It may surprise resellers contemplating their managed print offerings that the much-vaunted “paperless office” was popularised by a company synonymous with rapidly printing vast reams of paper on demand.
The famed Xerox Palo Alto Research Centre (PARC) – the research lab behind the graphical user interface and which further developed the mouse and tablet computer – made the paperless office famous in a remarkably prescient 1975 Business Week article.
“There is absolutely no question that there will be a revolution in the office over the next 20 years,” PARC founder George Pake told a reporter nearly 40 years ago.
“I’ll be able to call up documents from my files on the screen, or by pressing a button. I can get my mail or any messages. I don’t know how much hard copy [printed paper] I’ll want in this world.”
Fast-forward to today, and paper is still woven into the fabric of office processes and communications. Despite – or because of – mobile devices, people still print because paper affords many benefits. It’s tactile, light, cheap, can be scribbled on, accessed randomly and easily shared.
And it’s not just luddites of the older generation who cling to print. A recent Norwegian study found 10th graders better remembered information printed on paper than displayed on a screen. This is why, over the past 30 years and spurred on by exploding volume of content on the worldwide web, page output has increased by half, says The Economist. And from 2003 to 2009 despite concerted “Go Green” campaigns and rising use of email, Australians lifted their annual paper use from 4 million to 4.25 million tonnes, says Clean Up Australia. The environmental group also estimates the average office worker bins 50 kilograms of paper a year – a staggering 10,000 A4 sheets.
Jay Ko, product director at Synnex Australia, distributor for printing brands including Fuji Xerox, HP and Epson, says that, perhaps unexpectedly, mobile devices are driving more print.
“Apps make it easier to print and they offer wi-fi print, which helps to print more because of convenience,” Ko says. “I expect page volumes to grow in single digits over the next couple years.”
Ko says Synnex’s partnership with managed print services software developer PrintFleet has just 300 to 400 printers under management with 20 resellers. The reason is small to medium-sized end-customer businesses are yet to grasp the benefits of managed print, he says.
Many resellers also have no idea where to start: “They require training to understand which managed print service model is suitable for them”.
Synnex marketing manager Chi Wing Chan is blunt: “Managed print service is still hype”.
He says tough trading conditions attract interest in cheaper managed print services but “I don’t see personally that many companies have jumped into managed print service yet”.
“For resellers, they have to transform to be a solution provider in order to offer a hassle-free managed print service. This requires shifting the business paradigm and skill set of their staff. After-sales is more important plus the measurements on savings.”
He adds that end-customers still prefer to own their devices because it “gives them peace of mind and full control”.
But Paul Harman, chief executive of specialist print distributor Alloys, says page volumes are declining and that time is running out to adapt to new market realities. He says page volume “hit its zenith” at the end of 2011 and is now declining by 1-2 percent a year.
“The print market is changing significantly and I’m not certain the reseller community is changing as fast as the market is trying, or needs, to change,” Harman says.
“Print is stuck with selling a toner-out configuration. And managed print services numbers are growing but not at a rate that many people thought they would.
“The managed print services market won’t reach its maturity before the print market comes into more significant decline.”
Alloys and US document-capture vendor Kofax are helping the channel provide business process services instead of simple print.
“We’ve been putting on a lot of seminars and package solutions to enable resellers to think about these as part of their balanced solution for print and process,” Harman says.
“I’m not suggesting everyone should throw out printers today. They will play a core role in the marketplace.
“It’s in six to seven years that Gen Y, which is the most printer illiterate of the generations, takes control of office purchasing decisions and at that time we may see a real change in how printers are viewed in office.”
To make it to that inflection point, Harman says resellers should evaluate paper’s role in business processes and communications – and learn how to replace or at least augment it with smarter solutions. For instance, Harman says scanning allows resellers “to move past a printer as the only solution they can offer for document output”.
“Most people think of the lifecycle of the printed page as creation and printing of the document and most people forget what later happens to the document. Smarter resellers have spent more time in document management and capture to drive it further.
“The next phase is trying to make information flow around the office; so we’re trying to build that bridge for resellers.”
An example was the project Alloys and reseller Upstream Print Solutions started last year to supply Toyota Finance with a Kodak digital capture system for its 350 dealers nationwide. The 450 Kodak i2400 document scanners that the Fuji Xerox-owned reseller supplied cut from the time to get loan approvals from dealers to head office from days to hours. Here, managed print trumped a costly and problematic cloud solution.
Snake oil
Nick Sheehan is also turning around SME perceptions. Sheehan, sales director for Fuji Xerox reseller EFEX Group, says realisation of the latent possibilities in multi-function devices is dawning on SMEs – especially those in hot verticals such as legal and financial services.
“Four to five years ago, scanning was seen as trying to sell snake oil,” Sheehan says. “Faxing is going away and scanning is becoming the new faxing.”
That includes sending to document management systems such as SharePoint and optical character recognition engines to automate common business tasks, he says.
Another change EFEX Group notices is the drift from big A3 printers to more economical A4 sizes. “Ninety-eight per cent of what people print is A4 and that’s only increased over time; the big push has been, let’s sell A3 copiers and multi-function printers [but] its three to four times as expensive as A4.”
EFEX Group divides its go-to-market strategy into three dimensions. Firstly, speaking to customers about replacing their A3 devices. Explaining the advantages of Fuji Xerox’s ColorQube solid ink technology for low-cost colour.
And kickstarting engagements by seeing how the multi-function device’s scanner is a stepping-stone to smoother workflows and automation.
He says an end-customer “may have signed a five-year contract with someone else [for printing] but we can still talk to them about their capture”.
Anthony Toope, Fuji Xerox channel manager, says device makers are “pedalling fast” to catch up with end-customer demands. That includes cloud services such as Dropbox and Google Cloud Print, and printing from iPads over AirPrint.
“The ability to use mobile apps in the office is fast becoming a standard requirement we want to integrate in our products,” Toope says. AirPrint is standard on Fuji Xerox machines while the colour units pick up Google’s Cloud Print.
“People are mobile printing, hot-desking and working from home so you need devices smart enough to work in that environment.”
While SMEs are warming to managed print services, enterprise and government use it to transform their operations, says industry watcher David Hampe.
“Companies are moving more to look at managed document services whereby they effectively outsource the management of all their print devices,” says Hampe, who has just joined a partner
from a position as product strategy manager at Ricoh.
“We’ve seen a central print ring for five to six schools, rather than each school having their own devices, in an area managed by an outsourced company for bulk stuff like flyers. Now they can send the job off electronically and have it couriered back. A reseller with a service arm is more in a position to offer that service.”
Hampe says resellers could buy the customer’s printers and rent them back with bundled services. Such novel solutions will become necessary as print volume and price per page declines.
“In the last 12-18 months, we’ve seen a flattening of print in the market,” he says.
“People are starting to use other technology such as iPads and phones to read emails rather than print them. They’re starting to browse online rather than print so that’s slowing down sales of new printer and copier devices.”
The days of making a cent or two a printed page are winding down because customers are smarter about comparing costs between resellers.
“[It] is becoming harder because the market isn’t growing at the rate that vendors expect. A lot of the [page] rates are extremely low so gaining a margin to maintain a business is harder.”
Hampe says managed print partners who can transform their customers’ operations by being business process consultants will steal deals from box-droppers: “System integrators have the advantage”.
“Look at other workflows you can help with, for example, scanning documents back to an archiving package [through optical character recognition] and charging for that service as well.”
White-label solution
HP is also doing its part to move resellers into managed print providers for the mid-market, says Ben Vivoda, business manager for the vendor’s printing systems.
In August, HP launched its managed print specialist program that wraps up its portfolio of infrastructure services – including monitoring and delivery – into a white-labelled product.
It’s especially attractive for incumbent solutions providers who are not print specialists because it gives them another conversation starter, he says.
“That’s absolutely a gamechanger and the interest has been tremendous,” Vivoda says.
“From the reseller point of view, it’s flexible in how they on-sell that. They come to us and work on a quotation for one their customers.
“The reseller can add their own solutions, rebrand it [or] pass the offering straight through to the customer and be transparent that it’s a HP back-ended
infrastructure.”
Vivoda says that a managed print solution typically saves a customer 20-30 per cent on their print costs.
He says print is thriving but customers need help identifying waste: “What organisations are struggling with as content keeps exploding is how to manage information workflow”.
An easy way to sell managed print is to show rapid return on investment, says Jim Bullough.
“The flavour of the month is accounts payable invoice processing,” says Bullough, who is managing director of managed document provider Caylx. “We scan the document from the beginning, and extract the data pertinent to it. We populate a form, associate an image and it gets passed around the workflow for managers to approve.”
Bullough says that starting at $30,000 for a custom scanning solution, cost savings are compelling for bigger organisations. In one instance, Caylx cut full-time data entry staff from 10 to two while providing more timely and accurate invoice processing.
“If we can move eight butts into higher value jobs, that’s quite a saving of $300,000 to $400,000 per annum for a solution that might have only cost $150,000.”
Even without such customised scanning solutions, resellers can take advantage of the customer’s existing multi-function printers. “We have quite a few clients who use an MFP to deliver an image to us and we take it from there.”
Caylx, which also powers other resellers’ solutions, is Australian agent for Hyland’s OnBase software that eases the interface between MFP and financials systems. This allows information from supplier invoices, for instance, to be read into OnBase and passed to other software including SAP, Oracle and Exchange.
Bullough says no programming is required and it takes five to 10 minutes to prepare a document template: “It’s all point and click”.
“People get enormous value out of that because if you go into most medium-sized companies, their staff spend all day in Outlook or financials software.”
Helping to move resellers up the value chain from simple purveyors of devices, paper and ink to business process consultants is ever-smarter optical character recognition software, Bullough says. This enables innovative workforce automation and hybrid approaches to dealing with paper and electronic records.
“We had one case where the conversion from paper to electronic was a service application where they had 40 techs around the country repairing equipment. The paper [eg, purchase orders] never came back – it would go in the wash and now it comes back as an electronic copy signed [by the client].”
Sell on security
One of the biggest areas of hidden compliance is what happens to hard drives inside multi-function devices. These store confidential or sensitive information about the organisation, its customers, partners and employees and need to be secured – especially when devices are disposed of.
SmartPrint Fleet Management and Print Security director Jason Ganis has just returned from a fact-finding tour of the US printing industry where, over a period of two weeks, he witnessed 6,000 printing devices transiting a warehouse that exported old technology.
“In all instances they had data on them,” Ganis says.
“From firewall proxy server settings to a live porthole into someone’s network. There was actually compressed data on a hard drive; we flattened the hard drive and got all the data off it.”
In another example, someone’s medical chart rolled off a printer that was being disposed of.
“A lot of people are turning a blind eye to it, especially in Australia. They haven’t taken into account when they did the original acquisition about the decommissioning costs.
“It’s a pretty scary thought that devices sustain the data thereafter.”
Ganis has the rights to a hard drive cleaning system that sanitises up to eight drives in two-and-a-half hours.
He says it’s a “pretty scary thought” that addresses of schoolchildren, business financials or personal identity documents could be so easily swept up by crooks.
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