[From iSource Business, June 2001] A giant media and communications conglomerate with independent divisions wants to realize the efficiencies of aggregating its more than $300 million commercial print buy for all its diverse groups. The challenge: The company doesn't want to centralize its procurement.
One of the most striking characteristics of AOL Time Warner, the world's first Internet-powered media and communications company, is that it's essentially a conglomeration of diverse businesses. Despite their different missions, they still share a need to produce print products. For example, Time Life Books is considerably different from the Atlanta Braves yet they can both benefit from an efficient system to buy commercial print.
Using the integrated print management system created by the Pittsburgh, Pa. company printCafe, AOL Time Warner has aggregated its commercial print buy across a shared collection of approved print suppliers. This allows each company to maintain individualized buying needs, while sharing a common buying tool.
Each group operates independently, says Peter Giamanco, director of commercial print management for AOL Time Warner, who was involved in the selection and led the implementation of the printCafe solution from company headquarters in mid-town Manhattan. One of our fundamental goals was to maintain buyers' flexibility.
Yet, there were considerable efficiencies to be gained by gathering a select group of approved printers and managing the bidding process across the Internet. We enlisted a group of senior buying executives from each of our core business units to assist in the process, says Giamanco. Beginning in July of 1999, we went through an exhaustive search, looking at every option available at the time.
The period of selection just happened to occur during a virtual flood of Web-based initiatives in the print field. Interestingly, the technology changes during the process gave us the opportunity to see what other choices we had ... but we still felt printCafe was the right choice, says Giamanco.
printCafe is a company with deep experience in developing enterprise resource planning (ERP) systems for large printers. We're installed in about 8,000 printers worldwide. For printers, their Web site on printCafe is an extension of our ERP product, so a printer is going to automate their entire system, says Marc Olin, co-CEO at printCafe.
Nearly Halfway There
With printCafe already embedded into major printers, the task of managing the print process was already half in place, which is an attractive feature in a B2B world where supplier enablement is always an issue. We wanted to engage someone that had a history in the printing market, says Giamanco, someone who could be an asset to the printer as well as to us. Our goal is to create an end-to-end solution that is of value to everyone, buyer and seller.
printCafe allows AOL Time Warner units to find the best printer for each job, be it a direct mail package for Columbia House or a poster for HBO. That's the beauty of the tool. It allows our discrete companies to interact with the same core base of suppliers and use one functional means to the benefits of the tool, yet they have their independence of interacting, says Giamanco.
The Rough Seas of Integration
The full rollout involves a large group of print buyers and a diverse collection of operating units. We have approximately 100 print buyers that will participate in this program, says Giamanco. We are a complex organization, and there were situations where we challenged printCafe's abilities.
Olin is quick to agree that the integration challenge of hooking into disparate operating systems was no small task. Each group has its own methodology on how they do their bidding process and their own legacy ERP systems, so working to integrate to all the ERP environments and helping them develop a common methodology has definitely been the most challenging piece of the process.
Printers Bear Most of the Cost
The three-pronged challenge of e-commerce is supplier enablement, integration and adoption. printCafe came already loaded with supplier enablement; they wrestled down integration, and adoption was less difficult than anticipated. The buyers were very enthusiastic about getting on the system and using it, says Olin. We worked with Time Warner on an enterprise-wide plan, so the users were shown how this is a strategic initiative for the company as a whole.
Giamanco concurs that adoption was not an overwhelming factor in getting the system to work. Once an individual gets comfortable with the tool, it's really quite easy to use.
Return on the Investment
Most of the cost of printCafe is borne by the printers who subscribe to the system and receive a Web site that integrates into AOL Time Warner's managed print buyer system. This connects the printers to the AOL Time Warner group of print buyers, while also connecting backwards into their own enterprise systems. The one good thing that separates printCafe from their competition is that they are a company that already has integrated software solutions at printers, says Giamanco.
As buyers, we recognize the potential value of being able to interact with our suppliers over the Web, says Giamanco. Having the ability to do that with one common tool further enhances that value. From our suppliers' standpoint, it opens the door to a variety of AOL Time Warner companies they haven't been previously introduced to. We see this as a real win-win situation.