ARE YOU PAYING FOR UNUSED SEAT LICENSES IN YOUR PACKAGING ARTWORK GAMEPLAN?

Many companies have conducted rigorous process optimizations with robust KPI’s for their artwork processes. However, in my experience, fewer companies have conducted a similar rigorous review for the structure and Roles & Responsibilities for the artwork organization itself. This blind spot could result in increased costs in several areas:

• Direct software license costs
• Inefficient resource allocation costs
• Potential opportunity costs
• Potential product recall costs due to artwork errors

Here are some things to consider for a review for the artwork organization:

Organization Structure / R&Rs

There are many ways to structure the artwork organization. Some examples are:

1. Highly Dispersed Structure – In this model, every person who takes part in the artwork process also enters inputs and approvals directly into the artwork workflow system. This has the potential advantage of accountability since every person has their inputs/approvals recorded in the system. However, the potential disadvantage is that it relies on many “part time users.” For these people, artwork is a distraction from their “real job.” This could result in job satisfaction issues, an important consideration in the new “great resignation” era. Also, these part time users are sometimes the cause of inefficiency and artwork errors.
2. Highly Concentrated Structure – In this model, only a small group of “artwork managers” in the artwork group manage the inputs into the artwork workflow system. These managers gather required information from various departments and then input the specs and approvals into the system. Since these managers are 100% dedicated to artwork, this model has potential efficiency and ownership advantages, and you will pay for “fewer seats” for your software. However, the potential disadvantage is that communications between the artwork team and the individual functions often take place “off-line.” This could make it difficult to track sources of inefficiency, delays, or artwork errors if they occur.
3. Hybrid Structure – Many companies use hybrids of these two structures to maximize the positives and minimize the negatives. Some examples include:
   1. “Artwork Specialists” – In this model, some functions such as Marketing or Regulatory embed “artwork specialists” in their organizations with the responsibility for functional artwork inputs and approvals. Potential advantages are that you pay for fewer “software seats,” the specialists are often more efficient and accurate, and they are still directly accountable to the functional organization. It also allows key functional personnel to concentrate on strategic functional activities. In addition to the strategic benefits, removing the “artwork distraction” for key functional personnel could deliver morale benefits to help counter the “great resignation” issue.

      The key challenge is “justifying” the headcount for these specialists. For example, if Marketing has 10 people who each spend 10% of their time on artwork, you could restructure to 9 people doing 100% strategic functional work (including some strategic artwork direction) and 1 person concentrating on artwork details (including making sure it meets strategic requirements). This is easy to describe in theory, but more difficult to get approved in actual practice. But many companies that have implemented this concept have recorded significant benefits.

   2. Proxy users – Similar concept as “artwork specialists,” but in this case personnel from one organization enter inputs and approvals for another organization. This is often used for suppliers or contractors who do not have access to your system and sometimes also for internal departments. This offers benefits like “artwork specialists” but adds an “accountability” issue that you will need to address. Both organizations need to agree on enforceable SOP’s that clearly outline accountability, procedures, and communication channels.
   3. Outsourcing – Some companies chose to outsource key inputs and approvals for functions such as legal, regulatory, or packaging specs. If you hire the
      right experts, they will deliver speed, efficiency, and accuracy benefits. You may be able to offset the cost of the experts by freeing up internal resources to concentrate on strategic work. If you consider outsourcing, you will need strong contracts/SOP’s with clearly defined R&Rs, and you may also need to do upfront validation work and on-going auditing to maintain GMP compliance.

Software Sourcing Models

Your choice of Artwork Management Software can have a direct impact on the efficiency and effectiveness of the organization. There are many functionality items to consider including ease of use, workflow and content management, graphic comparison tools, security, GMP compliance, and others. These can be the subject of an entirely separate discussion.

In addition to these functionality considerations, your software sourcing model can also have a major impact. Examples of sourcing models include:

1. Named user licenses – In this model, every user has their own individual “seat” in the system. One advantage is that every user always has immediate access to the system, even during peak user demand. The downside is that you are always paying for these “seats” even if they are not being used. This is particularly important if you have many part time users.
2. Concurrent User Licenses – In this model, you buy a specific number of user licenses, and any approved user can use the system if there are “seats available.” The key challenge is to accurately estimate normal and peak usage rates in order to buy the right number of “seats.” If you buy too many, you pay for unused seats. If you do not buy enough, users may be denied access during peak periods, causing delays and user frustration.
3. Hybrid Models – Strict adherence to rigid “Named User” or “Concurrent User” models can cause cost, speed, and efficiency issues. Therefore, many companies also use hybrid models. For example, in a named user model, you might negotiate different rates for power users vs regular users vs part-time users. You might negotiate a separate “pool” of licenses for part time users, or you might use proxy users to make inputs and approvals for part time users. For a concurrent model, you might be able to get an “auto-add” feature that automatically adds seats for an extra charge if usage peaks above the official number. Or you may negotiate a flexible usage model where you pay for a larger number of seats during known peak periods, with fewer seats during slower periods.

Building The Winning Artwork Organization Model.

Some companies still “back into” decisions on organization structure and software sourcing because “that is the way we have always done it.” However, many are now putting more databased analysis into this decision.

Many companies are moving toward more hybrid organization models rather than the “purely dispersed” or “purely concentrated” models. The key is to find the right balance for your company between relying on many “part-time” users in every department vs a more limited number of experts. This decision can have a major impact on resource allocation costs, software costs, and speed and accuracy of the process. And it could also affect employee morale, an increasingly crucial factor in the new “great resignation” era.

For software sourcing, you could end up paying too much for the “seats” in your system if you strictly adhere to a rigid “Named User” or “Concurrent User” model. You will likely be better served by a more flexible version of one of these models or a hybrid model. A company like ManageArtworks offers software solutions that deliver GMP compliant functionality and very flexible ways to arrange and pay for your “seats” with a per SKU usage model.

Finally, the most important thing is to carefully consider all of these options, thoughtfully develop the organization model that best meets your needs, and then develop robust KPI’s and rigorously track them. This will tell you if you are on track to meet your goals, or if not, what improvements you still need to make.

John Morrow has extensive experience in business process optimization for international corporations, including Colgate-Palmolive, Procter & Gamble, PepsiCo, and Bristol-Myers Squibb, and for smaller start-up companies. John started VinPeak Advisors in 2018. Current Advisory Services include Packaging Artwork Design and Implementation, Process Optimization, Go-to-Market Strategies, R&D, Product Development, Quality Assurance, Regulatory Compliance, and Crisis Management.