Print Approach

www.printapproach.com.au

Executive Summary

Print Approach is a family owned and operated printing company servicing the corporate and government sectors. Based in Brisbane, Queensland, Print Approach employees 38 full time staff.

In early 2001, Managing Director Tom Eckersley decided e-commerce was vital in Print Approach's drive towards a position of market leadership. The inherent marketing opportunities of the Internet and client demand for e-commerce convinced Tom that online business processes were the way of the future.

With the assistance of a government grant, Print Approach enlisted the services of an IT consultant to help develop an electronic value chain. Print Approach was careful to develop their e-commerce initiative incrementally and with a client focus. The staged process would ensure the implementation was both successful and flexible, providing scope for additional functionality.

The company's approach to the value chain enabled them to develop client specific solutions and utilise business relationships with other print manufacturers such as Imprint (a subsidiary of Print Approach), and printing brokers such as Business Print Australia. As customer requirements evolve, new solutions are deployed to meet their specific needs.

Print Approach's supply chain integration generated additional revenue of $500,000 in 2001, which contributed a total of $100,000 to gross profit. A further $160,200 in cost savings resulted in a net operating benefit of $183,565. The total initial outlay invested was $135,540. Print Approach supplemented these costs with a dollar for dollar government grant of $35,000.

The Business

Print Approach is a family owned and operated printing company founded in 1971 by the Eckersley family, which specialises in providing printing services to the corporate and government sectors.

Based in Brisbane, Queensland, Print Approach employs 38 full time staff.

Getting Started

In early 2001, Managing Director Tom Eckersley decided e-commerce was vital in Print Approach's drive towards a position of market leadership. The inherent marketing opportunities of the Internet and client demand for e-commerce convinced Tom that online business processes were the way of the future.

Motivated by a printing industry government grant, Print Approach were careful to develop their e-commerce initiative incrementally and with a client focus. The staged process would ensure the implementation was both successful and flexible, providing scope for additional functionality.

The first step involved identifying the company's goals, followed by the development of strategies to integrate e-commerce into the existing business structure. Through collaboration with clients, Print Approach was able to identify system requirements that directly correlated to customer needs.

Tom recruited the services of Information Technology (IT) consultants to reconfigure the existing IT system and equipment to support the new processes. The final stage involved developing client specific solutions.

An organisation called The Executive Connection (www.tec.net.au), a global knowledge exchange network for CEOs, was one of Tom's key sources for information for the project. Tom was able to research case studies and assess the e-commerce solutions of other companies.

Supply Chain Integration

Supply Chain Integration focuses on the strategic sharing of information in order to promote synchronised planning and workflow coordination amongst business partners. Print Approach participated in a government funded value chain program managed by the Department for State and Regional Development. A dollar for dollar $35,000 grant was provided to enhance the electronic collaboration between companies in the print industry.

The process included a scoping exercise, which analysed the supply chain processes taking place between the client, product broker/marketer/manager (Business Print Australia) and the print manufacturer (Print Approach). Possible improvements to the process were identified and the system was designed to accommodate these.

For example, one particular client had difficulty tracking orders from several distributors located around the country. A solution was devised and implemented allowing the client to logon to the website with a specific password to view individual order details. The website would display to the client the relevant order, dispatch details and inventory levels.

Print Approach built a system that will facilitate the development of individual client solutions when required. Through collaboration with Business Print Australia (BPA), a printing broker specialising in outsourcing, the company provides customers with a transparent printing service featuring online functionalities such as proofing, order tracking, and inventory management.

Current e-commerce strategy

Print Approach's electronic portal with Business Print Australia allows customers of BPA to view and edit proofs of ordered documents at their convenience. Any corrections are then automatically forwarded to Print Approach before final production.

In addition to the electronic portal, Print Approach has built a company website detailing the company's profile and various services such as designing, printing and finishing.  The website is maintained and updated bimonthly by an external web developer. The web developer also provided conceptual ideas for customer solutions in addition to those presented by employees and clients of Print Approach.

Both Integrated Service Digital Network (ISDN) and Asymmetric Digital Subscriber Line (ADSL) broadband technologies support the company's Internet based strategy. The mainframe applications are supported by ADSL due to its speed, cost effectiveness and reliability whilst the ISDN connection is used to create a Virtual Private Network (VPN) with business partner, Imprint.  The VPN allows real time data interchange with Imprint who provide additional printing support and share Print Approach's website interface for job tracking and online quotes.

Print Approach staff use the Internet for supplier research, online quotes and ordering. Raw materials and services are easily located using the Internet, with Print Approach staff obtaining quotes electronically, improving staff productivity and cost efficiencies.

Recognising the importance of e-security, Print Approach have installed various mechanisms to protect information transmitted over the Internet. In addition to the physical security of its servers, the company employs a firewall to protect data transmitted in and out of the internal network. All data is encrypted and access to the network is password protected. The system is backed up regularly with off-site tape storage and virus protection software is updated on a weekly basis.

Revenue and Costs

* Note: Capital Expenditure was amortised over a four- year period

Financial Analysis

Print Approach generated additional revenue of $500,000 in 2001.  This was the result of new work gained due to improved workflow co-ordination among the supply chain partners.  Print Approach's e-commerce initiative contributed $100,000 to gross profit. A further $160,200 in savings resulted in a net operating benefit of $183,565.

Total cost savings attributed to Print Approach's supply chain amounted to $160,200 in 2001. Decreased postage and freight requirements saved the company $20,000, and expenditure on printing and photocopying was reduced by a further $10,000. An increase in after sales service efficiencies produced a labour expense savings of $80,000 whilst reductions in administration errors saved $10,000 and communication time saved $10,000.  Electronic banking reduced administrative costs by $5,000 and the electronic value chain saved a further $5,000 in inventory.

Print Approach invested $135,540 into the e-commerce system. The company allocated $10,000 for preliminary research and a further $10,000 for staff training. Professional web development fees totalled $15,000 and the installation of telecommunications infrastructure to support the network cost $5,000.

System design assistance from IT consultants cost $10,000, and the integration of the existing database with the new system was a further $10,000. The software was developed for $30,000 including consulting fees. The hardware requirements were completed with the purchase of ten computers, valued at $35,000.  In the interests of security, the company invested $10,000 on a disaster recovery plan including a backup server and tape system.

The total ongoing cost for e-commerce in 2001 was $76,635 including $33,885 allocated to the amortisation of capital expenditure over a four-year period.  System maintenance was the next largest annual expense totalling $20,000. Internet related expenditure consists of $6,000 in Application Service Provider (ASP) hosting services and $6,000 for Internet Service Provider fees.

Non-financial Benefits

The e-commerce initiative has resulted in significantly increased staff productivity. The company has now been able to reallocate staff from reactive tasks (answering phones and emails) to proactive and revenue generating tasks (after sales service, sourcing new clients). The online interface and electronic communication methods have provided customers more control over orders, enabling more accurate results. The process from order to pre-production, proofing, production, warehousing and delivery is now more transparent, allowing clients and suppliers better visibility of demand and supply conditions.

Challenges

Tom found that there were often too many options in choosing between technologies. This created a recurring problem as every time a client specific solution was required time was spent identifying and determining the best solution, resulting in delayed solution deployment. This issue has been resolved by transferring more decision-making responsibility to the IT consultant.

Significant establishment costs presented another issue but this was partially overcome by the government grant.

Future

Due to the dynamic nature of client requirements, the e-commerce solution is continually being updated and adapted.  Print Approach plans to enhance system responsiveness and expand the company's client base to include internal government departments.  An interface would be introduced whereby government staff could electronically access Print Approach services directly through an online service on their desktop computer.

Tom believes three simple guidelines should be followed for a successful e-commerce implementation: develop the strategy incrementally, research industry examples, and match the system to market requirements.