The event, entitled ‘Don’t sit down – I’ve moved your chair’, focussed on the evolving structure of the print industry and its services as a whole, highlighting the need for companies to adapt and respond to change.

Inevitably the removal of the Sky tender from the market left print managers scratching their heads and asking: "Where is the work for us?"

But Cruise said that, although he had noticed a trend for companies to bring print management in house, there was still a need for small-to-medium print management companies. In-sourcing, he said, could run full circle and again release work to the greater market in the future.

"Bringing print in house is not killing the print management market and I think we have proved that it can be done.

"If a company can’t afford to bring in a team and pay National Insurance among other administration costs, then outsourced print management is the way forward."

But is it simply all about costing? The definitive outcome of the evolution of ‘print brokers’ to print managers in the past decade is arguably the addition of services rather than just squeezing down prices.

Cruise said: "The print management model meant that it drove out margin for many printers, which got rid of a lot of print companies that arguably shouldn’t have been there. The legacy is that it hasn’t left a lot of margin for those that are left."

He added: "If your focus is purely print management, I’m not sure there is a future for it."

Neil Smith of Blue Buffalo Consulting agrees: "If you pin your life on the cost of something, then it is only ever going to be pushed in one direction."

Survival of the most focussed
So, how do SME print management companies survive in a market where previously competitive pricing can no longer be driven down?

Smith criticises the lack of focus on print procurement in the sector, which he believes could make budgets go further. The development of technology, which he says is now available for "only hundreds of pounds", could help companies to truly centralise procurement focus.

"It is about understanding the individual specification of everything that is bought, because that is the only way you can truly control it," he says.

According to Cruise, Sky brought its print management in house because it provided greater "control, ownership and savings", as well as offering "immediate and constant contact with stakeholders". So does in-sourcing print management offer an abundance of benefits over outsourcing?

Infotrends senior consultant Barney Cox believes it creates a space for SME print managers to play in, offering expertise to smaller companies that do not have the resources to increase their head count.

He says: "Small-to-medium print management units offer time, resources and expertise, whether it be industry- or geographically specific, to companies with needs that are more complex than the standard job but cannot justify in-sourcing."

Finding a niche with a dozen or more customers seems to be the way forward, with so many players battling for the same space.

Smith says: "Print management could be a lot leaner. The industry needs to change its model, it needs to strip down the heavy head count and over-servicing and offer a simple answer to what print buyers need."

With so many of the larger companies offering marketing communications, logistics, and data handling, Smith believes that there is an opportunity for SMEs to begin a ‘greenfield’ operation, which is more simplified than their current model.

"A lot of the big print managers are really focussed on the value up the chain but what they are missing is the value of procurement," he says.

With the evolution of print brokers to print managers and now to marketing and communication providers, it could be assumed that small print managers would be out of the running if they did not up their offering, perhaps at a huge cost to themselves. But instead, it seems that, like the rest of the print industry, those in the know are consolidating their knowledge and skills and creating a market for themselves.

Much as the bigger companies have diversified by adding services to complement print management, SMEs can distinguish themselves in a gap in the market to meet clients’ individual needs.

As Cruise summed up at the IPIA annual event: "There is still a requirement for small-to-medium print management companies if they know where they’re going and how to use their knowledge."

30-SECOND BRIEFING

• Print management companies are adding marketing communications, logistics, data and storage to their services
• Margins have fallen, meaning that print management companies have to add value to their services
• Head count, National Insurance and tax are putting smaller companies off in-sourcing, allowing SME print managers to service SME companies
• A focus on truly centralised procurement is needed before print managers begin adding extra-value services to their offerings.
• Procurement technology is more accessible to SMEs, now available for less than £1,000
• Heavy head count and over-servicing harm the SME independent print management market, offering no added value compared to insourcing operations
• Small-to-medium industry players have an opportunity to compete in a different field to the higher-turnover companies
• There is room for SME print managers to offer leaner models

READER REACTION

Is there a future for smaller print management outfits?

Steve Smith
Managing director, Mosaic Print Management
"If we were just buying print, marking it up and trying to sell it, we would be dead in the water. So we ensure that we are adding value by being careful with costs and investing in technology. Perhaps some smaller print management companies would not be able to make this kind of investment so they may need to think about how they can collaborate with other companies. We will see more consolidation, as it is a very aggressive marketplace, but we feel like print management definitely has a future among SMEs."

Tim Peppiatt
Chief executive, Paperhat Group
"There is more opportunity today than at any other time. There has been an overreaction to print managers and it needs to be corrected but the sector is rife for consolidation. There are some niche players who know their subject inside out and continue to do well. You’ve got to fight for new business and find clients that value the service. There is a place for large, medium and small, you’ve just got to find your place in the market."

Simon Bitcliffe
Managing director, Webmart UK
SMEs offer a much more personal relationship with end users. It is all about understanding a customer’s strategy and being able to influence that in how they deal with their customers. SME print managers are able to listen to the massive breadth of requirements within middle-sized companies and you have to morph your offering to best reflect what your client is wanting. As there has never been one style among smaller companies, print managers targeting those business have always offered flexibility and can evolve as needed."

Read Intelligent Outsource consultant Mike Newman's comment here