Thursday, December 17, 2009

Becoming a Multi-modal Postal Company

Today, RR Donnelley announced a new mobile application for broker/dealers and financial advisors.  This application is part of a suite of digital products and services that RR Donnelly offers to the financial services industry.

RR Donnelley's significant presence in digital documents may be a surprise to many readers of this blog who only know of the company as the largest printer of documents that are delivered by mail in the United States.   Illustrative of this change is how RR Donnelley describes its business.

RR Donnelley is a global provider of integrated communications. Founded more than 145 years ago, the company works collaboratively with more than 60,000 customers worldwide to develop custom communications solutions that reduce costs, enhance ROI and ensure compliance. Drawing on a range of proprietary and commercially available digital and conventional technologies deployed across four continents, the company employs a suite of leading Internet based capabilities and other resources to provide premedia, printing, logistics and business process outsourcing services to leading clients in virtually every private and public sector. (Emphasis added)

In this entire description, the word "printing" appears only once.   Instead, RR Donnelley sees itself as a communications company and "printing" is only one modality to deliver communication.    RR Donnelley clearly envisions a world in which it is multi-modal provider of document delivery, whether by print, the Internet or through a mobile smart-phone.

RR Donnelley is clearly still primarily a printing company.  Most of the services described on its website relate to the process of taking communication concepts and turning them into printed documents.   In a similar fashion, RR Donnelley does not break out the revenue of its digital document business separately in its quarterly financial statements, suggesting that the revenue in that business is still not large enough to note separately.

The change in its definition of its business suggest that RR Donnelley understands that to continue to serve its print customer needs, it must be capable of providing solutions that allow the delivery and/or storage of documents digitally to reflect the demands of recipients.   Other firms that serve parts of the postal supply chain, such as Pitney Bowes, Canada Post, Deutsche Post, and Xerox, are making a similar transition.   For all companies in the "postal" business, the changing environment raises three questions:
  • Is my company prepared to be a competitive multi-modal postal firm?
  • What changes does my company need to make to remain relevant in a multi-modal world including acquisitions, divestitures, partnerships and mergers?
  • What strategy does my company have to deal with legacy physical-delivery focused assets and divisions so that they can generate an acceptable financial return for as long as customers exist for that portion of our business?

No comments: