In recent years, as organisations have realised the scale and complexity – not to mention the burgeoning costs – of their printer usage, many have decided that it is a problem best handled by an outside specialist. But as with other outsourcing contracts, the adopters of these managed print services have encountered both advantages and pitfalls.
Two factors are fuelling the trend towards outsourcing the printing estate. First, as the price of printers continues to fall, manufacturers are moving away from their traditional product-centric portfolio of hardware and supplies and towards a services-based offerings.
Not only do such services establish a much closer relationship with the customer that was not there when they were regarded as commodity peripherals provider, but they also can begin to offer services at a much higher level than simply print management.
“Document workflow outsourcing, for example, is becoming the main moneymaker for some manufacturers,” says Philip Grote, an consultant at analyst firm Current Analysis. “The hardware is only a vehicle to up sell services,” he says.
Second, printer manufacturers, specialist print consultancies and traditional outsourcing and integration partners, are exploiting the knowledge gap within organisations as they struggle to realise any significant savings on their document output through their own efforts.
But is outsourcing the printing estate to a third party supplier the best method to reign in costs?
Certainly that worked for UK-based construction group Carillion. Its project manager for outsourcing, Trevor Rowland, says that in the first six months of the outsourcing project alone, Carillion saved over £600,000.
In a typical year, the company’s cost of producing documents range from £2.5 million to £3 million. Reducing costs was possible by implementing a printer rationalisation and upgrade plan at its largest business units before rolling the same programme out to the smaller units.
Working with Xerox Global Services, Carillion shrunk the number of desktop printers in use from 2,500 to 800, and consolidated 550 photocopiers and hundreds of faxes and scanners into 450 multifunctional devices (MFDs) across all of its 400 sites.
However, reducing the number of devices and replacing them with MFDs is not the only route to more effective print management.The starting point for all companies, whether they go down the route of outsourcing or not, is to conduct a survey of the current printing environment. Such a print audit tries to establish the current cost of printing – not always easy (see article, ‘Costing the print job’.)
It needs to list what devices are in use (both networked printers or those attached directly to desktop machines), identify which users are printing to which machines and how often, the quantities of paper, ink and toner being consumed, differentiate between key documents and supporting documents, and at what time and what days they are being printed.
But print audits come with a health warning. They are often conducted by prospective third party service suppliers hoping to secure a lucrative outsourcing contract. As David Wilson, director of managed services and solutions at print maker Oki, warns, organisations that pay nothing for a survey, do not have a choice of using the results independently. “Be very suspicious of people who say they will do it for free,” he warns. “The value lies not just in handing over any money: it might also be in the content of the survey, the approach they take or the time they spend with you.”
Organisations are, of course, free to take the results of an independent print audit and implement their own cost-cutting changes. But there are certainly plenty of well-documented benefits to outsourcing print services to a third party.
First, it typically eliminates capital expenditure on printers, copiers, scanners and faxes, and establishes a fixed cost for printing. Customers are presented with a single bill detailing costs, with prices generally calculated using a per-page pricing scheme. Printing equipment is leased from the third party, freeing customers from maintenance hassles and giving access to the latest printers and MFDs. “For business that means that they do not tie up their money in hardware, and that they can plan budgets ahead,” says Current Analysis’ Grote.
A host of other services are becoming standard in most outsourcing agreements. Most vendors offer an extended helpdesk facility dedicated solely to print related problems, as well as regular monitoring and reviews of the print equipment. Extra services include placing staff on site within the business to help with reconfiguration of machines and to re-establish the correct printer layout when staff additions or contractions occur.
Banking services group Lloyds TSB, for example, renewed its office printing outsourcing contract to Xerox Global Services in 2004 to help control document costs across its 2,500 branches. An important part of the contract includes the ability to update the document output environment as and when significant changes occur at the bank.
“Lloyds TSB and its subsidiaries now have four dedicated project managers from Xerox visiting locations across the UK to help manage any changes that occur,” says Paul Birkett, sales operations manager at Xerox Global Services.
However, outsourcing the print environment does not work well for all organisations, warns Gartner. The IT sector advisor says that organisations who lack the time to focus their efforts on making the right choice of vendor may unwittingly sign exploitative outsourcing contracts. Failed contracts are expensive to cancel and the remedy goes beyond merely replacing hardware or software. Moreover, like any other contract, companies should maintain active supervision of the outsourced operations throughout the life of the contract.