Did You Know About Digeno?

R.R. Donnelley wades into the world of e-commerce

BY CAROLINE MILLER

R.R. Donnelley & Sons (RRD) is launching a new e-commerce venture this month at Graph Expo and Converting Expo in Chicago. Digeno.com is an R.R. Donnelley-funded network that provides an e-procurement solution for the sheetfed printing industry. This portal is a comprehensive, printer-led Internet solution for buying and selling print-related products and services in the regional commercial printing markets, according to Digeno President Terry Tevis.

As Tevis gets ready to introduce Digeno to the graphic arts industry, Printing Impressions wants to know how he views the direction of e-commerce in the printing industry, how Digeno.com fits into this continually evolving space and what Digeno brings to the e-commerce table.

PI: What audience is Digeno.com targeting?

Tevis: We have two distinct channels for customers. RRD's top 2,000 customers alone purchase more than $9.2 million in sheetfed work each year. None of this is produced on RRD equipment, as they do not compete in sheetfed print. In fact, RRD is currently using Digeno to outsource more than $25 million of sheetfed work that supports current magazine, catalog, book and financial printing.

These RRD customers use their preferred printers, and we simply connect them to their choices via Digeno. The second audience is the 5,000 printers that make up the bulk of the commercial sheetfed market.

PI: How did Digeno develop?

Tevis: Bill Davis, chairman and CEO of RRD, and Jon Ward, president of RRD, approached me last October about the possibility of returning to Donnelley to build an e-commerce business. With the help of Raine Consulting, PB Systems and several key RRD executives, we looked at all the print e-commerce companies and technologies, as well as all the leading-edge providers in other industries.

We decided not to reinvent the wheel, but to focus on printer and buyer service solutions for today using "Best of Breed" technology providers. Rather than develop solutions that would disintermediate the printer from the buyer, we wanted to find a way to protect the value propositions of both the printer and the buyer.

PI: How do you see Digeno fitting into the current e-commerce landscape?

Tevis: With the host of companies trying to develop e-procurement systems for the printing industry, Digeno is lead by a consortium of printing and technology experts who embrace "Best of Breed" technology providers to meet the service needs of this marketplace. Digeno is being built to integrate with existing printer and buyer systems.

Linking to other horizontal e-procurement hubs such as SAP, Commerce One and Ariba, Digeno will become the specific site for print procurement in this space. Our target is the top 4,000 printers who want to move into this space with a solution that is printer/buyer designed, not simply a singular-focused Silicon Valley application. Hence, we merge the best in print solutions and technology rather than create our own.

PI: What will set Digeno apart from its competitors?

Tevis: First, we originally built this with the printers in mind. We have assembled a blend of print, purchasing and technology executives to build a solution for the smaller printers and their customers.

Second, our world class site tutorials will help both buyer and seller of print to easily navigate and use our portal.

Thirdly, our "click" transaction fees are event-based and are not based on the value of the job. We treat each transaction as important, not based on the dollar amount. Hence, our $9.95 per purchase order is very competitive with other B2C and B2B sites.

Lastly, our personalization through BroadVision enables each user to customize reports and dates to their needs, not to our requirements, for secure, private and customized information any time.

PI: How will the world of e-commerce impact the commercial printing industry?

Tevis: Providing a customer and its printer with 24-hour, seven-days-a- week connectivity will simply enhance the relationship between buyer and seller. The World Wide Web will never replace the sales talent creativity needed to help a customer. The World Wide Web will never replace the service culture that differentiates a printer's value proposition. What the Internet brings is speed and communications, which are critical to any industry.

The Internet will help keep print timely. The conversion of digits to the printed page will still be a dominant part of the marketing plan for any company. E-procurement systems will blossom over the next five years to make this purchase easier to complete. The printer will be part of his customer's e-procurment, similar to their P.O. system of today. Electronic estimates, schedules, bills and payables will simplify the process and make it always available to any person in the loop.

Being able to access your printer via the Internet with changes, questions and updates will promote fewer errors, immediate responses and exact audit trails on alterations and change orders. The RFQ will be on the Web and all data surrounding that live job will be always available.

PI: What will the e-commerce landscape look like two years from now?

Tevis: We expect to see rapid consolidation of the 100 or so players in the print and paper e-commerce space; possibly down to four or five major players. Similar to phone companies, both big printers and other e-commerce solutions, only those that execute best will survive.

Building real solutions that really work will create the leader in this space. IPOs can be beneficial if they bring cash for expansion, not simply to return VC money. The hard work of old-fashioned business plans, execution and cash management still drive a successful vision. That is why we opted for open architecture, proven technology from other industries rather than developing our own code for a printing industry solution.

The best value Digeno can add is to take the lessons learned from other industries (such as supply chain management, collaboration, e-procurement, integration and aggregation) and leverage its scale advantages to build a superior service that can deliver cost-effectively.