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Wednesday, September 15, 2010

The cost of transpromo...

In the last few posts we have reviewed the skill sets and the activities associated with a transpromo project (forgetting for the moment of conducting the project without the proper skills).
  1. Graphic arts (design).
  2. Programmer/IT infrastructure.
  3. Database.
  4. USPS
  5. AFP/PDF document handling.
  6. Real security.
Now let's examine the costs.  (I used a site call for some of this information, other sites for the rest by googling ".net programmer average pay" and so on.)

An average salary for a graphic artist might be $40K depending on experience, education, etc.

Average pay for a .net programmer would be around $60K, with similar pay for an experienced database person.

An experienced USPS mail person might cost $50K.

We'll skip the AFP/PDF skills for the moment.

Finally an IT security person will probably cost around $100K.

So, all together you probably would have a payroll of around $250K per year to handle basic transpromo work.  This would include a set of 4-5 people with sufficient skills to set up and process the work.

Seems reasonable, right?  Except we forgot the expensive "VDP" application to drive it.  Many of these cost at least $100K along with the training to use it properly.   

We also forgot someone to manage all this and handle the output properly (the AFP/PDF document handling).  While each of these people may be able to do their task on their own they still need someone to manage all this and certainly that can't be the sales or customer service person.

We also forgot a Q/A person.  Someone who can understand the customer requirements as well as the generated output and make a determination as to whether things are working or not.

And we also need to consider a sales person qualified to sell this type of work as well as a CSR to support the sales and production efforts.

All in all you're "investment" to be able to do "transpromo" would probably be about $500K per year minimum plus another couple hundred thousand for sales and support.  (This of course assumes you have the devices necessary to produce and finish the work.)  Now many companies interested in transpromo may have some of these skills on staff already so the "startup" cost might be less.

Let's say, just as an example, your total annual costs with a equipment, supplies and people is $750K.  Given 200 work days per year you need to make $3,750 per day.  At $.01 per piece you need to process 40K pieces per day or around 8 million pieces a year.

Having done this type of work and having been involved in all the aspects described above I can say that there are very few shops, especially print shops, that have these sorts of skills.  The high-end financial services providers (FIS, Fiserv, etc.) all do this today in B/W and are now moving to color.  Their cost structures are not like a print/mail shop in that they already have the IT portions handled.

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