Inkjet justification – do you know how much is outsourced?
Many for-profit and in-plant print mail operations have made significant investments in production inkjet. Each organization arrived at their decision after prioritizing the most relevant impact to their operation. The primary factors cited in the decision to move to inkjet include:
Lower total cost of ownership/operation (TCO)
Reduced labor cost
Improved time to market
Increased personalization and versioning
Automated workflow and finishing
Easier training of new staff
Flexibility to produce multiple and new applications
Ability to reduce the number of printers in the operation
However, at industry events I continue to hear about organizations that aspire to migrate to inkjet but lack the justification. My first question to a manager in this situation is, “Do you know what print work is outsourced?” Often the answer is “not completely.”
What is outsourced?
Some in-plant managers have the first right of refusal before jobs are outsourced. This methodology gives operations managers the ability to evaluate their internal costs and job timing, compared to third-party vendors. If an internal solution isn’t available, in-plant managers can then assist in determining the best outsourcing decisions. Many organizations do not utilize the right of first refusal process. In these situations, the in-plant operation often must undertake detective work to find out about the types and volume of print that are outsourced.
I recently wrote about the decision criteria for cutsheet vs. continuous feed inkjet in this article. Total volume of print – including outsourced work – is one criterion in evaluating the opportunity for inkjet. Identifying the details about outsourced jobs can provide critical information to inform investment justifications. Like a detective, gathering the details will require input from other departments, including procurement, sourcing, marketing, and other lines of business. In-plant managers undertaking this exercise typically find large volumes of work outsourced from a variety of departments.
Why outsource?
Reaching out to the owners of the outsourced work will be a learning experience. Uncovering why jobs are outsourced is critical to gain support for insourcing and potentially justifying inkjet investments. The reasons often vary from “that’s the way it has always been done”; or there was an error some time ago and the in-plant lost the job; to a preference to work with specific vendors. The most uncomfortable truth is learning that many jobs are outsourced because the department creating the content did not understand the full capabilities of the in-plant operation.
Business units may outsource because the vendor makes it easy to accept the job and they can meet tight turnaround timeframes. Outsourced jobs can be at a significantly higher cost than the internal operation. In-plant operations will need to educate key departments about web-to-print submission tools and other options to meet shorter turnaround timeframes.
Arranging meetings to discuss why specific jobs are outsourced will begin the process of educating internal customers and make the case for insourcing. The reality of hybrid work environments means key content creators and new hires may have little visibility into the capabilities of the in-plant operation.
Managing change is hard. Decisions to outsource specific jobs may have been made years ago. The reasons may no longer be relevant. Business units may be surprised to understand that their jobs can be handled successfully by the internal print operation.
Why inkjet now?
The true cost of outsourcing is much more than the dollar amount on vendors’ invoices. The total cost of outsourcing includes the indirect costs of sourcing and managing vendors, contracts, accounts payable and receivable in addition to other costs and potential risks. Sourcing teams can provide details to calculate the total cost of outsourcing in your organization. Undertaking the analysis of outsourced work will support a justification for inkjet. Production inkjet, when done right, provides significant benefits to futureproof your operation. The equipment is less complex to run compared to offset and digital toner. Inkjet is more reliable and productive. Several in-plant managers have also shared improvements in hiring and training with inkjet platforms.
Determining the right technologies to support your internal goals is critical to remaining relevant and providing value to your customers and your organization. Pursuing alignment for insourcing may take a significant effort. That effort will generate great results – even when the first steps are challenging.
What is your next step on the journey to inkjet justification?
This article was originally published on Inkjet Insight.