WHY PRINTERS CAN T AFFORD TO IGNORE CLOUD-BASED PRODUCTION. By Heidi Tolliver-Walker

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WHY PRINTERS CAN’T AFFORD

TO IGNORE CLOUD-BASED PRODUCTION

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If you’re using Facebook

TM

, sending and

receiving email, or watching Netflix

TM

,

you’re using the cloud. If you’re using your

cellphone to make calls, send texts, and

manage your calendar, you’re using the

cloud. Most of us run our personal lives

through the cloud; so why aren’t more

printers using it to run their businesses?

The answer is: fear.

• Are my files secure?

• Can my client’s data be hacked?

• What happens if the internet goes

down? Will I still be able to meet

my deadlines?

• When I have a problem, who can I call?

For many printers, using the cloud for

business can seem frightening. It is an

unknown, and when dealing with the

unknown, fear is a natural result. But

printers don’t need to fear the cloud. In

reality, the cloud can be more flexible,

more secure, and more cost-effective

than on-site networks.

As human beings, we feel more

comfortable when dealing with something

we can see and touch. However, the more

you learn about the cloud, the more

comfortable you will become. In fact, the

more you see how many opportunities

you have been missing to benefit your

business, you may even find yourself

asking, “Why didn’t I do this sooner?”

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Here is a deeper look at the savings:

Savings can be immediate, and can actually increase over time. IDC found that, in the first 36 months of moving to the cloud, clients received $3.50 in benefits for every dollar spent. After 60 months, the benefits had nearly tripled to $8.40 per dollar spent. This doesn't include the savings arising from the business intelligence provided by the cloud.

Many other studies have been done on cost savings from adding cloud services, and they all tell the same story. Yet, fear still paralyzes many printers. Why not just invest in a stronger, more updated network on site? Why take the risk? The answer is, no matter how advanced your network and experienced your IT staff, today’s high volume, fast turn,

1 Server Costs

Hardware - Server, Rack Chassis PDUs, ToR Switches (+Maintenance) Software - OS, Visualization Licenses (+Maintenance) Facilities Cost Less -tangibles: Cost of delays Risk of premium Competitive abilities Governance etc, Space Power Coding

2 Storage Costs Hardware - Storage

Disks, SAN/FC Switches Software - Backup

Facilities Cost Space Power Coding

3 Network Costs

Network Hardware - LAN Switches, Load Balancer Bandwidth costs

Software - Network, Monitoring

Facilities Cost Space Power Coding

4 IT Labor Costs Server Admin, Visualization Admin, Storage Admin, Network Admin, Support Team

5 Extras Project planning, Advisors, Legal, Contractors, Managed Services, Real-Estate, Training, Cost of capital Diagram doesn’t include every cost item. E.g. software costs can include database, management, middle tier software costs. Facilities costs can include costs associated with upgrades, maintanance, building security, taxes etc. IT labor costs can include security admin and application admin costs.

multichannel workflows, along with the data, storage and back-up, and security requirements to support them, demand more than what most printers can handle. Multiple job formats, multiple inputs (desktop, tablet, mobile phone), mixed process workflows, islands of automation, multichannel integration, data-driven workflows, as well as the exploding numbers of small jobs—few printers can afford the time and resources to manage all of them at maximum efficiency. Then there is security and redundancy. No matter how much you spend on file management and storage, you can’t outspend good cloud providers. Reputable companies can provide far more security (including redundancy and disaster recovery) than you can do on your own.

BENEFITS OF THE CLOUD

The cloud directly or indirectly helps address nearly all of the major issues pressing on printers today. Whether you are a small family-owned print shop or a large multi-site company, you’re addressing the same challenges—the need to eliminate inefficiency, minimize cost, provide new services, push through higher volumes, and do more with less. The cloud helps address all of these concerns.

According to IDC on behalf of Amazon Web Services (AWS)1,

41% of the value of moving to the cloud is in business

productivity. Thirty percent is in IT staff productivity, and 29% is in IT infrastructure cost reduction. Not only are companies able to eliminate hardware expenses using the cloud (IDC found that moving to AWS resulted in an average of 400 servers being replaced per customer), but they can save on the personnel front, as well. Personnel that used to be managing IT projects can be allocated to other areas.

1 “Cloud Economics and Calculating TCO,” (November 2016, slide presentation), Amazon.com.

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DEFINING CLOUD PRODUCTION

Before taking a further look at the cloud and its benefits for printers, let’s define what cloud printing is and what it is not. There are three definitions of “cloud printing” being used today:

Printing using the cloud. This refers to wireless

transmission of information. People started using the term “cloud printing” to refer to wireless printing in the home or office. Popularized by Google Cloud Print, wireless printing has been adopted by nearly all suppliers of commercial and home printing systems.

Printing from the cloud. This refers to storing, accessing, and printing documents from the cloud. This is another name for web-to-print solutions in which access and document storage occur in the cloud with no downloading or opening of the file in between.

Production cloud printing. This is defined as production being hosted on company servers behind a firewall or in a secure server farm in the cloud hosted by the software provider with users connecting via browser or apps. There are also options for companies to host their own cloud solutions, either wholly or in a hybrid environment, but they are less common and more expensive.

Production cloud printing can include a portion of your workflow or the entirety of it. In some solutions, cloud printing can also draw on production and workflow data to improve productivity, reduce cost, and help printers make better business decisions.

Production cloud printing can occur in a private cloud, which is hosted on a company’s own servers, or in the public cloud.

Some market verticals, such as medical, have regulations that require that all compliant information be handled on a private cloud.

This definition for production cloud printing, whether public or private, is being used here. However, defining all three is necessary to prevent confusion from the multiple definitions of the term being used in the marketplace.

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• Web-to-print • Email marketing

and automation • File transfer, storage,

and sharing • Job estimating • Project management and scheduling • Job tracking • Customer relationship management

• Creative and design

• Collateral and document management • Data analysis and augmentation • Workflow/MIS • Business intelligence • Mail hygiene

• Variable data design • E-publishing

• File storage and back-up • Digital asset management There are other areas of the business that benefit from the cloud, as well. These include human resources, payroll, telephony, group and private messaging, and online chat. All of these areas, while largely administrative, can have a profound impact on the bottom line.

FEATURES OF CLOUD PRINTING

In the printing industry, cloud solutions can be as different from one another as workflow solutions. Consequently, it would be impossible to define the features of “cloud printing.” However, here are some of the categories for which cloud services are often used:

CLOUD PRINTING VS. WEB-TO-PRINT

Although the concept of cloud production may be new to many in this industry, the idea of job onboarding, storage, management, printing, and finishing, all the way through distribution, is not. Many web-to-print solutions have been cloud-based for a long time. The difference from true cloud solutions is that, for most printers, web-to-print is a portion of their business, implemented for specific types of jobs in specific market verticals or for specific clients. It is not their entire business, so the fear factor is not as great.

Cloud production is seen as more risky because it is more than an add-on for template-based workflows or physical or digital assets clients have stored online. It can handle the most sensitive areas of your business, from job intake to project management to invoicing and shipping.

Another difference is the business intelligence offered by these systems, giving you real-time insight into your process. Is your production running smoothly? Are jobs going out on time? Are they priced for a profit? While some web-to-print solutions offer business intelligence, not all do. While often overlooked, business intelligence can be one of the most valuable benefits of the cloud.

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ADDITIONAL BENEFITS OF CLOUD PRODUCTION

In addition to the “hard” benefits of being able to help eliminate hardware and components and reduce software costs, cloud solutions offer a wide range of other “soft” benefits, as well. These include:

Accessibility. The cloud offers your management, production, and sales personnel the ability to log in from any device, laptop or mobile, and conduct business as if they were in the office. Clients and vendors can access cloud systems, as well, at the level of permission you set.

For example:

• Even if the lead designer on your client’s most important project is at home with a sick child, they can still log in and work on a project, collaborate with clients and other team members, and view and approve proofs as if they were on site.

• If your production supervisor is out to lunch, they can check on job status, keep an eye on press productivity, and make sure that things are on track anywhere on the shop floor. • If your customers want to estimate the cost of a new job

or check the status of an existing job, they can do so in a self-service fashion. This reduces the number of calls to your CSRs and frees them to do more complex tasks.

Continual “up to date status.” Cloud-based production stays up to date through the cloud. There is no need to constantly maintain, update, or provide patches. Maintenance occurs automatically, usually overnight. When you log in the next morning, your new features, patches, and updates are already up and running.

Connecting “Islands of Automation.” Many printers have implemented automation in specific areas of their workflow, but those islands are disconnected from one another. This leaves room for duplication, errors, and inefficiency. Connecting these islands maximizes profitability, something that becomes even more important as the number of small jobs grows. The realities of putting a comprehensive workflow into place can be challenging. While working in the cloud does not require you to have an end-to-end solution, it does enable you to pull all of these islands together if you choose to do so.

“Hands-free” IT. Because your IT occurs in the cloud, you can reallocate IT hardware and personnel to other areas. In a 2016 study of cloud solutions in the printing industry, InfoTrends found that one of the top benefits of printers moving to the cloud was, in fact, lower IT infrastructure costs and savings in labor/staffing2. Since the cloud can be accessed even

by inexpensive netbooks, you can also help save thousands of dollars by eliminating many desktops and laptops and replacing them with netbooks.

Online storage and back-ups. With cloud solutions, you don’t have to invest in server capacity for redundancy and back-ups. You don’t have to maintain a climate-controlled location to keep those servers cool. If you need to add capacity, you don’t need to buy more hardware. Because cloud back-ups occur on a regular, automated basis, should disaster strike, recovery will take days instead of months.

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State of the art security. Cloud vendors have far more resources than even the largest print shops, so your files, assets, and even financial information are as secure—if not more secure—than they would be on-site. (Did you know that the majority of security breaches occur on on-site servers?) Whether it’s PCI, credit card data, or medical records, the power of the software company is behind you. By tapping into that power, your system can react more quickly to and be more protected from threats than most companies can achieve on their own. Furthermore, when breaches occur on local systems, there is often no way to determine who did it. With cloud services, there is proper fingerprinting every step along the way, so if there is a breach you have a better chance of identifying who accessed the system and when.

Rapid disaster recovery. Lightning blows out a transformer. Hurricane or tornado creates destruction. Whatever the disaster, you can be back up and running in a matter of hours, not days or weeks. With your files, your software, and your data all safely stored in the cloud, you simply replace the hardware, log back in, and you are back in business.

Integration of web storefronts. Web-to-print isn’t the same as cloud printing, but it can be part of it. If you have a cloud solution, the ability to offer secure client portals, with all of the benefits—from template-based design, document customization and personalization, to storage and shipping— is part of the mix.

Ability to add APIs to address specific areas of the workflow.

APIs are add-ons to a larger solution that address specific needs. Common examples include the ability to integrate preflight checks, color management, variable data, 3D proofing, and shipping options. Keypoint Intelligence calls this the “appification” of the industry. It is web 3.0: everything talks to everything.

Performance data. While most of the automation is happening at the machine level, the data gathered from each machine is stored in the cloud. Cloud solutions analyze that data and provide it back to you in the form of performance benchmarks and productivity analysis that you can use to help improve the profitability and productivity of your business. Is each shift meeting production benchmarks? How is the new press performing? Over time, this level of data analysis allows you to make more data-driven decisions.

You can also set up the solution to send you push

notifications. Is job scheduling off? Is there a bottleneck on this press? Are you making money, or losing it? Instead of waiting to learn your profit margin until your accountant does your taxes, you can make adjustments in real time.

Scalability. Because the solution exists in the cloud, it is easily scalable as your volume and capacity grow.

To give just one example of business intelligence

in action, one printer used his cloud solution

to determine that payment of the shop’s

invoices had slowed to 55 days. He

adjusted his internal processes so that,

when the client took possession

of the job, this required sign-off

on a tablet. Once the sign-off

occurred, the system generated

an invoice automatically. The

result? The client’s invoices

were paid 10 days faster.

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IS THE PRINTING INDUSTRY READY FOR THE CLOUD?

While trusting your workflow to a cloud-based solution might sound scary, think about how many cloud-based business solutions we rely on every day. Even keeping track of time, on which we rely every moment of every day, is in the cloud. All of these services are cloud-based, and we never worry about them going down. Why should print management be any different?

Although printers have been slow to adopt the cloud in their production operations, their comfort level is growing. A 2012 cloud study conducted by Caslon & Company, for example, found that about one-quarter of commercial printers had cloud strategies in place. By 2015, this had grown to about one-third. A 2016 InfoTrends study found that 82% of printers use some form of cloud printing in their businesses, even if it’s just Adobe Creative Suite.

Not only are more printers embracing the cloud, but they are doing so for more critical operations. In 2012, Caslon found that cloud solutions were being used primarily for services for which printers were already using the internet anyway. When Caslon surveyed printers two years later, cloud use had grown significantly, particularly for internal functions.

• Around 70% of printers with W2P were using the cloud for at least some functions, as were 70% of printers with software for multichannel communications, file sharing, email marketing and automation, and file transfer. • Around 60% of printers with software for design and

data augmentation were using the cloud, as well.

• More than half were using the cloud for CRM, marketing collateral and document management, data analysis, and mail hygiene.

• For project management, cloud use has risen from about one-quarter of those with project management software to more than 30%.

• For accounting, cloud use has risen from less than 20% with accounting software to nearly 30%.

• For print shop management, it has risen from less than 20% to nearly one-quarter.4

A study from WhatTheyThink reported similar results. As of 2015, here is the percentage of printers reporting use of the cloud for the following internal functions:

“Just like Netflix revolutionized the way we

entertain ourselves, all of print is going

to be revolutionized with the cloud.”

— Slava Apel, CEO of Amazing

Print Tech

File sharing 83%

Adobe Creative Cloud 63%

E-marketing 44% Computer backup 41% Web-to-print 36% Office 36% Accounting 26% CRM 20% VOIP 16% Marketing automation 12% Estimating 4%

Source: Fall 2015 WhatTheyThink survey, sourced from Cloud Production: A New Path to Profitability, p. 41.

4 2012 Cloud & Printing Report (PODi/Caslon & Company, 2012); 2015 Cloud

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Let’s summarize by comparing cloud-based workflow and automation to traditional solutions. Assuming that cloud and traditional solutions both offer comparable features, here are eight areas where cloud solutions offer

significant advantages.

1. Lower initial acquisition costs

No need to invest in servers or other hardware to handle your storage and back-up needs or maintain environmentally controlled areas to keep them cool. No need to commit to a large upfront software bill that can run anywhere from a few thousand to $100,000.

2. Lower ongoing maintenance expenses

Cloud solutions can cost less to maintain over time. Software licenses include upgrades, patches, and other maintenance services that would otherwise be handled internally. They also help eliminate the IT, utility, and other costs of maintaining the servers on site.

3. Lower hardware costs

No need to own servers and all of the connecting hardware. You can also replace some of your more robust desktops and laptop computers with lower cost netbooks.

4. Less IT expertise required

With the software company handling the maintenance, this frees up your IT staff to be reallocated or handle other tasks.

5. Faster deployment

Once you have contracted for the solution, it becomes immediately available.

6. Scalability

Add or delete modules as you need them. Adjust your solution to meet your changing business requirements.

7. Business intelligence

With so much information available in real time, the business intelligence gained can help make a huge impact on your productivity and profitability.

8. Greater flexibility

You are not weighed down with capital investment. This keeps your company nimble and able to scale up or down, add or delete capabilities, and react quickly to market changes.

CONCLUSION

There is certainly no mandate for printers to move into the cloud, but the benefits are compelling. In an industry in which profit margins are increasingly tight and printers are being asked to do more with less, there is only so much more efficiency you can squeeze out of your presses and traditional approach to workflow.

Any significant gains in cost efficiency may come from making radical changes that fundamentally impact their overall cost structure in the first place. This means moving into the cloud. Commercial printing has always been an industry willing to invest in new processes, new technologies, and new services. Now, the cloud gives printers the opportunity to reinvent in ways that—once again—better serve their clients and the bottom line.

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Canon is a registered trademark of Canon Inc. in the United States and elsewhere. All other referenced product names and marks are trademarks of their respective owners and are hereby acknowledged. ©2017 Canon Solutions America, Inc. All rights reserved

11/17-438-1871

For more information, call or visit

1-800-815-4000

CSA.CANON.COM

This analysis was commissioned by Canon Solutions America and NAPCO Media to help printers better understand how today’s technology can optimize their production and how they can benefit by adopting these solutions.

Canon Solutions America, Inc., a Canon U.S.A. Company, provides enterprise, production print and large format solutions, supported by exceptional professional service offerings. www.csa.canon.com.

ABOUT THE AUTHOR

Heidi Tolliver-Walker

Heidi Tolliver-Walker is a long-time analyst, feature writer, author, and content developer for the commercial and digital printing industries.

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