How to Justify a Large-Format Scanner, Part 121 Aug, 2006 By: Henrik Vestermark
Some background information and a few general considerations help lay the groundwork as you consider this major hardware investment.
Large-format scanners have been around since the mid- to late 1980s. Initial demand was created by early adopters looking for new opportunities -- especially in the CAD market, where the need was obvious for scanning legacy drawings. As the market matured, wide-format scanners moved into the mainstream, fueled by explosive price/performance improvements and the introduction of wide-format color scanning in the mid 1990s and wide-format color copying a few years later. During the past five years, color image capturing technology has improved, broadening the applications of wide-format scanners.
Naysayers once commented that wide-format scanning was useful only as a transition technology, until all existing paper documents have been scanned into a system. However, demand over the years has remained continuous. Recently, we've seen a trend among major players in the market to integrate the scanner with the printing device, indicating that these major companies are convinced that the market is viable.
All this raises some interesting questions for businesses, mainly: Do we need such a solution, or not? Wide-format scanners -- ranging in price from $9,000 to $30,000 -- are not an investment to take lightly. In this two-part series, I'll provide some introductory information about wide-format scanners -- including uses and general purchasing considerations -- followed by a new tool I've developed that will help you calculate potential ROI (return on investment) so you can make the decision that's right for your company.
Applications for Wide-Format Scanning
Several uses exist today for wide-format scanning. Before we delve into financial considerations, let's take a look at how this equipment is used.
Scan-to-File. Scan-to-file is the classic application for wide-format scanners. It originated in the CAD world as a way to reuse legacy paper drawings by scanning them into an electronic format or directly into the CAD system. This allowed business to recoup invested intellectual property from legacy drawings.
Typically, two approaches existed for this application. The first was to convert drawings on demand. The second was to convert all legacy drawings into an electronic drawing archive. The latter was justified by reducing the amount of storage space needed and preventing further deterioration of the drawings. Disaster recovery is another application for scan-to-file. A city engineering department, for example, can use a scanner to make electronic copies of drawings of bridges, utility lines, buildings and more and store them in a safe, fireproof location.
You have two viable options for the scan-to-file approach:
- Outsource the scanning to a third-party scanning service.
- Invest in a solution so you can do the scanning in-house.
Scan-to-Print. Scan-to-print, or S2P, was first applied following the introduction of wide-format color scanners in the late 1990s. These devices allowed business owners to expand their services offerings to include color poster and other wide document reproduction. The scan-to-print workstation was created using a wide-format scanner as the front end to a wide-format printer. Reprographics shops were the first to jump into this new concept for expanding their service into the wide-format arena. Other markets, such as architects, copy shops and photo labs also jumped on the bandwagon.
What makes these solutions attractive for business owners is the potential for a high rate of return on investment. Typically, reprographers charge $6-$8 per square foot copied in color -- or $72 to $96 for a 36"x48" original on standard bond paper. The relatively inexpensive and fast wide-format inkjet printers that are available today -- such as the Canon imagePROGRAF W8400 ($5,995) -- a complete "copy solution" could easily be set up for less than $20,000. Given revenues of $100 per copy, the payback on the original investment could come quickly. Scan-to-Application. A new breed of uses, scan-to-application, has popped up in recent years, propelling wide-format scanners into new niche markets. It's amazing to observe the innovative thinking in other parts of industry.
For example, takeoff estimating for the construction industry is a process commonly done with traditional digitizers. I recently stumbled on a new application from Callidus that targets those contractors who need to make quick and accurate estimates for planning and installation. Callidus takes information from scaled floor plans, site measurements, AutoCAD and scanned drawings to calculate all the figures required for flooring installations, such as carpet, ceramic, wood, raised access and more. This is just one example where an innovative company has found a new way to capitalize on wide-format scanning technology.
Justifying the Investment: In-House or Outsource?
Let's talk about how to justify the investment in a wide- format scanner system. If you need a wide-format scanner for one or more of the applications described above, then you are either a service provider of the technology or a service user. Whatever the case, you can either outsource or in-source the service. It's fairly simple to do your own business calculations to determine which approach would be best for your business. Following are key considerations:
Protecting Intellectual Property. As you consider whether to outsource wide-format scanning needs or purchase your own in-house system, one element is key: the intellectual property held in the drawings. Some companies will not allow such intellectual property to leave the facility. If this is the case with your company, your decision is easy. You have no choice but to invest in your own system.
Financial Considerations. Intellectual property issues aside, the most important factor in determining whether to purchase your own wide-format scanner decision is money. Quite simply, if a wide-format scanner solution does not improve your bottom line, you probably should not invest in one, no matter how fancy the technology might look.
Generally, an in-house investment can offer three possible competitive advantages to a company.
- Innovation. Adding an in-house wide-format scanner allows a company to offer new, even innovative, services or solutions for in-house use or to sell to clients. Scanners get drawings into a electronic format where they can be viewed and edited simultaneously by many different people in the architectural/engineering department -- leading to improved workflow and tracking.
- Differentiation. Wide-format scanning can help a company differentiate itself from competition and expand into other business areas. Architectural firms could offer a new online service in which a client can select, view, download and edit construction or engineering drawings in real time -- which was impossible when drawings where available only on paper. Expanding services can expand your client base and in turn expand your revenue.
- Cost. Finally, your solution to this puzzle will come down to whether your investment can either reduce costs or increase profits, depending on whether you're using the technology for your own in-house service or to provide services to outside clients. Either way, you need a method to determine if the potential return justifies the investment.
Until now, we've had very few financial tools to help determine whether and when to invest in a wide-format scanner. Granted, some of you have probably thrown some numbers down on a piece of paper in an attempt to answer these questions. However, most prospective owners of wide-format scanners realize they are encroaching on new turf, and they have no idea how to obtain and calculate realistic numbers for such an investment. In Part 2 of this series, I'll introduce you to a tool I've developed that you can use to crunch the numbers and determine whether investing in a wide-format scanner is a smart move for your company.
About the Author: Henrik Vestermark
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