Reprographics 101

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  • A Successful Sales Story “Selling Software as a Service”

    On February 8, Shaun Meany, President of ARC’s PEiR Group division, posted a very well-written article, which is, essentially, a “case study” of how a salesperson sold PlanWell Collaborate to a General Contractor. The case study also mentions that the sale was expanded to include a staffed FM (OnSite) service. I don’t know which reprographics company sold this deal to the GC; it could have been an ARC-owned division, or it could just as well have been an independent reprographer (i.e., not owned by ARC) who invested in PlanWell Collaborate. Also, I don’t know which GC bought the deal. If the GC this article mentions was the “Gilford Corporation” (a very large minority-owned, highly-successful GC based in the Washington, DC area), that would make this deal even more impressive than would otherwise be the case, since the owner of Gilford Corporation, Henry Gilford (one of the nicest guys you could ever know), was formerly a partner in The Reproduction Center (TRC), a reprographics company that operates in Prince Georges County, MD, a suburb of Washington, DC. TRC was purchased from Henry and his then-partner (Peter Chase, who was with Clark Construction Group at the time) by Jim Costello, who still owns and operates TRC.

    The article begins with this:

    A Successful Sales Story “Selling Software as a Service” – PlanWell Collaborate

    One of the fastest growing and most successful, privately owned, minority Class ‘A’ general contractors in the US Mid-Atlantic region, has made the commitment to invest in PlanWell (Collaborate). This progressive GC has the proven abilities and track record to take on some of the most challenging of construction projects in the area. They are committed to meeting their clients’ goals by making investments in education, technology and their employees, so they are able to avoid costly delays, keep projects in budget and deliver high-quality work.

    And, the article provides additional information for these topics:

    · Solution Selling Process

    · Sales Objections and Solutions

    · Learnings

    · Opportunities with Account

    For reprographers who are interested in reading the full article – and I urge you to do that – because any information you can learn from the success of others will help you grow your business – here’s a link to the full article that Shaun posted on the PEiR Group Point of View Blog:

    http://peirgrouppointofview.blogspot.com/2011/02/successful-sales-story-selling-software.html

  • Reprographer (LSG) in North Carolina apparently scores success with PlanWell.

    This afternoon, I found on the Internet the “meeting minutes” of a very recent meeting of the “HUB Advisory Committee” of Guilford County (NC) Schools. (“HUB” means, “Historically Underutilized Businesses – and that’s a new term for me; I’ve never heard that term before.)

    When you can get “your customers” to talk about “the products/services” you are offering them, that’s fantastic.

    First, here’s a portion of the “minutes” from that recent meeting:

    Guilford County Schools (mentioned throughout the document as “GCS”)

    712 North Eugene Street, Greensboro, NC 27401

    Phone: 336.370.8100

    HUB Advisory Committee Notes January 25, 2011

    Present: Committee Members – Anita Bachmann, Cynthia Barnes, Bo Chisholm, Alan Duncan, Tammie Hall, Jarvis Harris, Deena Hayes, Tyrome Holloman

    Staff – Gerald Greeson, Andy LaRowe, John Mann, Julius Monk, Sharon Ozment, Monica Walker

    Chairwoman Deena Hayes welcomed those present at 11:45 a.m. and led the group in introductions.

    GCS Green Initiative

    Wayne Branch and Shawn Dees, LSG, LLC, presented information regarding the (school) district’s PlanWell initiative. PlanWell is a web portal that houses construction plans/drawings. Contractors can visit the site at no cost to view construction plans. Contractors can also order printed copies (for a fee) of plans for the projects they are interested in. There is no registration or membership fee to contractors to access the site.

    GCS staff can view the order history of projects/plans to determine which contractors have ordered copies of plans. This allows staff to see inquiries for projects and to ensure contractors have appropriate information for projects for which they are interested. PlanWell also links to other websites throughout the state that list projects/bid information.

    LSG has trained Facilities staff on the website and will continue to hold such sessions for staff and contractors/vendors as needed.

    Tammie Hall, GCSMWBE Coordinator, shared that a press release/email blast regarding the PlanWell website was being written and would soon be distributed.

    Second, here’s some information about LSG, the reprographer mentioned above: (they have a really nice web-site):

    http://www.lsgnc.com/

    “Large & Small Graphics”

    A reprographer with locations in Raleigh, NC and Greensboro, NC and with affiliate locations in Wilmington and Greenville (all are in North Carolina, USA.)

    From the “our history” page on LSG’s web-site:

    “A Franklin County, North Carolina native, Wayne Branch (the owner), graduated from Fayetteville State University in 1991 with a B.S. degree in Criminal Justice. He always had a desire to serve others as a law enforcement officer. After a short period as a teacher’s assistant, he became a deputy with the Franklin County Sheriff Department. After working with the Sheriff Department for two and a half years, he made the leap to the North Carolina State Highway Patrol. He continued as a State Trooper until mid-1995 when his life transitioned to a new career path, which at times, was uncertain.

    Wayne then made the leap to the North Carolina Highway Patrol in 1993-94. Wayne often says college gave him the education he needed to get started. However, the State Trooper Patrol School gave him the life lessons that would soon lead him down the path of what is now Large and Small Graphics.

    After being a state trooper for some time, Wayne’s life transitioned to a new career path which at the time was quite uncertain. After experiencing a brief stint in a few other jobs, unbeknown to Wayne the opportunity for LSG was right around the corner.

    The foundation for what is now LSG began in 1996 when Wayne accepted the position of Production Specialist with Plain Paper Solution(s). He operated and managed the production equipment, dedicating long hours to meet deadlines for many clients he still works with today. During this time his work ethic and ability to foster relationships with his clients began to take shape. The seed to learn the reprographics business from the ground up was planted in Wayne and he became committed to one day managing his own reprographics business.

    While employed with Plain Paper Solutions, Wayne became knowledgeable and more involved in the A/E/C industry and the technical aspects of running a multimillion dollar business.

    After nearly five years with the company, Wayne was presented the idea of running his own business. Although reluctant at first, Wayne seized the opportunity to go out on his own and LSG opened it’s doors in March of 2001. The first invoice under Wayne’s leadership came three months later for a whopping $30.78 from Simplex Grinnell, a popular sub-contractor; still a client today.

    From two employees in an 800 square foot building in 2001, to thirty six employees in a 14,000 square foot facility in 2009; Wayne has never forgotten how he was able to reach such a dramatic milestone in his life. With a combination of determination, a solid team, strong values, cutting edge technology and the ability to establish and maintain long term relationships is what makes today, Large and Small Graphics.”

  • Reprographers, do you offer "franking" services?

    Well, well, reprographers, maybe you should consider getting into the “franking” business!

    And, no, I’m not referring to hot-dog(ing)!

    Before you read Service Point’s most recent Press Release, which mentions “franking”, you’ll need to have (well, I needed to get) a basic understanding of what “franking” is.

    Definitions of Franking on the Web:

    Franking (or “franks”) are any and all devices or markings such as postage stamps (including printed and/or embossed on postal stationery), printed or stamped impressions, codings, labels, manuscript writings (including “privilege” signatures), and/or any other authorized form of markings …

    and,

    Definitions of franking machine on the Web:

    A machine that automatically stamps letters or packages passing through it and computes the total charge
…

    Okay, now that we’re all familiar with what “franking” is and with what a “franking machine” does, here’s the Press Release I found today on SP’s web-site: (Note that, although the Press Release is dated Jan 13, 2011, I’m pretty sure that it was just posted on SP’s web-site yesterday):

    Service Point’s Dutch subsidiary re-ensure and extend franking contracts worth over €15 million

    Service Point Benelux represented 30% of revenue in 2010 The contracts extend for minimum one year and cover franking services The franking services represents a 20% of the revenue of the unit in Benelux

    January 13th 2011. –

    In recent weeks the Dutch subsidiary of Service Point Solutions, S.A (ticker: SPS.MC) has re-ensured contracts worth over €13 million for the provision franking services. They also arranged new franking contracts worth over € 2 million new business. In 2010 the Dutch and Belgian operations, combined, accounted for 30% of group revenue. The contracts have a minimum term of one year and can be extended for further terms.

    By adding franking contracts to print and mail services, Service Point uses its economy of scale to provide their clients a unique value proposition for combined print & mail solutions.

    Benelux is the only unit of Service Point that operates the franking business. Late last year, SPS has renewed its contract with the Dutch Foundation “Children Stamps Stamps Foundation for the Welfare of Children, for a period of three years. This new contract is valued at 1.5 million euros.

    The production of stamps for this year represents 2 millions stamps.

    On average the degree of renewal in Service Point stays over 95% and have an average period of between 2 and 5 years. It should be noted that companies have renewed have been working with Service Point Solutions since 2002, showing the satisfaction with the service received.

    According to Juan Carlos Peiro, COO of Service Point Solutions, “This success demonstrates Service Point’s competitive advantage in the Dutch print & mail market, using the franking proposition as a enabler for targeting new business and logos”

  • IRgA Q4 2010 Reprographer Survey (authored by RW Baird & Co.)

    The IRgA Q4 2010 “Reprographer” Survey was completed yesterday and will soon be available, to IRgA members, at http://www.irga.com.


    As most are aware, this Survey is conducted by RW Baird & Co., one of the preeminent financial services companies in the U.S.

    In the “intent” of the Survey, as per what’s said on the “overview” page:
    “This survey is meant to give investors and participants a general indication of current market trends.”


    Access to the Survey is limited to IRgA members. This is certainly one of the reasons why your firm, if it is not already, should be a member of the IRgA. If you are a “reprographer” and are not interested in knowing what others in your industry are saying and thinking, you should be ashamed of yourself. Being disinterested in the opinions expressed by other reprographers – and not paying attention to the results of others in your business – is kind of like burying your head in the sand. Can you really afford to do that?


  • On January 27th, 2011, Sidoti downgraded ARC's shares from Buy to Neutral

    ARC shares closed at $8.22 the afternoon of January 26th, 2011, and I noticed, just this morning, that Sidioti, a financial analyst firm (that evidently follows and reports on ARC) issued a “downgrade” on ARC’s shares the morning of January 27th.

    JANUARY 27, 2011, 10:08 A.M. ET

    American Reprographics Cut To Neutral From Buy By Sidoti

    So, Sidoti issued its downgrade on January 27th when ARC’s shares had closed the day before at $8.22, and, this morning, February 7, 2011, I see that ARC’s shares are trading at right around $8.41.

    I did not recall hearing the name, Sidoti, but, when I went back and read one the transcripts from an earlier conference call about ARC’s Q2 2010 results, I found that Matthew Kemper of Sidoti was one of the analysts who participated in that conference call (date of that conference call was August 3, 2010.) Here are the questions that he asked and the responses that he got.

    (Before I forget to mention it, the “earnings transcript” reports that are published on http://seekingalpha.com are fantastic; seekingalpha is a great web-site!)

    Operator

    The next question comes from Matthew Kempler with Sidoti & Co.

    Matthew Kempler – Sidoti & Co.

    Hey, good evening.

    Suri Suriyakumar

    Good evening, Matt.

    Matthew Kempler – Sidoti & Co.

    So, a couple of things. First a follow up on MPS, it is great that you have the first new contract wins. I was wondering if you can share a little bit more about the terms of this contract, and how we can affect MPS as you sign these two affect the model. So are these multiyear contracts, and then, you know, what should the margin impact be from these business to be in line with what you see in some of these management and then finally, if you can talk little bit more about (inaudible) with these formal RFPs or these transactions that ARP actually went in there and tried to derive a solution for it.

    Suri Suriyakumar

    So I will take them, one at a time, Matt; and hopefully I won’t forget any of those questions. So the first one is that you were talking about the multiyear. So fundamentally, most of these MPS are three to five year engagements. Generally they are three years. We try to get five years where we can, so that is actually a five-year contract or a three year contract depending on the customer.

    Number two, the margins are somewhat not exactly, we cannot say it is very, very high of any height compared to an FM margin. The FM margins are always on the higher side compared to outsourced work we do. MPS would be slightly challenged, because then answering another question you have, we often have to, you know, there are RFPs out there. In some instances, these particular two plans we were referring to, both of them were our existing customers, large national customers who actually had contracts with other equipment manufacturers. So often, when we compete with equipment manufacturers, because they sell equipment on a different basis altogether, those prices are much more competitive, and we need to compete with them. With regard to the general MPS business itself, when we compete in this segment, we often have RFPs and often we compete with other manufacturers of small format devices.

    Matthew Kempler – Sidoti & Co.

    Okay. Let us clarifying on the margins side, understanding that it is a little bit lower than the absolute management, would you expect overall that when you look at your corporate average, to be positive on the corporate average or to drag it down slightly?

    Suri Suriyakumar

    I think it will be positive for now. If MPS becomes a very large portion of our business, then it could have a slightly lower impact. For now, I do not think it is going to be substantially down, Matt, but if you know, two years later, we had $250 million in MPS, now to gain that kind of market share and fight equipment manufacturers, we might actually have to satisfy some margins, which I think is fine, because this segment of the business is ours to gain.

    Matthew Kempler – Sidoti & Co.

    Okay. And then, I missed it on color. I guess the commentary over there was that it is going to be a driver for the business. But was it in the – what average did it total in the quarter and then maybe you can talk about what areas you are seeing as (inaudible) on the color side.

    Suri Suriyakumar

    Okay. I will let Jonathan in a second to answer that. He is looking for the numbers to give you a little more color on the color business. But fundamentally, what we have been able to do, Matt, is bring a clear focus as to how we are selling color. Because we have acquired companies over a period of time, they always operated at separate divisions. So the color capacities and capabilities, kind of substrates we used, kind of trades we serviced, kind of the marketing and collateral material we used, were not consistent across the company, because in the west coast, we would have full graphics, have a brand name called Colorwise, and in New York, we might have a different brand name, and different kind of collateral.

    What we are trying to bring is consistent in terms of collateral, in terms of services, in terms of substrates, in terms of products, and that is bringing about a greater level of focus. So we tell color at two different levels, one at a national level, and secondly, at the regional level in the local markets, because at the regional level, we already have a big sales team, who is already selling to AEC and non-AEC. So we enhanced that sales team to go sell color. At a national level, we have just kicked off that initiative. We wanted to make sure that we had all of our centers in place. Now that we have six or seven centers, we have brought in a few salespeople and we have kicked off that.

    So overall, there is a lot of excitement about color, and we are already starting to see color numbers are tracking very positively quarter over quarter. And I will let Jonathan add a color to that. Jonathan?

    Jonathan Mather

    No pun intended, he is adding color to it, but the color revenue year-to-date is about 16% to 17% of our total revenue. In the prior year, in 2009, it was approximately 15% of our total revenue. The good news is, the incremental color revenue is coming from the non-AEC segment too. So we are seeing growth in revenue quarter over quarter as I mentioned by 10%. The overall, as a percentage, it is also picking up, and the mix is again to the non-AEC side of the business.

    Matthew Kempler – Sidoti & Co.

    So, it was up 10% sequentially, you said.

    Jonathan Mather

    Yes.

    Matthew Kempler – Sidoti & Co.

    Okay. And then, finally, I know everybody has been trying to pin down, just to make sure we understand the cost reductions that you were talking about, and yes, what I want to understand is, talking in the second half, should expenses be down on an absolute dollar basis in the second half versus the first half or are these savings going to be reallocating to some of the areas of investment that you have been talking about?

    Jonathan Mather

    So as I said, of the $10 million reduction that we will realize in 2010, a higher percentage will be realized in the second half of the year, offset by some of the additional investments that we have been doing in the other new initiatives, but those are to a much lesser extent.

    Suri Suriyakumar

    In most of those dollars, I would add with regard to the new investments are already in place, but you know, new salaries, additional salaries are things which will still have some impact, but I don’t think they will largely take anything away from the cost savings. And also, the reality of cost savings is incremental, because we are constantly fine tuning it. So we call that the stay-fit program. So our Senior Vice President of Operations is constantly monitoring, and every time there is a reason to reduce cost, whether it is employees, whether it is locations, or consolidations, and then on the financial side, that calls for office consolidations, and then improvements and consolidating our benefits plan, all those dollars, I think what will happen is, it will take, it will come into full impact the second half of the year, as against the first half. So we are fairly confident that it is going to actually benefit us substantially.

    Matthew Kempler – Sidoti & Co.

    Okay, thank you.

    Suri Suriyakumar

    You are welcome.

  • Florida Reprographics (Tampa, FL) files Chapter 11 Bankruptcy (Part 4)

    For those of you who are interested in taking a look at a couple of the more recent filings in the Florida Reprographics Chapter 11 Bankruptcy case I’ve posted on Google Docs the following documents:

    Florida Reprographics “Operating Report”, which can be found at this link:

    https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B81al4kFAU9JYTU0NTUwMmUtNDExYi00ZGJjLTk4NTUtMzBiNjI1OWUxZjZl&hl=en&authkey=CJfTk7II

    Florida Reprographics “Amended Schedules” (Assets, Liabilities, including updated list of Creditors):

    https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B81al4kFAU9JY2VjYjc0NzEtOTBjMy00MjEwLTliZTYtYmIxMWQxMzQ1OGMy&hl=en&authkey=CIiclJUG

  • You've gotta maintain your sense of humor!

    One of my industry friends recently remarked that I should consider making authoring “Reprographics 101” my career. Sure. That would be profitable, NOT!

    Well, I just noticed this news…..

    AOL acquires Huffington Post

    CNNMoney – 1 hour ago
    By CNN Wire staffFebruary 7, 2011: 9:37 AM ET NEW YORK (CNNMoney) — AOL, the online media company that has recently snatched several smaller content firms, has agreed to purchase news blog service The Huffington Post for $315 million, ..
    Have I got a deal for AOL! How about $3.15 for “Reprographics 101” !!!

  • Construction Economics

    The U.S. Census Bureau recently released statistics for December 2010 “put in place” construction. Here’s the first page of that Press Release. But, please note that you should also go to this link – – – – –http://www.census.gov/const/C30/release.pdf

    – – – – – because they’ve also posted, at the end of the Press Release, comparative statistics for “full years” 2010 vs. 2009.

    Also, after the Press Release below, you will see another press release, one from the AGG. (scroll to the bottom to see the AGC’s Press Release.)

    Released Tuesday, February 1, 2011 by the U.S. Census Bureau (a division of the U.S. Department of Commerce):

    DECEMBER 2010 CONSTRUCTION AT $787.9 BILLION ANNUAL RATE

    The U.S. Census Bureau of the Department of Commerce announced today that construction spending during December 2010 was estimated at a seasonally adjusted annual rate of $787.9 billion, 2.5 percent (±1.3%) below the revised November estimate of $807.8 billion. The December figure is 6.4 percent (±1.6%) below the December 2009 estimate of $841.8 billion.

    The value of construction in 2010 was $814.2 billion, 10.3 percent (±1.0%) below the $907.8 billion spent in 2009.

    PRIVATE CONSTRUCTION

    Spending on private construction was at a seasonally adjusted annual rate of $486.9 billion, 2.2 percent (±1.1%) below the revised November estimate of $498.0 billion. Residential construction was at a seasonally adjusted annual rate of $226.4 billion in December, 4.1 percent (±1.3%) below the revised November estimate of $236.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $260.5 billion in December, 0.5 percent (±1.1%)* below the revised November estimate of $261.9 billion.

    The value of private construction in 2010 was $507.3 billion, 14.3 percent (±1.0%) below the $592.3 billion spent in 2009. Residential construction in 2010 was $241.4 billion, 1.7 percent (±2.1%)* below the 2009 figure of $245.6 billion and nonresidential construction was $265.9 billion, 23.3 percent (±1.0%) below the $346.7 billion in 2009.

    PUBLIC CONSTRUCTION

    In December, the estimated seasonally adjusted annual rate of public construction spending was $301.0 billion, 2.8 percent (±1.8%) below the revised November estimate of $309.8 billion. Educational construction was at a seasonally adjusted annual rate of $68.2 billion, 3.7 percent (±2.9%) below the revised November estimate of $70.8 billion. Highway construction was at a seasonally adjusted annual rate of $84.9 billion, 1.6 percent (±4.2%)* below the revised November estimate of $86.3 billion.

    The value of public construction in 2010 was $306.8 billion, 2.7 percent (±1.4%) below the $315.5 billion spent in 2009. Educational construction in 2010 was $74.4 billion, 13.6 percent (±2.7%) below the 2009 figure of $86.1 billion and highway construction was $83.3 billion, 1.7 percent (±3.5%)* above the $81.9 billion in 2009.

    Press Release from the AGC web-site, which refers to the statistics recently released by the U.S. Census Bureau for put-in-place construction.

    CONSTRUCTION SPENDING TUMBLES TO 10-YEAR LOW IN DECEMBER, WITH “VERY MIXED” OUTLOOK FOR 2011, SAYS AGC CHIEF ECONOMIST

    Date: February 1, 2011

    All Major Components Dropped at Year End; Rental Housing, Warehouse, Hospital and Factory Construction Show Best Prospects for Improvement, While Schools and Other Public Construction May Shrink Further

    Construction spending tumbled 2.5 percent in December to a $788 billion seasonally adjusted annual rate, the lowest level in a decade, the Associated General Contractors of America noted today in an analysis of new Census Bureau data. All three major components – private residential, private nonresidential and public construction – shared in the decline.

    “These dismal results – coming just days after another government agency reported the overall economy grew for the sixth quarter in a row – show that the agony of the recession continues for millions of construction workers and their firms,” said Ken Simonson, the association’s chief economist. “Construction spending fell again in the last two months of 2010, and the preliminary total for the year was the lowest since 2000.”

    Simonson noted that there were a few bright spots. Power construction climbed for the fifth straight month and finished the year 13 percent higher than in December 2009, due to a mix of oil and gas-fired power plants, renewable power projects such as solar and wind generation, and transmission lines – all of which Simonson said he expects will continue strongly in 2011. Highway and street construction slipped 1.6 percent in December but was 7.6 percent of the year-earlier level. Spending on transportation facilities, such as truck terminals, airports and transit projects, was up slightly from November and from year-ago levels.

    “The outlook for 2011 is very mixed,” Simonson commented. “Spending on rental housing, warehouses, hospitals and factories should pick up. Power construction should stay strong, and federal dollars for stimulus and base realignment or ‘BRAC’ projects will continue to sustain some contractors. But public school construction and other state and local projects will keep shrinking, while single-family homebuilding, retail and office construction are likely to remain feeble.”

    Contractors themselves also have mixed views, according to a recent survey sponsored by AGC and Navigant Consulting. On balance, more firms expect to hire workers than to shrink in 2011 – by a 27 to 20 percent margin, but only 16 percent of the 1277 respondents said they thought the overall construction market would pick up in 2011. Nearly half – 48 percent thought the turnaround would occur in 2012, with 36 percent saying it would be even later.

    Association officials urged leaders of the 112th Congress to act quickly to renew federal programs to invest in transportation and water infrastructure. Stephen E. Sandherr, the association’s chief executive officer, noted that proposed rule changes being considered by the incoming Congress jeopardize highway, bridge and transit investments. “Deferring needed improvements to our aging transportation network will undermine business activity today while saddling future taxpayers with ever-larger maintenance and repair costs,” Sandherr said.

  • Have you hugged an Architect lately? Many are feeling a lot of pain.

    Ever since the Internet made it easy to find information (and many thanks to Google for making it oh-so-easy), I’ve made it a habit to visit web-sites of A/E firms and blogs devoted to Architects to find out “what they are saying” about their industry. After all, if one is in the reprographics industry, isn’t one’s business tied to the fortunes (or famines) of our customers? Should we not spend at least some time to understand trends and business conditions that are affecting our customers?

    Arup, an international A/E firm. The headline on Arup’s main web-page says this:

    “We are an independent firm of designers, planners, engineers, consultants and technical specialists offering a broad range of professional services.” Arup is based in the U.K., has offices in many countries, and has 9 office locations in the U.S.

    Recent news article about Arup found on bdonline.co.uk

    Arup cuts 670 jobs in UK

    18 January 2011 | By David Rogers Both full-time and temporary staff go following review

    Arup has got rid of (i.e., has terminated) 670 posts (i.e., staff positions) at its UK operations with nearly half the casualties being full-time employees, following a shake-up at the business. In September, the firm announced it had put 600 staff on a 90-day consultation in the wake of the coalition government’s decision to scrap or put on hold a series of public sector projects including the Building Schools for the Future programme.

    Now the engineering-to-architecture business, which employed more than 4,000 people in the UK across 17 offices, has confirmed that 670 roles have gone as a result of the restructure. The company said 280 permanent roles, including five architects, had been axed along with a further 230 temporary and agency contracts while 86 people who have left the firm have not been replaced. New UK boss Robert Care said it had tried to mitigate the final numbers facing the axe by posting at-risk employees overseas. The firm said it had found posts for more than 70 people throughout Arup’s offices across the world.

    As to the article about Arup, I found that article when I read another article (the one that appears below). Actually, I found a link to the article about Arup in the “reader comments” section that followed the article below. Here’s that other article, and you read this article, you will see that I’ve posted some comments posted by Architects who chose to comment on that article.

    Will We Ever Get Out of This Hole?

    December 27, 2010 By C.J. Hughes (from http://www.archrecord.construction.com)

    For architects, the Great Recession hasn’t really let up since its official start in December 2007. Countless projects are stalled or canceled, including Santiago Calatrava’s Chicago Spire — now a 110-foot-wide void. We investigate what’s in store for architects in the near future and beyond.

    “If the slew of Internet posts, letters to editors, and comments to reporters are to be believed, the economy has put the architecture business in such a deep funk, it’s like a proverbial doornail: dead.

    And there’s plenty of long-term statistical evidence — about unemployment, a lack of projects, tight credit markets — to back up that prognosis. Besides, architects who have lived through previous downturns often say that this one feels different in a not-so- good way.

    Yet an alternate reading of the tea leaves suggests that what may really be happening is that architecture is not keeling over but molting. Increasingly, it is becoming a multidisciplinary profession that will benefit generalists over experts, however painful that transition might be, according to employed and unemployed designers alike.

    “I don’t think it’s dying, but I do think it’s taking a different direction,” says Paul Mendolia, 60, of New York City. The 35-year practitioner was let go from a firm in 2009. He has since been hired back as a freelancer, though at a fraction of his former wage, for tasks like filing paperwork with local building departments.

    In Mendolia’s view, the only chance he has to land steady, dignified work again is to become more proficient with modeling software, which seems to be a requirement of the few jobs that are advertised. Though classes can be prohibitively pricey, he says, “if I don’t get up to speed with CAD [computer-aided design] and the rest of it, I think I will be left behind.”

    Joblessness persists in the field: Some AIA leaders put the unemployment rate at 20 percent or higher. And more gloom is spelled out by the Architecture Billings Index, compiled by the AIA. Since January 2008, the index has cleared 50 only twice, in September and November of 2010 (anything less than 50 suggests an industry in contraction).

    The next generation of architects may be in a better position to weather slowdowns if they act as their own clients by becoming developers, too, says Vishaan Chakrabarti, who runs the real estate development program at Columbia’s Graduate School of Architecture, Planning, and Preservation.

    “Architecture is by no means dead,” says Chakrabarti, 44, who once worked for Skidmore Owings & Merrill (SOM), though being successful now requires more than just making sure a structure doesn’t leak or fall down. Business savvy is key, which might explain why 55 of his 103 students, a recent spike, have architecture degrees or are pursuing them. When Chakrabarti was a student, he says, “it was sort of a badge of honor to be stupid about money, but no longer.”

    That holistic spirit can be realized on the professional level as well, according to Bill Sharples, 47, a founding partner of the 14-year- old New York firm SHoP Architects, which recently created three other stand-alone businesses. These include a two-year-old construction arm that is hired by other architectural firms as a subcontractor.“Before, we were doing [pattern-design work] in-house, and we weren’t getting any fees. So we decided to get paid for it,” says Sharples about SHoP Construction, which was profitable this year and will be handing out holiday bonuses.

    In fact, Sharples credits his diversified revenue stream — he also has green technology and design software businesses — with helping SHoP bounce back quickly from layoffs that cost them 30 employees in 2008. Today, the firm employs 67 people, he says.

    Some sectors, such as housing, may still be R.I.P. for a while, especially in certain U.S. markets — Nevada, Florida, California — that have too much “overhang,” says Bradford Perkins, chairman of Perkins Eastman. Those woes contributed to his firm’s axing of 20 percent of its staff in late 2008, says Perkins, adding that this recession dwarfs the previous three he has worked through since the mid-1970s.

    But Perkins Eastman will be hiring again in 2011, fueled largely by overseas demand, says Perkins. He predicts that other major firms like SOM, Kohn Pedersen Fox Associates, and Gensler will begin to boost their staffs, too.

    The foreign projects that Perkins is most focused on now are senior centers in China, which by 2050 will have 300 million people over the age of 65, he says. Also, his firm, which has six offices overseas, has been busy designing schools for expatriates in Hanoi, Shanghai, and Beijing.

    “It is a cyclical business, but people didn’t see this [recession] coming,” Perkins says. Studies in the mid-’00s showed there was an undersupply of architects. “Unless all the research prior to the recession is completely erroneous,” Perkins says, “I remain cautiously optimistic about a recovery.””

    The article above prompted 8 pages of reader comments. One thing’s for sure, Architects are not apathetic about sharing their views when something they read in an article strikes a chord. Here are just some of the comments posted by architects who read the article

    Anonymous wrote:

    I’ve worked as a design engineer for almost twenty years, so I apologize if these comments seem naive, but I see many parallels to my industry.

    I tend to think both sides are correct. The best architects are probably those who are experts at producing physical models and experts at using BIM software. The experience building physical models probably trains the mind to think better in a three dimensional world. Additionally, the ability to use BIM definitely makes designing much more efficient, allowing for more through, efficient, and better designs.

    I sense many of the older professionals have a negative perception of BIM because the learning curve is steep. Furthermore, many architects who have moved up to program management or principal positions are not adept at using this technology and believe learning it is below their “pay grade”. They love the technology when they are employed managers or owners because it increases productivity, thereby increasing profits. Once the downturn hit and they found themselves out of work, they hate it because they realize that experts in this technology have an advantage over them when it comes to finding new work. As a result, they feel as if they are being left behind in a profession for which they have given so much.

    I have had job opportunities to move into higher management, but have made the decision to always stay technical and become expert in the newest software applications. In my field someone who is very good technically is compensated nearly as much as managers, but will always have many more career opportunities even during industry downturns.

    Anonymous wrote:

    The only thing that will get this profession growing again is real sustainable demand. The current state of the profession is not the fault of politicians or bankers. Politicians have never created sustainable demand for anything useful, and bankers will not loan capital unless they believe they will get a return on investment. Everything is driven by demand, and there is obviously no demand for more buildings in our society (at least in the US), at least for probably the next five years. Vacancy rates are too high. Would you loan your own capital so a developer can put up another project which will sit empty, then default on the loan? I’m sitting in Silicon Valley and there are brand new buildings everywhere, which have never been occupied for years.

    I’m also curious as to why architect always feel like they deserve the same salaries or respect as other occupations such as law and medicine? No one forces anyone to become an architect. Compensation is based on the value added to society. Any occupation which deals with ones personal freedom (law) and health (medicine) will always be compensated more than design related occupations. It’s just a simple fact of economics.

    Anonymous wrote:

    I am an Architect and have been since 1982. That said, by the standards expressed in these comments, I’ve never been much of an Architect. I do basic work… nothing that would ever get into a magazine, nothing that could ever be nominated for an award… let alone win one. My designs, such as they are, are best described as ‘competent’ and ‘workman like’ Yet I’ve managed to have a career and make a living in this profession and hope to continue to do so for a few years yet.

    All through 2009, and 2010 I did so (As I have detailed in these ‘pages’ before) by finding two clients that are by and large feeding off the general misfortune and malaise in the economy. This was repeat work and I have done very well with them and they with me. Now a bit of advice and a bit of good news:

    If you have a license, and have not found a way to make a living… no matter how small of one, I suggest that you are not trying. Always seems to be some work out there. You won’t like it much… at this level you have but two choices for clients: those that buy Architectural services every day, and know just how much they will pay… and not a penny more. Or ‘civilians’ that have never ever done this before and have not a clue. Enjoy.

    Now the good news: in just the last 45 days… since Thanksgiving, the work and the inquiries have picked up here on the very bottom of the market. The little guys, seemingly… are getting back into the game. Small Mom-n-Pop businesses, 2,000 sf 4,000 sf strip center stuff. This is noteworthy for two reasons: we have not seen this type of client since mid-2008. They have been gone, out of the market. Second, to come out and get moving during the holiday season is unheard of, even in the best of economies. That’s telling… everyone wants to get moving on things.

    spratt wrote:

    I am 60, thankfully still actively employed , know all the 2D, 3D, and illustration software and use it profusely. Not all older architects are computer illerate. I can’t think anyone still moving ever used a t-square- I know I certainly didn’t.

    The only firms that seem to be doing o.k. are those with international ability. The small firm with only local work in architecture or engineeringing is in the deepest trouble and likely can’t hang on until things turn around. Even for firms with foreign presence, things have changed. After the Dubai crisis, fees are not fortunes in the Middle East that they once were. I feel sorry for the people graduating now- we had a bad recession in the early 90;s and many young people left the profession. The one person every firm that has work is looking for is the 10-15 years of experience person. They are in very short supply because so many left the profession back then.

    Anonymous wrote:

    The problem with BIM is getting paid to do it. We have been using Autocad in our small office for 16+ years, and some form of Cad for 20 years. We haven’t found that BIM- Revit saves any time , it takes us more time and my engineers want to charge more. Same for “green” architecture. I am afraid that all this just ends up being more work for no more fee. Something that has been going on for a while where we have to provide ever increasing documentation, details,Energy studies, cost comparisons, code information,ADA provisions, fire studies for the same fee structure.

    Here in Atlanta the unemployment rate for architects is 60%.

    Anonymous wrote:

    Yes, “the times, they are a’changin”.

    Architecture has changed in the past 30 years with the onset of AutoCad, and “program/construction project managers”. Architects were respected, and Contractors usually felt like second-class citizens. Somehow, that all reversed, and the good old days are past us now.

    Building Information Technology (BIM) is the wave of the future, which requires actual knowledge of systems and structures. The Architects who incorporate this new technology will be the survivors.

    Ladies and Gentlemen, the entire world as we know it is changing. Imagine how fast the new technology will take us in the next decade or two. Keep yourselves educated and learn as much as you can now.

    Just a point: The Architect was paid 9%(of construction costs) for a $1,000,000.00 project that the Realtor sold the following year for $2,000,000.00 with a 6% commission. The Architect received $90,000.00 for services, while the Realtor received $120,000.00. And the Realtor has no Liability… Do what you love to do, not just for the money.

    Anonymous wrote:

    I’m sitting in Japan as I write this, and can report that things look similarly daunting here–maybe more so. There is a schism which has been growing for more than a decade, with plenty of tall buildings going up in Tokyo, benefiting contractors and developers, but with very little involvement of the traditional architect. (Detailing is being handled by the contractor and major planning and massing decisions by the developer.) The firms that have awards, fame and media exposure are hungry, and much of their staff poorly paid (if paid at all). The youngest have almost nothing we might call architecture to point to: a house, a table, a balloon. The “successful” ones are working for cultural capital in a world where that is an increasingly fickle and feckless reward system.

    As long as we ignore the technical and economic demands on architects, that is not going to change–at home or abroad.

    Anonymous wrote:

    Telling young architects to be their own client and developer too…jeeze. Gensler has been running hire adds here but I wonder how many people out of the 1/3 total staff they laid off from 2008-2010 got called back? I think we, who are bound as employees in architecture offices, have realized there is no loyalty left in this profession.

    Anonymous wrote:

    To the contrary of what Bradford Perkins said, how could you not see the big recession coming? Every asset bubble has been followed by a bursting; that being a housing bubble, what group was most likely to suffer, than construction-related professions? It wouldn’t take but a few minutes to stare and chart the Case-Shiller housing prices to know that things were really crazy…internet bubble crazy.

    And to the notion that SHoP and Vishaan Chakrabarti have the positive idea of diversification, the fact remains that there are few winners and mostly losers in a large-scale recession. In part, their ideas make a whole lot of sense, but in a broader perspective, one should not discount equal parts luck and well-connectedness that results from strong marketing strategies.

    As demand and supply goes, there is a wide supply of low-cost outsourced CAD monkeys and self-taught designers around the world, willing to undercut American professionals and young workers. As I look today on the list of torrents, I can see clearly as anyone else, that there is no shortage of “free” information about drafting, building typology, detailing, CAD, 3D and design guideline books, as well as accompanying “free” software. Combine “free” information and “free” software with inadequate trade balance or inequitable monetary valuation controls (price controls), you can see the future on sites like Guru.com.

    The economy will recover, but in the process, beware, for the paradigm may have shifted.

    earlmiranda wrote:

    Try 40%-50% here in Charlotte, North Carolina. I agree with the gentleman’s comments about low-cost outsourced CAD monkeys and self-taught designers. I personally have all the 3D and CAD skills, but I had to write a book on it to get compensated for my skills. Like one of the gentlemen before me, I now file paperwork for building departments. It’s not bad work, but it is more demanding if you don’t work for an architectural firm. Yes, I saw the real estate bubble coming and I jumped ship six months ahead of the bust. On the other hand, I am also licensed as a real estate broker. As the gentleman in the article has said, I’m still diversifying my employment opportunities. Truth be told though, architectural education needs to change. Architecture is the only profession taught by primarily non-licensed staff. Recent graduates may know how to design, but they are poorly trained to be useful to licensed professionals. They may know how to rock an I-Phone, but they don’t have a clue how to find clients, meet client’s needs, or manage client projects. Until this changes, the architectural profession will eventually die out.

    Anonymous wrote:

    20 % unemployment? Where? Not in this country. The true unemployment rate among architects is not a statistic that is kept anywhere but the anecdotal evidence suggests much higher unemployment. Most firms never tell the truth about how many employees they have on staff due to fear it will scare clients away. The truth? Most firms are a shadow of their 2005 selves. Principals working for 30% of former earnings are the lucky ones. Best employees working for a fraction of former earnings is truth. Less essential employees now working in other unrelated fields, out of architecture probably permanently. Only Good news is that the remaining architects will have less competition for awhile.

    Anonymous wrote:

    The profession has been rotting from the bottom up for a while now. Glad you guys finally noticed. There’s only so many museums, campus buildings, and transit centers to go around. When the final hospital bubble bursts then what? The profession stuck it’s nose up at everything else and now everything else is gone. When 9 out of 10 homeowners call a contractor to add on to there house or build one anew, it is he who hires the architect now. I would love to see the statistics on retail and commercial as well

    Anonymous wrote:

    Undersupply of architects? I always thought the mid nineties to 2008 was the age of stupidity but this just proves it. When the next crash comes (and it will) the architects that still have jobs in traditional firms will be goners. If BIM business savy green design builder developer decorators that also design logos, teakettles, and end tables are the future of architecture we will truly be in unchartered territory. Hell, why don’t we all work nights at supercuts and design clothing on the weekends while we are at it? We are witnessing the swan song of traditional architecture and the shift to something new.

  • Are your “hunter” sales reps generating the amount of “new business” you expect?

    This particular post is directed at Owners of Reprographics companies and Sales Managers (or Sales VP’s) of Reprographics companies.

    According to the results of the Survey I recently conducted, Shaun Meany’s blog, “Point of View”, is well visited by people who also visit “Reprographics 101”. (“Point of View ranked second, tied with ARC’s web-site.) (As I’m sure everyone who reads this blog knows, Shaun is the President The PEiR Group. Shaun is a veteran reprographer.)

    Two weeks ago, Shaun did a post that consisted of a couple of statements, “Say something. We want to know what you think about the reprographics industry.”

    So far, no one has responded to Shaun’s post. Apathy?

    I only point that out because I’m now going to explain a scenario and ask one question. But, based on the response that Shaun got (or, I guess I should say, lack of response that Shaun got), I’m going to assume that no one will respond to the one question I’m going to ask. But, I’m going to ask it anyway.

    My question pertains to “productivity of a sales rep.” Let me first explain what I mean by that and then ask the question: If you hire (or have) a “hunter” type sales rep and if his/her main priority is to generate business from “new” customers [you’ve explained to your sales rep that you expect him/her to spend at least 85% of his/her time signing up “new” customers (and, of course, that activity requires and includes – prospecting, cold calling, setting up appointments, making in-person sales calls, presenting your company’s products and services, asking questions, generating proposals, submitting proposals, asking for the business and, yes, closing deals and generating new revenues)], how much “new business” do you expect that sales rep to generate each year? (i.e., “annual” new business sales?)

    (Note: do not include “penetration sales” to customers who were already existing customers.)

    What would be your answer to that question? $1,000,000 in new business per year? $500,000 in new business per year? $250,000 in new business per year? What’s the number that would “meet” your expectation for a good hunter sales rep?

    And, okay, there’s a second question I’d like to ask. At what level of “new business” sales achievement would you consider your sales rep to be not worthy of continuing employment with your company?

    Very recently, one of my reprographics industry friends said that, “a) I expect a hunter sales rep to generate at least $250,000 in “new” business from “new” customers, each year, and b) if a hunter sales rep does not generate at least $150,000 in “new business” each year, then he/she isn’t cutting it and won’t be allowed to stay on our team.”

    Well, that was my friend’s response. What’s your response, what are your two numbers?