Outsourcing Has Its Privileges
Offer services that close the gap and raise the bar.
A major portion of the business forms industry has turned into an outsourcing industry," someone told me during a phone interview the other day. "It's undeniable that [manufacturers and distributors] are so much more valuable because of the services, not just the documents, they provide."
That person was Alan Olivero, president of Matrix Imaging Solutions, Niagra Falls, N.Y.—a supplier specializing in electronic data transfer and document processing, largely serving end-users with bill, invoicing and other statement needs.
His point is more than valid. Over the course of a few years, the story behind the product discussed through BFL&S has been, in essence, that those simply selling and drop-shipping the basic business forms don't cut it in the forms industry today. Rather, it's the progressive visionaries willing to move with the times toward a new type of forms industry who do. They're the ones offering services that increase the value of a form ten-fold, the ones who can see what an end-user needs to be more cost-effective and time-efficient.
Raising the Bar
And that is where outsourcing comes in. "Offering outsource services is beneficial to all parties involved," said Betty Jo Wood, marketing manager, Matrix. "End-users want to be able to focus on their own business and relinquish burdensome responsibilities that come with ordering forms and the information on them. Forms distributors want increased sales opportunities."
She added that some of the main reasons end-users choose to outsource are because they want to reduce and control operating costs, improve cash flow and efficiency and gain access to the latest technology without expending capital and IT resources.
Wood also noted that distributors, on the other hand, will realize a guaranteed monthly income, increased sales opportunities, protection of existing business and the ability to provide a real value for the customer by offering outsource services.
"All of these services raise the bar on expectations of the distributor," said Olivero. "There is no doubt distributors can sell much more of their product because of the services they offer."
In fact, one of the newer capabilities Matrix can bring to the table when talking solutions is electronic bill presentation and payment and document archiving. "In addition to taking data and creating a paper document, printing it and mailing it, the market has evolved so that we can produce that information electronically without going to paper," Olivero said.
"We have major clients that come to us for statement processing and, in many cases, they ask if we can take them to an electronic process. Although, the evolution to a strictly electronic process is much slower to be adopted than predicted, We have the technology and solutions in place to move those clients to a paperless environment when the time is right for them," he said.
For Bill Breed, president of Megabyte Express, Austin, Texas, offering document management and fulfillment services has enhanced business. "We just moved into a much larger building, which is partially due to forms management," said Breed. "We had three locations and needed to consolidate to one to help operations run more smoothly."
Breed reported that Megabyte handles three major forms management accounts from the financial, health-care and manufacturing industries. For them, Megabyte handles everything from commercial printing, checks, continuous forms, presentation folders, labels, toner and ad specialties.
"The benefit to our clients is that they can utilize their space much better, enjoy reduced personnel and lower warehousing overhead," said Breed. "And, since clients can order online, they are afforded greater efficiency and the ability to review budgeting reports, which help forecast expenses."
While solving clients' problems is a great thing, probably one of the better advantages emerging from the increase of outsource services is the transition to stronger, healthier relationships.
"There is no distance between the distributor, manufacturer and end-user," said Olivero. "Through outsource-type services, the distributor automatically needs to build up faith, trust and confidence with the manufacturer. As a result, the manufacturer embraces, rather than threatens, the distributor."
Breed agreed, stating that new and stronger partnerships are created by working so closely with customers. "These services sort of lock the distributor in with the customer," he said.
He added that the current state of the industry is almost reminiscent of business from the past. "In fact, when I got into the business 12 years ago, I saw a lot of special servicing being done. Then there was a phase during which time outsourcing was not very popular. But I'm starting to see it pick up in the market again.," he said.
What may be more desirable in today's outsource environment is that most of the customer inventory is paid for by the end-user, allowing the distributor to absorb only the fulfillment and distribution end of it. "In the past, there used to be a bill-a-ship program where a customer would order 500,000 forms but only get billed for 50,000 at a time. While a manufacturer could handle that, many distributors could not," said Breed.
For distributors not yet offering outsourcing services, Olivero advised, "This is important in that the marketplace realizes this is the future of our industry. It is a tide that is coming—one that distributors should want to be involved with to remain strong in this industry."
By Sharon R. Cole