At the recent 13th Annual Toner Printing Conference,
sponsored by the Information Management Institute, a number of speakers
presented analysis of the markets served by toner-based printing. The trend
across almost all segments was clear — the number of pages is steadily
declining and there is nothing on the horizon to indicate a change.
While this was certainly bad news, it's not new news to most of us — the
decline has been slowly building for more than a decade — and the vast majority
of printing executives are either considering or already developing strategies
to counter the downturn.
The challenge for printing executives now is to avoid taking the slow,
steady decline for granted and assuming that they have years, perhaps as much
as another decade, to put these strategies into place.
Recent research we've conducted at Madison Advisors indicates we may be
approaching a turning point. Our "2009 Print Suppression Market Study" provided
concrete evidence that leading users of toner-based printing are aggressively
engaged in formal efforts to eliminate print in favor of electronic delivery. Big
companies that spend millions on direct mail to send statements, bills,
policies, contracts and other mandatory customer communications are establishing
programs, budgets and strategies intended to radically reduce print expense in
the next few years.
In planning business strategy, it's critical to avoid relying on mental
models that may no longer be viable. Instead, we look for historical models
that can help us understand how markets change and identify high-impact
scenarios that can affect our industry.
One such scenario is called "the last piece." In 1988, the Internet was a
small collection of university and government computers, and the World Wide Web
did not exist. A few months later, in March of 1989, a little-known computer
scientist at the CERN particle physics research facility in Geneva proposed a
system that linked the Internet, hypertext and TCP into a "web" of
interconnected documents. Two years later, in 1991, Tim Berners-Lee built the
first website and the World Wide Web was born — with just one node. Two years after
that a young student at the National Center for Supercomputing Applications
(NCSA) released a software tool — the Mosaic browser — that allowed ordinary computer
users to connect to the Internet in a simple, graphical way.
There were still well under 1,000 websites worldwide, but a few
visionaries began aggressively developing new ways of presenting information and
even doing business on the Internet. In 1997, Amazon.com conducted an IPO based
on its Internet business model, and e-commerce became accessible to ordinary
businesses. From 1989 to 1995, the World Wide Web grew slowly, but as leaders
debugged the technologies, the rest of the business world took notice. By 1998,
the World Wide Web had exploded with millions of websites and began to grow
exponentially each year.
What happened? The development of sophisticated browsers and e-commerce
were the last pieces of the puzzle. Once the basic underpinnings of Internet
commerce were debugged, businesses everywhere began putting up websites, many
of them offering products for sale. Major players, Internet service providers,
large brick and mortar retailers, music companies, movie studios and others, were
caught off-guard. Even the founder of Netscape, visionary Jim Clark, was still focused
on developing interactive TV. What ensued was the greatest restructuring of
business since the industrial revolution, and many old-line companies were
severely challenged or failed.
What is the lesson we can learn? When the last pieces of a major change
fall into place, when that magical "good enough" point is reached, the majority
of the market will almost unanimously decide it's time to move. Market forces
are aligned to support a transition sooner rather than later. We have a decade
of slow growth in print suppression behind us, and major players are transforming
their efforts to move customers online from experiment to policy.
When, not if, the majority decides to follow, it will radically alter
the printing landscape, with sudden and unpredictable changes in volume. As a
printing executive, you must prepare for this scenario and start now defining
how your company will deliver value that can sustain your business. A long,
slow transition for your printing business is not guaranteed. Don't be caught
by surprise if the last piece falls into place.
TERRY FRAZIER [terryfrazier@madison-advisors.com] is a principal
analyst with Madison Advisors, an advisory firm that specializes in print and
electronic communications. He provides project-based advisory services designed
to assist clients with business strategy and technology selection decisions. For
more information on Madison Advisors, visit www.madisonadvisors.com.
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