Within transactional print, stars attract each other
Printed in billions of exemplars worldwide every month, transactional documents (bills of sales, account statements etc.) are the result of a process exclusively based on high-security digital data flows and digital print technology. Tempting to many, transactional print remains a field reserved only to players willing to continually invest in top-tier technology – like Star Storage, an “IT thoroughbred” and one of the top providers on the Romanian market.
Based on the number of printing machines and print volumes, Star Storage is, undoubtedly, a printing firm. Transactional print is just one of four components of a mainly IT business, that we discussed with Silvius Neagu, Document Outsourcing Director, and Constantin Clip, Delivery Manager at Star Storage. Not by chance, the conversation topic was the investment Star Storage made in 2015 in renewing their digital printer fleet.
A star born out of IT
Under the print magnifying glass, the relationship between IT business and industrial print, be it transactional print or otherwise, may seem bizarre. Technologically, transactional print fits the Star Storage profile like a glove, better than it does for printing-pedigree competitors. “We have an advantage over other providers, because we separated and evolved from an IT business”, states Constantin Clip. “Unlike a print shop, IT services make up the brains of this business. Because we’re only talking about personalized documents with variable data. This is the secret. Otherwise, any print shop can venture into this field. But the big issue are the IT services behind print services.”
Founded in 2000, Star Storage focused its activity on managing documents and information, with all the associated software and services, offering document scanning services (with digital conversion, digital storage and protection of data, and all that this process entails). 2008 brought the launch on the automatic mailing processing market, when the firm added digital-to-physical medium data transfer services to its portfolio, via digital print.
“The growth was organic,” Silvius Neagu recalls. ”We had clients from archiving who needed printing services, especially companies in finance and banking, utilities etc. This was the birthplace of our digital print division. We started with four printers and two mailing machines, and the business evolved from there. We extended our service range and were one of the first companies to offer color digital print on the Romanian transactional documents market. Our volumes started to increase once we acquired our first color roll printer.”
Presently, Star Storage has four divisions, each accounting for a quarter of their revenue: the software division – covering in-house product apps and locally-configured international apps; the IT division – covering IT infrastructure and the data center (data storage, networking etc.); archiving services; and the digital print division. According to Star Storage, this services structure will ensure the company’s income for the next 3-4 years.
The mailing preparation division offers all the necessary services for transferring digital data to printed documents, with a fully automated process. The list of clients includes big finance and banking companies – the greatest market covered –, big suppliers of phone and cable TV services etc. According to Silvius Neagu, another segment that Star Storage is seeking to resuscitate is direct marketing, with an offer for high-quality digital print.
In an unofficial ranking of the Romanian transactional print market, Star Storage places third, with a market share of 15-20%, behind Zipper Data (approx. 25-30%) and the market leaders, Greek company Inform Lykos, taking up almost 40%. “Inform Lykos preceded us on the market and dealt in transactional print services from the very beginning. Basically, we’ve taken a piece of their market share. These are, by and large, the big players. The rest are small local players, either going for the local public administration and utilities sector, or small firms that crop up, remain on the market for 2-3 years and disappear without making a difference,” Constantin Clip explains.
From the four printers of its 2008 debut, Star Storage now owns an entire fleet of industrial machines. For roll printing applications, the company uses a high-speed monochrome Océ VarioStream printer and a 5-colour duplex printing press. For sheet printing, last year Star Storage replaced their 10 digital devices with just 5 Canon machines.
Between e-data variability and printing technology stability
The need to replace the old sheet printers was imperative, mainly dictated by their physical wear. “We replaced them because every machine has a certain lifespan. The older our machines were, the more service interventions and the higher our usage costs became. Secondly, we could no longer rely on them for big jobs,” Constantin Clip explains.
Business growth is another driving force for change. “We’ve reached a level where we must optimize everything related to workflows and production costs,” Silvius Neagu states. “By reducing the number of sheet printers to half, we actually re-built the technology for our production process. We were using six monochrome printers from a different supplier, which we replaced with three high-speed Canon devices – two Océ VarioPrint 6250 and a Canon VarioPrint 110. We used the same algorithm when replacing our four color machines, by installing only two Canon ImagePress C800 printers,” Neagu elaborates, remarking that the smaller number of devices also reduced usage costs – with fewer operators and lower energy and service costs. The need to cut usage costs was also underlined by Constantin Clip, who says that, as the transactional print market dropped, so did the prices, forcing smaller margins and an increased difficulty in maintaining costs at the moment.
The price of service was a determining factor in choosing Canon’s offer. “The costs are 20% lower than before, with savings due to better quality toner and our advantageous contract with Canon. The market prices have lined up and, why not admit it, we got a better contract than we would have 3-4 years ago,” Silvius Neagu believes.
Choosing Canon also reduced the number of printer suppliers in the production section. “We started out with sheet printers, and then added two roll printers, color and monochrome. We had devices from three suppliers. The manufacturers of the old cut-sheet printers didn’t produce roll printers and, as we made the change, it was easier to lean towards what we already had on-site. It’s difficult to work with several suppliers, and we preferred to only collaborate with two of them,” Constantin Clip says. Another element that tipped the scales in Canon’s favor was the printers’ technological concept. “The Océ machines have an engine that allows for one-pass duplex printing. The old supplier’s devices were built on a different principle, and their duplex printing offer actually consisted of stringing two printers together,” Clip continues.
Fewer in number but with better performance, the Canon devices help visibly reduce the electricity bills by 25%, and also to “air out” the production hall. This makes for more efficient use of available space, allowing more equipment to be installed, and therefore a higher production rate for the same work area.
Performers on performance
A self-declared fan of the Océ printing technology, especially monochrome printing, Constantin Clip says he felt fulfillment after the new devices were installed. “It gave me peace on multiple levels. Before we acquired the old cut-sheet printers, we negotiated with Océ. They were not open to us, we were regarded with distrust and we had to sign a contract with another manufacturer.” Clip admits that things changed after Océ was taken over by Canon, adding that the status of Star Storage also changed. “When you’re starting out small, big manufacturers regard you with distrust. In time, many similar service providers appeared and disappeared, as they didn’t last on the market. But we grew…”
With over 15 years of experience in transactional print, Constantin Clip is one of few Romanian experts who know the weight of each manufacturer’s technology. “The strong suit of Océ has always been their monochrome printers. They’ve been a market leader on this segment for many years, and I see no match for the quality and speed of Océ printers among any of the brands on the market. They are clear winners here and the brand was a perfect match for Canon. I don’t think there are any transactional service providers in the world without monochrome Océ roll printers or cut-sheet. I’ve worked with many monochrome printers and I can honestly say there’s no comparison to Océ,” Clip considers.
The Star Storage digital printing expert believes that Océ devices – at least the monochrome printers – are meant for production. “One example is the Océ VarioPrint 6250, with a capacity of 50,000 sheets for its standard feeder, way above the old machines. In fact, the entire path of the paper through the printer is enhanced, from the print medium’s transport through the printer up to the output. They are printers designed for production. We took this opportunity to upgrade from mid-range monochrome printers to production class. In the current market you can no longer sustain production on mid-range printers. The new printers print at 250 ppm. It’s a huge improvement from the old printers, of 105-120 ppm,” Constantin Clip declared.
Our dialogue also touched on the Canon-Océ “marriage”, which Constantin Clip considers to be a perfect match. “Canon had advanced color technologies, financial power and the status of a global leader. Océ was a great acquisition, bringing the latest black-and-white printing technology to the Japanese. The Dutch remain visible in this relationship, especially with high-speed color inkjet roll printers, which will slowly claim their market share back. Roll printing is very profitable for high volumes, with fewer production halts due to paper jams etc. Although high-speed color inkjets seem inopportune for the level of the local market – relative to the price and productivity of these printers – we don’t rule out an inkjet solution investment, should the market demand it.”
Star Storage managers display a moderate optimism when regarding future prospects of the field, as they only see potential in the direct marketing and trans-promotional segments. “Purely transactional documents, informative and devoid of value, are migrating to electronic channels. If you want to add extra information and add value for the client, then you keep the printed part, which has a higher impact than e-mail. This requires a mix of promotional messages, including marketing materials from other business partners, so that you can bring a bundle offer to your client. This is where the potential lies. Our estimates show that the market won’t have any spectacular growth within the next period, but we believe it will stabilize at the present level for the next 5 years. Then we’ll see – considering that, with the current rate of technological advancement, nobody can predict where we’re headed,” Constantin Clip believes.
Apparently only one click away from regular paper print, transactional document production depends on workflows and data-flows as complex as any military operation. Under the imperative of absolute information security and accuracy, mailing preparation remains a special activity, under strict regulation by law. Unlike a print shop, where a failed job doesn’t change anyone’s destiny, the transactional print sector carries a potentially devastating impact for clients in the event of a mistake. “These documents ensure most of the cash-flow of companies big and small, therefore they must be delivered correctly and on time,” Constantin Clip explains. “Any mistakes may be fatal. The production workflow is highly streamlined, so that we can ensure no errors or information leaks occur. It’s critical to our activity. We are personal data operators and have a special status. We’re relying on high-end software and hardware technologies and, as we’ve demonstrated throughout our activity, we continuously invest into remaining one of the top players on the market,” Silvius Neagu ends.