Mythbuster: we give you the low down on ROI
The low down on costs, capital investment, click charge models and digital technology investments.
Debunking digital press ROI myths
Enthusiastic Salesperson: “Let me show you the return on investment with our ROI calculator.” Long suffering customer: Smiles sweetly, quietly takes a large breath, “OK” …Sighs.
The problem with Return on Investment presentations is they often paint a skewed rosy picture that is designed to show a positive outcome and phenomenal profits. In an attempt to present a more balanced picture, at Fujifilm we have created a Jet Press Ready tool that helps printers try several “what if “ scenarios using their own data. The idea is to analyse if the printer and Jet Press 720S are ready for each other and if so, what benefits the relationship will bring? A little like a dating website but without the tears and ‘Photoshopped’ profile pictures. During the development of the software we started to see some interesting trends and principles.
1. Don’t start with the capital
Many technology investment conversations start with questions like: “How much is it?”, along with “Can I afford it?” and “How long will it take to make my money back?”, all of which are valid questions. The problem is that a high percentage of those conversations end right there when the reality is that in many cases it may not be as simple as just looking at capital cost.
In many of our discussions with printers using the Jet Press Ready tool, we found that adjusting the capital cost of the equipment by 20 or 30% would only affect the cost of a printed page by a tiny percentage, often just fractions of a penny. Conversely, the factors most likely to affect the cost of the final printed page were press uptime and utilisation, and stock cost.
2. Value not volume
Of course press utilisation is only part of the equation. A full press is great to have and if you sell your print at a low unit price it’s essential. However things switch around if the print you are selling is high value. For example a Jet Press 720S running at under 30% of capacity with the print selling at standard litho prices will make a loss. But this is a digital press that is capable of effectively printing ultra-short run and variable data work which demands a higher price in the market place. At 30% press capacity, adjusting the margin of the finished print by just 30% changes the situation from a loss making one, to over a £250,000 profit. And that’s without adding any more work to the press, so there’s still capacity to take on another 70% more.
3. Life beyond the click charge
Freedom from click charges introduces a new, possibly challenging but potentially very rewarding, dynamic to our model. The implications of running a digital press with the same pay-as-you-go considerations as a litho press demands some serious thought, but can result in some equally serious benefits.
4. The inkjet swing-o-meter
More subtle indicators in our model confirm the view of many industry analysts that the momentum is with inkjet technology and presses like Fujifilm’s Jet Press 720S. This is because the Jet Press 720S retains many benefits from the world of litho, but removes many of the downsides:
A duty cycle to support 2-3 shifts per day, a B2 format size to support current finishing equipment and the ability to print on standard litho stock
To name but a few, but perhaps the most significant: No plates to make; no make ready waste; no pre-press consumables; no fount or wash; little press maintenance
The Jet Press 720S can cope effectively with an array of difficult to print colours and images that challenge many litho and most digital presses. While others are losing sleep, and more importantly, time and money, trying to get things right, the Jet Press 720S is printing smooth vignettes, neutral clean greys and bright colours way beyond the gamut of a litho press.
Believe it or not
Whatever the amount of cynicism surrounding a manufacturer’s ROI calculations and assumptions made to justify a purchase, there’s no denying some new thinking is needed in relation to investments in new technology. At Fujifilm we present the argument for inkjet in a logical and considered way. For the growing number who have invested, the decision making process required some new thinking, but they are fast becoming the real winners in the emergence of inkjet as the future of commercial printing.