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Selling a digital process

Jun 1, 2001 12:00 AM


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On Demand Technologies (ODT), a 100-percent digital printer, was co-founded six years ago by Tom VanGoethem, a process engineer, and Wynne Jennings, the CFO of a software company.

VanGoethem and Jennings were introduced to the just-in-time advantages of digital printing when they worked together at the software company. VanGoethem says the software products' short shelf life compelled management to adopt a make-to-order process: The cost of goods sold went from 13 percent of sales to 2.5 percent, and the execs saw an opportunity for other industries to take advantage of this on-demand, cost-savings business model.

ODT (Overland Park, KS) is now a 40-employee shop with sales in excess of $5 million. The company operates six Xerox DocuTechs and an Indigo UltraStream, producing short-run, fast-turnaround products primarily for digital-savvy corporate clients and other printers. ODT's customers include retailers, human resource departments, financial service providers, training/seminar groups and insurance companies. Fifty percent of its business comes from outside the Kansas City area.

Digital printing can be a tough sell to buyers who are used to traditional offset, and the ODT execs admit that it was a bigger challenge than they anticipated. “We opened our doors thinking that other industries would follow quickly, and that was a mistake on our part,” VanGoethem recalls. “Any time you take advantage of a new technology, you have the issue of the infrastructure surrounding the technology not shifting its paradigm immediately.”

MANAGING INTELLECTUAL PROPERTY

ODT has worked tirelessly to educate potential customers on the advantages of digital. The top managers, including VanGoethem and Jennings, make personal visits to explain the savings that can be achieved in switching from traditional offset to the short-makeready, short-run process.

ODT has worked to promote a different mindset amongst print-procuring companies to help further digital printing. VanGoethem says companies should think of publications and documents as intellectual property and that those materials should be versioned and adapted to the marketplace. “Co-branding, localization, permutation on specific products — all of that is the wave of future for print. It's also the wave of the future for communications,” he says.

ODT views itself as a manager of customers' communications and intellectual property, “and some of those communications come out nicely with toner,” VanGoethem quips.

ODT has more than 23,000 print-ready documents in its digital library, including training and software manuals, sell sheets and catalogs. The library is facilitated by the DocUtilities document management and archiving system, which ODT developed in-house and now sells to outside parties.

WEARING DIFFERENT HATS

ODT's staff of programmers is just one aspect of its organization that differs from many printers. The most striking contrast is the absence of a sales staff and retail presence. The majority of ODT's business is generated from its established partnerships with other printers.

Since it doesn't have direct salespeople, ODT can wear the trade-shop hat, enabling its printer clients to maintain strong ties to their valued customers. Van Goethem believes that this division of specialties best serves everyone involved.

“Any time a printer introduces a new technology into the shop, they're biased by their existing equipment profile, and they spend all of their time figuring out what job should run where,” the exec says. “It de-focuses them.”

Customer service representatives act as the main liaisons to clients and take responsibility for sending the jobs through the shop. They do not earn commission, but they are given cash bonuses through company-wide bonus and incentive programs: If ODT reaches certain sales quotas in a 12-month period, all employees are rewarded.

ODT's competition includes printers with DocuTechs and digital printing capabilities, facilities management sites or their outsource companies. “It's hard to say who our competition is, because no one really looks like us,” says Tammy Oskvig, vice president of client services. “We're a sort of hybrid company.”

ODT's strategic plan calls for continuance of a 30 percent to 40 percent growth rate over the next few years, and despite the slowing economy, VanGoethem believes the company will reach those goals. “Because we're process-based, our business takes off when times get tough,” he says, adding that organizations are more willing to make changes when financial resources are tightened. “We understand technology, and focus on saving money.”