The True Cost of Business Communications

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Headquarters: Europe: Asia: 97 Libbey Industrial Parkway 3 rd Floor, Sceptre House Hiroo Office Building Suite 300 7-9 Castle Street 1-3-18 Hiroo, Shibuya-ku Weymouth, MA 02189 Luton, Bedfordshire Tokyo 150-0012 United States United Kingdom, LU1 3AJ Japan +1 781 616 2100 +44 1582 400120 +81 3 5475 2663 [email protected] [email protected] [email protected] February 3, 2009 Strategic Assessment The True Cost of Business Communications Authors Steve Adoniou Michael O’Leary Published by Document Outsourcing Consulting Service On Demand Printing and Publishing Consulting Service © 2009 InfoTrends, Inc. www.infotrends.com Abstract As the pressure builds for companies to reduce costs and maintain profitability, understanding and controlling print costs is critical to success. An effective document printing strategy leverages technology and process efficiency to provide high quality, low cost printwhen and where it is needed. Outsourcing can be an attractive approach to producing high-quality documents on-time and at significant cost savings. To make an effective ROI comparison of outsourcing print versus doing the work in-house, it is critical to understand the total cost of document production and not just the direct costs of putting marks on paper. This document examines the total costs of producing certain types of documents. We consider not only the costs associated with the actual printing and finishing of these documents, but also other production components such as creative, editorial, storage, archiving, distribution, and obsolescence. For More Information If you would like to order extra copies of this report, receive permission to use any part of the report, or be informed of upcoming market updates, reports, and related projects, please email us at [email protected] .

Transcript of The True Cost of Business Communications

Headquarters: Europe: Asia: 97 Libbey Industrial Parkway 3

rd Floor, Sceptre House Hiroo Office Building

Suite 300 7-9 Castle Street 1-3-18 Hiroo, Shibuya-ku Weymouth, MA 02189 Luton, Bedfordshire Tokyo 150-0012 United States United Kingdom, LU1 3AJ Japan +1 781 616 2100 +44 1582 400120 +81 3 5475 2663 [email protected] [email protected] [email protected]

February 3, 2009 Strategic Assessment

The True Cost of Business Communications

Authors

Steve Adoniou

Michael O’Leary

Published by

Document Outsourcing

Consulting Service

On Demand Printing and

Publishing Consulting Service

© 2009 InfoTrends, Inc.

www.infotrends.com

Abstract

As the pressure builds for companies to reduce costs and maintain

profitability, understanding and controlling print costs is critical to

success. An effective document printing strategy leverages technology

and process efficiency to provide high quality, low cost print—when and

where it is needed. Outsourcing can be an attractive approach to

producing high-quality documents on-time and at significant cost

savings. To make an effective ROI comparison of outsourcing print

versus doing the work in-house, it is critical to understand the total cost

of document production and not just the direct costs of putting marks on

paper. This document examines the total costs of producing certain

types of documents. We consider not only the costs associated with the

actual printing and finishing of these documents, but also other

production components such as creative, editorial, storage, archiving,

distribution, and obsolescence.

For More Information

If you would like to order extra copies of this report, receive permission to use any part of the

report, or be informed of upcoming market updates, reports, and related projects, please email

us at [email protected].

The True Cost of Business Communications February 2009

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Table of Contents

Introduction ............................................................................................................................... 2

Document Costs: It’s More Than Just Printing ...................................................................... 4 Profiles of Common Business Documents ............................................................................................. 4 Non-Printing Costs vs. Printing Costs .................................................................................................... 5 Impact of Shorter Print Runs on Non-Print Costs ................................................................................... 7

The Cost of Printing Internally – Perception vs. Reality......................................................... 9

Key Enablers to Automating the Print Process .................................................................... 11 E-Business Capabilities and Workflow Software .................................................................................. 11 Focus on Super Efficiency .................................................................................................................... 11 Decreasing Run Lengths ...................................................................................................................... 12

Conclusion .............................................................................................................................. 13

Introduction

Companies and organizations in today’s economy must increasingly review and evaluate the costs

associated with non-core business processes. As the pressure builds to reduce costs and maintain

profitability, there is a greater need to understand and control the total cost of document production.

Implementing an effective document management program can save organizations significant sums of

money that flow directly to the bottom line. The proper mix of internal and external production provides

an attractive approach to producing high-quality documents on-time and at significant cost savings. To

make an effective return on investment (ROI) comparison of outsourcing print versus doing the work in-

house, or between print providers, it is critical to understand the total cost of document production and not

just the direct costs of putting marks on paper.

Over the years, InfoTrends has focused considerable attention on the subject of the total cost of

business communications. Our initial, landmark research in 2001 titled The True Cost of Business

Communications revealed that for every $1 spent on print, another $6 were spent on non-print related

activities that were required to produce a given document. Back then, digital on-demand printing

technologies were still in early stages of adoption. Since that time, the use of digital technologies has

grown steadily at a rate of 20%-30% annually. In 2006, we revisited the topic and involved more

than 1,000 print buyers and document owners. The results of that study found that non-printing costs

had shifted downward and were, on average, about equal to printing costs. The reduction of non-

printing costs was enabled largely by the benefits of digital on-demand printing. Shorter printing runs

(reducing the need for document inventory), automated finishing and distribution workflows, as well

as e-procurement all helped reduce costs.

Document obsolescence refers to the cost of producing quantities of documents that never get used—

and are eventually discarded. In traditional ―print and fulfill‖ models, the cost of document

obsolescence is very significant. In our 2001 study, we found that document obsolescence represented

between 10% and 20% of the total document production costs. Of course, the adoption rate of digital

printing hardware and software technologies was nowhere near the levels seen today. Nevertheless,

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even with the arrival of digital technology, document obsolescence still exists. In fact, in the traditional

―print and fulfill‖ environments, the cost of document obsolescence remains at the same levels as in

2001. It is mainly within the more advanced, print-on-demand environments where the cost of

document obsolescence has decreased significantly.

Despite the fact that the ratio of print and non-print costs has shifted, non-print costs are still considerable.

InfoTrends has found that non-print costs are often still higher than actual print costs in environments

where older methods are used for producing, purchasing, creating, and managing printed documents.

Larger print runs are still common, potentially resulting in documents being stored for future distribution.

The print-on-demand concept allows for shorter and customized print runs, greatly reducing the need for

maintaining inventories. Print-on-demand also facilitates the ability to produce updates, edits, and

revisions. Our on-going research with Print Buyers consistently shows that design and internal approval

of documents are still labor-intensive. Smaller firms also cite job specification, inventory management,

and print job management as activities that consume time and significant labor.

e-Procurement (Web-to-print) applications expedite the document submission process, simplify order

tracking, and may also provide online layout, design, and editorial capabilities. Some of the more-

advanced Web-to-print tools are closely integrated with back-end, production workflow systems, enabling

the print service provider to operate more efficiently. Web-to-print tools, along with the latest digital print

technologies, have become a standard offering by successful print service providers.

Another consideration when developing an effective document management strategy involves examining

the costs associated with performing the work internally. Traditionally, the belief is that doing the work in-

house costs very little—and perhaps free, if chargeback processes are not in place for print. The reality is far

from that. The total burdened cost per page for a typical document produced in-house (at the desktop or

workgroup level) can range from $0.52 to $0.72. For organizations that print more color and graphic-

oriented documents (which increase the usage of ink and toner), the per-page costs can be even higher.

The remainder of this document takes a closer, up-to-date look at the total costs associated with

producing common business documents. We consider not only the costs associated with the actual

printing and finishing of these documents, but also the other production components, such as creative,

editorial, storage, archiving, and distribution. Our analysis also provides insight about the real cost

implications of printing internally.

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Document Costs: It’s More Than Just Printing

Profiles of Common Business Documents

To establish the total costs of producing documents, InfoTrends examined documents that are very

common across different companies and organizations. For these documents, the content may vary by

vertical industry segment or department, but in general, they are constructed in a similar manner. The

following document profiles were used to better understand the non-print related processes involved with

producing documents, along with the actual manufacturing-related requirements:

Manuals

Brochures

Sell-sheets

Microsoft PowerPoint presentations

In our 2006 vertical market study, we found that these types of documents represented 30% of total print

spend for document owners and print buyers. If we only consider marketing, promotional, and

publications documents in this view, the percentage of the documents we are examining here is closer to

60% of print spend. Table 1 below provides a quick view of the assumptions used regarding the finishing

and paper specifications for each document type.

Table 1: Document Job Specifications

Document Type Color Finishing Finished

Size Paper Pages

1

Manual 4/4 cover

1/1 text

No Bleeds

Spiral Binding

Three Hole Drilled

Auto-collated

Cut & Stack

8.5”x11”

20# Bond Text

100# Uncoated

Cover

200

Brochure 4/4

Bleeds

Trim to 11”x17”

Self Cover

Fold

Saddle-Stitch

8.5”x11” 80# Gloss

Text 8

Sell sheet 4/1

Bleeds

Trim to 8.5”x11”

8.5”x11” 60# Opaque 2

PowerPoint Presentation 4/4 No Bleeds

Coil Bound 8.5”x11” 60# Opaque 20

1 This figure represents the numbered pages or sides in each document. For example, the sell sheet is one 8.5 inch x

11 inch sheet printed front and back.

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Non-Printing Costs vs. Printing Costs

To understand the true cost of these documents, the entire document lifecycle must be examined and not

just the final print ―cost per page‖ for ink or toner on paper (or other medium). The real cost of documents

is embodied in the time, resources, and money spent in document processing, including authoring, design,

revision control, ordering, printing, distribution, warehousing, and inventory obsolescence.

The following costs were estimated for each document type in the model:

Creative Costs (Internal and External) – Refers to design agency/advertising agency expenses; may

include page layout, template creation, photography work, graphic design, and conceptualization.

Editorial Costs – Includes copy writing, technical writing, proof reading, and internal document

review.

Project Management – These costs refer to general internal and administrative activities related to

meetings, vendor selection, order processing, project tracking, document preparation and review,

approvals, press checks, and final proofing.

Printing Costs – Includes prepress, paper, printing, and finishing. This component is dependent on

print run length.

Warehousing/Archiving – This component is also dependent on print run length, as well as the

planned distribution strategy. For example, will a technical manual be shipped with a product or

warehoused and fulfilled upon request?

Obsolescence – This cost is most significant within traditional print and fulfill/distribute models. It

does still exist in more advanced print-on-demand scenarios, particularly due to supply chain issues as

well as the need for frequent updating of document content. In non print-on-demand environments,

obsolescence can still represent between 10%-20% of the total costs.

Shipping/Distribution – As with warehousing and distribution, this component is dependent on print

run length and distribution strategy.

For each document type we have assumed a number of characteristics regarding creative and editorial

processes as well as shipping, storing/archiving, and distribution. Table 2 shows the assumptions we have

built in to this model. These assumptions were derived from interviews with print buyers and document

owners, as well as information from print service providers. The financial figures represent the averages

for each document type.

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Table 2: Costs Related to Non-Print Document Production*

Function Manual Brochure Sell

Sheet PowerPoint

Presentation

Creative (internal) $392 $1,406 $283 $135

Creative (external) $1,234 $2,707 $602 $0

Editorial $5,832 $1,517 $377 $55

Project management $1,176 $958 $175 $75

Warehousing/Archiving $55 $29 $29 $29

Total $8,689 $6,617 $1,466 $294

*Excluding shipping/fulfillment. These costs appear in Table 3, and vary depending on quantity.

Table 3 shows shipping cost estimates for the various quantities that we are considering. For the sake of

consistency, we are using a single shipping destination, average rates for standard, and ground shipping.

Table 3: Document Shipping/Distribution Costs

Quantity Manual Brochure Sell

Sheet PowerPoint

Presentation

1 $18 $15 $15 $15

25 $25 $24 $15 $24

50 $32 $29 $15 $29

100 $67 $43 $19 $43

500 $223 $181 $20 $181

1000 $445 $220 $23 $220

Table 4 shows average pricing obtained from four major national print service providers. These print

service providers all have digital capabilities, and can therefore produce quantities as low as one set or up

to 1,000. All of them also have finishing capabilities that can accommodate our specifications from Table

1.

Table 4: Document Printing and Finishing Costs

Quantity Manual Brochure Sell

Sheet PowerPoint

Presentation

1 $20 $10 $3 $19

25 $407 $130 $32 $338

50 $777 $247 $60 $616

100 $1,410 $439 $114 $1,425

500 $6,086 $1,980 $460 $6,271

1,000 $12,001 $3,551 $873 $12,539

The Data Tables above do not account for document obsolescence. In our more recent research, print buyers

did not indicate an estimated cost for document obsolescence, but indicated they were not using 10%-20%

of the pieces printed. We have found that this is most common with documents such as technical manuals,

training manuals, assembly instructions, and several other multi-page bound documents. Taking these

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percentages into account, the cost of obsolescence for a quantity of 1,000 would be in the range of $1,200 to

$2,400 for manuals, for example (based on printing and finishing costs as represented in Table 4).

Considering the cost estimates presented in Tables 2, 3, and 4 above, we developed an aggregate, average

percentage of cost estimate across all four documents in this study. This is illustrated below in Figure 1, where

we display the various components and their percentage share of the total cost of document production.

Figure 1: Average Costs for Document Production

Printing

Internal Creative

External Creative

Editorial

Project Management

Warehousing/Archiving

Fulfillment/Shipping/Distribution

Inventory Obsolescence

45.6%

54.4%

Impact of Shorter Print Runs on Non-Print Costs

The previous section provided us a basis to our comparison of the costs associated with non-print

activities, such as creative, editorial, project management, as well as shipping and costs directly related to

print activities (e.g., the actual print itself and the finishing that must occur to produce the document).

One primary driver in this comparison is the quantity in question. The preceding data includes some very

low quantities, going as low as a single set of the document. Due to the availability and proliferation of

print-on-demand technologies throughout the printing industry, it is quite feasible to obtain a single set of

any document, like a sell sheet or manual.

As we illustrate in Table 5, ratio of non-print costs to print costs varies dramatically depending on the

number of document sets that are purchased. As we mentioned earlier, in our 2001 study we discovered

that for every $1 spent on print, another $6 was spent on non-print. As we can see below, that ratio

increases substantially when considering very small quantities. In addition, the ratio diminishes

significantly when the quantity increases.

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Table 5: Amount Spent on Non-Print for Each $1 spent on Print

Quantity Manual Brochure Sell

Sheet PowerPoint Presentation

1 $445.24 $693.93 $432.48 $16.28

25 $21.41 $50.90 $45.88 $0.94

50 $11.23 $26.95 $24.86 $0.52

100 $6.21 $15.18 $13.00 $0.24

500 $1.46 $3.43 $3.23 $0.08

1,000 $0.76 $1.93 $1.71 $0.04

The critical point here is that non-print costs are still very significant. For documents created at shorter

print runs, the greatest relative expense can be attributed to that creation process. Publication-type

documents, such as manuals, frequently use expensive professional resources. Since this expense is not

dependent on run length, it is not amortized over many documents for shorter print runs. The creative

process, however, is not the only major expense. The time spent on editorial and project management

activities is very significant, as well. For example, across all document types, project management

represents 13% of the total non-printing costs.

Document obsolescence can occur in a variety of ways. It is more evident within a traditional print and

fulfill model. One example of this would be a physician directory for a health insurance company, where

a large quantity would be printed annually and then stored in a warehouse for future distributions within

that calendar year. Every year, the insurance company would print a new directory and the old ones from

the previous year would be discarded. In this scenario, obsolescence occurs in two ways: (1) it would

occur nearly immediately, since these directories would not reflect any physicians that had been added or

removed from the network, and (2) any directories that were not shipped by the end of the year would be

discarded. Another example would be a training manual for a training session of 15-20 people. In this

scenario, we could even apply a short-run digital print on-demand model. A typical approach to supplying

these manuals would be to print a few extra in anticipation that the total number of session attendees was

not confirmed. If 20 are printed and only 15 people attend the session, there are 5 unused manuals (still a

very high percentage of obsolescence at 25%). Removing or mitigating obsolescence from this type of

digital short run, however, can be achieved by printing only the quantity for a confirmed number of

attendees, and then printing any additional copies a day or even hours before the training session occurs.

As run lengths get shorter and margin pressures increase, the focus needs to be on automation and lean print

manufacturing, beginning with capabilities such as Internet-driven ordering and extending through

fulfillment. New digital technology and software lead the way in terms of implementing these strategies. In

today’s difficult economy, relying on an outside print service provider may be the fastest way to take

advantage of achieving the desired levels of automation, while driving down unnecessary costs.

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The Cost of Printing Internally – Perception vs. Reality

When building the case to outsource print, another consideration is comparing costs to doing the work

internally. Today, workgroup and desktop devices have greater functionality, providing color and

advanced finishing options, such as booklet making. Traditionally, the belief has been that doing the work

in-house costs very little or is free if there are no internal chargeback procedures. The reality is far from

that. The proliferation of output devices in the office and inefficient in-plant configurations have

significantly contributed to the dramatic increase in corporate document output costs.

In addition to the direct costs associated with maintaining the internal document technology

infrastructure, other less-visible (but very real) costs must be factored. Organizations incur costs for

things like MIS/IT support, print servers, document creation and editing software, in-plant labor,

administration and purchasing support, as well as training—all of which are needed regardless of whether

or not an organization chooses to outsource. Another important consideration is the employees’ time,

which is often spent doing tasks that can be automated. Examples include simple things like walking to

the in-plant print center (or copier/printer) to submit and retrieve orders, hand finishing documents

(binding, folding, stapling), repeating steps to correct errors, and performing packing/shipping activities.

In 2006, InfoTrends found that as low as 10% of the total burdened costs for documents processed

internally were tied to equipment, supplies, and service expenses. Other burdened costs include IT

support and infrastructure, procurement and facility costs, end-user interaction time, and document

management expense. These costs are usually fragmented in budgets and processes across the

organization. Table 6 shows the burdened costs per each page produced in house.

Table 6: Total Burdened Costs for Documents

Total Burdened Costs for Documents Avg Cost

Visible Hard Costs – hardware, toner and inks, paper (plain and special), click-charges,

services and maintenance, power, etc. 5¢ to 7¢

IS Support and Infrastructure – help desks, 2nd

level support, installation, asset mgt.,

assessment, testing, training, print servers, network connections, mainframe

conversions, print formatting software, pre-processing equipment., etc.

5¢ to 7¢

Administration and Purchasing – product and services selection, internal requisitions,

orders, billing, RFP’s, storage, restocking, supplies service centers, inventory

management, vendor relationship management, etc.

2.5¢ to 3.5¢

Document Production – end user production time/energy, waiting time, intervention

activity, hand finishing, walking to copiers, fax machine interaction, etc. 15¢ to 20¢

Document Management – the ‘before and after’ process costs, including filing, storing,

indexing, COLD, scanning, binding, retrieving, mailroom functions, pre-printed forms,

electronic forms, document creation, waste disposal, etc.

25¢ to 33¢

Total Burdened Cost 52¢ to 70¢

Based on this analysis, the total burdened cost per page for a typical document produced in-house can

range from $0.52 to $0.70. For organizations that print more color and graphic-oriented documents

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(which increase the usage of ink and toner), the per-page costs will be higher. These ―unaccounted for‖

but very real burdened costs are in addition to the non-print related costs described earlier.

Another effective manner to compare the internal costs of producing documents against outsourcing is to

build an activity model that includes time and actual print costs. The assumptions and example below

demonstrate a very simple cost model for printing a single manual internally and externally via several

well established providers.

Labor cost for knowledge worker: $0.52 per minute (equates to $65,000 annual salary/ benefits)

Color print: $0.39 internal, $0.30 and $0.28 external

B&W print: $0.05 internal, $0.049 and $0.028 external

Binder and cover: $2.92 internal, $1.90 and $1.99 external

Table 7: Internal Document Production Activity Costs

Activity In-House

”Traditional Printer”

”Internet Printer”

Min Cost Min Cost Min Cost

Driving/Walking time 10 $5.20 10 $5.20 0 $0

Creating new order 12 $6.24 10 $5.20 5 $2.60

Proofing 5 $2.60 5 $2.60 2 $1.04

Reordering 12 $6.24 7 $3.64 2 $1.04

Pick-up time 12 $6.24 12 $6.24 0 $0

Repeat due to errors 15% $3.98 9% $2.06 0.3% $0.01

Obsolescence 5% $0.67 15% $1.80 2% $0.16

Sub-total $31.17 $26.74 $4.85

Direct print $13.31 $12.00 $7.87

Total Costs $44.48 $38.74 $12.72

This example is not intended to be all-inclusive, but it does demonstrate there are several factors to

consider when printing even simple documents, such as manuals—the labor costs associated with manual

tasks, the need to repeat tasks when there are manufacturing errors, and the actual cost of printing. In this

example, one external provider clearly showed the benefits of automation through Internet-enabled

software functionality.

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Key Enablers to Automating the Print Process

The recent economic decline will clearly impact print spending. In an effort to reduce costs, larger

organizations will look closely at the economics of eliminating (or consolidating) in-plant print shops and

copy centers, as well as shifting required print work to outside providers. There are several key trends and

enablers to automating the print process and driving down costs.

e-Business Capabilities and Workflow Software

Since many of these organizations already utilize e-business solutions for print and non-print parts of their

business, they will look for providers who supply similar Web-based capabilities. In 2008, InfoTrends

evaluated the e-business capabilities that were most important to buyers of print and related services. Our

research found that tracking job status is very important to enterprise respondents, with more than 60% of

them indicating they use this feature at least some of the time.

Web-To-Print tools allow for print buyers and document owners to automate purchasing, project

management, editing, approval, and creative processes. Where a staff person or outside contractor may

have been relied upon to perform even the simplest editing functions, these can now be performed

through one of many Web-To-Print tools by someone who may not necessarily have advanced editing

and/or graphic design skills. In addition, many of these tools allow the print service provider to more

easily manage and simplify the production processes and provide logistics services.

Some Web-To-Print tools are not limited to providing automation and added efficiencies for print buyers,

but also possess additional back-end print production. These tools are key enablers of ―super-efficiency.‖

With a Web-to-print application, information provided by the document owner remains with the job

throughout the production process, allowing the production staff to review job specifications, shipping

information, deadlines, and other critical job data. In addition, certain advanced production automation

features will enable the print production staff to gang jobs on press sheets to maximize productivity and

efficiency, as well as manage the workload across multiple devices. This level of integration and

automation will ultimately ensure accuracy, consistency, and timeliness for the print customer as well as

help the print service provider to offer competitive pricing and superior customer service.

Other software tools, such as Offset/Digital Workflow and Print MIS, allow print service providers to

streamline their workflows and manage processes (e.g., finishing, inventory, fulfillment, and distribution)

to maximize efficiency and increase productivity.

Focus on Super Efficiency

The term ―efficient‖ can be used very loosely, particularly in regard to print. We hear of work

environments and workflows that are running lean and are very efficient in terms of limiting their errors,

but may not have much in terms of process automation. Over the past few years, InfoTrends has used the

term ―Super Efficiency‖ to reflect a level of efficiency that is partly related to accuracy and limiting waste

in all areas of production, but further enabling that through the effective use of some of the software tools

previously mentioned in this paper to achieve a higher level of efficiency, which automates processes that

otherwise must be handled manually by a person.

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Some examples of functions that can be automated would be color management, job ganging/imposition,

inventory counts, order processing, and integration of shop floor activity with accounting and customer

service. A truly integrated workplace is one where various processes are linked in through a system that

communicates relevant information to the various departments within a print production environment.

Super Efficiency ultimately delivers greater levels of customer service satisfaction along with competitive

pricing. There is a high level of assurance for the print customer that the work will be done accurately and

on-time. Certain processes such as activity reports, billing, and pricing estimates are all expedited, saving

the print customer time and accelerating the overall supply chain.

Decreasing Run Lengths

InfoTrends surveyed 318 print service providers about run lengths in October 2008. This study validated a

previous survey done in 2004 that showed that run lengths were declining. As Figure 1 illustrates, fewer

print service providers reported that longer print run lengths are increasing and, conversely, more are

saying that run lengths are decreasing. Interestingly, the only area we found increases are with quantities

below 250 pieces.

Figure 1: Print Run Length Trends

2004 2008

48% 50%

39%30%

23%15%

50% 49%45%

27%20%

14% 12%

48%

46%46%

53%

52%

45%

41%

43% 42% 49%

60%

57%

43%

33%

13%4%

8%

17%

32%

44%

6% 9% 7%13%

23%

43%

55%

40%

6%

0%

20%

40%

60%

80%

100%

<250

250 to

499

500 to

999

1,00

0 to 4,9

99

5,00

0 to 9,9

99

10,000

to 4

9,99

9

50,000

+<25

0

250 to

499

500 to

999

1,00

0 to 4,9

99

5,00

0 to 9,9

99

10,000

to 4

9,99

9

50,000

+

Decrease

Stay the same

Increase

Source: InfoTrends 2004 and 2008 Print Service Provider Surveys

Pe

rce

nta

ge

of R

esp

on

de

nts

Run Length Range

Documents that are modified to create a different version ultimately become their own document and

would not be considered additional copies of the original document. Most Web-To-Print software

solutions offer the ability to create versions on the fly. This is an important contributor to the ongoing

decreases in print run lengths.

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Conclusion

Print buyers and document owners need to be aware of the total costs of producing a document. Our

research indicates that documents are still costly to produce, distribute, manage, and print. In all cases, the

total quantity required must be taken seriously into consideration.

Many organizations consider just the cost-per-page when printing documents. Nevertheless, there are

non-printed related costs that must also be considered to accurately assess the total cost of producing a

job. If the total quantity is ultimately going to be very large, then the cost ratio between non-print and

print related costs will diminish. Regardless of the ratio, the cost of non-print activities is significant and

these activities usually require some level of moderate-to-high wage people to do the work. Through the

use of some of the Web-To-Print tools that print service providers offer, however, most of these functions

can be migrated over to the Web and the labor costs can be reduced.

To deploy an effective document management strategy, understanding the true cost of documents and

business communications is critical.

o Overall, documents are still costly to create, manage, distribute, and print. In addition,

obsolescence remains an issue, despite the adoption of print-on-demand workflows.

o The ratio of non-print related costs to print costs can be very significant, particularly for short

(low quantity) runs.

o The costs related to submitting, managing, and printing jobs internally can be much higher

than most companies understand or expect.

The emergence of digital technology and automation software provides the ability to drive costs out:

o True print-on-demand applications and shorter runs are enabled by digital printing

technology.

o Super Efficiency through Internet-enabled, Web-to-print solutions, document workflow

solutions, and other software applications ultimately lower production costs, enable faster job

completion, and improve customer satisfaction.

o The lower cost of higher-speed, digital color technology allows organizations to produce

quality color documents at affordable rates.

In today’s economy, deploying the right document management solution can deliver significant results.

Determining the proper mix of internal and external services is critical to success. It requires an

understanding of all related costs. For most organizations this is not an either/or decision, but one that

provides them with the most effective mix.

This material is prepared specifically for clients of InfoTrends, Inc. The opinions expressed represent our interpretation and analysis of information

generally available to the public or released by responsible individuals in the subject companies. We believe that the sources of information on which our

material is based are reliable and we have applied our best professional judgment to the data obtained.