• Written by Azhar Aliyar, Director

A chief information officer reviews the quarterly IT budget for a printing and packaging business, looking at the line items for report development, system integration, and software licences, and wonders where the money is actually going. The business is like many others in the sector, with 12.4% of US manufacturers, the Census sector that includes printing and packaging, reported using AI in the previous two weeks, according to the US Census Bureau's Business Trends and Outlook Survey.

Where IT money actually goes

The majority of IT spending in printing and packaging goes towards getting answers out of existing systems, rather than running the systems themselves. This is because the print MIS, prepress workflow, estimating, and scheduling systems are not designed to provide easy access to the data they hold. As a result, IT teams spend a lot of time and money building custom reports and dashboards to answer specific questions. A production manager, for example, may need to know the current production schedule, while a sales manager may want to see the latest sales figures. These questions require IT to build new reports, which can be time-consuming and expensive.

This approach is wrong because it assumes that the systems are not capable of providing the answers on their own. In reality, the systems already hold the data, but it is not easily accessible. By using AI to ask better questions of the systems, businesses can reduce the need for custom reports and dashboards, and free up IT resources for more strategic work.

The report and dashboard backlog

The report and dashboard backlog is a major problem in printing and packaging businesses. Every time a new question is asked, IT has to build a new report or dashboard to answer it. This can lead to a backlog of requests, which can take months or even years to clear. The cost of building and maintaining these reports and dashboards is high, and it is a major contributor to IT spending. According to the US Census Bureau's Business Trends and Outlook Survey, 14.3% of US businesses used AI in sales and marketing in the previous six months, but only 1.7% used it in production of goods.

AI can replace this approach by providing a single interface to answer all questions. Instead of building a new report for every question, AI can be used to ask the existing systems for the data. This approach is more efficient and cost-effective, and it can help to clear the report and dashboard backlog. For more information on how AI is transforming printing, see our blog post.

Extending the print MIS, prepress workflow, estimating and scheduling

Rather than replacing the print MIS, prepress workflow, estimating, and scheduling systems, businesses can use AI to extend their capabilities. By asking better questions of the systems, businesses can get more value out of their existing investments. A shift supervisor, for example, can use AI to ask the print MIS for the current production schedule, without needing to build a custom report. This approach can help to defer a replacement programme, which can be costly and time-consuming.

This approach is more cost-effective than replacing the systems, and it can help to reduce IT spending. According to the US Census Bureau's Business Trends and Outlook Survey, 64.3% of US businesses that already use AI made no change of any kind to adopt it, and only 6.8% changed how they collect or manage data. By using AI to extend the capabilities of the existing systems, businesses can get more value out of their investments, without needing to make major changes.

Integration spend

Integration spend is another major contributor to IT spending in printing and packaging businesses. Every time a new system is added, IT has to build a point-to-point link to integrate it with the existing systems. This can be time-consuming and expensive, and it can lead to a complex web of integrations that are difficult to maintain. AI can replace this approach by joining data at the point of the question, rather than building and maintaining a point-to-point link for each one.

This approach is more efficient and cost-effective, and it can help to reduce IT spending. By using AI to integrate the systems, businesses can get a single view of the data, without needing to build and maintain multiple integrations. For more information on how to implement this approach, contact us at our contact page.

Where AI adds cost

While AI can help to reduce IT spending in printing and packaging businesses, it is not a panacea. There are some areas where AI can add cost, rather than removing it. For example, the data work and governance that is required to implement AI can be time-consuming and expensive. Businesses need to budget for this work honestly, and make sure that they have the necessary resources and expertise to implement AI effectively.

This includes making sure that the data is accurate and up-to-date, and that the AI system is properly trained and validated. According to the US Census Bureau's Business Trends and Outlook Survey, 11.4% of US businesses used AI in their information technology function in the previous six months. By budgeting for the data work and governance, businesses can ensure that they get the most out of their AI investment, and avoid costly mistakes.

Measuring the impact of AI on IT spending

To measure the impact of AI on IT spending, businesses need to look at the requests and licences that have stopped, rather than just looking at the overall IT budget. This can help to identify areas where AI has reduced spending, and make sure that the benefits are being realised. A category manager, for example, can compare the number of reports and dashboards that are being built, before and after the implementation of AI.

This approach can help to provide a clear picture of the impact of AI on IT spending, and make sure that the investment is paying off. For more information on how to measure the impact of AI, see our executive and strategic leadership page.

When AI is not the answer

While AI can be a powerful tool for reducing IT spending in printing and packaging businesses, it is not always the answer. In some cases, the costs and complexity of implementing AI may outweigh the benefits. For example, if the existing systems are relatively simple and easy to use, it may not be worth the cost and effort of implementing AI. In these cases, businesses may be better off sticking with their existing approach, rather than trying to implement a new technology.