Specialty Graphic Imaging Association Digital Printing & Imaging Association
	Executive Summary January 2008

When Quality Isn’t Enough

In today’s competitive marketplace, producing a quality image isn’t enough to maintain success. To improve their competitive position, many printers are moving from a production business model to a service business model. They are adding value beyond their imaging capability.

To see examples of companies successfully moving from a production business model to a service model, you need look no further than to the larger point-of-purchase producers in the SGIA community. These companies are not only maintaining state-of-the-art imaging capability, they are advancing their businesses by improving customer relationships; working closer with customers in the early stages of projects; and they are staying involved with customers long after production by finding new and more efficient ways of managing inventory and distribution.  These companies are extending their customer interaction and adding value.

Changing from a production business model to a service model means repurposing people. If the workers don’t change, the company doesn’t change. To be successful, employees must buy into new corporate values; including rules, methodologies and goals.

While every worker in the organization will be affected by the move from a production business model to service model, they won’t all be affected equally. Consider that all workers in your company fit into one of three groups – production, interactive or administrative.

Production – this group is responsible for all phases of manufacturing and implementation. They represent the engine that creates product and maintains quality standards. Using the production business model, this group was the primary value source. Under the service model, they will share that responsibility with the other two groups.

Administrative – while important to the cause, these workers are behind the scenes involved with operations such as payables and receivables. However, they will have a more visible and decisive role using a service business model.

Interactive –workers in this group are experiencing the most change. And it is here that many companies are developing their competitive advantage. Interactive workers have direct contact with customers. This group includes sales staff, customer service representatives, management, fulfillment staff, etc. Each worker is in some way directly involved in the exchange of goods, services and information with customers and vendors.

To compete in today’s marketplace, workers who interact with customers will be required to improvise, problem-solve and maximize opportunities quickly and accurately. They need to be empowered and informed. It is their ability to add value for the customer that is proving to be the competitive advantage in today’s marketplace.

In the past, the interactive group was the smallest of the three groups.  Decisions affecting customers were typically left to owners or a few other individuals within the company. Today, across the corporate landscape, the interactive group is by far the fastest growing of the three groups with more employees working directly with customers, making value judgments and contractual commitments than ever before.

To increase the effectiveness of interactive workers, managers are investing in communication networks linking employees, customers and vendors. They are finding creative ways to keep interactive workers informed and connected. Successful companies are maximizing collaboration, fostering innovation and promoting teamwork. They are eliminating barriers and fast-tracking the decision making process.

But there’s another competitive advantage to be found in this changing scenario. That advantage is in the management of today’s workforce. Managers who effectively balance the needs of these different groups will have an advantage.

It’s not easy. Managers across the corporate landscape are wrestling with out-dated company structures, ineffective evaluation metrics and a host of other issues. The tried and true management science applied to production workers doesn’t suit the growing interactive group.

As examples: the deep hierarchies used to manage production personnel are being flattened as interactive workers need the ability to make fast decisions on their own. There just isn’t enough time to run ideas up the chain of command. And, in terms of evaluation metrics, how do you evaluate a sales representative’s ability to anticipate opportunity or increase customer loyalty?

The move to a service based business model is a positive step for many in our community. At SGIA, we’ll continue to investigate the changing marketplace and explore management concepts that can deliver a competitive advantage. Our goal is to help you make successful decisions. We’ll support this effort with educational programs and information resources.