The company
Incorporated in 2002 and based in Newcastle, Imprint Group has 72 staff and 5,600sqm of production space. It is one of Europe’s largest installation bases for the Inca Onset S20 (the company has three of the six-colour machines) and it serves the retail sector, among other corporate and commercial clients.

The aim
Around three years ago, the company sat down to formulate a strategy for the future. There were two key issues to address: the large amount of work the company was outsourcing, and the direction it should take for growth. It found that the answer to both issues could come from a single solution: a shift into small-format digital print.

"A lot of the work that we get in for our large-format machines is part of a wider package of promotional work that includes smaller format work," explains Dave Matthews, group sales director. "Historically, we subcontracted that work to other printers, as we were a large-format print business. For cost, turnaround and quality purposes, we felt we had to bring that work in-house."

"Alongside that, in terms of future direction, we came to the conclusion that we did not want to go into commercial litho – it’s far too competitive and there’s no margin in it," continues Graeme Wilkie, group IT director. "The other option was to move into commercial small-format digital. We decided this would be a good fit, both for competing for commercial work to grow the company and for solving the outsourcing issue."

The discussion and planning for the new strategy took 12 months, meaning the roll out began in January 2011.  

The method
The first step was to find a digital machine that could cope with both the small-format POS work for the company’s existing client base, and compete in the commercial digital print arena. Wilkie says this was actually quite a difficult mission. He assessed the market and briefly looked at the HP Indigo machines, but he felt that though the image was good, the sheet size limit reduced its effectiveness.

Fortunately, he then found what he was looking for in the form of the Xerox iGen4 with the XXL module, which enabled larger sheet sizes than the other manufacturers were offering at the time.

"We had a few conversations with suppliers and eventually we flew out to the US to take a proper look. It ticked all the boxes. It meant we could get a foothold in the small-format commercial market, but also do the small-format work we were outsourcing. It was key to our business strategy that we had that kind of unique offering," says Wilkie.

Of course, just buying a press was not the end of the small-format digital story. To make that press work there needs to be a certain degree of infrastructure around it. On the data side, Wilkie says the company was fortunate in that it had already established variable data practices with its wide-format machines, meaning much of the data infrastructure was already in place.

"We’ve done a lot of work on our IT direction and strategy. As part of that we have made major inroads into large-format variable data print. So we had the basic infrastructure and IT tools in-house already," he says.

Another issue that was particularly key was colour management. With much of the small-format digital work being part of larger packages for retail clients, consistency of colour across the print technologies was key. Again, though, Wilkie had already put in place systems to ensure colour was consistent across the screen and digital wide-format kit. Adding in the small-format digital was not too much trouble.

"We have some fantastic systems in place so that whether it be screen, digital wide-format or digital small-format, we have consistent colour guaranteed – when we were outsourcing this was much more difficult to achieve. It has been a massive bonus as colour is key for our clients," he says.

The result
"For our retail clients, we can now provide variable data print from the largest sizes for window dressings and the like, right down to the A5 promotional material clients send out. It means we can be a one-stop shop for all that type of work," says Matthews.

He explains that this was increasingly important as retail clients were demanding faster turnarounds and for their suppliers to provide a more complete, one-stop service. That’s not to say the company does not outsource the occasional bit of work, still.

"We have a crossover point where we know we are not competitive with litho and we leave that work to the litho printers. There are instances, therefore, when we manage print for our clients still if a litho solution is needed. What is important, though, is that the vast majority of work is still kept in-house and under our control," he says.

Yet the point of the shift to small-format digital was not to just satisfy existing clients, it was to get new clients on board as well. This presented slightly more of a problem for the company, but after an initial hiccup regarding how that side of the business was managed, it was able to solve the issues it was having.

"Initially we gave the opportunity for our existing digital wide-format minders to be trained on the Xerox machine and to take a bit of responsibility for that side of the business," says Wilkie. "However, we realised quite quickly that just transferring those individuals across possibly wasn’t the best solution for what we wanted to achieve. Hence, we then decided to employ someone externally who had more managerial experience of small-format digital print, and that appointment really moved us on massively, increasing the turnover going through that part of the business. So we learned from our mistakes and fortunately we built in the flexibility to our strategy to be able to make and learn from those mistakes. We now do quite a bit of commercial work, and that side of our business is growing."

The conclusion
"I think it was easier for us than perhaps it would be for other wide-format printers, because we already had a very good understanding of data, as we were producing variable data applications already with our large-format digital machines. So much of the additional work we have taken on with the strategy shift depends on data handling systems being in place, so having that infrastructure already, smoothed out the whole process," explains Wilkie.

Matthews adds that it was a change the company has increasingly seen as integral to its growth.

"We have a very diverse client base, from agencies, to print management firms to retailers direct and they all want something slightly different. We feel we can now offer the vast majority of what those clients require as we have screen, wide-format digital and small-format digital. The fact we can do it all under one roof has had a massive impact," he says.

Both concede that while the transfer of existing outsourced work was an instant success, the attempt to get into commercial small-format digital was a lot more difficult than they perhaps expected.

"It’s a different type of market. It has been a different sell and we have had to learn quickly about how to get that work. It was crucial that we got the right person for the job that understood that market, and when we got that person it made a massive difference," says Matthews.

As to where the company is now, Wilkie says it is ahead of its original five-year plan.

"To begin with it was tough, we had to learn the machine and the market. A year in, though, and we were exceeding where we wanted to be. Now we’re two years in and we’re far ahead of our target so we are looking at upscaling our infrastructure around the service. This means looking at how we sell it and the opportunities we are targeting with it."

Matthews adds that he feels it is much easier going from wide-format digital to small-format commercial digital, than the other way around. He adds, though, that other wide-format printers looking to follow Imprint’s lead need to assess the business case carefully.

"You have to assess what your customer’s want and what would suit your business. This shift fit with where we wanted to be as a company and if others want to do something similar then they have to make the right strategy and product choices to fit their business and client base. We had a critical mass to migrate, we had the need, and we also had a good 12 months of discussions and planning. Where we went digital, it may be that others should go litho. It has to be the right decision for the business and for us, this very much was."

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COMMENT
Philip Thompson, head of BPIF Business
The question of whether to outsource or not is one that most companies will have addressed at one time or another. Outsourcing is often used to free up management time so that a business can focus on core services and as a way of increasing competitiveness by reducing costs.

However, with production costs going down, due to increased automation and process improvements, the costs that were the main reason for a business to adopt this approach have become less of a determining factor. As a result, there is a movement now for companies to increase in-house capabilities. Topping the list of reasons for this are increased profitability, control on quality and supply chain security.

One other reason is that the ability to provide customers with a one-stop shop service has become common practice, both to increase sales volume and as a defence against competition. Customers want faster turnarounds and a less complex supply chain; being a one-stop shop means a print business can offer that.

Behind the shop window, however, the capabilities available in-house will vary from company to company. What we see with Imprint is that it was able to build on already sophisticated tools to support its strategy of bringing service in-house, and that having suitable infrastructure in place reduced the overall cost.

It is essential for a company to be able to clearly identify any additional costs that would be generated by internalising services. These can include the transactional costs and other financial and resource costs that will be generated by bringing these services in-house.

If these are not correctly identified, the perceived benefits will not be realised. What is certain is that business theories and trends will change over time and that only when the business knows the true costs of a strategy, will they know if it they can make it a profitable one.