Total Economic Impact of ERP (MIS) Software for Printers

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If your management team could clearly see all of your numbers in an instant, could they control costs better?

A recent study from the Center for Print Economics and Management analyzed the costs for an average sheetfed printer. Manufacturing costs made up 76 percent of total costs. Admin and selling costs accounted for 22 percent, which left just over 2 percent average profitability for the printer. A one percent decrease in the cost of manufacturing translated to a 34-percent increase in profits. A one-percent decrease in overall total costs translates to a 43-percent jump in profits.

Now just imagine what ½ a percent reduction in cost could do for your profit margin.

To lower costs and increase profitability as a printer, you have to understand your costs. With full visibility into every area of your business, you have the information you need to analyze sales and performance, improve manufacturing processes to save costs, and make informed decisions that impact the bottom line. That’s exactly what ERP (MIS) software is designed to do—and that’s exactly what we will demonstrate in this blog post and supporting webinar.

Our goal is to show you how ERP (MIS) software can help you lower costs, increase profitability, and see a return on investment (ROI) within the first few months of a successful implementation.

What’s Driving ERP Software Adoption?

Before we jump into costs, let’s look at some of the more pressing issues facing printers today. Many of these challenges are driving ERP (MIS) software adoption in a big way. They include:

  1. Shifting buying behavior
    Thanks to the internet, customers expect immediate answers. And if you don’t have the ability to quote quickly and accurately, they go somewhere else.

  2. Pandemic-driven supply chain issues
    Supply chain problems interrupt deadlines and drive-up costs in the print industry today. This increases the need for process efficiencies and software to fully visualize the operation.

  3. Cost-plus approach to pricing jobs
    Everything resolves around cost in the print industry; there is a street price for everything. The conversation is never about value-add.

  4. Increased inflation
    Increased interest rates and other financial challenges emerge as inflation continues to climb.

  5. Difficulty in hiring and retaining talent
    Unfortunately, the print industry is not as popular as it once was, and it is getting harder to attract and keep experienced staff.

  6. Decentralized point solutions running all aspects of plant operations
    The average printer today has about 10 subsystems within their business that create separate islands of data and no clear line of sight to true costs.

Print businesses are highly dependent on cost control, as you can see. Your profitability as a printer depends on your sales or total revenues, the prices you charge, and your cost structure. The Center for Print Economics and Management says that the two key drivers for lower costs are more equipment and fewer (but more productive—and higher-paid) people.

ERP (MIS) software is what will help you uncover the data and give you the information to overcome all of these obstacles. By containing every part of your business in a centralized database, you and your team will be able to see every single cost, every single transaction, and every single error. And when you have that complete operational visibility into your business, you’re going to see a major impact on your business and bottom line. We’ll explore this deeper in the next section.

How Costs Impact Profitability in a Print Shop

To help guide you through the total economic impact of print ERP (MIS) software and improve your ability to control costs, we have brought in the strategic planning expertise from George Brown, CEO at Pivot Marketing and esteemed board member of Wye LLC. He recently developed a detailed presentation for the How to (Legally) Print Money Print Technology Summit that we have included below.

In addition to elaborating on the challenges facing printers today and what’s driving profitability, George discusses managing costs of the average print shop and the total economic impact of a successful ERP (MIS) implementation. He walks you through how to calculate your ROI on print software by using a hypothetical mid-size printer with a benchmark operating profit of 2.27%. In the example, this printing company is considered mixed mode, specializing in offset, with digital and wide format in a plant of about 105 employees.

In the following video, you will also learn more about the impact of ERP (MIS) software outside of ROI. George shares 5 areas where you will experience bigger changes and improvements in your business, including:

  1. Working capital improvements
  2. Revenue increases
  3. Cost reduction and efficiency
  4. Risk reduction
  5. Compliance (government, debtor, customer)

This presentation is filled with great questions and valuable information on justifying your investment in print ERP (MIS) software. But it’s only the tip of the iceberg! If you have any questions about print ERP (MIS) software and the implementation process, browse all of the expert videos and awesome demos available on-demand at the summit:

You can also reach out directly to George and our print technology experts here. We can help you calculate your ROI, assess your existing infrastructure, provide a demonstration of print ERP (MIS) software (PrintVis), and answer any questions you have about the print software implementation process. At Wye Print, we are passionate about helping printers understand their costs through the right technology and equipping them for the challenges ahead.