you can more easily provide status information, exchange previously paper documents and even content files, obtain approvals electronically, and generally improve interaction with your customers, everyone wins.

Some of these new services are providing useful production tools like job ticketing, job status (both for internal and for customer communications), and even automated preflighting. Not to mention the fact that these systems can provide extremely high-tech job estimating and job costing that can help your bottom line.

Because of the number of companies in the market vying for both the printer’s business and the business of the print buyers, there will be tremendous competition among them to offer the greatest feature set, at the best price. This means we will see great innovations that, prior to this marketplace phenomenon, would have only been available to companies that would internally develop software or spend an enormous amount of money to buy sophisticated software packages (along with service fees to the vendor, and internal staff to support them.)

We basically get all the benefits, but for what amounts to a small monthly fee that in some cases is similar to what you would pay a company like ADP to do your payroll. Thinking of these vendors in this way, you may start to realize that the real offered far outweigh any perceived loss of control.

Advantages to the buyer

Clearly, a lot of the FUD (fear, uncertainty and doubt) that exists around e-commerce in the printing industry is based on the fact that many of these companies have aggressively targeted the printing company’s customers. We’ve seen this before in our industry, and to many, this is spelled “get your checkbook out.” Some prominent executives in the printing industry have used stronger words.

When you listen to customers who have endorsed these new systems, it is easy to understand why they are naturally gravitating toward eproduction. A good example of this is Bank of America. Its national Creative Services team, headquartered in San Francisco, California, handles over $50 million in print services. As a user of the Noosh system, says Sue Ward, VP and Director of Commercial Print, “Bank of America is now able to look into the system and see exactly what is going on and where things stand during production.” Prior to using the on-line system, the bank had three separate internal systems, none of which provided the complete picture of where all their jobs were at any given time.

If you are one of Bank of America’s print vendors, you’re going to have a difficult time saying no when they ask you to participate in this scenario. Fortunately, the e-commerce providers have listened to feedback, and have changed their approach and pricing models to be much more printer-friendly. This includes, on the part of some of the vendors, no charge to the printer—only the print buyers are charged transaction fees on jobs run through the system. This makes a lot of sense, since in order to obtain the benefits inherent in the systems for a print buyer, their company would previously have had to buy many thousands of dollars worth of software and systems to get the same result.

Printing as a commodity?

Another big uncertainty that printing companies have with e-commerce is that their business will look like a commodity in the marketplace. A big objection is that price will become the only consideration that the buyer cares about when purchasing print through these systems. While it is beginning to appear that this just isn’t true, it is certainly a valid concern.

To address these issues, companies like Collabria, printCafe, httprint, Printable and others are all focusing their development and marketing on the printing community, rather than the print buyers. When you, as a printing company, choose to work with one of these vendors, the end benefit will be either a procurement site branded with your company’s name, or an extension of your existing web site that provides the e-commerce functionality. Customers see your brand, with the e-commerce vendor’s technology behind it.

Sunnyvale, California printing company R.W. Nielsen implemented the Collabria system, and uses it as a sales tool when calling on new prospects. According to Eric Nielsen, the firm’s president, “We send them to a demo site Collabria has set up that’s branded with our logo. When it piques someone’s interest, we give them a complete demonstration and leave them with the URL, password and user ID on the demo site so they can explore on their own. We haven’t had one demo where people say, ‘I’m not interested in this.’”

These systems will charge you a fee, typically either for setting up the system, and then a small transaction charge for each completed job. Some just charge the transaction fee and provide the setup at no charge to help you get started. Many printers feel this approach is a less intrusive way of “going e”.

More than one system

According to a recently circulated Trendwatch FastFact (#80, June 27^th, 2000, find out more at www.trendwatch.com), only 4% of print businesses are using a “dotcom” company. While that may be true at this time, it doesn’t seem like a number that will remain static.

One particularly important reason to align your company with an e-commerce vendor early, is, as discussed previously, the possibility that your customers may end up choosing one of these systems for you. Worse, they could choose more than one system for you. The possibility is very real that, just as we’ve all had to keep copies of PageMaker and Quark installed on our Macintosh computers, we may now have to subscribe to more than one e-commerce system and have our staff learn how to use them.

Some printers, like R. R. Donnelley, MailWell and Consolidated Graphics, have already announced relationships with e-commerce providers. In our next installment, we’ll talk to some of these companies and find out how they chose their vendors and what drove them to be proactive about making this move.

It is possible that by embracing a system early, doing your due diligence and educating your employees, your company can substantially influence how your customers will adopt these technologies. This will not only prevent a loss of control for your company, but more than likely will result in your company becoming a leader in this important area and providing new benefits to customers that will make them more loyal to your company.

Existing Systems and Infrastructure

As these service providers extend their reach, one big issue is how they will interface to our existing systems. For our companies to reap the benefits inherent in “e-production”, we will need integration.

One of the features I like most about using my American Express card is that I can download the monthly statement detail into Quicken on my home PC. This is a very rudimentary example of the type of integration that we can initially expect from these services. But we’re going to need more, and soon.

We must be able to plug the data from these services into our accounting and estimating systems and look at historical data from jobs that are complete. We’re going to want to upload our production data into these systems so we can use it to job cost and benchmark that data against prospective new jobs we’re going to bid on.

Beyond the accounting systems, we’ll need to have an interface to our workflow and scheduling systems that will allow us to integrate the production information we need. We need both content (i.e., production files) and context (the information about the jobs: accounting, personnel, scheduling, etc. which is sometimes referred to as “metadata”) in the systems to have them really benefit our manufacturing operations.

Perhaps the most ambitious company in this area is printCafe. They have acquired several companies that are deeply involved in the IT area of a large number of printing companies, both MIS (management information systems) and production. Their goal is to seamlessly integrate both the e-commerce aspects of e-production and IT functions of the printing company into one neat package. The business integration of the many companies they’ve acquired will be quite a chore unto itself, but if successful (and there’s no reason to doubt they won’t be), this could be the system to beat.

Finally, these systems may require changes to your current IT infrastructure in order for them to work. For example, do all your personnel have access to the corporate LAN and/or a robust Internet connection?

Emerging trends

While a tremendous amount of seemingly proprietary technology is being built in the labs of companies from Boston to Silicon Valley, a number of groups have emerged that seek to enable these systems to communicate and inter-operate with one another. These groups may be able to fulfill the promise of “e-production” efficiencies that current services alone may not be able to provide.

The first such group to emerge is printCafe’s PCX (eProduction eCommerce eXchange) initiative, which is a specification for companies to interface to the printCafe system, and, potentially each other’s disparate systems. This group includes Digital Art Exchange, Inc. (DAX), 58k.com, Group Logic, httprint, MAN Roland, MediaFlex.com.

In May, 2000 Quad/Graphics, Quebecor World, R.R. Donnelley and Banta announced that they are working together to create “supply-chain efficiencies for industry participants worldwide by establishing standards and leveraging enabling technologies”. These efforts include what they are calling XPP, which stands for “XML for Printers and Publishers”. According to their press release, they believe that working together they will “enable customers who frequently work with multiple print providers to streamline the print process in areas such as job planning and administration. The companies will also address standards and common interfaces for administering the procurement of materials such as paper. The group will encourage broad participation among printers, customers and suppliers worldwide with the goal of enhancing industry relationships.” On July 5^th, 2000 these companies announced the inclusion of publishing company partners Meredith Corporation, Reader’s Digest Association and The New York Times Company in their efforts.

Another group has also announced a sort of consortium of vendors to promote XML standards for inter-system communication. This group is calling itself PrintTalk and includes Noosh, Impresse, Collabria, Parsec, Graphic Arts IT, Printers Software, Inc., Streamline Solutions, and Profit Control Systems. The group has begun work on an interface specification that is based on cXML (Commercial eXtensible Markup Language) and Adobe’s JDF (Job Definition Format) specification.

Summary

To quote Mills Davis, CXO and Sr. VP, Consulting Services, printCafe, “The urgency to get on with it comes from a sense that this new platform is like water freezing. It's a change of state where all the rules change. You don't want to be caught below the ice, or stuck in it. You want to be on top of it and put on your skates”.

“The process of freezing the pond may be complex, but once the water freezes, nobody will care which parts of the pond froze first. We'll just have a simple, solid foundation to skate on. The technologies beneath the Internet are very complex, but you can get to anywhere on it with a simple point and click.”

I believe it… do you?

SIDEBAR ABOUT PRINTPLANET.COM/EPRODUCTION FORUM

To find out more about the topics discussed in this article, and about e-commerce for the printing industry in general, check out the eProduction forum on PrintPlanet.com (www.printplanet.com).

Printplanet.com provides e-communities centered on a variety of topics of interest to graphic communications industry professionals.

The eProduction forum discusses Business to Business eCommerce, eProduction in the publishing world, and allied industries. Specifically process management tools and web-based print buying products available to use in end to end integration of publishing/printing production from conception to delivery. On eProduction, you will find over 1,000 of your fellow industry professional subscribers worldwide engaged in discussions of these topics 24 hours per day, 7 days per week.

E-commerce: a positive change for the printing industry? Part 1: The “dot coms”… who are they and what do they do?

Originally appeared in High Volume Printing magazine
By Chuck Gehman

This series of articles will explore the new e-commerce companies that are taking the printing industry by storm. From print buying to supplies procurement, there are new “dot com” companies that want to put themselves in the middle of almost every transaction a graphic arts company will make.

At this writing, there are at least 40 Internet companies addressing the specific needs of the printing industry. The most incredible fact about that number is that as recently as last year at this time, most of us would be hard pressed to identify even one company that could be described as a printing industry e-commerce company. Even more astounding is that more of these companies are launching their businesses seemingly everyday.

Some of these companies are “dot com” manifestations of traditional printing industry businesses; these include distributors and actual printing operations who instead of having “brick and mortar” operations choose to place their customer-facing operations on the world wide web. Some sell paper or operate exchanges for other commodities and chemicals.

But perhaps more interesting and controversial, especially to the printer or trade shop in our industry, are the companies that intend to put themselves in the middle of the transaction between buyer and seller. These companies will charge a fee to facilitate the exchange between the buyer and seller. Perhaps the biggest question we’re hearing is: do these companies provide enough value-add to our operations to justify taking a percentage of our sales. Another big fear among printers is that these companies will turn their business in to a commodity, making all the value-added services (and even personal service itself) disappear as a component in the customer relationship, leaving price as the buyer’s only consideration.

In this series of articles, we’ll attempt to give you enough information about these companies to make an educated decision about whether or not there is a value proposition in all this for your company. In this article, we’ll help you identify key companies in the marketplace, what they do and how they operate.

e-commerce business models

For the most part, the graphic arts industry e-commerce companies are all considered “business-to-business” plays (also called B2B). There are basically four different types of business models that are currently in use for B2B companies.

Forward Auction. What most people think of when they think of an auction; sellers post descriptions of products on a web site and buyers post bids to offer to buy the product.

Reverse Auction. Made popular (perhaps “invented”) by Priceline.com. Buyers post descriptions of products and services that they desire to purchase, and companies review the postings and offer (or perhaps do not) products at that price.

Internet Exchange. In this model, multiple buyers and sellers come together in an e-commerce system. A match is made between buyer and seller, with the exchange garnering a transaction fee.

Digital Marketplace or Linked Exchange. This model involves multiple exchanges sharing information and transactions, and paying each other fees or percentages for completing customer transactions.

To get more detail on each of these business models, read “Ways of Doing Business” by Greg Dalton, in the March 6^th, 2000 edition of Industry Standard magazine. In addition to those listed, a couple of other strategies have emerged in the graphic arts arena. These are:

Bulletin Board. Basically, a place on the Internet where buyers can post RFQs and sellers can read them and respond. This is a very loose definition of e-commerce; since basically, you are paying for the privilege of exposing your RFQ to a larger audience (as a buyer), or for the ability to see RFQs from a larger customer community than you may be exposed to by your normal sales channels.

Storefront. An e-commerce company provides a printing company branded e-commerce site, and provides all the backend logic and processing. Makes a company look like they have their own elaborate e-commerce system, but in fact they are using the e-commerce provider’s systems.

Companies serving the graphic arts industry

The sheer quantity of startup “dot com” companies vying for our business makes identifying and categorizing these companies a difficult task. And since their names are not often descriptive of what they do, it makes life even more difficult. For the purposes of our discussion here, we’ve broken down the various industry e-commerce companies into three distinct categories. These are: 1) Intermediaries, or companies that are attempting to broker transactions between buyers and sellers, 2) Online printing companies and 3) Companies selling supplies or trading commodities.

The Intermediaries

Our first category of e-commerce service provider is the intermediary. These are the controversial companies that want to inject themselves in the middle of your transaction and take a fee or percentage of the net or gross of the job.

Table 1 provides information about 11 of the most prominent companies providing e-commerce services to print buyers and sellers in the graphic communications industry. within this category of provider, you will see three prominent models in use by companies addressing our industry: Forward Auction, Bulletin Board and Internet Exchange. In addition, you’ll see multiple e-commerce companies coming to market using the storefront type of offering.

In a future installment, we’ll go into detail about what makes some of these companies unique, and get some feedback from their executives about their approach to the market. For now, let’s just examine what the benefits might be for your company in each of these approaches.

58K.com claims to be the printing industry’s only auction site. This claim appears to be true. Their homepage lists numerous features and benefits to both print buyers and sellers, as well as providing a small window into some of the auctions that are currently taking place in their system. The biggest criticism of auction-style e-commerce is that price is the primary motivation of the buyer, and the sellers may have a difficult time differentiating their products in any other way.

Httprint.com, Printbid.com and Printmarket.com are all examples of bulletin board systems. These systems are typically free to the print buyer, and charge a very small fee to the printer (see table 1 for examples of fees.) However, these systems do not offer a lot of functionality to either community: the primary benefit to a buyer would be to get a larger number of responses to RFQs, or an easier way of distributing them. To the seller (printer), the primary benefit might be more jobs to bid on.

The Internet Exchange category is represented by Impresse.com, Noosh, and Printcafe and Printmarket. These companies appear to be the most heavily funded and most aggressive of all the players attempting to address our industry. They also are generating the most controversy, primarily through their fee schedules (seemingly slanted toward charging the printer more) and their aggressive selling to the print buyers. However they are also offering numerous benefits to both buyers and sellers, and have only just begun to roll out the wide range of features that they have planned for their systems. Impresse and Noosh both come from the high-tech world, with executives from e-commerce and database companies at their helms; Printcafe is a unique conglomeration of graphic arts industry hardware and software companies.

Finally, the storefront approach is being implemented by Collabria (the most prominent player in this category), Mediaflex.com, and Printchannel.com. These companies charge an upfront fee to create the web site and e-commerce environment for the printing company, then take a small transaction fee (typically a flat fee) for jobs completed through the system. These systems are appealing to printers primarily because they preserve branding (“I’d rather have my company name in the buyers face than someone else’s”). However, this could backfire if buyers gravitate to the exchanges, because no one wants to have to learn how to use lots of different systems to place an order.

Online Printing Companies

The next category of industry e-commerce companies are the online printing companies. We’ve compiled a list of six of the more prominent players in this category in table 2. Some of these companies are Internet manifestations of existing companies that have been around for many years (namely, e-printshop.com and Easiest.com).

Postcard.com has been doing “e” a little bit longer, by virtue of the fact that they have always operated as a virtual printing company (doing business via 800 numbers primarily and aggregating small jobs to larger printers).

Imagex is an Internet-oriented companies that has executives from high tech, is well funded and moving aggressively into many different segments of the market. Imagex is a unique public company and they have purchased quite a few other graphic arts/Internet companies in the recent past (most recently Creativepro.com); we’ll talk about Imagex in particular and their various companies in the next installment in this series.

Mimeo is a company whose young executives are from the Internet world. Founder and CEO Jeff Stewart (30 years old) could be described as a “serial entrepreneur.” Iprint.com is also an Internet-oriented company whose founder came from one of the earliest Macintosh software companies and offers an easy way to buy the most basic printing needs that a small business might have.

In a future article in this series, we’ll talk to some of the executives of these companies and get their impressions on the directions the industry is going, and how they feel they will be affected by the emergence of the various e-commerce models and exchange-type companies we discussed earlier.

Buying supplies online

Finally, several companies have emerged that are selling or providing exchange or auction sites for the commodities and supplies that are used by our industry. Table 3 lists seven of these companies, their mission and scope. Paper seems to be the “hot commodity” for e-commerce in our industry, with five of the seven companies focused on this segment of the marketplace. We’ll talk more about these companies in a later installment.

The other two companies, Printnation and Street-price.com are taking aim at the traditional graphic arts distributors. Perhaps the most amazing thing about this category is that none of the large, existing distributors have publicly shown any interest or technology for providing their products and services over the Internet. The biggest criticism of these new “dot coms” is that they have missed two of the largest reasons why people do business with the traditional distributors: First, because they are “the bankers of the industry”, providing credit and consumables rebate deals to help service providers make ends meet and second, because their “feet on the street” and personal relationships mean so much to companies in our industry.

Summary

We’ve established the basis for discussion of this fascinating new world of Internet applications for our industry and identified some of the key who want to forever change the way we all do business. In our next installment, we’ll get to know some of the executives of these companies and talk to some of their customers.