What is in question is what we should call it, because the print management term seems a little outmoded, and rather too narrow these days.
Turning to the company at the top of our league table, Williams Lea Tag as it is now known, the firm’s own preferred description of what it does is “marketing and communications supply chain services”.
And while that neatly demonstrates the difficulty in coming up with a simple umbrella term to describe ‘the business formerly known as print management’, it does more accurately describe what most print management businesses are offering in 2016.
“It’s moved on and really has morphed,” agrees Mosaic Print Management chief executive Tony Gill.
Even though he has ‘print management’ in his company’s name and described the firm’s offering as “people-powered print management”, the range of services on offer goes far beyond that.
“It’s about adapting and listening to what our customers want. We do a lot more than print management,” he says.
HH Global chief executive Robert MacMillan concurs: “I think the challenge is the way that different businesses and people articulate what we do in different ways,” he says.
“We see ourselves as a global marketing execution business. It’s not print management as it was, to be a successful business you have to evolve and develop your offer.”
HH Global can be viewed as a case in point. It recently announced that sales have breached the heady heights of £200m (£202m in fact), up 37%, as a result of its strategy of diversifying its offering, and expanding into numerous overseas markets. The UK has become a small part of a much bigger whole.
MacMillan has further expansion in his sights, and is looking at a similar increase in sales for the current financial year. “We’ve grown the business organically and when you do that it takes longer. We’re now in 34 countries and things have really taken off. We must be doing something right.”
Similarly, Communisis has made significant headway with its overseas offering, which has gone from nothing to some 24% of the group’s sales in five years.
New frontiers
One important factor in all this overseas expansion is that the UK can be considered a mature market for print management-type services. It’s reached a stage where the available large outsourcing contracts that are attractive to the major players have all pretty much been tied up under multi-year deals, so it then becomes a matter of a wrestling match when the work comes up for renewal.
Hence the opportunities for substantial new business wins tend to be in overseas markets where the outsourcing model is perhaps not as established. Indeed, one seasoned outsourcing expert believes the UK market is probably five years ahead of other countries.
M&A is also being used to drive growth, with recent notable deals including Adare’s buy of Banner Managed Communication and Paperhat taking a majority stake in creative house Nirvana CPH.
There are also of course overseas players in the mix here, the giant RR Donnelley business, which has just completed a three-way split, has a £215m-turnover outsourcing operation in the UK.
And a very substantial player that doesn’t feature in our table is Xerox, which is also in the process of splitting its global operations into two separate organisations. Under the umbrella of Xerox Global Document Outsourcing it has substantial print-related outsourcing ops that encompasses both print infrastructure outsourcing under the banner of managed print services (taking over a fleet of devices at a large enterprise organisation), and a more ‘print management’ style offering under the banner of communications services.
Xerox doesn’t file separate UK figures for this part of its operation, but Document Outsourcing was a $3.3bn global business last year. Andrew Morrison, president Large Enterprise Organisation, Xerox Europe, says that its overall services offering will form a substantial part of the new Xerox Corporation. So all in all, very big business.
Another notable exponent is US-headquartered Innerworkings, which describes its business as “marketing execution services”. It has worldwide sales of more than $1bn (£787m) and posted sales of $224.9m in its EMEA segment last year.
“For the larger players the world is really opening up and there are opportunities in all regions of the globe.
“Corporate clients also understand that a one-size-fits-all approach is unlikely to work, so they are either flexing the model across categories and regions or coming to market with an open mind regarding appointing a national, regional, or global solution,” says Innerworkings vice-president of international business development Tony Massey.
Alongside geographic expansion, outsourcers are also expanding their outlook into different markets with untapped potential. HH’s MacMillan has already seen big growth in point-of-sale, and now cites packaging as his next target: “We see packaging as a big opportunity because most of it is being done by manufacturing groups, as print used to be.
“A lot of what we do is complicated in terms of security, geography and technology. We’re providing what we see as a compelling argument for larger corporations to outsource, particularly for secondary packaging.”
What is it, then, that makes a good print manager/outsourcing partner?
Mosaic’s Gill has a simple way of describing it from his company’s perspective. “We are a collection of knowledge workers and we become a safe pair of hands and trusted partner for our clients.
“We are keeping them safe and keeping them compliant. It’s all in the detail. It’s about stopping the problem happening.”
Gill believes that true value can be delivered to customers through this expertise, and being ahead of the game in developing know-how in other areas, be that beyond print, such as digital screens, or in specific areas of print such as point-of-sale, direct mail and postage and VAT.
“I say to our clients, if you’ve got a toothache you go to a dentist, and if you’ve got a VAT issue you go to an accountant, because you understand the value of experts. Well, we are experts in print.”
As an example of where such expertise comes into play he cites a job where shaving 2mm off the format saved the client a whopping £50,000.
Alongside knowhow, sophisticated software systems are playing an increasingly important part in the print management offering, handling everything from digital asset management to version control. Most outsourcers have their own specific technology platform, their ‘special sauce’, if you like.
And it’s increasingly the case that pre-media creative services, market insight, and post-print offerings such as ware- housing and logistics, are a valuable part of the mix.
“I think the more progressive ‘print managers’ are really now ‘marketing service providers’ providing lots of post-creative pre-production and pre-media type services allied to their sourcing core competency, with added post-production services from logistics through to installation and post-installation upkeep,” notes Massey.
Not one size fits all
While the outsourcing model undoubtedly has a lot to offer, especially for large corporates keen to focus on their core offering and get a chunk of headcount off their books, it’s not for everyone.
One experienced print purchasing professional has provided an unvarnished view of the pros and cons (see boxout).
“Some customers embrace it, some have tried it and reverted back to in-house purchasing, and some wouldn’t even consider it,” observes one printing company boss.
And in the case of the sort of large-scale arrangement that involves Tupe-ing staff over to the outsourcer, if things don’t pan out as expected it’s very complicated indeed to backtrack.
“The savings can look attractive and we’ve seen examples where people are enticed by that at the beginning, but they didn’t actually translate once you cut through everything and benchmarked it and could see what the market is offering,” he notes.
From a printer’s point-of-view an important aspect will be how they are treated. Unfortunately, it remains the case that some parts of the outsourcing industry have reputational issues around their dealings with suppliers, and some of the methods used to generate margin such as arrangement fees, retrospective rebates, and protracted payment terms.
Gill has a pretty unique perspective on this, as he used to be a supplier himself, having spent 20 years in envelope manufacturing.
“When I was running Encore Direct I had direct relationships with all our customers, and we always prided ourselves on that. Over a 12-month period I got letters from every one of our customers saying ‘thanks for your services but as of X date we’re going print management’,” he recalls. “I didn’t want to be a trade supplier, so I thought if you can’t beat them, join them.”
Gill says that Mosaic’s policy is to “pay suppliers on the nail” and foster long-term, mutually beneficial relationships.
“We want to look after our staff, our customers and our wonderful suppliers – they are our three cornerstones,” he states.
Here to stay
At the end of the day, manufacturers can choose who they do and don’t print for. At the same time, as MacMillan points out, the outsourcing trend shows no sign of abating: “Most printing companies have accepted that companies like ours are here to stay and have embraced that.”
Print suppliers serving large outsourcers in particular will need to demonstrate they have the right credentials, particularly when it comes to the security aspects of some arrangements.
Clients may have understandable concerns about the security of their information, when their outsourcer might be using multiple suppliers.
“The SLAs on behalf of our large clients tend to be quite rigorous. We have an increasing requirement for accreditations in terms of security, especially for financial clients,” explains Xerox’s Morrison.
In amidst the print management mix we also have businesses that combine outsourcing and management services with their own manufacturing facilities. In which case the mindset requires a fundamentally different approach to one that is just focused on keeping the company’s own presses turning.
“The world is changing with the explosion of channels to market, and that means we’ve got to stay media neutral,” observes Linney Group managing director Miles Linney. “But having your own kit can be a reassurance. If something goes wrong and it’s 5.30pm on a Friday night, then I can have something on press – or on two or three presses – within hours.”
Indeed, it could be argued that in recent years more and more print companies have in one way or another added an element of ‘print management’ to their offering, as Webmart founder Simon Biltcliffe points out: “Most successful printers have to have a degree of outsourcing to offer the wider range of products that customers require.
“The whole industry is print management when you think about it.”
WEIGHING UP
A procurement professional’s view
Pros
- Buying power and taking advantage of the print manager’s leverage on both print production and paper
- Insight and feedback on the print market, to include innovation in kit and formats to deliver more effectively – the same or more for less
- Reporting, if you have no insight into what you do today then making a call on strategy is nigh on impossible. With decent reporting comes effective planning
- Potential to take advantage of elements before and after the print process i.e. design, creative production, warehousing and distribution
Cons
- The UK market is very mature, if you are buying print only then it is a game of margin on a commodity. How can print management deliver this better than going direct?
- Implementation and risk with existing relationships (internal and external), insight and knowledge of your business
- Loss of direct relationship with suppliers means potential to miss out on innovations
- Lack of knowledge on where your product is being placed
- Quality inconsistency as product is placed with varying suppliers based on cost alone
