In this four-part Industry Insight aimed at SMEs, I will cover the benefits of outsourcing to a managed print service (MPS); how to set clear goals and define priorities for a comprehensive strategy; the selection criteria for choosing and contracting with a service provider; and the broad steps needed for success.
In today's challenging business climate, driving down costs has become a significant competitive strategy. Yet, according to an InfoTrends report, 90% of companies don't know, or underestimate their own document production costs. The report shows that companies may spend as much as 15% of revenue on document-related activities (with up to 3% on output costs alone).
SMEs stand to save between 20% and 30% of these costs by outsourcing their device fleets to an MPS on a guaranteed cost-per-page basis. The MPS service analyses and reduces the total cost of ownership (TCO) of output device fleets, including expenses for consumables such as toner, ink and paper, maintenance and repair, helpdesk calls and energy consumption. An MPS can also free up IT, financial and procurement resources to focus on more business-critical areas.
In control
Basing the price of output on actual usage allows organisations to create a predictable and easily controlled output fleet. They receive one bill from a single point of contact, covering all print, copy and fax expenses, enabling better output forecasting and expense allocation.
When SMEs seek cost savings and efficiency gains, the solution is often no farther than the nearest office printer. The typical office output infrastructure - copy, fax, scan and print - offers significant opportunities for business improvements and cost savings. Many organisations suspect they spend far more than is needed on office printing, and have deployed more copiers, faxes and printers than they actually need.
Take the following into account:
* On average, companies deploy one output device for every 2.2 workers.
* Typically, offices use an output device only about 15 minutes (2%) of every business day.
* The average output fleet device is 5.6 years old and may not meet modern standards for competitive document production.
* Offices spend between R6 000 and R7 500 per employee on output each year.
When SMEs seek cost savings and efficiency gains, the solution is often no farther than the nearest office printer.
Rabin Ram is MD of the Xerox division at Bytes Document Solutions.
Of the 90% of companies indicated by a recent InfoTrends report that have little or no understanding of what they spend on document production costs, 30% to 50% are incorrect, mainly because the assessments are based on estimates instead of actual usage data.
However, companies can reduce direct output costs by nearly R3 000 per employee per year, and reap many additional indirect benefits.
Benefits of MPS
By moving to an effective MPS, organisations can centralise output fleet control, gain business process efficiencies and enhance operations in several areas:
* Reduced TCO - organisations can expect savings in the 20% to 30% range, a straight gain in the bottom line. It is important for companies of all sizes to be aware of unnecessary costs. By consolidating many desktop printers and standalone copiers into a few, energy-efficient multifunctional printers, the cost reduction benefits are clear.
* Predictable output budgets - output expenses are consolidated into a single recurring charge based on usage, allowing more accurate expense forecasting. Most output device fleets are significantly underutilised. Typically, offices use an output device only about 15 minutes (2%) of every business day.
* Decreased environmental impact - an optimised output fleet reduces unnecessary device acquisition, cutting down on waste and power consumption, and reducing space requirements in facilities. In addition, a more accurate picture of device usage enables managers to implement resource-saving measures such as two-sided printing, alongside better consumption management of inks and toners.
* Frees IT resources - output device problems account for about 23% of all helpdesk calls, according to an IDC report in 2004. Outsourcing to an MPS removes the burden of output device support from the IT, freeing resources that can then drive significant service level improvements in business-critical areas.
* Increased employee productivity - when employees manage the day-to-day maintenance of output devices - ordering and changing toners and inks, routine maintenance - business productivity suffers. This is particularly true in a smaller office, where the ratio of users to devices is very low. End-users would much rather work in an environment where device uptime is very high and their involvement with the device is very low. Outsourced management of output devices transfers much of the support burden to the service provider, allowing employees to do their real work.
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