Justifying the Cost of New Technology
As technology continues to evolve, in-plants are perpetually balancing their need to stay relevant against the costs of new equipment and software. Justifying those costs is easier for some than others.
“If I have money in the budget, [I] get what I need,” says Cathy Prala, director of digital production and mailroom services at Toledo Public Schools. “So I don’t need permission.”
Many others do, though, and must spell out their plans in detail, stressing the functionality they want to add.
“I will make a business case showing ‘here’s what we have, and [here’s] what we want to look at,’” says Michael Griswold, department lead for Print & Graphics at Tacoma Public Schools.
Both managers have great relationships with their upper management and usually get the equipment they need. But that outcome is not universal.
According to new In-plant Impressions research, 35% of in-plant respondents say “getting approval to add needed equipment” is one of their top challenges. And 22% have not added any equipment in the past two years.
For Griswold, equipment upgrades are factored into the budget each year, with a “use it or lose it” mentality that encourages him to keep a close eye on what equipment is due for an upgrade, and which new technologies might benefit his district. He says he is fortunate to have a boss that is easy to work with when it comes to this process.
“It’s not always about ROI, and not necessarily about trying to make money; we’re just trying to break even,” Griswold explains. His four-employee in-plant serves about 60 schools and 30,000 students in the Tacoma, Washington, area.
The shop’s latest purchase was a Duplo DC-618 slitter/cutter/creaser, which replaced an older machine that did scoring, perfing, and numbering, while adding new features the in-plant didn’t previously have.
“It’s been awesome,” Griswold enthuses.
Being able to score gatefolds more reliably on table tents and other projects has made those applications easier to produce, he notes. That said, the new equipment doesn’t do numbering, so he has kept the older equipment on the floor for now just in case that feature is needed.
‘Really Good Relationship’
In Toledo, Ohio, Prala also enjoys support from management at Toledo Public Schools.
“I have a really good relationship with upper management, and they are happy with what we do,” she says.
To serve the district’s 23,000 students at roughly 75 locations, the four-employee in-plant has made several recent additions.
“I installed a Xanté X-33 flatbed printer about a year ago, and [recently] had a Xanté En/Press delivered, as well as a Duplo cutter/slitter/creaser,” Prala lists.
She was able to justify those new additions in part by soliciting work from the City of Toledo, since the city shut down its own in-plant when its operator retired.
“So, they came to us with their print needs,” she says, “and they also changed their logo, so everything had to be reprinted. We’re doing a huge amount of business cards, so that prompted the cutter/slitter. And we were running envelopes on [an older piece of equipment] and that was time consuming, so that prompted the En/Press.”
The shop’s older equipment is all still in operation too, she adds.
“Now all I need is more space,” she laments.
New Equipment Means New Revenue
Justifying new equipment is somewhat easier when upper management understands the relationship between that equipment and new revenue possibilities. At the University of the Fraser Valley (UFV) in Abbotsford, British Columbia, Canada, Cameron Roy is the boss actually making those decisions for the in-plant. As director of Ancillary Services, he oversees UFV’s four-employee Print Services operation, run by Manager Chris Joakim, who was preparing to retire when we spoke with him. Joakim credits Roy with making all the critical equipment decisions in the past few years, although Roy himself notes that it comes down to good management.
“I work very closely with Chris in Print Services; he is the subject matter expert in printing and is current with the changing landscape of printing,” Roy says. “UFV secures capital funding each year to enhance the technology in the Print Shop.”
UFV’s goal, he says, is to stay ahead of the technology curve, and add capabilities that open new revenue streams.
“We have been able to add equipment and resources that enable our Print Services to produce traditional and non-traditional print services,” says Roy. “With the addition of these services, we can grow revenue and secure financial stability. Print Services is a cost-recovery department, essential to the university, but dependent on revenue for its budget.”
Roy further notes that he depends on the print shop manager to have a deep understanding of the industry, to be able to advise him on what new technologies are truly worth the investment, and which are just passing fads. But he also relies on him to make suggestions that ensure the quality of the in-plant’s work exceeds expectations.
“His thorough understanding of the industry allows him to suggest revenue and service opportunities as rationale when he presents his capital requests to management,” Roy says. “His business model is based on service excellence first, ROI second.”
Explain the Benefits
Making sure upper management understands how new technology will help the entire organization is crucial, since they often don’t have printing backgrounds. For example, explain the benefits of standardizing items like business cards, so that instead of cutting one card at a time, you can set the machine up and walk away.
“They like to hear the benefits of automation and reducing touches,” Griswold says. “We also have a five-year business plan, and in slow times we’ll work on those kinds of things, and how they tie in with different business divisions’ goals and values. We also show them key performance indicators, and how things have been going, which helps show where we’ve been and where we might want to go next.”
Staying top of mind is something Prala advises other in-plants to do as well.
“My follow-up is a sample of what we’ve just done,” she says. “We recently did some keychains for students, so I sent them one of those. Or if we’re doing acrylic plaques or coffee mugs with names, filled with candy, I’ll send them one saying, ‘look at what your print shop is doing now.’ This keeps them in the loop of what we’re doing. Otherwise, they don’t know that this is what the new equipment did for us.”
“Staying current with trends in the printing industry allows our Print Services to exceed customers’ expectations,” Roy says. He notes that it doesn’t have to just be about the bottom line either; stressing how the purchases dovetail into other initiatives is a great way to demonstrate value. For example: “With the increasing demand for sustainable equipment, we have successfully prioritized procuring equipment and technology that would support our university’s sustainability priorities,” he offers.
There is no one right way to justify equipment purchases, but by staying open to new ideas and strategies that have worked for others, your next budget meeting doesn’t have to be quite as stressful.
Toni McQuilken is the senior editor for the printing and packaging group.