Earn more business by reducing your prospect’s marketing cost by up to 75% while maintaining maximum margins
Most account executives are facing the same two print sales challenges: How do I differentiate my services when my competitors are capable of supplying the same job and how can I be competitive when there is always someone willing to print the same job for less? Although co-op marketing does not apply to every print sales situation, if your prospect is a neighborhood business that is print marketing collateral then co-op marketing offers a unique solution to this print sales challenge.
What is co-op marketing?
With summer now in swing, businesses that offer home services like lawn care, carpet cleaning, door and window sales, heating and air conditioning sales, eaves trough installers, roofers, driveway paving, kitchen and bathroom renovators, home improvement contractors and landscapers are getting ready for their summer marketing drive, which usually entails distributing fliers, brochures and door hangers throughout the local neighborhood. This need for marketing collateral presents an excellent opportunity for anyone in the printing industry to grow their sales and earnings.
But landing these accounts is not that easy, after all, most of them are already dealing with a printer and the vast majority – a whopping 80 percent – are happy with their existing supplier. So why should any of these companies endure the risk and inconvenience of changing suppliers? Well the fact is that in most cases they won’t, unless:
You have something to offer that they can’t get from their existing supplier,
You can show them how to get a better ROI, and
Your quote is very competitive.
Co-op marketing allows you to meet all three of these criteria. Co-op marketing simply means sharing the printing and distribution costs between two or more noncompetitive businesses.
CO-OP Marketing advantages
1. It lowers your prospect’s cost
For example, the lawn care service provider is ready to invest $3,000 to print and distribute a promotional flier; the roofing company is also planning to send promotional fliers to the same target market; and so is the driveway paving service and the eaves trough installers. If only two of these businesses got together to share the cost of the flier and distribution, they could reduce their marketing costs by up to 50 percent; and if all four got together their savings could be as high as 75 percent.
From a print sales perspective creating a co-op marketing program allows you to differentiate your service by telling the prospect that you can reduce their marketing costs by up to 75 percent!
2. It will increase sales
For your prospect a reduction in marketing costs means much more than just saving money; it also means an increase in sales and higher profits. For example, take any business person; a real estate agent; the owner of a lawn care service or the owner of the local pizzeria, their success requires marketing. They need to tell everyone in their neighborhood about the service or product and the more often they get their message out, the higher their sales. But small business owners have a limited marketing budget, so although they’d like to advertise more, they cannot afford it. Small business owners will welcome an idea that allows them to promote their services more often for the same cost and co-op marketing provides this opportunity.
From a print sales perspective, creating a co-op marketing program allows you to differentiate your service by telling the prospect that you can share an idea that will increase their sales and gain market share.
3. It makes your prospect’s marketing material more effective
Diversity increases readership. For example, a Healthcare Newsletter that included an article and ad from a dentist, a dermatologist, a chiropractor and a nutritionist would have a much higher readership then a newsletter that only focused on one of these topics. So while sharing the cost of printing and distributing a brochure, flier or door hanger will greatly reduce your prospect’s marketing cost, co-op marketing will also increase readership and, for the prospect, that means generating a higher response.
From a print sales perspective, creating a co-op marketing program means that you differentiate your service by telling the prospect that you can share an idea that will increase response and make their marketing collateral more effective.
While offering your prospects a co-op marketing opportunity is an extremely effective way to differentiate your services and eliminate price competition, you can maximize your sales and earnings by offering the prospect a marketing campaign instead of a single co-op distribution. For example, if you created a co-op Home Services Newsletter or Door Hanger your promotional package could include printing and distribution to 5-million homes once a month for six months.
How to create a co-op marketing package
1. Select the product
Any printed material can be turned into a co-op marketing program, a note pad, flier, postcard, calendar, oversized door hangers, or an 11 x 17 sheet can be turned into 4-page newsletter.
2. Select an area for distribution
5,000 homes along specified postal routes, all the businesses within a target area
3. Pick a theme
Again, there are lots of themes to choose from, primarily depending on time of year: Home improvements, real estate, food and entertainment, health and fitness, business services, etc.
4. List the different types of business that fit under your theme
Home improvements: Carpet cleaning, door and window sale, heating and air conditioning sale, eaves trough installers, roofers, driveway paving, kitchen and bathroom renovators, home improvements contractors, landscapers, lawn care, plumbers and electricians.
Food and entertainment: Restaurants, theatres, pubs, country clubs, caterers, wine making outlets, butchers, home delivery, bakers and even farms that sell to the public.
Business services: Office cleaning, office supplies, office equipment, business insurance, car leasing, temp services, accounting, bookkeeping and computer services, courier, shipping.
5. Create a prospecting list
Use the phone directory and Internet to identify all the local businesses on your list.
6. Contact everyone on your list
Tell them about the benefits. Offer everyone exclusivity by only including one company for each service. For example if your theme was dinning you could make it exclusive by including only one Italian, one Chinese and one Mexican restaurant.
Strategic brainstorming, change management and printing awards at CUPMAC’s 47th annual conference
CUPMAC stands for College and University Print Management Association of Canada. Its approximately 80 members, who are all managers or other key personnel of in-plant printing operations in Canadian institutions of higher learning, do not necessarily follow the same protocols that spell success in the business world. Rather, they operate in ways uniquely geared to effectively serve the specific needs of their own academic institutions and customers. At the same time, their day-to-day routines accomplish many of the same goals that have always been among printing’s loftiest – education, freedom of thought and speech, free access to information and the progress of the arts, sciences, and technology.
Another remarkable aspect about CUPMAC members is that they are regularly required to devise sophisticated practical solutions to meet the unique challenges of their work. Invariably, when I speak with members, I am fascinated to learn about the latest solutions they have uncovered for printing dilemmas I’ve never even heard of before. For this reason, I was excited to facilitate a 90-minute interactive brainstorming session on the latest challenges, successes and growth strategies for academic in-plants at CUPMAC’s 47th Annual Conference, held in early June in Halifax, Nova Scotia. The conference’s relatively small size of about 40 participants enabled shop talk that was satisfyingly intense and detailed, and gave all of us an opportunity to get to know each other over the information-packed three-and-a-half-day event.
Change or die
The conference theme, The Change Imperative, emphasized CUPMAC’s focus on supporting its members at a time when print and education environments are both changing rapidly. To survive this volatility, academic in-plants must quickly keep forging new paths to ensure their products and services stay relevant, while also ensuring their printing platforms remain efficient in the face of tightening budget constraints.
Among the conference’s eye-openers on managing change was a workshop called Change or Die by Scott Comber, Assistant Professor at the Rowe School of Business at Halifax’s Dalhousie University. Comber is also a leadership coach, who works with organizations to help them manage change and improve the effectiveness of their leaders, conflict resolution, ethical decision-making, and the overall quality of work life.
Comber’s thesis for his Change or Die sessions derives from studies in the health-care field involving patients with heart disease who undergo bypass surgery and afterwards need to change to a healthier lifestyle for their own survival. Yet statistics show that 90 percent of these patients choose not to change. Comber believes the reason is that, although they can understand rationally and intellectually why change is necessary, they fail to grasp the need for change on an emotional level and, therefore, fail to do so.
“In business, change management usually refers to new sites, new bosses, new organizational charts, new technology, new policies, or other practical measures,” explains Comber. “Most management approaches to change focus only on these externals and their results."
But most managers neglect what he calls transition: The internal psychological experience of the people involved in change as they come to terms with the new situation. “Unless transition occurs, change will not be successful,” says Comber, pointing to research showing that a full 75 percent of corporate change initiatives fail.
“Since research also confirms that the largest catalyst for behavioural change is emotion, you must understand that change is emotionally driven and that managing people’s internal experience is the most critical part of change leadership,” says Comber. “Accordingly, you must integrate emotion into the way you communicate with others about change to make your communications effective in engaging people and changing their behaviours.”
He suggests that connecting with people on a human level right at the beginning of the change process is the most-important single thing you should do – even before addressing the subject of how the change will proceed. “All you have to lead people through the change is your relationship with them,” he advises. He also recommends that leaders’ initial communications about change should identify the brutal facts – meaning what needs to be different – or else the change will not proceed successfully, either.
Since change – especially endings – can often give rise to people’s negative emotions like fear, denial, frustration and anger, Comber advises leaders to acknowledge (but do not necessarily judge) any endings that must occur, including any associated conflict and emotions.
Support people in dealing with their feelings about the change and recognize that some people will take longer to adjust. Only after these preliminaries is it advisable to move on to discussions identifying best practices and creating an action plan for external changes.
At this stage, one of the best ways to aid someone’s transition is to empower them to become part of the decision-making process through engaging them in dialogue, answering their questions, and listening to their feedback. “Help them decide on their own parts,” advises Comber. “In most situations you can include others in this way and avoid the common mistake of not holding other people capable and assuming they won’t be able to handle it.”
Once an action plan for change is determined, Comber advises it is best to move quickly and energetically to implement it, because research shows that fast, large movement actually helps people adjust better than small, gradual changes.
Another effective leadership technique is to tell a story about the road to change and new beginnings in a way that gives people meaning, purpose and validation. An excellent way for leaders to achieve all these ends is by communicating progress in a way that speaks to people’s emotions by instilling hope or even joy – emotions that are far more powerful motivators than logic, facts or fear.
Comber says another important part of communicating about change is appreciation: “Focus on what you want more of, give energy to it, and it will grow. In other words find it, track it and fan it.
“Conversely, do not focus on problems, because if you focus on the negative, it will actually grow. Instead think in terms of the changes you want to see. As a small example, if employee lateness is a problem, track people who arrive on time and appreciate them. Rather than focusing on the problem, get people galvanized on a positive future marked by early arrivals.”
Your expression of appreciation should be timely, convey thanks and include an all-important impact statement explaining the positive results of what you are appreciating. “It’s the impact message that actually changes behaviours by helping people understand how their contribution counts,” Comber explains. “During change people must do things they normally don’t have to do, so it’s important to appreciate their extra efforts.” It is not necessary to acknowledge each person individually, however. You can also do it through collective events like awards presentations or ice cream days.
Comber adds that effective change leaders also need to cultivate their own skills at communicating with others about the ambiguity and volatility of information and situations. Likely, as plans progress, they will need to find constructive ways to address such unforeseen developments as delays and unanticipated consequences.
Adding local colour and national awards
Halifax is one of Canada’s most-historic cities when it comes to printing. The country’s first newspaper, the Halifax Gazette, was first published there in 1752. The city also became home to Margaret Draper, a Loyalist from Boston, Massachusetts, considered Canada’s first female printer, who arrived in Halifax at the start of the American Revolution with her business partner John Howe, dragging a wooden printing press along with them.
With a population today of 413,710, six universities and three colleges, Halifax seems to be experiencing a building boom, to judge by the number of cranes and construction sites in evidence in June. The CUPMAC conference took full advantage of local tourism by offering attendees optional nearby sightseeing on Nova Scotia’s South Shore, including visits to the famously scenic fishing villages of Peggy’s Cove and Lunenburg (the latter being one of only two North American UNESCO Heritage Sites). The fact that modern Halifax has become a gastronomic wonderland was reflected both in excellent meals at the conference hotel and several supplier-sponsored dinner outings to fine local restaurants.
The awards dinner at the conference was memorable for its impressive venue: The Garrison Room in the North Magazine of the Halifax Citadel, a British fort established in 1749 and Canada’s most visited National Historic Site, according to Fodors.com. The occasion marked the first ever presentation of the annual CUPMAC Awards, a new source of lifeblood for members, who depend for their existence on the acknowledgement of their value by the bureaucracy and teaching departments of the institutions they serve.
This clientele, consisting of administrators and academics, may have no concept of the expertise and benefits provided by their school’s printing in-plant and may in fact find it easier to farm the whole operation out to an external facility-management supplier if they seriously fail to understand its importance. Hence the requirement on all CUPMAC members to keep their institutions constantly aware of the unique and valuable services their in-plant provides.
The newly created awards program gives members a way to generate just this kind of vital internal recognition and marketing, explains Sean Kehler, Supervisor, Print & Logistics Services, Kwantlen Polytechnic University in Surrey, British Columbia. He laughs when recounting that his appointment to the Awards Committee of one, charged with implementing the program, came while he was taking a break from the room where CUPMAC’s 2013 annual meeting was being held in conjunction with the association’s 2013 conference in Whistler, British Columbia. (He was present, however, when he was elected the association’s new President at CUPMAC’s 2014 annual meeting in Halifax.)
In organizing the awards, Kehler elected to incorporate a number of distinctive features; for instance, wall plaques are awarded as prizes instead of trophies to save space on desks and shelves. The plaques are made in the city hosting both the annual conference and awards presentation ceremony to further involve the locale in the awards. All samples entered in CUPMAC’s five categories of Production Awards are displayed at the annual conference and judged by all members in attendance. A further five categories, called Impression Awards, are determined by CUPMAC’s executive team to recognize special achievements.
The Impression Awards include: Collaborative Service, working with another unit to achieve a goal; Green Service, changes in operations impacting recyclable, renewable and sustainable environmental resources or communicating the in-plant’s green efforts to customers; Accelerated Service, an extreme production deadline; Distinctive Service, continuing daily production while achieving innovative goals for growth through such drastic measures as new equipment installs, plant moves or reorganization; and Hall of Fame induction, exemplifying the highest standards of service to an institution along with contributions to CUPMAC and the in-plant community as a whole.
Although printing in-plants in institutions of higher learning vary greatly in size and complexity, Kehler explains the Impression Awards make it possible for even CUPMAC’s smallest members with only one or two staff to gain recognition: “Impression Awards are for something you accomplished in the trenches without ever necessarily producing a showy printed piece. Everyone can enter a good story or two about how they overcame a difficult challenge to achieve a special accomplishment.”
During judging, CUPMAC’s members and executive assess entries following detailed criteria set out on a judging sheet compiled by Kehler, then cast their votes accordingly. Another friendly, collaborative touch is that, after receiving an award, each winner then turns around and acts as the presenter for the next one.
Measures to protect your business from employee fraud
The printing industry is continually plagued by cases of employee fraud. During the five years I managed the Ontario Association of Quick Printers, I was surprised by the number of small business owners who confided that at some point their company had been defrauded out of ruinous sums by staff – often a long-term employee whom they thought they knew well and trusted...
Cases of staff fraud at printing companies reported in just the past 12 months, include:
Michael Britt, 31, charged with 13 counts of forgery occurring over more than five years and resulting in the theft of over $1 million from Gene-Del Printing, the Brentwood, Missouri company co-owned by Britt’s mother and three partners. Britt allegedly wrote at least 166 unauthorized cheques to himself using forged signatures of two of the company’s owners, fabricated fraudulent invoices for the cheques, and made at least $25,000 in unauthorized purchases on a company credit card.
Christina and Brian Russo, a married couple, both in their 50s, charged with stealing more than $657,000 from Harmony Press of Easton, Pennsylvania. Christina Russo allegedly wrote hundreds of unauthorized cheques to her husband and herself using a rubber stamp with the owner’s signature.
Leona Gebhart, the 70-year-old former comptroller of Henderson’s Printing in Altoona, Pennsylvania, charged with stealing at least $151,130 over 11 years by allegedly writing unauthorized company cheques to herself (including duplicate and triplicate paycheques), manipulating petty cash, and falsifying documents, while allowing the company’s Federal tax payments to become delinquent.
With all these past and present horror stories in mind, I spoke to Robert Fowlie and David Malamed, forensic accountants at leading Toronto financial and business advisory firms, and Detective Constable Keith Nakahara of the Halton Regional Police Service Fraud Unit (Commercial Team) to learn what printers can do to protect themselves from devastation by employee fraud.
How employee fraud works
Nakahara’s region of Ontario, including the towns of Oakville and Milton, has one of the highest per capita incomes and one of the highest rates of fraud in Canada. He observes that business fraudsters have no particular motivations or characteristics in common except that they have too much control with too little supervision – a position that creates overwhelming temptation for some people.
“Don’t automatically assume you can trust somebody based on a family connection or the length of time you’ve known them,” he warns. “In business the most common fraud we see is committed by a person in a position of trust with limited oversight, typically a bookkeeper or accountant who has a certain amount of control over what facts get released, so the fraud may go undetected for years.”
Both Fowlie, a partner at Deloitte LLP, and Malamed, a partner at Grant Thornton LLP, have long strings of credentials after their names certifying them as fraud experts. Besides investigating alleged cases and preparing financial information for use in court, they also work proactively to establish preventative controls.
Both say smaller print shops are more susceptible to fraud than larger companies if their smaller staff count results in less separation of duties. In other words, the person writing the cheques may be the same person reconciling the bank accounts and doing the accounting, so he or she can readily conceal bogus payments to themselves or fictional third parties.
In billing fraud, phony vendors may get paid, or an individual working in procurement for a company starts his own business, buys raw materials at cost, marks up the prices exorbitantly, then sells the materials to the company he works for. In payroll fraud, wages may be paid to a fictitious employee or somebody who was terminated still gets paid via deposits to an account controlled by the fraudster.
Verify bank and accounting records
Fowlie and Malamed say a good way to detect fraud is for owners to obtain their bank statement directly from the bank and review it monthly (or else delegate the review to an internal third party knowledgeable and reliable) to ensure that each payment and vendor is legitimate. They also recommend comparing your list of vendor and delivery addresses with your employees’ addresses and regularly reviewing the payroll journal that most companies submit to an external third party for processing.
“In a recent trial we uncovered that, even after review and approval of payroll information, a clerk was still able to make changes by adding payments to herself and terminated employees to an account she controlled and make accounting entries to cover up these payments,” warns Fowlie. “Our clients thought they were in control when in fact the process was not operating as they intended.”
Nakahara suggests that the notes in your company’s year-end financial reporting may also identify specific items of concern: “For example, ledgers that don’t match bank payments and the bookkeeper’s explanation dismissing the discrepancy as a computer glitch may warrant closer investigation.”
Expenses, consumables and cheques
Another big area of concern is employee expense accounts, says Malamed: “Expense fraud is epidemic among all organizations. It’s the number-one trend I see.”
Fowlie explains: “In today’s tougher economic climate, some families have gone from two to one income or experience no growth in income against growing expenses. Under new financial pressures, some people feel forced to do things they have not done before. Perhaps this is one reason we’re seeing an up-tick in fraudulent employee expense claims involving false documentation or duplicate claims.” He warns that Websites even exist where users can print out receipts for fictitious claims.
As a remedy, he says companies must check every detail of expense claims submitted by employees and require each item to be supported not only by legitimate documentation but also within business rationale.
“Another form of fraud happens if I cook and sell steaks in the restaurant where I work, then pocket the customer’s money because the owners don’t know they were sold,” says Malamed. “This type of transaction is also possible in the printing world, where press or pre-press operators could be running their own jobs on the side using the owner’s resources.” Since consumables like toner, ink, and paper are expensive and highly transactional, he thinks there could also be a secondary market for them.
One preventative measure he suggests owners can take is to project what the company’s sales should be based on consumption of supplies. If either the sales or the supplies in stock fall short, they need to investigate why.
“Don’t get carried away with the business and forget to look at the numbers,” he insists. “The numbers tell the story. Perform your own analysis to see if things add up.”
Typically, in cheque fraud the names of payees or dollar amounts on cheques are changed, or duplicates are issued of the same cheque. “Usually cheques are numbered sequentially, so if number 005 shows up a few times, it’s a red flag,” says Malamed. (Red flags are warning signals that deviate from correct practice and may point to the presence of fraud.)
Fowlie says organized criminals commonly perpetrate a counterfeiting scheme by intercepting a company’s cheque in the mail and taking it to a printer to obtain fake blank copies. Then they write the fake cheques to third parties, who cash them and return some of the proceeds to the organized criminals.
“This is the reason why in Europe payment is typically arranged through wires and direct transfers to avoid cheques being intercepted and compromised and counterfeits being written against the account,” explains Fowlie. “Some of my clients have lost millions of dollars through this type of scheme because they didn’t monitor their accounts closely or were unprotected in terms of the way their account was set up.”
As a preventative measure, banks operate something called Positive Pay programs in which companies pay the bank a fee (something like 20 cents) per cheque and provide the bank with standard information on cheques they issue like cheque numbers, payees’ names, and dollar amounts. If the information written on a particular cheque differs from their records, the bank will hold the cheque and notify the company. “Some companies think the cost of a Positive Pay program is too expensive; however, if you’re lacking in segregation of duties, it may be the least expensive way to handle the problem of cheque fraud,” says Malamed.
Staff and hiring issues
Nakahara says before hiring any employee in a position of financial trust it is important to have the person sign a pre-employment contract that clearly delineates the basis and limitations of the job. He explains that fraud is the crime of obtaining money or some other benefit for the perpetrator or someone else by deliberate deception. Thus, to prosecute fraud, police need evidence both of a theft and of the deceit the fraudster used to commit it.
He says a lot of cases get thrown out of court because the fraudster claims that the business owner knew about and approved the transactions in question. Without corroborating evidence on either side, the case boils down to the fraudster’s word against the owner’s and is likely to get tossed. Thus the pre-employment contract should specify that: (1) the person will not gain by any transaction without the knowledge and consent of the owner, and (2) the owner’s approval of any transaction must be stated in writing.
Additionally, before hiring accounting and payroll personnel, Fowlie advises owners to call their former employers. If, for example, his client’s company had checked on the payroll clerk mentioned earlier in this way, they would have learned she was charged by the RCMP for doing the same thing at a previous employer’s company.
But Nakahara says doing systematic police background checks on prospective employees only provide a false sense of security: “The checks only reveal when people are convicted, not charged, and for various reasons conviction rates are low in comparison to the larger number of people who are actually committing fraud. So no amount of front-end due diligence can replace ongoing due diligence in a business operation.”
Fowlie says due diligence should include remaining alert to changes in staff’s behaviour and financial well-being, such as someone suddenly living outside their means. Additionally, he says people involved in fraud often do not take vacations to prevent their fraud from being detected; so refusal to take vacations is often a red flag.
If you suspect fraud
Fowlie encourages businesses to review their insurance policy with their broker or insurer to make sure it includes coverage not only for fraud, but also for fees for a forensic accountant to conduct an investigation on their behalf, if necessary.
If you suspect someone of fraud, he says it is not prudent to confront the individual straight away. Rather, you should first conduct an investigation and strategize about what is to be done. “I have seen companies accuse and fire longtime employees, only to discover the problem was not fraud but careless accounting,” he cautions.
If an investigation substantiates fraud, Nakahara advises owners to be aware that perpetrators usually plan an escape, so that even if they are removed from their job, they can still continue to defraud the company. So the most appropriate course of action is not only to remove the person from the job completely, but also to notify your bank and other financial institutions that the person no longer has the authority to transact business for your company.
Nakahara also recommends you let the fraudster know you have gone to the police, which might make them stop robbing you of more money or prompt them into a legally useful verbal response – something police call a “spontaneous utterance” – such as an admission of guilt or an offer to pay you back the stolen money, which you should carefully make note of.
As the victim, you can also file a complaint with the police, usually in the district where you work or reside. In fact, to pay out on a crime insurance policy, most insurance companies require police to lay criminal charges to validate that the fraud has occurred with reasonable probable cause. A subsequent criminal conviction on the charges in court gives the perpetrator a police record which may prevent the person from repeating the offence at other companies.
Sometimes, if a business is not covered by insurance for fraud, or insurance does not cover the entire loss, the owner may also elect to pursue a civil lawsuit against the perpetrator to try to recover stolen money. In this event, Fowlie says forensic accounts are often enlisted to investigate the fraudster’s assets to determine how much recovery might be possible.
Fraud risk assessment
Fowlie points to statistics from the global Association of Certified Fraud Examiners (ACFE) showing that some businesses are defrauded as often as every two to three years. And because prevention costs are generally lower than the cost of a fraud investigation, he urges businesses to become proactive about prevention.
Malamed concurs: “Prevention is my key focus. Every dollar you spend on prevention saves $10 or $20 on reaction – not including dollar loss. If there’s one message I want to scream from the top of buildings, it’s ‘Put preventative techniques in place!’”
One thing a business can do is hire a forensic accountant to conduct a fraud risk assessment of its operations, which reviews all of the company’s activities to determine the types of fraud it is exposed to and develops preventative internal controls.
As with legal fees, you pay for the consultant’s professional expertise, so the cost of a fraud risk assessment can be high. But Fowlie explains: “Like lawyers, most forensic accountants will first meet with you for an hour to understand your business and prepare a quote on how much time and money will be required to assess the entire organization. Some will also help figure out a budget that will work for you, since it is possible to perform the assessment in stages, one division or function at a time. You can start with the most vulnerable area the first year, then assess the rest over time.”
Awareness training and whistleblower programs
Malamed suggests two more important anti-fraud services available from companies like his, which are affordable to small- and medium-sized companies: fraud awareness training and whistleblower programs. Fraud awareness training educates employees, owners, and stakeholders on how to identify red flags. A whistleblower program enables employees to anonymously point out instances where potential fraud exists.
“For example, in one investigation, I asked the employee I was interviewing: ‘Didn’t you find it unusual when the manager asked you to make journal entries on Friday nights and Saturday mornings instead of during regular business hours?’” recalls Malamed. “With awareness training, the employee would have realized this timing was a red flag, and a whistleblower program would have given him a way around his feelings of discomfort about questioning a manager’s orders directly.”
Malamed says research by ACFE shows that over 40 percent of fraud is identified by tips. Giving employees a way to report it without worrying about backlash increases the odds of detection. ACFE statistics also show most fraud take about 18 months to identify and result in an average loss of $140,000 over this time. But for companies with controls in place like awareness training and whistleblower programs, detection time goes down from 18 months to nine months and average loss from $140,000 to $77,000.
In the 1450s, Johannes Gutenberg’s development of combining metal moveable type, oil-based ink, and the wooden hand press into a printing process led to an explosion of popular literacy – fostering new possibilities for every person in the civilized to read and write. But now, in 2014, literacy has acquired a broader definition. In many North American towns and cities, public libraries are revising their services based on a definition of literacy that includes not just the ability to read and write words, but also the ability to operate digital technology and program digital code.
Public libraries now offer computer programming, 3D printing, and maker spaces as components of literacy. This expanded definition, together with partial funding from the Metcalf Foundation, led the Toronto Public Library (TPL) to create a $44,000 digital media lab, called the Digital Innovation Hub, which drew considerable attention from the press when it opened in February at its popular downtown Toronto Reference Library location, near the heavily trafficked intersection of Bloor and Yonge Streets.
“Literacy comes in several forms, and new technology plays a bigger and bigger role in how people acquire knowledge,” explains Ab Velasco, Project Leader, Digital Content and Innovation for TPL, who recently gave me a tour of the new Hub. “From the early days of computers, the library has made digital technology available to the public and supported them in learning how to use it, so the Hub is just an extension of the same principle.”
Velasco says the taskforce which planned the Hub consisted of TPL staff from a cross-section of such departments as IT, Web Services, Policy and Planning, and Marketing and Communications, aided by a survey of the TPL community and consultations with other libraries. He says Fayetteville Free Library (in a suburb of Syracuse, New York) was the trailblazer in creating facilities like the Hub and that its model has since been followed by libraries in Edmonton, Chicago and Innisfil (20 minutes south of Barrie, Ontario).
How the Hub works
For free and for up to two hours a day, TPL cardholders can reserve one of the Hub’s nine workstations, each dedicated to either Audio/Video Editing, 3D Scanning, VCR-to-Digital Conversion, Web/Graphic/3D Design, or Coding/Programming. Users can obtain help from one of the digital design technicians constantly on duty whose expertise varies among each of the processes for which the Hub is equipped. Users can also book time on an array of other high-tech devices, including:
- One of two MakerBot Replicator 2 3D printers (about $2,500 each),
- High-definition video cameras,
- A green screen (background for digital photography or videography that enables the image or video being shot to be superimposed on a second image or video),
- A variety of big-name-brand tablets and laptops, and
- Smart Pens (electronic ballpoint pens that digitize, store, and transfer what is written or drawn to a computer).
In a Learning Centre beside the Hub, the Library provides training sessions (some up to 2 1/2 hour long) on subjects like Photoshop (Parts I and II), Website Design (Parts 1 and II), Introductory 3D Design, and 3D Printer Certification. March Break classes for students are offered for 3D Printing, Video, or DJ-ing. Again, all classes are free to TPL cardholders and require only advance booking (although spaces are limited.)
Next, Velasco says, a course on Computer Programming will be added. And because high-school teachers have expressed the desire to build digital literacy amongst their students, TPL is developing a School Visits Program for the Hub, as well as video training modules. A further $50,000 from the Metcalf Foundation will enable TPL to develop and deliver outreach technology programs to youth in underemployed areas. Additionally, two more Digital Innovation Hubs are scheduled for TPL’s Fort York and Scarborough Civic Centre locations – two new branches expected to open later this year, bringing TPL’s total number of branches to exactly 100.
3D printing and maker space
Velasco says since the first Hub opened, 3D printing has proven especially popular, and the 20 3D Printer Certification classes TPL had scheduled for February and March were fully booked within three days. The certification courses are mandatory before using TPL’s 3D printers. About 60 of the 300 people who signed up for them also obtained their first TPL card at the same time.
Just as TPL charges users nominal fees for black-and-white and colour copies, 3D-printer users pay a surcharge of $1 plus five cents per minute, with a two-hour-a-day limit on printer time. Thus users can print a consumer-grade project, such as a smartphone case, in about 90 minutes for about $5.50; but if they wanted to print something more complicated and time-consuming, such as an engineering or architectural prototype, Velasco says they instead would have to use one of Toronto’s commercial suppliers of 3D printing. TPL also does not allow 3D printing of weapons, sexually explicit materials, and other items that contravene the Library’s published Rules of Conduct.
Some of the Hub’s other newfangled gear is aimed at the “maker” community. This is a subculture of do-it-yourselfers who enjoy creating things in their spare time, often new and unique inventions, using electronics, robotics, 3D printing, computer numerical controls, metalworking, or woodworking. The theme of Make Magazine, one of the niche publications for this community, is to celebrate “your right to tweak, hack, and bend any technology to your own will.”
Items in the Hub’s inventory that might especially appeal to makers include:
- Raspberry Pi computers (tiny, cheap computers expressly designed for educational applications and experiments),
- Arduino kits (open-source electronic boards that can control just about any do-it-yourself hardware project; Getting your coffee maker to tweet you after it finishes brewing), and
- Makey Makey kits (a device that lets you turn random objects, such as fruit or Play-Doh figurines, into computer-operating keys).
Part and parcel of the maker experience is that it generally occurs in collaborative spaces where people can connect and learn from each other as they tinker. Velasco comments: “Technology is great, but it becomes greater with a community and face-to-face interaction that utilizes, defines, and conceptualizes it. What is unique about the Hub is that we are hoping to build and foster a similar sense of community and collaborative learning here.”
“To succeed in today’s digital world, Torontonians need the opportunity to use emerging technologies in spaces that encourage collaboration and creativity,” stated City Librarian Jane Pyper, when TPL’s first Hub was introduced. In fact, TPL has codified these objectives as one of the four major initiatives comprising its 2012-2015 Strategic Plan; namely, to “Catalyze & Connect a City of Innovators, Entrepreneurs & Creators.”
TPL’s Website reads: “Through partnerships, transformations of our physical and virtual spaces, and the use of new and emerging technologies, Toronto Public Library creates cultural and creative destinations that stimulate and support creativity, encourage collaboration, and spark experimentation and innovation for creators and entrepreneurs of all ages.”
So far, these partnerships include outreach to such local maker spaces and communities as HackLab.TO, MakerKids, and Site 3 coLaboratory, because, “all these spaces are very much about community defining the space and the technology, and that’s the feeling we’re trying to go for,” confirms Velasco.
Another partnership has enabled the Reference Library to bring on site the Toronto Mini Maker Faire, scheduled for November 22 and 23, 2014. Other partnerships have resulted in Monthly Meetups – drop-in programs in the Reference Library’s Atrium with speakers and performances on such topics as Robotics: Creating a Star Wars Droid and When Wearable Tech Meets Art. Yet another of TPL’s innovations in collaboration is a Repair Café session where people can bring a broken household item and get help fixing it amid their neighbours.
TPL also recently inaugurated an Innovators in Residence program, commencing with 3D printing expert and digital fabrication artist Derek Quenneville of 3DPhacktory. Besides working on site for a six-week residency, Quenneville is slated to create a video training module; offer classes, demonstrations, and drop-in appointments for TPL’s customers; blog for TPL; and make himself generally available. Because the Hub is young, Velasco says further elaborations are still under consideration and will partly reflect how TPL staff witness people making use of the new facilities.
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