Evaluating ROI (Return on Investment) for CtP
Organizations are driven to justify capital investments. This is understandable.
What may not be so comprehensible is that companies often follow a model for return-on-investment (ROI) that is equipment-based.
Too frequently, they measure universal criteria rather than those that are specific to their own organization. For example, a newspaper that does not have a fully automated digital infrastructure in place will realize a far more dramatic return on its investment than one that was already gaining benefits from an automated workflow. In other words, an ROI model that works for one organization will not necessarily work for another.
There is more to justifying the conversion to computer-to-plate than how quickly the benefits will pay for the cost of the equipment and consumables. An accurate model for return will depend on the company's overall objectives and priorities as well. Here are some considerations that will help you to customize an evaluation formula for your organization.
Think outside the box
Don't focus solely on the cost savings of the technology. Consider overall productivity and process improvements.
Stop thinking of CTP as just a platemaking function; it is only one step in a continuous process. Along with CTP, consider the benefits of automating the entire workflow. Which system, or vendor for that matter, will allow you to most readily extend automation beyond platemaking?
According to market intelligence and consulting firm IDC (www.idc.com), not all good investments are going to yield returns in the hundreds of percent.
Thus, said IDC, a definite judgment call is required.
For example, a 200 percent ROI on a $100,000 investment is great, but a 40 percent ROI on a $1 million investment, which has an enterprise-wide impact and increases the company's ability to compete, is better.
Developing evaluation criteria
Only you can determine the objectives for your investment. Once again, don't limit these to the equipment purchase. When evaluating a CTP investment, consider the longer-term benefits. Here are some questions worth asking when developing your criteria.
How many print sites do you need to convert over a specific period of time?
Will the technology allow you to reduce operational costs?
Will it help you reduce steps and errors while increasing productivity?
Will the system integrate easily into your current workflow? If not, what other technology will you need to purchase?
Will that additional technology be beneficial to your overall workflow or simply be an added expense?
What is an acceptable total cost of ownership and to what extent will the technology contribute to this? Remember that total cost of ownership, however, is not as simple as calculating the cost of the plates and the platesetter.
What is the expected life cycle of the equipment? Is the system upgradeable?
Will the system automate quality control? Will it integrate into an overall best practices model?
Will the system allow you to yield higher quality progressively? That is, will you be able to add options such as screening technologies that will extend the quality threshold, and will you be able to implement those options without slowing down your system?
Will the screening technology allow you to standardize color and reduce the cost of adding more color?
Will the quality and productivity gains help you to increase advertising or commercial printing revenue?
Will the new technology allow you to improve press utility?
Will your service costs be reduced? How short is the learning curve? Will you be able to save personnel and labor costs?
What are your space requirements and does the system footprint accommodate your needs?
What is the system's long-term reliability? Does it have a good track record and how reliable is the vendor?
In the end
ROI should be used to help guide decisions. However, an investment in new technology should have among its objectives the ability to change behavior and improve overall workflow efficiency. The final ROI should be secondary to how well the investment contributed to meeting the newspaper's long-term objectives.
2004/2021 by Rosemarie Monaco
Ing. Rainer Wagner