By Ed Avis
Some clients of Precision Images in Portland, Oregon are ramping up their large-format scanning requirements, a welcome development for the IRgA member.
Precision Images' new location in Portland
“People are now coming back from the pandemic, such as municipalities and school districts, and they’re getting funding for archiving projects that they started in 2019,” says Phil Guzie, co-founder of the company. “So we’re seeing some of that business kick back up.”
But other digital business lines are not growing for his firm, Guzie says. He blames that partially on the environment – Portland and several other large Western cities are still dealing with social disruptions that started during Covid. And he says competition is tough, as most local GCs and municipalities have adopted competing digital planrooms.
Overall, according to an IRgA survey this week, scanning and archiving services are growing and other digital businesses are holding steady. Sixty-four percent of respondents said their scanning business is up in 2023 compared to 2022 and 42 percent said the same of their digital file management/archiving business. In contrast, only 20 percent of respondents said their digital download business is up this year, and 33 percent said their digital closeout business is up.
Scanning/Archiving Growing
The large-format scanning business has been a profitable niche for reprographics firms for decades, and it appears to be holding steady. The supply of “legacy” hard copy documents does not seem to be in risk of running low. And in many cases, even documents that started their existence as CAD documents are being scanned today, because the users have lost the original digital file or never had it.
DJ McClary, vice president of Tri-State Signs and Reprographics in Pittsburgh, says scanning is an essential part of their growing close-out business.
“Close-outs involve redlines, crayons and Post-It notes or whatever on drawings and all of that needs to be captured,” he explains. “I’m doing a good job finding more and more customers looking for close-outs. They give me a banker box full of specs and manuals and drawings and we scan it all in. That can be $500 to $2,000 per job. It’s all about making it as easy as possible on the GC.”
Other big scanning jobs for many repro firms involve school districts, municipalities, health care facilities and other organizations that have large built footprints and have store rooms full of old drawings. As they get the budget, they get those scanned in.
In order to make those scans – and original CAD files in many cases – easily accessible to clients, most repro firms with a scanning business also have an archiving/digital management business. Only 8 percent of respondents to the survey reported that archiving/digital management is down in 2023.
Planrooms Generate Ancillary Revenue
Digital planrooms are a form of archiving/digital management, but generally they are used for new CAD files that are uploaded for printing or bid management purposes. Both Precision Images and Tri-State use ReproConnect for their planroom.
According to the IRgA survey, the business of running a planroom has been flat for most firms in 2023 – only about 10 percent of respondents said that business is up. However, that figure may reflect the fact that most firms don’t charge much for use of the planroom itself.
“We use the backbone of our digital planroom for file submittal and keeping track of what’s been uploaded and downloaded. It definitely pays for itself through the monthly fees we charge, but we have only a few big GCs using it as their planroom all the time, bidding through it and that kind of stuff,” McClary says. “We could probably get more, but we just haven’t pounded on the doors for it.”
Guzie says his company’s planroom also doesn’t drive much revenue directly, but it may indirectly result in sales. “For example, we do a lot of signage for healthcare organizations that use our planroom. Did we get that business because of the planroom? I’m not sure, but it’s possible.”
A related business – fees from clients who download files from a planroom – was overall flat for respondents to the survey. Exactly the same percentage of respondents – 20 percent – said business in downloads is up as respondents who said it is down. The remaining 60 percent said that business is flat.
McClary reports that his download revenue is up in 2023.
“It’s 100 percent money,” he says. “It’s nice when you have a holiday weekend go by and on Monday morning you come in and see that people have downloaded files. It always seems like we’re getting something for nothing!”
Multiple Ways to Earn from Digital Bid Process
The digital management of bids grew during Covid because many municipalities and others who solicit bids did not want people coming into their office. About 38 percent of respondents to our survey said they offer this service, and all of them charge for it.
There are a variety of ways to earn money from the process. For example, McClary says his firm offers an ala carte menu of services the clients can choose from. He is upfront about the costs for everything – such as the cost to organize the bids, the cost for downloaded documents, the cost for prints, etc. – and clients can pick and choose which services they want Tri-State to handle. Basically, the process is customized for each client.
“I have one contractor who doesn’t want anyone to pay for downloading drawings, so we charge them a monthly fee that includes downloads,” McClary says. “And there are people who say, ‘Just add up how much all the printing is, because we’re paying for it as the GC.’”
Regardless of the payment process, McClary says he appreciates that managing the bid process gives his firm exposure to potential clients who may need to order prints or other services at some point.
Storefronts Equal Sales
Digital storefonts – which are customized web pages that allow clients to order regularly needed items directly from a repro firm -- offer repro firms the chance to “lock in” customers who regularly order products, and it reduces the workload of small projects.
For example, Guzie explains that one client of his was regularly ordering stickers and other printed items and was placing orders via email. After one order for helmet stickers involved dozens of emails and hours of back-and-forth work – for an order that generated under $100 – he finally persuaded the client to adopt a digital storefront instead.
“Instead of ponging emails back and forth for a tiny little order, when they have a storefront they can log in and see what they want and order it,” Guzie says. “It’s simpler for them and for us. With the storefronts, some people are ordering five to 10 times a month for some kind of signage. I don’t charge much for the storefront itself, because we want the signage work.”
Only a quarter of survey respondents said they offer digital storefronts, but it may grow as more companies realize the revenue potential.
Conclusion
Digital services are an important part of the reprographics world these days, but it’s not all gravy. As with any service, the firms that market the digital services heavily and innovate in their offerings have earned profits that may elude firms taking a more passive approach.