Peppiatt was speaking at a FuturePrint Virtual Conference session, where he was in conversation with Vpress sales director Kelvin Bell.
He said the classic print management offering had been the right option at the time “but it’s not fit for purpose now and hasn’t been for a period”.
“The old print management model served clients well when the focus was bringing agency networks into line, but it’s commercially unsound now,” Peppiatt stated.
“Any CFO worth his salt should be asking, 20 years on, can we still be delivering double-digit savings, especially when raw materials, rent and labour have significantly increased in price? It’s the law of diminishing returns. It can’t make sense.
“I don’t thinks it’s sustainable and don’t think it’s been sustainable for a while. I think that the commercial aspects and the way that we reward print management companies is incorrect, and it drives them to do things that aren’t in the best interests of clients.”
Peppiatt said a broader, technology-led approach was required in order to deliver the biggest benefits to all parties.
“If I were to start looking at it again today – and I absolutely am not – I don’t think you need the layers and layers of account managers, account directors and global structures. You need to engage with the organisation on all levels from data science to IT, finance, marketing and procurement. Otherwise the information only comes through a single channel,” he explained.
“It needs to be sold as a wider consulting piece to obtain the correct credibility. I think we were naïve in thinking that procurement departments would respect us for delivering savings so quickly. In fact we made a rod for our own backs.
“For me, if it’s possible, getting everyone around the table: marketing procurement, someone from the senior exec team, [to discuss] what is the ROI. A GM said to me ‘I’m not worrying about the savings. If it works better, faster and integrates with our ERP better, no problem’,” he added.
“Get everyone around the table. Although I know it’s difficult.”
The Paperhat Group went into administration in November 2018, after the loss of key customer Wrigley’s caused a drastic slump in sales. The Paperhat Communications business was acquired by Paragon.
Peppiatt subsequently set up a procurement consultancy business, and has recently been working with pharma giant GSK on a procurement and vendor consolidation project at its Consumer Healthcare wing.
The next FuturePrint event, its CEO Virtual Summit, starts tomorrow and runs for two days.
