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If the business mantra of a property agent is “location, location, location”, then the equivalent line from a print manager would probably be “price, price, price”. Until recently that is. While five or so years ago the traditional business model of a print manager may not have gone much beyond print broking, today PM firms provide a vast gamut of value-added functions for buyers ranging from call centre management through to data processing.

Much of this change has been forced on firms as profits from a pure PM offering continue to dwindle and, as a result, they have evolved into business process outsourcing (BPO) operations. PM behemoths such as Williams Lea and Astron have already undergone this transformation and earlier this year Communisis revealed plans to remodel its PM business and put an end to the mark-up on prices for print that the firm places, with a new emphasis placed on value-added services such as asset management design. Others look set to follow.

But as this new era of PM firms dawns, what can buyers expect to gain from outsourcing their print and, in the long run, is it really worth it or should you keep your print procurement function in-house?

The whole picture
The key difference, and advantage, that using a print manager holds over getting your internal print buyer to deal directly with the printer is that: “Printers sell on price and we sell on service.” At least, that’s the opinion of TripleArc chief executive Jason Cromack, who continues: “We’re selling a communications service, so we will ask questions such as ‘do you really need to print it, or can it be done another way?’”

Cromack says that his firm provides an invaluable service to companies – including those that already have internal print buyers or procurement departments – because of the expertise that his firm brings to the table. He explains that while buyers may be familiar with some areas of print, they might not have a clear understanding about all aspects. For example, they may believe that blanket mailings are the best approach for a direct mail campaign, but the smart advice these days is to opt for smaller, better targeted, personalised messages to build brand loyalty.

So, if you appoint a PM firm, what should you expect? Armed with the aforementioned market knowledge, the first thing that most PM companies will do when they go into a new client is to look at the existing procurement processes and work out how they can be re-engineered to deliver savings. A frighteningly large number of blue-chip companies have a fragmented procurement system, which means that they are not purchasing as efficiently as they should be. This lack of cohesion makes it easy for a PM to come in, improve processes and put in place more controls.

Big savings
Cost savings achieved by using a PM will vary depending on how much a company has already gone down the streamlining route – or how much of a mess its procurement functions are in. Typically, PM firms cite a ballpark figure of anywhere between 15-40% over the course of a contract and given that most large corporates’ print spend can be into the high hundred thousands, or even millions, this is not small beer that we’re talking about.

“We have a customer who used to pay 7p a copy and we managed to bring that down to 5p,” explains Patrick Auer, co-owner of Colchester-based PM firm Leanprint. “If you look at that sum as part of an annual print spend of two to three million copies per year then that’s a big saving.”

While the figures sound impressive, Auer and Matt Bird, managing director of PM outfit extrinsic, agree that the cost-saving sales pitch on its own no longer stacks up as a compelling reason to use a PM.
“If you’ve saved 10-15% in year one for a client and then you do the same again in year two, then the implication is ‘why didn’t you do that in year one?’ ” explains Bird. He feels that one of the major problems that reputable PM companies have is that as they have become more ubiquitous, clients are much more knowledgeable about their pros and cons and some of the more fly-by-night operators have conspired to give the rest of the sector a bad name. “Unfortunately, a lot of PMs have concentrated on what they appear to do, but they don’t really deliver on it because many PM companies are
offering pricing that’s unsustainable,” says Bird.

He adds that his own firm tries to quote “honestly and keenly” when asked to pitch for a new contract as cost savings are inevitably part of the attraction of any outsourcing deal but, ultimately, the key to a successful relationship for him is the framing of a contract that will deliver both hard and soft savings and to “allow the client to maintain control of their print but manage the material for them”.

This is a view subscribed to by Auer, who believes that the role of the PM is to look after both customer and supplier. “You’re nothing without your suppliers and we are not a company that is prepared to screw the printer down. My partner and I were both printers and we know how tight it is out there, but we believe that through our knowledge of print processes, we can do the job cost effectively and the printer will still get a fair price.”

Also in the spirit of transparency, Leanprint offers a print dictionary that guides its customers through the print maze. “There’s a lot of jargon in print and when we tell our customers something, we want them to understand exactly what we are talking about because we are totally open with them,” he explains.

However, not all PM firms are like Leanprint. There are still far too many operators blinded by cost who are prepared to wield their consolidated print spend to the detriment of their customers and their suppliers. Any buyer investigating the PM option needs to make sure that their aspirations match those of their print partner and that their respected end goals are not at opposite ends of the spectrum. Signing up with a PM firm is a big decision to make and, if implemented successfully, it can bring undoubted benefits but, if you make the wrong choice, it’s difficult to reverse it.

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TOP TIPS ON FORMING A PM RELATIONSHIP
• Try to establish from the start what you want to achieve from the relationship and what parts of your business you are willing to outsource
• The further down the line you are in terms of streamlining your procurement processes, the smaller the savings may be, in which case you should look at the value-added service provided rather than just the pure financials of the deal
• Shop around – get a number of people to pitch for your business and don’t just go for the one promising the highest savings. Chances are that if the deal looks too good to be true that’s because it is and the PM firm won’t be able to deliver
• Constantly review the arrangement and carry out a regular audit to make sure that you’re getting value for money

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CASE STUDY: DRUCKERS
Druckers Vienna Patisserie is a chain of cafés with more than 40 outlets in the UK.

In early 2006, following a change of corporate identity, the firm turned to print manager Etrinsic to handle the production of a number of different printed items including point of sale, marketing material, menus, posters, countertop tickets and carrier bags.

“We opted for a print management specialist because we wanted people who knew what they were doing and could deal with our diverse require­ments,” says Bernard André, technical services director.

A major advantage of working with Etrinsic is its access to a huge range of suppliers. “A good case in
point is our carrier bags. This project had been ongoing for six months with another supplier and was going nowhere. I rang Etrinsic and in less than two weeks, I had an idea of the cost and a visual.”

Also important to Druckers is colour consistency across all printed items – Etrinsic acts as the guardian to ensure that consistent colour is achieved. “If it’s not perfect, it goes back,” says André,
who adds that the key to a successful relationship is getting the chemistry right.

“With Etrinsic, we definitely under­stand one another and have a good partnership. We are getting a good deal and they are doing a good job.”