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Special Focus

Identifying Useful Information for Long-term Planning

by David S. Hutchison

February-March, 2003
Industry statistics are a great “historical” account of what companies have accomplished in the past. In today’s economic times, the pressures of short-term performance are a very persuasive force. No business can be without some focus on the reality of short-term events. However, today more and more businesses are failing because of a lack of long term vision. In fact many companies have grossly reduced the focus or completely abandoned strategic planning processes in their businesses. Connecting with reliable information sources that can give perspectives on the future is essential to establishing and maintaining a long-term vision. Identifying the most relevant information sources is often times difficult. Relevant sources of information change as general economic condition change. Evaluation and use of information is also important to preparing and validating a realistic vision. Ultimately a vision must be converted into action oriented tactics to form the operational strategy of the business.

Searching for information sources
Advances in technology of the last decade have placed an enormous amount of information within ready access of most individuals. The Internet provides a means for search and retrieval of endless volumes of free of charge and for purchase information. Searching for information on the Internet can be frustrating and seemingly inefficient. Our collective desires for immediate satisfaction are stimulated by the speed of the Internet and in comparison to alternative searching tools, the Internet is lightning fast. If you are not a “surfer”, the process can be made less frustrating with a plan to discover general types of information or specific sources of information.

Searching in a general manner for “market information” will yield a number of sites where you can purchase reports prepared by a variety of analysts and researchers on any type of market interest known to man. Most of the sites have an internal search feature to narrow the search to specific market types like “printing”, “packaging”, or “publishing”. Within these categories, specific studies will be listed with summary details of the report contents. One site of this type is known as www.MarketResearch.com. Most reports on sites such as this are for purchase, but at a fraction of the cost for a privately commissioned report.

Many times, using industry knowledge can reduce the search time by collecting the names of associations that have a stake in a specific product type or market. Large well-funded associations provide market research and industry surveys to their members and in many cases, the information is available to the public for a fee. To determine what is available and how to gain access, visit the websites of the specific industry associations and search for “publications”, “surveys”, or “industry data”. Most sites will have a specific area for individuals to review what is available. In addition to the industry associations, trade publications will often have websites that offer survey information or links to industry analysts where information can be obtained. Another way to gather information from associations is to attend conferences. Reports, studies, and presentations are often included with the conference fees. In addition to having an outstanding networking opportunity, the attendee can accumulate a great deal of valuable information for use in strategy development. As an example, NPES (The Association for Suppliers of Printing, Publishing, and Converting Technologies) holds an annual conference in December each year to provide an industry outlook for the upcoming year. NAPL, Cap Ventures, RIT, TrendWatch, PIA, and several government representatives provided speakers at this year’s conference. The FSEA provides some limited research on the specific finishing industry.

In many markets, there are industry-consulting or analyst groups that specialize in a particular market or market segment. Many of these companies prepare annual reports that are sold for a fee to subsidize their consulting activities. Companies that engage in this type of activity with an emphasis on the graphic arts or printing markets are Cap Gemini and Ernst & Young. TrendWatch Graphic Arts (TWGA) is an analyst group that reports on trends in printing, design & production, publishing, and Internet design & development. TWGA publishes reports for purchase on its website: www.trendwatchgraphicarts.com.

Less obvious sources of very useful information are stockbrokers, financial analysts, and websites of the leading publicly traded companies in a specific market segment. The list of leading companies in a market segment could include equipment manufacturers, suppliers, and customers, private and public alike. Information from these sources is free to the public or come at no charge as a part of having an account.

In the greatest macro-economic sense, the US Government publishes information free of charge on a variety of industry activities in the USA. This information includes domestic production and all import/export values. The information can be requested using the North American Industry Classification System (NAICS). Some states provide visibility of activity by the NAICS number as well. The US Government site providing access to this information is ,a href="http://www.census.gov/epcd/ec02/guide.html">www.census.gov/epcd/ec02/guide.html.

Identifying the most accurate information The research practices and data collection policies of an information source will determine the usefulness of a report’s content. The reliability of a source is generally not a question of the accuracy of the information but rather of completeness, in other words, inclusion or exclusion of information. It is not advisable to rely upon one source of information until it has been proven over time that the reports published are consistently accurate and the research practices are keeping pace with the change in markets. The best practice is to accumulate information from multiple sources and rely upon the details that carry consistency throughout the collective sources. Because one detail in a report is not validated by a collection of other reports does not necessarily mean that the entire report is inaccurate or useless. Validation of information is an important phase in the process of assessment and ultimately on the comfort in reliance upon the detail. In all cases, details from any report or collective reports should be validated and monitored against actual market conduct.

The source of the information weighs heavily on the accuracy and the reliability of the information. Recognized industry associations, longtime industry analysts, and the known leaders of the industry can ill afford to produce information that is subjective or inaccurate. These sources will take proper measures to insure the quality of the reports. Within the printing industry, reliable information can be obtained from Printing Industries of America, Inc. (PIA) through the new website for the Graphic Arts Information Network (GAIN), www.gain.net. Another reliable source for forecasting demand is NPES, www.npes.org.

What is relevant?
Relevance of information is a relative definition. Relevance will be different to individual companies depending upon the vision, strategy, and ability to execute tactics. When determining relevance, one should consider the following: Customer and Supplier Conduct, Influence on Technology and on Industry Capacity, Macro Economic Supply/Demand Picture, and Regional Economic Supply/Demand Picture.

Short-term relevance is in principle easy to assess. Interaction with customers validates short-term horizons and is more subjective. Long-term relevance requires executives to stretch beyond a day to day review of customer conduct and seek out information that reflects the future of customers’ needs or demand. In many cases, our customers limit their own vision and by association the vision of any supplier that does not actively look beyond the interface with a customer for information. Herein lies a paradox - is a company market-led when it is listening to customer(s)? What if the customer(s) you currently deal with are not keeping pace with the broader changes in the industry?

There is no substitute for intuition. No substitute. Your intuition is made of information that you have confidence in and your experience. Relevance is always a call from the gut, in some instances, you may not recognize it and in others, it clears.

Put knowledge to use
The disappointment in any failure to meet expectations in business is the acknowledgement that the information was available to have prevented or minimize the risk of failure. In the case of failure, it is simply that an executable plan was not developed or was not properly executed. The excuses are generally the same in every case, not enough time or not enough money. In hind site, a failure will always cost more than an investment in research and planning.

Relevant information that supports or validates a company vision, strategy, or current tactic is important to sustaining the energy and focus of associates while executing the plan. Research, surveys, and market reports should be widely distributed within a company so associates can validate their own sense of purpose.

Useful and relevant information should be used to create benchmarks for internal change activities or performance improvements. Information that validates trends or identifies a shift in a market’s future should be used to support investment activities. Investments in equipment, facilities, and research can all find a contribution from the research reports available today. Take a look at some of the current bits of information for the printing industry that we can put to use:

  • December 2001, Ronnie H. Davis, Chief Economist, PIA
    “Overall, 2002 print sales will probably be up around 2 percent or so from 2001 which will leave them at about the same level as 2000 ($163 Billion). The outlook for 2003 print sales remains very positive with a sales increase in the 4-5 percent range projected.”
  • December 2002, Ronnie H. Davis, Chief Economist, PIA
    “The consensus outlook for the economy in 2003 remains modest growth, assuming no serious repercussions from a possible war with Iraq or terrorist attacks. Expectations ranged from 2 to 3 percent for overall economic growth in 2003 with the pace picking up throughout the year.”
  • December 2002, Charles A. Pesko, Jr., Managing Director, Cap Ventures, Inc.
    “In the two years between 1999 and 2001, over 21,000 offset presses have dropped out of the market.” “Print buyers indicate 66% of color jobs are under 5000 run length.”
  • December 2002, Frank Romano, Professor, Rochester Institute of Technology
    In a report titled Print Outlook 2003 – Mr. Romano presents data that indicates 86% of the print capacity in the USA is less than 23” sheet size and 14% is greater than 23”.

Remain connected
To perpetuate a growing successful organization, executives need to be hooked up and remain hooked up. It is not surprising the numbers of companies where growth stalls out or the business fails, and note a change in senior management was in the history. In order for a business to benefit from investments in information, there must be continuity of purpose and interpretation. If the executive at the top is frequently changing, then the vision, strategy, and tactics begin to collapse. The associates resort to only reacting to immediate demand, and eventually the abilities of the business fail to meet the needs of the market.

The infrastructure of the business should generate continuous streams of data that can be used to validate the plan that is in place. Measures and monitors should be established to insure that the internal requirements of the plan are being achieved. Opportunities to broaden companies’ perspectives on target markets or customer interests should never be overlooked. Mingle where your customers mingle, take a genuine interest in their causes, and always take value from where you invest.