It’s All about the Data for PSPs in the Great Lockdown
Insight from the Software Investment Outlook Studies
Every assumption we personally and professionally had going into the new decade has been turned on its head thanks to the COVID-19 pandemic. Students are learning at home. Governments have injected economic stimulus packages. Businesses have faced forced closures around the globe and most of us are learning how to work remotely. Now more than ever, print service providers are digging into their finances and operations to ensure business survival and continuity.
We launched our already planned European and North American Software Investment Outlooks in Q4 2019 and Q1 2020, respectively, before the coronavirus had seriously hit. In an age where the amount of data is exponential, equipment is being connected through the Industrial Internet of Things (IIoT). Software is available to create a custom dashboard for interpretation and what matters to the end user: PSPs. The purpose of the research was to identify what financial and operational data is important to managing the business, how it is collected, what frequency it is gathered, and who is responsible for creating actionable insights.
The research is extremely timely as evaluating financial health and operational execution are critical as printers are disrupted and (in some cases) pivoting to new market opportunities. Knowing how to tighten costs, finding new revenue paths, and rationalizing operational capacity is critical. Having data as the basis to monitor key performance indicators is critical. The following are key findings from this year’s research:
- The top three financial KPIs used were overall profitability, cost of goods sold (COGS), and gross/net profit margin. These are usually compared to a previous period or established internal financial goals.
- Growing firms in NA tend to monitor top-line growth (profitability and sales growth), while also controlling the bottom line through COGS.
- Financial data and operational data are commonly pulled as needed and most often reviewed by the C-suite or general manager (see graph below).
- The average annual cost of missed service-level agreements (SLAs) could reach up to $1,980,000, depending on the type of print establishment.
|Review Cycles of KPIs by PSPs|
The research revealed insight into other financial data such as gross margins, sales per employee, and sales growth. From an operational perspective, PSPs reported on equipment uptime and effectiveness, along with other metrics like on-time performance and SLAs.
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