Communisis and the implications for the CCM/CXM Market

On 28th December 2023, it was announced that Communisis’ transactional business had gone into administration, after months of speculation and even national news headlines, the axe fell.  Clearly our thoughts are with all of the hard-working, talented staff who were once my colleagues and I sincerely hope that all of the individuals impacted quickly find new roles.  As we know Paragon acquired the Brand Deployment business and other assets and I’m sure these teams will enjoy working with their new colleagues.

But while the focus is quite rightly on the people impacted by this, let’s also take a moment to reflect on the implications for the UK CCM market.

While Communisis was once a leading player in the UK’s customer communications management market, its progress seemed to slow following its privatisation and acquisition by OSG.  We’ve seen the acquisition of some other significant players in recent years, including Paragon’s purchase of both Williams Lea and RRD as well as Adare SEC’s acquisition by Opus Trust (before the whole business was rebranded under the Adare banner).  In July 2022, Xerox purchased Go Inspire to extend its digital capabilities and focus. To really succeed in acquisitions like these, CCM service providers need to develop and execute successful strategies to diversify and cross sell new and profitable offerings to their client base; the implications of not doing so are now sadly evident…but we’ll come back to this point later.

Compared to these recent consolidations, this announcement is seismic as never before has a transactional business of this size gone into administration.  This is particularly concerning when only a few years ago Communisis was generally considered a market leader in transactional comms, not least when the OSG acquisition was met with great fanfare in 2018.

Communisis enjoyed significant growth in the early 2000s.  Of course, the print aspect of the UK CCM market was more buoyant then with many public sector organizations as well as financial services and utilities businesses outsourcing their transactional operations for the first time.  In more recent years, the landscape has looked somewhat different, with the market maturing and all large-scale first-generation outsourcing completed, the second-generation transactional print market has, over the years, proved somewhat slower. Big contracts rarely switched suppliers, due to the perceived cost and risk of change.  Although clearly that changed in 2023 as the challenges faced by Communisis became increasingly evident.

So, diversity is key and the CCM market in the UK remains buoyant, with the shift from CCM to CXM, providing significant opportunities to sell new, innovative and higher value services.  So, what went wrong for Communisis? One of the common issues for companies like Communisis has been the challenge of developing profitable digital and technology service revenues, coupled with an inability to capitalize on the arrival of new CCM buyers from line-of-business, marketing, and customer experience who lean towards partnering with SaaS providers or more specialised and tech-enabled service providers. In addition, recent economic developments have hit these print providers particularly hard, exponentially increasing costs for paper, energy, and transport. I’ve had many discussions with clients on this subject, and so I know how difficult it can be to pass on these increases.  I think we’re now seeing the consequences: reduced competition and an inevitable level of operational consolidation.

As we look forward, the market will continue to shift away from print as we approach a true omni-channel, interactive engagement model bringing together transactional, marketing, forms and service communications. Regulations (such as Consumer Duty) and new technology such as AI, are fundamentally changing the UK market, and service providers, historically print-orientated, are in a great position to help their clients navigate these complexities. Service providers in this space have an incredible depth of knowledge and expertise in CCM/CXM transformation, from technology and data services to systems integration and digital transformation. Many have also developed highly sophisticated technology platforms, created from a blend of market-leading software augmented by proprietary solutions and rooted in their in-depth knowledge of the challenges and opportunities their clients face. But as we know getting the message across and changing perceptions is not easy.

So where does that leave us? Here are some takeaways:

  • Whilst the overall print market will continue to consolidate, the evolution of the UK CCM market is very bouyant and is attracting new and diverse providers.
  • Service providers undoubtably have the skills and capabilities to help their clients navigate the complexities of migrating from CCM to CXM, but are often overlooked by enterprises, which is a missed opportunity for both parties.
  • Service providers, whether they come from a software, implementation or print background, must demonstrate they have the right expertise and digital skillset to navigate clients through the CCM to CXM evolution – especially in new areas of technological disruptions such as AI.
  • The pace of change in the buying personas for CCM/CXM services and corresponding changes to organizational structures, is set to increase significantly.
  • And inevitably there will be an increased focus on regulatory compliance, risk mitigation and the management of critical third parties, as the repercussions of the Communisis closure continue to reverberate.

In conclusion, whilst the overall print market will continue to consolidate, the evolution of the UK CCM/CXM market is very bouyant and is attracting new and diverse providers. While enterprises show stronger preferences to insource CCM technology platforms and data management, exacerbated by the collapse of the Communisis transactional business, they need to be aware that this will not provide a ‘silver bullet’ as they will still require expertise to effectively execute and manage all these changes. Enterprises who are reconsidering their insourcing/outsourcing options should take the opportunity to think about how the market is going to evolve in the coming years, rethink their operating models and look for a changing partner mix to support their strategic CCM-CXM objectives.

Aspire continues to track the service provider market’s evolution and our proprietary Aspire Leaderboard assesses service providers and technology vendors in the evolving CCM-CXM space. We also provide strategic support for enterprises who want to transform their customer communications to modern omnichannel experiences.

Kaspar Roos contributed to this article.

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