To Build Strategic Relevance, Look Outside Your Organization

Perhaps the starkest reality in-plants face today is that many of their customers rank digital media as their top communications channel, not print. In that context, it's easy to see why in-plant print revenues have trended slightly down and in-plant establishments have declined by about 2 percent annually in recent years, according to InfoTrends.

The silver lining is that the shorter runs generally produced on digital printers—an in-plant strength—are in demand, often to supplement digital campaigns. Digital color volumes, in particular, are projected to continue growing for the near term.

Nonetheless print's new supporting role in the media mix puts a strain on in-plants seeking to bolster their strategic relevance. In response, many in-plants are looking beyond the four walls of their enterprise to insource work that brings new volume and revenue—and to outsource services that bring new value.

In doing so, they walk a fine line. Their mission is to serve their own enterprise, not external customers. Their mandate is to optimize internal resources, not to incur new expenses. Nonetheless, many in-plants are successfully performing this balancing act to stay relevant in the digital era.

Making Up for Declining Volume

About half of in-plants insource work, says Steve Adoniou, director of Consulting, Forecasting and Research at InfoTrends. "In-plants probably are not going to grow dramatically," he says, "but they need a certain critical mass to have volume to justify reinvesting in the operation."

At the Rochester Institute of Technology's (RIT) HUB Print & Postal Services, insourcing is doing just that: making up for some of the business erosion the in-plant has experienced for the last three or four years. While long-run offset jobs are declining, Director John Meyer has found growth in short-run digital color printing and in insourcing, which has grown from about 5 percent of the work six years ago to about 15 percent today.

Meyer credits streamlined digital color printing processes with enabling this growth. "With digital color, we're not working with all the variables that come into play with offset," he says. "Digital jobs basically run the same way, so we can service a customer who has one job as easily as one with 30 jobs."

The work delivers two key benefits: filling in the volume during the slow months of December, June and July, and generating revenue that helps fund equipment investments.

Most of the work comes from people that have associations with RIT: faculty members with design firms, employees needing wedding announcements, and alumni working at area print shops. While sales efforts aren't proactive, Meyer follows up with external customers to encourage more work. And for a group of retailers in a privately run on-campus student housing complex, he has contracted for a low-cost U.S. Postal Services offering, Every Door Direct Mail, that none of his internal customers needs. "It's very important to our operation that we continue to do this work," Meyer says.

Outsourcing for Full-service Printing

On the flip side, more than half of in-plants procure some print from outside vendors, according to a 2011 InfoTrends survey. Such arrangements are common in government, less so in business, where marketers often want to control their work and commercial printers push for access to decision makers, says Adoniou.

So Brunswick Printing Solutions, in Fond du Lac, Wisc., is an exception to the rule. At the in-plant for Brunswick Corp., a leader in the marine, fitness, bowling and billiards industries, print buying is an integral part of the operation. It accounts for about 15 percent of overall volume and helped the operation grow by about 5 percent each of the past three years.

Three years ago, life wasn't so rosy for the in-plant. Brunswick had issued an RFP to outsource the operation. The in-plant competed, surprised management with its capabilities and low costs, and ultimately won the business.

The in-plant began buying print to attract and keep more Brunswick customers. "We tell our customers, 'you come to us and we'll get it done,' and that alone has gained us customers," says Mike Schrader, manager of Brunswick Printing Solutions. "We want to be their print expert, and we tell them that."

Many are happy to have the shop handle their print buying. Schrader says he's able to beat their pricing by 30 percent on average due to volume discounts, his knowledge of the process, and generally lower print costs in Wisconsin than in other Brunswick states. In addition, many marketers work in a do-more-with-less environment. "They're happier when they aren't buying print," he says. "They have a lot of other things to do."

Building Services With SaaS

A key enabler of Brunswick's print buying efficiency is a software-as-a-service (SaaS) print buying solution, the P3Expeditor Print Procurement Management System for managing a print job through its life cycle.

"It helps me a lot," Schrader says. "It ensures you put the right specs in your bids, collects your communications with printers, and really helps you organize your thoughts."

Such SaaS arrangements can help in-plants improve or add services, including offerings that deliver the digital communications capabilities customers increasingly seek.

More Accessible and Interactive

One of the growth areas at Oregon State University (OSU) Printing and Mailing Services, for example, derives from an SaaS Web-to-print system. It enables the shop to provide individual storefronts to university departments, with customizable design templates and storage for brochures, fliers and other print.

"We wanted to make things more digitally accessible and interactive for our customers," says Ari Grossman-Naples, associate director of OSU's Corvallis, Ore.-based in-plant. "It enhances our services. One of my goals when I came here a year ago was to market that, and we have been achieving outstanding results. Our list of registered users continues to grow on a monthly basis."

While the shop could have asked campus IT resources to develop the system, signing on for an existing solution that already met their needs made more sense, Grossman-Naples says.

"SaaS makes it easier to invest in new services," says Adoniou of InfoTrends, eliminating significant capital investments and the need to regularly update systems, while delivering a state-of-the-art solution. Risk also is reduced as the solution can usually be discontinued at any time.

That noted, SaaS isn't a panacea.

"You still have to take a leadership role, you must understand the technology and be a subject matter expert," Adoniou says. "It's not just, 'We can do that.' Customers want to be led."

Indeed, as new business models continue to emerge across the dynamic media landscape, in-plants have an opportunity to take a leadership role in reinforcing their strategic relevance. And some of their best opportunities are in capturing new revenues from insourcing, and developing new services by outsourcing and partnering with external firms.