SOI--Electronic Systems Infiltrate the Market
Forms and checks printing continues to impact the industry
Efficiency is the driving force behind the increasing popularity of electronic systems. Net profit increases for distributors and the ease of accessibility for large, and even mid-size, market accounts also helps. As print industry software programs become refined, more customers are placing trust in new-age technology and letting go of traditional processes.
Just ask Dan Siadak, CDC, president and CEO of Lansing, Michigan-based RBF. "I see end-users embracing electronic forms much more now than even a year ago," he said. "More companies are networked and have Intranets, so electronic forms can be used more readily, and productively, within their processes."
Mark Ford, CEO, Altec, Laguna Hills, Calif., agreed, noting that the overall decrease in technology costs have presented electronic routing capabilities to mid-market users that were once only economically accessible to larger businesses.
This means, however, that distributors must be more creative in order to develop an ongoing revenue stream from this product, said Siadak. As a result, distributors are seeking revenue through document maintenance or hosting issues.
Electronic forms have also brought about changes in production. According to Siadak, the goal of electronic forms processing is to eliminate paper, so production really becomes more of a programming issue.
"This is a completely different animal," said Siadak. "Product delivery is actually the creation of the form in addition to its installation and testing."
Electronic check printing and Integrated Document Management are other electronic systems experiencing growth. In fact, Jack Schachtel, president, CTP Solutions, Agoura Hills, Calif., is finding that businesses just can't refuse the benefits of these systems. "More customers are realizing that it is no longer efficient to print in-house," he noted.
Not only are end-users benefitting from electronic systems, but distributors are as well. Compared to traditional printing, which Ford reports as yielding a 35 percent to 50 percent gross margin, new systems provide a 90 percent to 95 percent gross margin on software and 50 percent to 70 percent for hardware. Net profits, he said, are in excess of 15 percent—a far greater profit contribution than from traditional printing sales. Additional revenue opportunities come from maintenance and support contracts and consumables such as security paper and toner for electronic printing solutions.