E-commerce - Big Interest, Little Action

In-plants are cautiously examining e-commerce offerings. But many aren't ready. And others already offer the same services.

You might expect a state-of-the-art in-plant like the Brigham Young University Print and Mail Production Center to have all the latest e-commerce solutions in place. But look all you want; you won't find Noosh, printCafe or any of the other e-commerce vendors in BYU's Provo, Utah, facility.

Instead, BYU uses a home-grown solution to provide online ordering for business cards, letterhead and stationery.

"The whole bottom line is, there's nothing new in what these guys have to offer," says Director West Barton of today's crop of e-commerce vendors.

And he's not alone in this thinking. Many in-plants have had Web sites for years and already offer online ordering. Their print management systems let them track jobs and handle costing and estimating.

"Those services were something we already had in our infrastructure," notes Jerry Grouzard, print operations manager at the Allstate Print Communications Center, in Wheeling, Ill. Allstate examined the services of all major e-commerce players before deciding to retain the systems it already had in place.

"There is some value in what they're doing," Grouzard concedes. "Unfortunately in our case it's not going to be much of a benefit."

Reserved Curiosity

It's true, the value is there—especially for in-plants that aren't as large or advanced as Allstate and BYU. These shops could surely benefit from the services e-commerce vendors provide. But for the most part, they've been holding back. The marketing campaigns and successes of these vendors have piqued their interest, but they're waiting to see which companies survive the inevitable shakeout. They're waiting for their customers to become more 'net-savvy.

They're waiting for e-commerce to prove it can benefit them.

But the proof is out there, insist the e-commerce vendors. They point to the time savings and improved coordination and communication offered by job management sites like Collabria, Impresse, Noosh and printCafe. They stress that auction sites like 58K.com and Printbid.com are saving print customers money, as are online suppliers like PrintNation.com and Prepressmall.com. Satisfied customers abound, they say.

Several in-plants are in the beginning stages of using e-commerce solutions. Some examples:

• SAFECO, in Redmond, Wash., is working with Collabria to implement a browser-based order entry system and is soon to choose a vendor to help it implement a document repository and inventory management system.

• Hewitt Associates, in Lincolnshire, Ill., signed on with Cirqit.com to establish an online system for print procurement and distribution of business communications. Cirqit.com will establish a Web-based platform for e-commerce between Hewitt and its supply chain partners.

One of the largest U.S. in-plants, the University of California-Berkeley Printing Services, is about to start a six-month trial with printCafe.

"I'm real optimistic," remarks George Craig, director. "It's going to make online ordering much more efficient and much easier for our customers." It will also let them track their jobs online, he says. And if all goes as planned, he'll be able to take the data the customer fills out to request a quote and download it into the in-plant's Covalent estimating program.

The system's project management tools, Craig adds, will help customers tremendously on the creation end. This, he hopes, will make customers more organized and ultimately help eliminate the delays that cause them to send jobs to the in-plant with impossibly tight turnaround demands.

"It's going to make life easier for our customers as time goes on and tie them closer to us," he says. Since the in-plant's Web site will be customized for the jobs customers frequently order, they will be more likely to make UC Printing Services their preferred site, he says. If the trail is successful, printCafe will be used across the whole University of California system, Craig adds.

Despite the clear advantage printCafe's solution provides, other in-plants, say they're unsure of the company's motives, especially after it bought Hagen, Logic and other print management companies.

"If I have my management system with them and they have access to the innermost details of my business, what's to prevent them using that to their advantage?" asks Mike Loyd, director of Louisiana State University Graphic Services, expressing a fear many in-plants share. His in-plant is a Hagen user and has so far not joined printCafe.

"I don't like to have my database move into where anyone else has access to it," echoes BYU's Barton.

But Craig is confident.

"The issue has come up, and we've been assured that that's not the case," he notes, adding, "It was kind of a minor concern." He feels printCafe is much more interested in making money from the charges it assesses on each job transaction.

"That's what it's all about," he says.

Still, Loyd, among others, would rather design his own e-commerce solutions. LSU is using grad students to help it bring online ordering to its site, which Loyd hopes to update by July.

The Human Touch

Some in-plants, though, say their customers are not ready for online ordering. They still want to deal with a human being.

"People would rather come down and chat," reveals Jean-Luc Devis, operations manager for the 15-employee in-plant at Johns Hopkins University's Applied Physics Laboratory. "There is a certain amount of that interface that people like. That human touch."

He says that even though a fair number of people use the in-plant's intranet site to fill out work requests and send files via an FTP site, many others feel more comfortable walking their jobs to the in-plant. They enjoy the relationships they have built up over the years with the in-plant.

"Breaks away to socialize are an important aspect of modern corporate business," says Devis. "E-commerce minimizes time away from the workstation, which may not always be viewed as a positive aspect from the employee."

Still, some users of e-commerce systems contend that these tools actually help them improve relationships with customers. In Sacramento, Dome Printing, a commercial printer, uses Noosh for everything from facilitating estimates, to managing deliveries and schedules, to collecting data on job progress.

"This business is about relationships," maintains Tim Poole, vice president of operations. "If we can develop better relationships with our clients and add value with Noosh, that's something on which I can't put a price tag."

But this assumes that customers are ready to communicate via the Internet—and in many in-plants they are not. David B. Liss, graphic communications manager at the San Diego County Office of Education, says his customers would rather use the phone to learn the status of jobs than click through several pages on a Web site.

"I don't see it applying to us overwhelmingly right now," he says.

This, however, seems to be just putting off the inevitable. The Internet, after all, is not going away. More customer training is needed. Besides, customers in the commercial world seem to be catching on just fine; printers there say online ordering is on the rise.

"We've seen many more online transfers," notes Mike Corson, president of NJC Printing & Graphics, in St. Louis. Corson enlisted Printable.com to develop a Web site for his company with e-commerce capabilities. He's enthusiastic about the results.

"We are giving our clients a new and powerful tool that can increase sales and reduce administrative burden," he notes.

Paying The Price

Cost is another deterrent for in-plants. Many e-commerce vendors charge a percentage of the transactions processed through their systems—and sometimes more.

In Baltimore, Constellation Energy Group's Print & Imaging Services was surprised to learn, after preparing to implement a solution from a well-known e-commerce vendor, that the vendor had changed its business model. Instead of no up-front cost, a one percent fee on each transaction and free client training, the vendor suddenly needed a minimum of $200,000 a year in fees and wanted payment for training. The in-plant backed out.

Also unsettling to in-plants are the daily reports of e-commerce firms going belly up.

"If you take someone in right now, are they going to be gone tomorrow?" asks Rick Parker, general manager of Wal-Mart's Printing and Mailing Distribution Center, in Bentonville, Ark. "Just on CNN today there were three more dotcoms that folded."

Wal-Mart looked into several e-commerce vendors, but Parker says their presentations contained a lot of "hype." The in-plant decided to wait.

"I think you're going to get down to two or three of them—that's it," Parker predicts.

In Berkeley, George Craig is more confident. He feels printCafe has deep enough pockets to keep it alive.

"They've got some big backers behind them," he says.

Building Relationships

But even assuming all the current e-vendors stick around, in-plants have other concerns. The biggest is summed up in a single word: Relationships.

Many in-plants would rather send work to local commercial printers than bid out jobs on online auction sites. And they would rather phone in orders to their usual suppliers than go online and search for better deals.

"I think it's better to bid to somebody you know," asserts Devis, of Johns Hopkins. He would rather build relationships with local printers so he knows he can count on them in a pinch. Also, he wants to be able to drive to the printer to check on jobs, not fly across the country to visit a distant printer.

"If I'm dealing with an unknown printer, he knows I'm only with him for price," adds LSU's Loyd. "What kind of allegiance do they have to me?"

But customers who have used print auction sites say bid-winning printers have put forth extra effort to please them and get their future business.

"I've been extremely pleased," reports Dennis Esser, coordinator of publications at Northwest Missouri State University. He used 58K.com to find a printer willing to meet his price and turnaround requirements. The printer was several states away, but Esser says the service was great.

"They were very accommodating," he says. "If they want the [return] business, they'll do a good job." Esser says the quality from some of his regular printers had been slipping, so he used 58K.com to find other printers and shake his local providers up a bit.

"It's made my job easier," he says.

Online supply sites, like PrintNation.com, also seem poised to make in-plants' jobs easier. But many shops have yet to try them. They say they are already locked into contracts with suppliers or, in the case of large operations like Allstate, they order such high volumes that they already get better discounts than the online suppliers offer.

Some in-plants worry that supplies ordered online may not reach them in time. Liss, of the San Diego County Office of Education, says he can call Gans, his ink supplier, order a special mix and have it delivered overnight.

"I've got long relationships with a lot of the vendors in town," he says.

In the end, relationships matter most. E-commerce may add efficiency or offer savings, but in-plants need to feel they can trust online suppliers to come through for them. They like speaking to a person when ordering—if only to have someone to hold accountable.

"If I really need something special or in a hurry I would much prefer to discuss it with a person I know and have built some history with," remarks Devis, "as opposed to a high-tech file server and workflow process."

by Bob Neubauer