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MAKING SENSE OF E-COMMERCE

Feb 1, 2000 12:00 AM


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Online-based e-commerce solutions are revolutionizing print procurement

New dot-com companies are appearing almost daily-you literally need a scorecard to keep up. Some printers are creating their own e-commerce solutions. Others are outsourcing the job to a third-party service provider. Buyers are taking an active role in the "webulization" of print by initiating third-party solutions and inviting their vendors to join them in real-time online communication either by quoting every project or producing projects under contract.

In all forms, browser-based e-commerce solutions are revolutionizing the print procurement process-from design to delivery. Content creators are getting involved in the printing process much earlier. Both print buyers and printers are discovering the benefits of business-to-business e-commerce: access to a broader range of customers and vendors, improved customer service, reduced operational costs and faster service/product delivery. Perhaps most significantly, the Internet is enabling an unprecedented level of communication between printers and their customers.

"The Internet is truly transformative," declares Bob Rosen, R.H. Rosen & Associates (New York City). "It's a fundamentally different way of providing your customers with a way of interacting that's easier for both of you. The real power of these Web-based solutions, however, is not the savings or speed made possible by the technology. That was the original rationale, but the real benefit is that the technology gives the customer a reason to interact more closely with you and build the two companies together."

"It's simply a tool," concurs Suzanne Carnes, president of Print Solutions (Arlington, VA). "The other things don't go away-customers still need printers to be problem-solvers and to educate them. They still need to know how to run their businesses better, and that requires face-to-face contact."

Buyers will judge e-commerce solutions by their communication potential, according to Carnes. "Does it increase the speed of communication and the delivery of the job? Does it increase the accuracy of the communication? Most importantly, does it enhance or take away from the existing relationship?"

Carnes, a former print buyer and print sales representative who has trained more than 3,000 print buyers, says she is encouraged by solutions that offer automatic job tracking and reporting because such functions increase printers' accountability to buyers. The consultant adds that, although some auction sites have robust information gathering capabilities, relationship-enhancement may be lacking. "It's like going on a blind date every single time," relates Carnes. "You have to start over and tell that person your life history, explain all those nebulous things about how you do business, your expectations and so on."

The majority of current e-commerce solutions are courting the corporate print buyer. It may be true, as one e-commerce exec quips, that "Nobody is buying annual report covers over the Web yet," but it seems inevitable that the Web will join the phone and fax as a standard business communication tool.

How do you get started in business-to-business e-commerce? You could design your own solution, provided you had sufficient funds, IT know-how and manpower. How much would it cost? ImageX is reported to have spent $8.6 million on its launch. (The company recently acquired PrintBid.com and PaperDeals. com.) Business Marketing magazine asked a group of developers to estimate the costs of creating a hypothetical business-to-business site. The median price totaled $693,000. If you use a third-party solution, expect to pay a one- to two-percent transaction fee-some arrangements may provide for an initial set-up fee and annual maintenance costs.

Printers will find e-commerce options tailored for all sizes of operations. Quebecor, for example, recently announced it had obtained a non-exclusive license that allows it to offer the proprietary GetSmart e-commerce system (iGetSmart.com) to Quebecor's worldwide client base. This electronic software solution provides a real-time online inventory management system that provides functions such as electronic order entry, warehousing, distribution, billing and financial data export. Quebecor will pay a set-up fee and an undisclosed percentage of all revenues processed through the system.

PagePath's e-commerce solution, MyOrderDesk, is intended for quick printers, small commercial printers, designers, etc. It consists of a Web-based order entry, file transfer, confirmation and job management system. The product is free-it is supported by banner ads.

"This isn't a buying or bidding service," explains PagePath's Steve Ciesmier. "It's a private-label system for printers to use to do online commerce with their clients on the printers' own website."

MyOrderDesk incorporates PagePath's Launch! Web file transfer engine enabling customers to transfer multiple files to the participating printer through their browsers. Although the transfer uses FTP and zips the files with their order information, this is transparent to the user-users do not need FTP training. Orders, documents or art files entered through MyOrderDesk are automatically acknowledged by e-mail. Customers get a confirmation message while an e-mail alert is sent to the printer. A weblink in the e-mail uses the printer's browser to retrieve the bundled order and any job files. Order data is password protected, ensuring that customers see only their company's information.

Printable.com's suite of hosted services, PrintServ, pledges to "e-commerce enable" printer websites-without a transaction fee. Printers who need websites can use PrintServ's self-serve website creation and management tools "for complete control over site content and appearance," according to John Gaffney, vice president, marketing. Adding e-commerce capabilities, such as RFQ management and creating "Customer Centers" are other possibilities.

Digital print and fulfillment providers in the $5 million to $50 million range are the focus of MediaFlex.com's Online Print Center system. "We're kind of an e-commerce third-party solution for the print provider," explains Greg Goldman, vice president of marketing. "We're in the background-we don't get in the middle of the relationships printers have cultivated with their clients."

Print shops can use Online Print Center to manage, distribute and fulfill on-demand print orders ("everything from business cards and reprinted articles to multi-page brochures or posters") for corporate customers. On the buyer's side, it handles orders, quotes and confirmation processes. On the printer's side, it handles credit card processing and maintenance of customers' digital assets. Printers can use the Online Print Center to set up corporate image centers for individual customers-online catalogs that allow customers to browse through a library of digital assets and order on-demand printing.

One of the earliest e-commerce solution providers, Collabria, offers printers and distributors its PrintCommerce solution. It enables a printer's customer to order data sheets, brochures, letterhead, business cards, forms and other products from personalized online catalogs, as well as print on-demand documents and variable data documents. The catalogs carry the printer's or distributor's brand-not Collabria's.

Since users' input is restricted to specific preset design templates and rules, file integrity is assured. And, since the basic design is known in advance, the system can impose the files in a variety of configurations based on the amount and timing of orders, ultimately supplying the printer with a completely press-ready PDF file. Collabria recently announced webDocket, a project management solution that allows all members of the print project team to work off a single job docket, available from anywhere via the Internet. It automatically notifies team members of job spec changes, facilitates digital file upload, review and approval, and tracks job milestones.

Noosh's solution promises to "eliminate the typical communication mayhem that often exists between buyers, brokers, printers and creative agencies" by centralizing information. The buyer decides which and how many printers can bid on a job. Noosh's Live Jobs technology gives all parties current status of a print job's specifications, estimates, change orders and real-time status.

Several months ago, the company formed a joint marketing alliance with Consolidated Graphics for the latter to introduce and implement the Noosh.com service to 12,000 Consolidated Graphics clients. This past January, Noosh announced a partnership with Wallace for Wallace to expand its existing integrated corporate print management tools @w.i.n, with Noosh's print creation workflow. About 480 Wallace clients currently use the @w.i.n. system.

Another e-commerce player, Impresse, claims "to automate and manage the entire print purchasing process from project initiation to delivery." Impresse.com targets corporate print buyers and commercial printers by "leveraging Internet-based technology to streamline project specification, quoting, proofing, production management, reporting and billing." The company recently announced an upgrade to its embedded customization "Smart" technologies and a collaborative feature set for multi-layered online project management and tracking.

"The new release rounds out some of the features shown at Graph Expo," explains Lisa Cleary, director of product marketing. "Most have to do with the postquoting process, what's happening after a quote has been accepted. We have provided new project management and project history page features. Printers can schedule custom milestones and provide information about those jobs as well. All of that milestone and status information can be input manually by the printer or can be automatically tied into print management products such as Hagen and Logic."

Both buyer and printer now have access to a richer set of reports. Printers can see the number of quotes coming their way and how many they've won, as well as the number of orders by buyer or by type. "You can manipulate the information in a lot more detail," notes Cleary.

Another new feature, Content Tracker, permits browser-based uploads of digital files to the impresse.com network, and tracks and manages all information associated with a specific project. Content items such as project comps, digital files, assets and proofs are associated with individual specifications, regardless if they are transferred electronically or sen t via "sneakernet."

As reported in November's "E-business for E-print" (p. 38), auction sites are courting both buyers and printers, too-58K.com is one of the latest such sites. "We're an open auction site-you see the bids in progress just like in E-bay," says Bob Rose, president. Prospective buyers are rated-for example if a buyer comes to site 20 times and requests 20 quotes but acts on two, the rating would be 2/20. Printers whose bids are sucessful pay a two percent transaction fee.

What's on the horizon for business-to-business e-commerce in the print industry? It's hard to know where to look first. Without sufficient bandwidth, you won't be able to take full advantage of e-commerce developments. Both WAM!NET and Vio have created an easy way to mix Internet and extranet service offerings to clients. This "Internet gateway" is less restrictive and more cost-effective than earlier services.

Heidelberg's recent announcement of a global agreement with WAM!NET for co-marketing and co-sales and technical exchange, also has intriguing possibilities. Ed Driscoll, CEO of WAM!NET, stated, "There is the ability to automate the archival of digital plates in WAM!NET's centralized storage facility, which will open up the reality of the digital printing revolution."

Digital Art Exchange's (DAX) Patrick White has announced his intention to pursue an online opportunity: Sprockets.com. White says the site will help printers and clients manage products-send files, receive estimates and job specs, etc.-with a few cents charged per megabyte of job files sent over the system. Sprockets will track bandwidth usage for each project, which the printer can then bill as a monthly project expense.

Some dot-com execs came from print management system firms-look for more of these companies to leverage their data collection and distributing expertise. Dennis Stroud, vice president sales and marketing, Programmed Solutions Inc., notes that his company will have "a strong e-commerce answer," having introduced WebLink in 1996 to enable users' customers to enter RFQs, determine job status and make inventory control and fulfillment inquiries online. "If it weren't for us, e-commerce solutions wouldn't have much to offer," declares Stroud. "They'd just have a glorified e-mail system."

Finally, if e-commerce is advantageous, why aren't more printers implementing it? Only five percent of the commercial printers and trade shops responding to a TrendWatch (Harrisville, RI) survey on current and planned Internet use among U.S. commercial printers and trade shops are using the Web to let clients track jobs.

"Printers tend to be perfectionists," responds Rosen. "One of the lessons of the Web is you do the best you can, you try it and you learn quickly from the feedback you get, which is almost immediate. That's not natural for printers who obsess for years over estimating systems and order entry systems trying to get them just right. The Web encourages you to try it and keep refining."

But he who hesitates may be lost. "The new dot-com companies are providing services that also integrate client job tracking, are solving many of the print buyers' critical issues with printers (i.e., not knowing where there jobs are in the overall production workflow)," observes Dr. Joe Webb, TrendWatch. "Once this capability is more widely known and understood by print buyers, printers who do not offer this capability may find themselves absent from their customers' preferred vendor lists."

About four years ago, Dave McConnell of Hammerwood Print Inc. (Sunnyvale, CA) got together for coffee with some printer buddies. When McConnell announced his interest in doing business with his customers online, he was greeted by hoots of laughter.

"Who ever heard of a printer who wanted to create a paperless paper trail?" says McConnell. "They said, 'Sure, Dave, go ahead.'" Pickings were slim-McConnell found some home-brewed business-to-business e-commerce solutions, but deemed them "Mickey Mouse." Eventually he hooked up with Collabria-an e-commerce company co-founded by Robert Hu, who had spent the previous 18 years running the family printing business, A&a.

Specializing in small-format work, Hammerwood now focuses exclusively on corporate accounts. The nine-person operation has been able to maximize productivity and build stronger customer relationships by implementing Collabria's e-commerce solution.

Hammerwood works closely with clients to create an online customizable catalog under its own name.

McConnell stresses that each catalog is created specifically for individual customers by listening to their needs. Customers can create and order letterhead, labels, business cards and more. Benefits of automating the print procurement process include making manual order-writing obsolete, significantly reducing typesetting and prepress errors, and eliminating the need for employees to ferry proofs between the shop and customers. "There are a lot fewer phone calls," adds McConnell, noting customers can order directly from their desktop and, since many prefer to track their own job status online, CSRs are freed from handling these inquiries. The printer says the efficient information flow from the beginning of the procurement cycle to the last stage of invoicing" has shaved days from order cycle times. Hundreds of orders can now be processed in a few minutes.

"We can compete against anybody," says McConnell. "Size does not matter-this brings the profits back to printing."

Stuart Welham is a regional sales manager with Petersen Graphics Group (South Bend, IN), a $12 million sheetfed and half-web commercial printer. This past September, Petersen became a beta site for Impresse.

"We do sales and marketing catalogs and point-of-purchase for Whirlpool," explains Welham, a 20-year veteran of print sales.

Whirlpool used to have its agencies handle print buying, but, to cut costs, its procurement department eventually transferred these duties to an in-house art director. To communicate between the agencies and its three main print vendors, the art director created an Excel spreadsheet. "It was a horrible thing they had to work with, but it was the best they had at the time," recounts Welham. "Information was missing, people couldn't open their e-mail, some people weren't included in the e-mails-it was a nightmare."

The art director learned about Impresse while attending a conference and Whirlpool later became a beta site. This past September, all participants got together for a training session. "I'm not that computer literate, but it's a piece of cake," relates Welham. "It's eliminated a lot of the paperwork because we don't have to type our quotes anymore after they're priced. The vendors are under some contract with Whirlpool, and so everybody knows what terms and conditions are."

The Impresse transaction fee is one percent. "When I first heard that, I said 'I've squeezed every penny I can out of a job and now I have to give up one percent? I won't do it,' " acknowledges Welham. "But we don't even quote the one percent. If I've got a job quoted for $10,000, I automatically put $100 on there as a line item on an invoice charge. Originally the terms were for 30 days. "I said, 'I'm not going to do that-we don't get paid for 90 days.' It wasn't a problem-we agreed they would get paid within 15 days of when we receive payment from our customer.

"We see this as a communications tool. People want more convenience. Over the years, buying habits have changed. The new people are in the electronic mode. They want convenience."

WWW. Printnation.com is "a one-stop business-to-business e-commerce supersite for the commercial printing industry." Film, plates, paper , chemistry and ink, consumables, software, computers, scanners, imagesetters are among the 100,000 products from more than 1,300 vendors offered here. Orders are shipped from a network of more than 40 partner warehouses throughout the U.S. The site also has used equipment auctions, industry news, a career center, research tools and an online community.

According to chief operating officer, Freddie Seba, the site will enable printers to save time and money. "We want to bring the power of the Internet to printers-giving them purchasing power, information power and fast delivery of products." (See p. 42 for some paper companies' on-line plans).

*Printers and the Internet-How the U.S. Printing Industry Uses and Plans to Use the Internet. Features a summary of the dot-com companies now in the industry as well as analysis on the extent to which Internet services are needed and are likely to be accepted in the industry. Cost is $1,250. Order at www.trendwatch.com or call (800) 283-8063.

*Print E-commerce: Players, Products and Market Size. Provides information on players and products/services, estimates the size of the market and market analysis. Cost of the report is $5,000. See www.podi.org or call (716) 239-6063.

*E-Commerce Council. For PIA/GATF members only, this new council met for the first time this past month. To join industry colleagues in learning about and shaping the future of e-commerce in the printing industry, call Mary Garnett at (703) 519-8189.