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May 1, 1999 12:00 AM
Make no mistake, there are some printers and trade shops who liken the magnitude of digital asset management (DAM), still in its infancy, to the original desktop publishing revolution--they insist their very survival will hinge on being able to manage customers' assets. There are many others inside the industry, though, who resist even contemplating the emerging technology, maintaining a "wait-and-see" stance rather than a "run, don't walk" conviction.
While the asset management market is already worth about $1 billion a year, and is set to explode to as high as $5.3 in the next two years, according to a 1998 study sponsored by Apple Computer and conducted by Gistics (an independent research firm based in Larkspur, CA), doubts about potential profits persist.
"Everybody looks for reasons not to do something and people are looking for arguments not to invest in this right now," says Axel Zoeller, marketing director of prepress for Heidelberg Americas, which offers DAM solutions for small to large prepress environments, including its DeltaBase Manager software. "Nevertheless, the single biggest reason for investing today is the big cost savings that come from increased internal productivity due to better organization of data and being able to retrieve and link data quicker."
Indeed, the study by Gistics estimates DAM can shave over 46 hours of work a year per employee. There is also a significant cost savings in avoiding duplication of efforts by different organizations who want to reuse the same content across multiple media. Zoeller ranks DAM on par with computer-to-plate (CTP): "These are the two growth areas of the industry and they go hand-in-hand because you have no film, only files. Customers are becoming overwhelmed with the amount of digital files they have to handle today. I'm sure if printers actively pursued this issue they would be totally astonished by how many customers have this problem and would love to have some help."
Paul Beyer, director of Banta Corp.'s digital content management solutions lab in Cambridge, MA, stresses that as automation continues to improve and more business is done electronically, the volume of print will continue to erode and the margins on printed pages will be slimmer. Therefore, it is essential for graphic arts firms to streamline their workflow and extend their range of ancillary services.
"There are definitely ways to profit from DAM, but companies must be decisive and have a clear understanding of who their customers are and what their needs are," says Beyer. Banta has developed the application software line B*Solutions for its customers, including catalog publishers, corporate publishers, marketers and retailers. As an example of the customized system's capabilities, catalog clients can now link online merchandising systems (with order entry and inventory information) to Banta's automated catalog database production system, which handles versioning and different renditions.
"The objective is to dramatically cut the time it takes to build the pages, get them out the back and get them on to the press," explains Beyer. "Five years from now, when everybody has a database and knows how to use it for a streamlined workflow, there won't be any new profit in it. But right now it's a new domain and, just like in the early stages of Postscript, you can have a big advantage over everyone else."
DAM, an umbrella term for the various ways companies manage their digital data, involves the organization, storage and retrieval of all the digital files a customer uses for its business, including images, text and formatted pages.
The backbone of a DAM system is a large database that holds the digital data, which is indexed in a library format for easy retrieval and conversion to various file formats. High-speed telecommunications links or the Internet are often the means by which customers and sometimes their suppliers search the database and can download low- or hi-res files simultaneously for their individual purposes.
Seen in its bigger, broader role, DAM is a crucial component for customized publishing and one-to-one variable imaging and dynamic Web publishing. Demographic databases, becoming a priority for many organizations, can be used with a DAM system to generate personalized materials through a Web site or on-demand printing services.
Mike Randone, a 22-year veteran of the printing business whose one-year-old firm MediaLogic (Davenport, IA) consults with printers on how to sell DAM, suggests that printers and trade shops begin looking at asset management as a separate division or as an offshoot of their core business in order to differentiate it as a value proposition rather than just another component of the production process.
"Graphic arts execs have a tendency to look at asset management services cautiously, fearing that if they charge clients for DAM, customers will see it only as an add-on expense,' " says Randone. "The reality is this is not new money; this is old money being reallocated. If printers can show corporate clients how they can save hundreds of thousands of dollars a year by deploying an asset management strategy, there really should be no problem for them to spend a third of that money toward implementation."
Customers may either prefer to manage their own end of a DAM system or outsource the entire job to the printer or prepress provider. The transaction model for pricing is still evolving, and most companies will tell you their billable service charges for areas such as maintenance, storage and retrieval are random, arbitrary or dependent on the client or the amount of data being stored. The problem is many printers have been offering film-based asset archiving for many years and their customers have naturally come to expect it as part of doing business with a printer.
"It is essential that archiving services be broken away and rebundled in such a fashion that end-users or clients see it as impacting their bottom line," says Randone. "You don't do that at the production-buyer level necessarily, which is where most printers and prepress people tend to hang out. Take it to the level of vice president of marketing and show them how you can add money to their bottom line. Or go to the director of brand development and show how, by using database technology, assets can be moved into the marketplace or into dealer networks much quicker and much more efficiently. This is where asset management can be sold as a strategy."
Randone is a certified Mastermind marketer for WAM!BASE, a turnkey solution for printers and their "partners" (agencies, customers, service bureaus). The service covers cataloguing, access, transfer and security through its high-speed WAM!NET network.
One of the companies eagerly pursuing DAM for its revenue possibilities is Merrill/Daniels Corp., formerly Daniels Printing (Everett, MA). The commercial printer has developing its Web-based in-house storage system in response to its large customers' (Fortune 500 and Fortune 1000 companies) need to communicate across multiple distribution, sales and communication channels, including print, print-on-demand and the Web. The client is charged for initial set-up, storing the assets (based on gigabytes) and for ongoing maintenance. A nominal fee is also charged for each upload or download from the system.
"We don't really see this as a value-added; we see it as a value-chain proposition," says Tim Post, project manager of information management systems for Merrill/Daniels. "This is not something our customers would be able to do without a significant investment and we've invested significantly in it. We got on board with this four years ago and we probably have not broken even yet. But at this point, it's our experience that will bode well for us in this new market. We've already made our mistakes and so we know what we need to do to service our customers at this point."
Merrill/Daniels is promoting its system, called Content Manager, to companies with worldwide brand identities and messages they want to maintain. The latest addition to the system's diverse functionality is in the area of job mapping and a workflow reporting system.
"The more services you can support with asset management, the more additional profit points there are," reasons Post. "And once you actually have the DAM system in place, development of add-on services can be pretty reasonable to do." Primary Color, a $30 million sheet-fed printer and prepress house with two locations (Irvine and Culver City, CA), has also designed its own customized solution for its clients built on top of a Sybase engine, using no off-the-shelf software. Its initiation into DAM goes back more than three years when a large client requested an asset library. The client, a national advertising agency, was billed a few hundred thousand dollars for the hardware and T1 lines associated with the job, says Larry Meilleur, director of digital communication for Primary.
"But that doesn't fly today," he cautions. "Customers aren't willing to assume that kind of cost and if those are the pricetags associated with an asset library, they'll just build it in- house."
Today, the start-up cost for the client, including a customized Web site interface and all the associated criteria for defining digital images, begins at $5,000. There is a $20 fee per scan added to the library and a $50 fee per QuarkXPress document added. All assets stored in the asset library are owned by the customer. There are no monthly maintenance fees, licensing fees or archiving fees.
"We don't initially look at this as a profit center," claims Meilleur. "Our main incentive was to be able to track all of our digital media and organize our library in-house so anyone at either of our facilities could access and find any scan, ad or logo we have archived. That was quite a time-consuming process within our workflow. And with our clientele made up of mostly the entertainment and advertising industries in the very competitive Los Angeles area, turnaround time is key. Plus, we're providing a service to our clients that makes our company more valuable to them. If they continue to do scanning, color correction and printing with us because we offer them something others can't, it's a win-win situation."
For Quad/Graphics (Sussex, WI), the payoff in developing a DAM system (based on Canto's Cumulus software) early has come in being able to "lay the final brick in the foundation for the customer's market," says Gary Lundberg, technical imaging manager.
"Our position is that a cataloger or publisher really needs to take control of asset management in-house as much as possible and we see our role as facilitating that," says Lundberg. "At Quad, we are already very far along with CTP and have essentially replaced film files on the shelf with digital archiving integration. Now we can translate that knowledge to our print customers."
For the clients that want to set up a server that is accessible over the Internet, Quad charges anywhere from $5,000 to $500,000 depending on the scope of the implementation, says Lundberg.
While Quad assumes liability for "catastrophic backup" of files if they are lost or destroyed, copyright and product release information is held at the client's sites for their protection. "If we were to store it, it would raise our liability and there would be pricing issues involved," says Lundberg. "We think a certain amount of intimate data that is closely held--such as business, sales and inventory data-should stay closely held and our role is to add a graphical asset management system to that scenario and do it with as low a financial impact as possible."
P&H Graphics is a prepress service bureau and trade shop in Minneapolis that has adopted Xinet's WebNative product to convert image archiving from film stored in hardcover binders to files that can be viewed online. It asks clients what they're willing to pay for storage, after helping them determine which areas of the DAM system are useful and which aren't.
"We think there is a real argument for doing this as a value-added service, especially because we're talking about some of our major clients. But we also believe the added functionality of this offering stands on its own," says Paul Herzing, systems manager at P&H. "We have a client who has us store images so they will be accessible to people working on catalogs, including, a cadre of freelancers. Rather than the client taking the responsibility for distributing low-res versions of the images to freelancers and others, the firm lets us open up the DAM library to download images whenever they are needed. That's a function the client simply didn't have before and, for that reason, it's something that should actually turn a profit for us."
P&H is now using its DAM capabilities as a sales tool to lure more clients online for its archived image services.
"Our sales reps think it's the most wonderful thing since sliced bread," says Herzing. "We pre-prepare a site for a potential client on the WebNative server that only he or she can log onto," explains Herzing. "The site actually has the company logo and some images on it, to which which the client responds very favorably. It's a much more intimate connection to our company than clients would get from a standard paper-based presentation. The site demonstrates how the service will work in real-world situations."
Howard Etheridge, owner of the 100-year-old Etheridge Printing Co. (Dallas), sees the value of his printing firm's database management offerings as a differentiator from competitors. Not only does it show potential clients his firm is staying current with technology, but that it embraces workflow advances to help ease the process for everyone involved.
"This is an entry point giving clients yet another reason to do business with us," says Etheridge. "There are definitely profits associated with management services but they are indirect. What we offer makes it easier for clients to do business with us. We're basically rewarded by doing their printing work."
Another mid-sized commercial printer that has integrated a DAM system mostly for internal workflow purposes is Impressions, Inc., (St. Paul, MN). Specifically, the company has adopted Imation's MediaManager product line, which focuses on prepress image management for tasks ranging from job ticketing to estimate requests. The system incorporates workflow management features that have the capability of tracking the production schedules of clients and determining the status of individual job components. Once the various stages in the production workflow have been defined, information about production can be gathered and tied into a system used for business administration, such as estimating, billing and accounting.
"Asset management is something we looked at internally not only to help us find our assets, but also our clients'," says Jim Proulx, systems manager for Impressions. "We figured if we were going to use it internally, why not add an interface for customer use. I don't think we're going to make a profit from this and I don't think that's necessarily bad." For the mid-volume printers that are feeling increased pressure from larger customers to offer DAM but aren't anxious to take on the planning or financial risks involved in deploying a large-scale system, several outsourcing services have cropped up, including Impact Communications, Inc. (Morristown, NJ).
Toppan Printing Co. America, Inc. (New York) is one commercial printer that has entered into a partnership with Impact, which offers storage and retrieval for customizing and deploying assets to various departments within an organization. Impact's Web-based, enterprise-wide system is based on IBM's Digital Library System.
"We recognized our large customers, some of them multi-national corporations, had a need to distribute their assets nationally and internationally and that because of the sophistication of those images we were better off to partner up with Impact," says Peter Grant, senior vice president of sales and marketing for Toppan. "Certainly if you have the resources, firepower and capital to do this as a full-service inside your own plant, you should do it because it all becomes value-added, but my guess is there are very few out there who have that capability. As printers with sales under the $100 million category, we believe in staying with our core competency which is to get commercial printing jobs to our clients on time and within budget. At the same time, we need to respond to our clients' needs or they will go someplace else. The whole idea is to serve customers' needs and that's the bottom line to all of this. We can create a stronger customer bond while giving ourselves the opportunity to capture a larger share of their business."
Clearly, DAM's role in the industry will only continue to grow. While there are financial risks involved in building a large-scale DAM infrastructure, beginning to integrate some of the more basic DAM services into your operations does not require a huge investment. The key is to get started now. There may not be any clear-cut profits in the short-term, but there is the real potential to improve the bottom line through internal production efficiencies while fostering tighter bonds with customers.