The content on this page and other DCITA document archive pages is provided to assist research and may contain references to activities or policies that have no current application. See the full archive disclaimer.
Copytime
Executive Summary
Copytime is a family owned company that provides printing services to customers located throughout the Northern Territory. The business also offers online printing and multimedia services such as graphic design and plotting. Copytime is based in Darwin, Northern Territory and employs 26 full time employees.
General Manager, Colin Rohde, required a more convenient method for file and data exchange between offices and with customers. He believed that e-commerce would provide customers with the option of emailing their job requests in various file formats instead of post or courier. It would also enable different Copytime offices to exchange jobs and access resources electronically, simplifying administrative processes.
The Virtual Private Network (VPN) employed by Copytime provides an encrypted connection between the company's distributed sites, which allows staff to access a central repository of information and operate printers from remote locations. This flexibility allows staff to work from home or from customer premises. The use of VPN enhances the security of electronic data exchange and transactions.
In 2001, Copytime generated additional revenue from e-commerce of $301,000 as a result of work received online or customers having found the business through its website. Benefits were also realised in the form of cost savings, totalling $139,800. Copytime invested $212,000 in setting up the e-commerce system over three years.
The Business
Copytime is a printing service based in Darwin, Northern Territory. The family-owned company provides general and job printing services to a wide range of customers. Products include ordinary reports, specifications, leaflets, wideformat posters, plan printing and specialty paper/cards/envelopes etc. The company also offers online printing and multimedia services such as graphic design and plotting.
Copytime has been in operation for 23 years and employs 26 full-time employees.
Getting Started
General Manager, Colin Rhode, initiated e-commerce in 1991 after gaining insight from communications operator, Bulletin Board System (BBS) as to the benefits of operating business online. Initially, Colin believed e-commerce could provide a more convenient method for file and data exchange. Customers would be able to email their required printing in various file formats and correspondence of drafts and amendments could be easily exchanged.
Colin later expanded his usage of e-commerce to include product quality enhancements and process efficiency. To achieve this goal, a Virtual Private Network (VPN) was established to enable different Copytime sites to access and retrieve information from a central source. A VPN solution would also provide secure business data exchange between Copytime premises and customers.
To complement the internal system, a website was also established to enable cost effective and convenient information distribution with customers. The company website is marketed by word-of-mouth, flyers, invoices and posters. The site is currently maintained in-house.
In conducting initial research, Colin sought the advice of communications experts and referred to computer magazines. He also consulted with BBS (Bulletin Board System) operators in developing a communications strategy that would meet the needs of Copytime customers.
Virtual Private Network (VPN)
A VPN provides a secure connection between two parts of a network, one end being the office's network and the other end being a computer terminal or gateway to another network. The transfer of data between the two ends is carried through a public network (Internet). An advantage of VPN is that a user could be anywhere in the world and need only incur the cost of a local modem call to an Internet Service Provider (ISP) who securely transfers data back to the user's main network.
Copytime's VPN provides an encrypted connection between the company's distributed sites throughout the Northern Territory which provides staff with secure access to a centralised repository containing company information such as credentials and corporate logos, as well as operate printers from remote locations. This flexibility allows staff to work from home or from customer premises.
Current e-commerce strategy
Whilst the VPN forms the core internal component of the online infrastructure, development of a company website provides further efficiencies to the company, as well as to external parties. The website is used primarily as a marketing tool to disseminate information including printing products, job types, colour scales and paper qualities. An online printer function allows customers to create a design on the website, submit the request and Copytime prints and delivers the product. In addition, an online shop is available for the purchase of stationery, paper and print supplies.
Several internal processes have also been transformed by the use of Internet technology. Email is now the main form of communication between Copytime and its customers. By allowing customers to email designs and data, physical travel time is minimised. In fact, Copytime has become the "tender centre" for several large construction corporations wherein the constructor emails or ftp's a complete set of data such as tender documents for print. Copytime has developed a strong relationship with several larger organizations such as Multiplex whereby all tenders are now printed using this delivery method. Any amendments similarly are forwarded and each prospective supplier or sub contractor or duly notified with either hard copy or electronic version as required.
Similarly, amended documentation is also easily handled for contracts and upgrades or updates during a construction phase. Concurrently, each supplier or subcontractor also has the ability to join the network allowing easy data retrieval for production of as-constructed information. In essence this has formulated the process of "Document Project Management".
Other processes that have shifted to a web platform include banking, payroll and procurement research.
Several security measures have been implemented to protect against system failure, particularly in light of Darwin's inconsistent power supply. As a result, Copytime has acquired a back-up server to support the operating server in the event of power outages. Other security measures include the installation of firewalls, antivirus software and the backing up of business data on Compact Disc (CD) or (DVD).
Revenue and Costs
|
E-commerce Establishment Costs |
|
|
|
|
|
|
|
|
|
($) |
|
Web development |
|
50,000 |
|
Preliminary research |
|
20,000 |
|
Staff training |
|
30,000 |
|
Database integration - VPN connecting branches to a central database |
|
30,000 |
|
Telecommunications |
|
4,000 |
|
Disaster recover plan - backup server |
|
20,000 |
|
Back office infrastructure |
|
10,000 |
|
Printing - marketing material |
|
9,000 |
|
Software - database integration and modification |
|
2,000 |
|
Hardware - router/server/hub/cabling |
|
36,000 |
|
Hardware - data storage and backup |
|
1,000 |
|
Total Establishment Costs |
|
212,000 |
|
|
|
|
|
|
|
|
|
Operating Benefit from E-commerce |
|
|
|
|
|
2001 |
|
Additional Revenue from E-commerce |
|
($) |
|
Domestic |
300,000 |
|
|
International |
1,000 |
|
|
Total Additional Revenue from E-commerce |
|
301,000 |
|
Less: Cost of Sales |
(225,000) |
|
|
Gross Profit from E-commerce |
|
76,000 |
|
Add: E-commerce Cost Savings |
|
|
|
Postage / Freight |
4,000 |
|
|
Administration - banking |
2,000 |
|
|
Staff time: procurement |
23,400 |
|
|
Staff time: online payments and banking |
10,400 |
|
|
Staff time: access and retrieval of data |
100,000 |
|
|
Total E-commerce Cost Savings |
|
139,800 |
|
Gross Benefit from E-commerce |
|
215,800 |
|
Less: Ongoing e-commerce costs |
|
|
|
Amortisation of Capital Expenditure* |
(47,500) |
|
|
Electronic payment systems - fixed costs |
(500) |
|
|
Electronic payment systems - variable costs |
(3,000) |
|
|
Bank charges |
(3,700) |
|
|
Internet service provider |
(1,200) |
|
|
Staff Requirement - IT manager |
(40,000) |
|
|
Total Ongoing E-commerce Costs |
|
(95,900) |
|
Operating Benefit from E-commerce |
|
119,900 |
|
|
|
|
* Note: Capital Expenditure is amortised over a four year period
Financial Analysis
In 2001, Copytime generated additional revenue attributable to e-commerce of $300,000 from domestic sales and $1,000 through international sales. This was mainly due to job requests submitted online and from customers having found the business through its website. Currently, Copytime receive approximately 10 email jobs per day. Additional revenue from e-commerce has contributed $76,000 to gross profit.
Cost savings achieved during 2001 totalled $139,800. Access and retrieval efficiencies afforded by the VPN has produced the most significant cost saving ($100,000). The use of the Internet to procure supplies and manage banking has improved staff efficiency by $23,400 and $10,400 respectively. In addition, the use of email as the main form of correspondence has reduced the need for the postage and courier of documents ($4,000).
Copytime invested $212,000 in establishing the system over a three-year period. The single largest establishment cost was incurred in development of the website ($50,000). Other costs were mainly associated with developing the online infrastructure including; database integration ($30,000), back office equipment ($10,000) and cabling ($4,000). Investment in new hardware required to support the system included router and hub ($36,000), data storage devices ($1,000) and a back up server in the event of system failure ($20,000). Staff time spent in researching suitable Internet solutions amounted to $20,000.
Ongoing costs associated with the e-commerce implementation totalled $95,900 in 2001. The majority of this figure was allocated to the recruitment of an Information Technology (IT) Manager to oversee the online system ($40,000). Other ongoing costs involve support of the electronic payment system being usage charges ($3,500) and bank fees ($3,700). In addition, capital expenditure was amortised over a four-year period ($47,500).
Non-Financial Benefits
Service delivery to customers has improved significantly following the implementation of e-commerce. Email provides a convenient method for file transfer, minimising the need for customers to physically submit requests. In terms of internal processes, easier access to required documents via the Virtual Private Network (VPN) enables more timely response to customer enquiries. Furthermore, staff ability to control printers from remote locations ultimately contributes to a shorter delivery cycle.
Challenges
Copytime encountered a number of difficulties during implementation due to the inadequacy of the existing IT infrastructure. In particular, the lack of skilled IT staff proved limiting for the smooth and timely establishment of the online system. In addition, an inconsistent power supply presents the constant threat of data loss and system failure. These issues have been overcome by developing customised software solutions utilising the skills of experienced IT professionals.
Future
In the past, Copytime has found it difficult to maintain a consistent marketing and maintenance strategy for its website due to the demands of increased printing work. To manage this issue, the company intends to strengthen marketing efforts to raise the company profile and increase revenue.
Colin advises those venturing into e-commerce to ignore the media hype and ensure that a solid plan is in place. He believes companies should be conservative in their projections for revenue growth and be aware that an online presence will also expose a company's sales strategy to competitors.