Questions & Answers From the Top

A conversation with Fred Ketcho

• By Security Products Staff
• Nov 05, 2007

Reducing the cost of desktop card issuance is a constant challenge for issuers and resellers alike. We sat down with Fred Ketcho, Americas’ vice president of sales and service for Datacard Group, to talk about all the factors that can affect this critical metric.

Q. What is the best way to assess the true cost of card issuance?
A. You have to look at cost per card, without question. Issuers and resellers understand this, and they’re looking for providers who understand this, as well. They know you can’t look at the purchase price of a card printer or the list price of a single supply item. Independent of each other, these numbers don’t mean much. To get a true picture of what your organization is going to be spending over time, you have to calculate cost per card. And that calculation must account for all the money that will be spent.

Q. Can you take us through an example of this calculation?
A. Sure. Let’s say you’re looking at two card printers that run at approximately the same speed, and they have the same capabilities. If one of these card printers costs $1,000 less, you might assume that the less expensive printer offers lower cost per card. And it might. But you have to take into account the cost of supplies, too. In this hypothetical example, let’s say the less expensive printer has supply items that cost $50 more for a 500-card yield. As you produce 10,000 cards, the difference in supply costs is $1,000. So even though the printer costs less, the overall ownership (considering cost per card) is identical.

This is an oversimplified example, but it gets the point across. Card issuers need to look at the acquisition cost of the printer and the cost of supplies over time. If you are comparing two printers, you also need to make sure the printers in question require the same number of supplies. In other words, if one printer’s supplies cost half as much as another’s, but it requires two different supply items to do the same job, then the supply costs for the two printers are actually the same.

By the same token, when you’re looking at hardware costs, make sure you compare prices based on the capabilities you need for the application. All providers structure the price of standard and optional features differently, so looking at the MSRP is only the first step. You have to make sure that price includes two-sided printing, magnetic stripe encoding or security laminate application, depending on the type of cards you need to issue.

Once you have an accurate cost per card, you need to look at the difference and compute it with your expected volume over the life of the printer. Let’s say one provider has a cost per card of $0.75 and a second provider has a cost per card of $0.85. If you plan to issue 10,000 cards, that 10-cent differential becomes a $1,000 savings or a $1,000 expense, depending on which printer you choose.

Q. Are there other factors that affect cost-per-card?
A. Yes, although they are harder to quantify. These factors all fall under the category of “soft costs.” Reliability of the card printer is probably the most important. Obviously, if your card printer is constantly in need of service, cost per card goes through the roof—because you’ve already made the investment but you can’t produce the cards you want. You can spend a great deal of money in both service costs and employee time.

Another important soft cost is consistency. Does the printer deliver functional and visually appealing cards every time? Or are operators spending a lot of time adjusting settings or running reprints? If it’s the latter, cost per card goes up because you’re losing productivity and wasting supplies on unacceptable cards.

A third soft cost relates to integration. Are you using a printer from one provider, software from another and image capture from a third? Assembling a solution from the least expensive options is one way to go, but you generally increase your risk of downtime and ongoing service costs. If the products aren’t designed to work together, you can expect to invest some time problem solving and debugging on the fly. If that amount of time gets too great, your cost per card is going to skyrocket.

Q. Is cost per card the only way to compare competitive offerings?
A. Absolutely not. You have to look at the whole picture. If you get a lower cost per card, but the service and support does not meet your needs, it is not a good trade-off. If you get a lower cost per card, but the quality is not where you would like it to be, that is not a good trade-off either.

Q. How can you reduce cost per card without sacrificing quality?
A. At Datacard Group, one way we do this is through intelligent supplies. Our print ribbons and laminates include patented RF technology that allows the card printers to pull data from the supplies automatically. This way, the card printer can recognize the specific supply item and adjust color and image density settings accordingly to achieve optimal card quality.

Other features help reduce cost per card directly. One example is the ribbon saver feature, which enables the printer to advance the ribbon just far enough to print the image, instead of advancing the full width of the card, as is traditionally done. By itself, this feature has the potential to double or even triple the standard yield of our monochrome ribbons—and that would have a huge impact on the cost-per-card calculation.

@Feature Biography:Fred Ketcho is the Americas region vice president for sales and service at Datacard Group.