Define needed changes in print buying before moving
to e-procurement
By Denise A. G. McConnell

Purchasing agents familiar with the terrain of electronic procurement for office supplies can be lulled into complacently thinking that printing can be ordered the same way. However, printing’s complexity, with its own set of assumptions and nomenclature, requires a fresh approach to realize maximum hard and soft dollar savings.

To begin, purchasing and marketing professionals need to coalesce their priorities to discover if they will benefit from an electronic approach to producing and purchasing print. In fact, studies say that cooperation between the two departments can produce two-fold benefits in dollars saved and in improvement of relationships externally and internally.

While better relationships are alluring, profits are the true motivator for businesses. Savings can be greater than 40 percent, says one print procurement and consulting company in an executive paper documenting results from its solution, printLYNXX. e-LYNXX Corporation, based in Chambersburg, PA, has a 30-year history to back up its claim.

Moreover, Doug Harbach, senior vice president of e-LYNXX, says the print-spend category drops and benefits are, again twofold: the print buyer sees significant savings and the printer’s revenues are stabilized and even improved by filling unsold production.

“Our firm offers an e-procurement solution designed for print, but we counsel organizations to first look at their print-buying process and how some consolidation of repetitive tasks being performed by both marketing and procurement can garner some savings,” Harbach said.

Specifically, Harbach says companies should first look at their print processes and determine how do you create your print project, what your goals are, and whether an e-procurement system will produce profits for you.

“It’s essential to know the departments involved and the amount of time that goes into managing any print project from conception to billing,” said Harbach. That is sometimes a painful process of self-discovery. It’s not unusual for executives to be unaware of the exact methods used to create a printed piece, who touches it and how long each step requires. Those soft dollar costs can significantly add to the price of each piece produced.

Top management who foster the attitudes and establish open communication will help make cooperation pervasive through all departments.

When examining internal processes, don’t forget to include external relationships with suppliers. Stephanie Buono, regional specialist for graphic design and print management for Xerox Canada, recommends asking trusted printers to look at e-procurement solutions with you.

After all, an electronic solution for print procurement will give printers some reporting capabilities including feedback on competitive pricing. Throughout the process, your goals will no doubt include a number of ways to decrease costs and increase profits. Look at the cycle of bidding; spec writing, print management time and how you compile records. All of these items are important to your supply partners and their feedback can help you.

Kevin Long, vice president for printLYNXX services, recommends that businesses consider how an e-procurement system clarifies the print process and manages suppliers. How does the system track developing trends? How is it tailored to fit your existing systems? What type of support does the e-procurement solution provide? How fast can it respond to your needs and suggestions?

The introspective process will naturally give rise to looking at what solutions are out there for your organization. Long says a system is either internally built, pre-built software or a system hosted by a third party provider.

The days of companies building their own solutions were in their heyday in the 90s. Then, companies discovered that it took millions of dollars to develop and meet ongoing needs of the system developed. Today, most companies would rather focus on their core competencies and buy services such as print e-procurement.

A large upfront fee is usually required with pre-built software. Costs such as hardware maintenance, security, backups and upgrades may not be included. Whereas a hosted software solution is usually sold as a flat monthly fee that can include a small percentage of print costs going through the system. Most hosted software is web-based. Therefore, costs for web-based, hosted software can have a wide-range in cost.

Harbach pointed out that the flat fee might work better for an enterprise. A percentage-based fee on print going through the solution may be the right choice if you need to allocate costs to departments. An e-procurement firm may want to offer a combination of these fees if it’s right for the enterprise.

Print procurement systems are different, but they should cleanly shave time off processes and save labor costs. There’s also the benefit of reduced frustration, as elusive as it might be to quantify. It counts for something, certainly. Such solutions should also give you a robust, yet trim, supply line.

You have to figure both hard and soft savings when considering if a print procurement system will benefit you. All that is left is doing the math. How quickly can you see a return on investment in hard and soft dollars? Can you make money with it? The answer should be yes after you take into account your complete costs revealed by the self-examination. If the answer is no, then an electronic print procurement system may not be for you — yet.

But, the homework you’ve done will do you well in the future.

About the author: Denise A.G. McConnell is the marketing and communications coordintor for e-Lynxx.com, a division of ABC advisors. ABC Advisors advises printing companies on how to secure contract printing from the Government Printing Office, the largest commercial printing operation in the world. ABC Advisors’ services are discounted to members of Printing Industries of New England and Printing Industries of America/Graphic Arts Technical Foundation (PIA/GATF), through a national discount buying program established with PIA/GATF. Contact PINE at 508-804-4100 for more information about this program. McConnell can be reached at damcconnell@e-lynxx.com or by telephone at 717-709-0990 or toll free at 1-888-876-5432. The company’s Web site is www.printlynxx.com.