Print outsourcing defined“Print outsourcing” has come to mean different things. In simplest terms, it involves aggregating and consolidating print management – including indirect print spend and related services – through a firm that specializes in this field.Few short years ago, there was talk of a wholesale shift to digital communications.However, far from going away, print continues to be a critical part of most companies’marketing mix. The evolution of customer communications presents a new challenge for Chief Marketing Officers (CMOs). They recognize that reaching their customers and prospects effectively requires multi-channel communications. While many consumers prefer printed materials, they can touch, others respond better to email or even text messages. Or, in some cases, both print and digital communications are required.Also, shrinking budgets and increasing pressure to grow top-line revenue are forcing CMOs to streamline processes and workflows and ring out waste to deliver better results.This creates a compelling need to manage better their overall print spend to drive more effective communications in both print and digital format. It also makes print management outsourcing a more important consideration for business efficiency and savings.This white paper explores the reasons that marketers are increasingly turning to outsourcing solutions for improved print management, the ways in which print managementoutsourcing can drive improvements in customer communications management overall, and the key factors for consideration in selecting a print outsourcing or, more accurately, a print management services provider.The Power of Print Outsourcing2HOW MUCH CAN ORGANIZATIONS SAVE? Savings can amount to as much as 30 percent on print across the enterprise. Whats more, experts in print management outsourcing are increasingly willing to consider pricing on a gain-share basis providing a savings guaran-tee. That 30 percent can have a huge impact, whether it is used to boost directly the bottom line or reinvested for greater marketing gains. A
Under this definition, print outsourcing includes vital consulting services that optimize print production and distribution, coordinate print with communications across all channels, and leverage print spending to create significant savings. In fact, to call it simply “print out-sourcing” is to sell it short. It is more accurate to refer to it as “print management outsourcing”, because it is the management and consulting component that can offer the greatest value. Print management outsourcing: A growing solutionAccording to the IDC*, print sourcing, and procurement services “is projected to grow from $2.8 billion in 2011 to $6.4 billion in 2016 in theUnited States at an 18.1% CAGR. Worldwide, the segment will grow from $6.6 billion in 2011 to $13.2 billion in 2016 at a 14.8% CAGR.”This projected double-digit growth rate is not due to an expected in-crease in print volume but rather to the significant value businesses are recognizing in outsourcing their print and print management. Outsourcing print management can help marketers gain a competitive advantage by transforming the way that they create, produce, store, distribute, and integrate their customer communications. There are dramatic savings and benefits to be had across the print workflow, including:4Maximized resources – from both a cost and labor perspective4Optimized customer communications – reaching customers and prospects more effectively to drive revenue and retention4Enhanced control of brand identity – ensuring proper branding and alignment by centralizing all printed marketing communications4Access to world-class print capabilities globally – leveraging the best quality print services based on each campaign4Faster time to market – greater speed and agility in production and distribution for revenue-generating campaigns and critical customer communications 4Improved compliance and reduced risk – leveraging only pre-vetted printersOutsourcing – not offshoring? So much of outsourcing today is designed to capture lower labor costs overseas. But with print, any production savings that could be derived from offshoring is more than offset by the costs of delivering the printed materials to their ultimate destination.The most valuable print outsource providers have vast networks of highly-vetted local printers, so jobs can be kept close to delivery locales, saving both time and money.
Delivering value and controlThere are three critical drivers that determine how great the benefits of print management outsourcing can be–outsourcing efficiencies, print capabilities, and management expertise.When organizations outsource, they gain the opportunity to direct more of their efforts toward their core businesses. They benefit from getting these non-core activities offsite to pre-vetted printer networks with excess capacity and from not having to carry the equipment and staff on their books. They reduce their overall risk and support their diversity, environmentally-sound practices and sustainability initiatives through a diverse vendor base.They also can pay just for what they use rather than having to staff for peak capacity. And they gain the leverage that comes from the massive combined volumes that are managed by outsource providers.More specifically, outsourcing your print management gives you ac-cess to the latest print capabilities around the world. This creates the ability to near-source your print campaigns, increasing both speed-to-market and reducing costs. Access to a wider selection of printers also helps in allocating each job to the best available print provider. Striking an effective balance of speed, capabilities and cost ensure rust jobs can be cost-efficiently expedited, specialized jobs receive the specialized attention they require, and routine jobs are completed economically as possible.Risk mitigation is another significant benefit. Using an un-vetted printer network can be filled with risk for an organization: for example, there is great risk associated with vendors outsourcing to other vendors – vendors who are not financially stable, not environmentally sound or not compliant (SEC, FDA, etc.) or who have little or no data security, secure digital asset management or storage. Leading print management outsourcing providers take the necessary steps to ensure their vendor panels include only qualified vendors with responsible and sustainable operations.IDC describes the latest approach to print management services as follows:“Depending on the nature of the contract, these services may also encompass consulting that is designed to optimise print manufacturing, reduce postal costs, or optimize print-relatedcommunications to drive faster customer/recipient response times and/or to reduce operational costs(e.g., demands on call centers) via more effective customercommunications. Service providers often leverage a qualified or certified network of suppliers for printing, fulfillment, and related services. These services may be based on proprietary technology and may include dedicated print management resources onsite.”
4Looking downstream–in addition to near-sourcing print jobs to minimize time and reduce the expense of delivery, organizations can gain significant savings through presorting during or after the print production process. Stricter postal automation and presort requirements make it increasingly difficult for individual organizations and smaller presort suppliers to capture these savings. Working with an outsourcing provider with expertise in both print and mail can deliver even greater benefits.Not only can you save on the print side, but you can also lock-in savings for your direct mail efforts, giving you more flexibility to test different marketing messages and offers in different areas without sacrificing postal discounts. Overall, organizations are finding that a wider, business-process focus enables improvements in everything from document creation through delivery and creates benefits that extend well beyond print savings.Who benefits most from print management outsourcingAll organizations can benefit from streamlining their print supply chain and workflow. However, we ‘ve found that mid- to large-sized companies with a minimum print spend of $1 million annually gain the most from print management outsourcing. On average, these companies save up to 30 percent of their overall print spend.There are several client-dependent factors that determine the upside potential for print managementoutsourcing, including: 4Disconnected print workflows and disparate print procurement processes4Limited print sourcing expertise4Regional network of print vendors with limited capabilities and lack of global reach4Procurement practices that allow each department or location to select their own print vendors4Insufficient visibility to the process and various spends across the enterpriseAll of these factors – unique to each organization – need to be considered when evaluating the value of outsourcing print management. The right print management partner will conduct a thorough audit of an organization’s internal processes and identify all the areas for improvement. Choosing a print management outsourcing providerEven organizations that outsource their print in some fashion today often find significant benefits in reassessing and realigning their approach. The criteria below can help your organization decide which vendors to consider who to choose.
1. Business-process expertiseAs discussed above, the business of customer communications is changing: There are more channels, and businesses are expected to be nimble in managing customer preferences across all channels. Social media is expected to play a growing role in customer communication – but its place in the mix is still being defined. New opportunities such as hyperlocal and real-time mobile marketing are new to the scene and require tremendous agility and speed.In this rapidly evolving environment, expertise in print doesn’t begin to encompass all that is important in the communications space. Organizations will gain the greatest benefits by teaming with a provider that is truly skilled in business-process optimization, has the required breadth of expertise and solutions across all aspects of document management and keeps abreast of communications trends and capabilities.A recent article quotes Ilan Oshri, a professor at Loughborough School of Business: “Buyers… expect the vendor to work closely with them on improvements.” Today’s business-process outsourcing is becoming more collaborative and consultative as today’s marketplace demands more efficiencies as well as savings.2. Performance and trust Customer communications are the lifeblood of businesses. It is crucial to choose a partner with a strong track record and a reputation for reliability and quality. It is also important to consider any potential challenges provider may have in recommending an approach that is not aligned with their own company offering, as a printer suggesting exclusively print campaigns to fill their factories.Reliability: The level of personalization, trans prom messaging and customer demand for accuracy and relevancy makes it more critical than ever that every element of every mailpiece and digital campaign is properly associated. There is also considerably increased scrutiny when it comes to compliance. In choosing an outsourcing provider, it pays to look for established expertise in managing the intricacies of data quality, multichannel communications and document integrity and security.Aligned interests: A vendor that has its own printing facilities and services has a vested interest in keeping its own print volume up. On the other hand, a “print-neutral” vendor is in a position to place communications jobs where their customers will get the greatest benefit. Particularly with the shift to multichannel communications options and the need for agility and speed, it pays to look for vendors who will not be inhibited by allegiances to any particular channel.Quality: Organizations need quality they can rely on – under all circumstances. When printing hits peak volumes, it can strain the process overall, and quality can suffer. It’s crucial to seek out a print management
An outsourcing provider who is fully prepared for peak volumes, not just the day-to-day. Look for a guarantee that every time, every job will be performed by a carefully-screened and approved resource, regardless of the job’s size and circumstances. This is particularly important when you consider a provider who does its own printing – be sure to ascertain what happens to jobs when the provider needs to outsource overflow.3. Overall value for investmentWhen you consider all of the factors that can help or harm communications effectiveness, it pays to look upstream and downstream, from data quality to print production to presort services for huge USPS savings and faster delivery.The trend in outsourcing today is to seek end-to-end providers who take a consultative approach to working with their clients and a holistic view of the communications process. These providers work with organizations, not just for them, and they structure services to meet their clients’ needs.Here are some additional questions that can help in ensuring a collaboration that meets your business requirements and generates savings and efficiencies that will improve customer loyalties and your organization’s bottom line:4Can the vendor provide support across all communications channels and throughout the communications process?4Do they have a single-platform solution? How easily can they change and add functionality as operational and market needs dictate?4How robust is their print network? Does it offer the global coverage the organization requires?4Will they place staff on-site as appropriate to coordinate jobs and interface with organization personnel – and at what cost?ConclusionGiven the growing challenges and mounting budgetary pressures faced by marketing leaders, print management outsourcing provides a very compelling proposition – the ability to aggregate and leverage their print spend to capture cost savings and efficiencies, while enhancing compliance and control of their brand and improving their ability to communicate with customers and prospects. And you can take those cost savings and reinvest them in additional marketing efforts to deliver even greater revenue growth. Finding the right print management outsourcing provider with the necessary blend of outsourcing expertise, print capabilities, and document process management experience will help ensure success.