The great printer dust-up

Far from delivering the paperless office, digitisation has given people the ability to print directly from their computer and access to a quickly expanding, seemingly bottomless pool of information worth printing.

Freefalling printer prices have produced few savings for business as the purchasing of consumables, especially paper and ink, has soared.

Printing costs have more than doubled over the past three years, according to Gartner. The research firm estimates that one to five percent of revenue is spent in print – “and two percent is more than the rent,” points out one distributor.

Managed print services can give SMEs a way to rationalise printer fleets, monitor usage and rein in costs, and allow them to get on with the business of making money.

The sales pitch is more difficult than simply selling hardware because some of the benefits are more subtle than increased output.

A managed services reseller can offer a regular agenda of review where the volume of paper and toner, as well as the number, position and use of printing devices, are recorded and analysed.

Identifying the right machine for the job and placing it in a position where it will be used the most will lift staff productivity and morale.

Without an external partner in charge of the process, few organisations would bother to do so.

Outsourcing print management removes it from a customer’s weekly schedule, thereby freeing up more time for tasks related to making money. A summary of print assets and their usage gives a customer greater knowledge of what is happening within its business.

And finally, managed services can save a customer a lot of money. Exactly how much money depends on several factors including the size of the organisation and how printing was managed beforehand.

However analysts, vendors and resellers interviewed for this article claimed potential savings averaged at 30 percent.

Managed services in IT have brought big savings in time and money to SMEs with the external management of networks and PC fleets. “Now it is print’s time to come under the microscope and I think there are some huge savings to be made,” says Malcolm Hancock, a UK-based principal analyst for print markets and management, Gartner.

Managed services bring two obvious boons to the supplier – ongoing revenue and a deeper engagement with the customer. However it also includes the lucrative consumables market that often is missed by traditional printer suppliers.

Direct sales businesses such as Corporate Express and OfficeWorks target the front desk with colour catalogues that often snare bulk orders of toner and reams of paper among the highlighters, staples and other stationery.

Managed services wrap up toner and paper into the contract which builds in a level of profitability that the box-dropping reseller will never see. “That’s exactly the reason a managed print environment is so important,” says Gary Cox, managing director of Lexmark Australia.

The walk-through

Managed print services begin just like any other traditional sale – with an audit of the customer’s current set-up. Typically this involves a walk-through the premises noting the location of each imaging device and its “owner” or a point of contact.

Using management software or manually printing off meter readings and other data, a reseller compiles a picture of the way in which the devices are being used.

Staff surveys can reveal workflow patterns, complaints and requirements that are difficult to identify in more complex environments.

General truths emerge from audits. As a rule companies tend to significantly underestimate what they are spending on print. They also undercount the number of devices, as well as the amount of paper and toner used each month.

“Machines will only tell you so much. It is important to talk to the users as well,” says Peter Burr, marketing director of Print Services Australia, a managed print services reseller.

Then a reseller studies current service-level agreements and lists the support organisations involved in maintaining the printer fleet, which include device vendors and ink, paper and service suppliers.

There are often too many suppliers involved in maintaining the printer fleet, each with their attending SLAs.

SMEs which use devices from multiple vendors can find themselves calling a different toner supplier and service company for each brand.

Managed services lets a customer retain the choice of vendors but have the devices operated by a single company, which cuts down on confusion and cost.

A reseller can become the sole supplier and a trusted consultant, says Joe Ciliberto, national product and marketing manager for Lanier Australia.

“It opens up new doors for non-printer related business, all the printers, all their computers, which leads to greater profitability.”

Rationalising the number of models also generates savings. Revlon, a customer of PSA, reduced the number of copier models from seven to four, simplifying the printing process and reducing staff training.

Sometimes saving money can simply be a matter of moving a machine’s position. The placement of printers affects their usage, and some basic psychology – a printer closer to end-users is used more often – could reduce the use of other machines with higher per-page print costs. PSA’s Burr says laziness is often a major contributor to cost when an employee has the option of doing a high-volume print job on his desk printer rather than the dedicated, higher-end model down the hall.

Other times it might be a matter of breaking traditional behaviour. Older employees that witnessed the arrival of the fax machine may still continue to print and fax documents to another part of the company or elsewhere.

Either using email or a fax server in the first instance or scanning in a document through an MFP cuts print costs, speeds up workflow and enables electronic archiving. It is also an opportunity to upsell to an MFP with scan-to-email function.

Colour is becoming more common in business printing.

“Anything used in the outside world with colour certainly stands apart,” says Mike Pleasants, director of marketing communications at Epson Australia. “Colour says, ‘I’m a professional company and I mean business’.”

However colour is the easiest way to blow out your printing bill. Black and white printing costs can fall to one or two cents a page, whereas the best colour is eight cents a page on a colour laser, a four-fold increase. The bulk of colour printers cost 15-20 cents per page or higher.

Using management codes to restrict the use of colour in printing can dramatically reduce unnecessary spending. Most businesses find that 90 percent of jobs can be done on a mono printer, says Cox.

A reseller may even recommend outsourcing certain print jobs that are high volume or require special production such as saddle-stitching or binding rather than advise a customer to buy a machine and produce it in-house.

These decisions require a reseller to develop skills as a business consultant and weigh up the frequency of print runs against overall TCO. A real estate agent who prints his own leaflets every month might do it in-house for eight cents and not 50 cents at the local Kinko’s.

The best resellers in managed services are across all the features, advantages and disadvantages of lasers, inkjets and MFPs, and can pick a solution that will cover a customer’s needs for the lowest cost. “A customer is looking for good, sound, solid advice for their business and there is no one answer,” says Pleasants. “Understanding the person’s business is vital to making the right decision.”

Decentralise now

Management theory can be no more reliable than weather reports. Changing circumstances can send good advice out of date and even reverse entrenched ideas.

Printing is going through just such a reversal now, according to Geoff Croshaw, managing director of Fuji Xerox Printers Australia New Zealand.

For 10 years companies have stored their larger printers and copiers in dedicated rooms at the behest of the accounting department. Some vendors still back centralisation as a better finance model that reduces the amount of hardware and simplifies use and management. However Croshaw believes plunging hardware prices have given end-users the upper hand. “We will see a decentralisation of printer environments over time,” says Croshaw.

A decentralised printing environment puts the device closer to the user, which boosts productivity and staff satisfaction. However it also means more machines and often more consumables. Both arguments are well entrenched and it is up to resellers to decide whether a customer’s primary objective is saving costs or raising productivity.

Falling printer prices have allowed middle management to make purchasing decisions and workgroups are often able to buy their own machine. But the IT department remains stuck with the management of the device and its consumables during and after the workgroup’s project.

A Gartner report on print management tools in September last year advised businesses to manage, monitor and track their output fleets to lower operating expenses.

By measuring device usage IT departments can channel printed pages to more-efficient (faster) and cost-effective devices or redeploy underutilised printers to areas with higher demand, the report added.

New software tools that can “see” all imaging devices on a network allow an administrator to monitor toner levels, take page counts and respond immediately to paper jams or more serious malfunctions.

Previously vendors released their own programs but these were often limited in their ability to collect data from competitors’ devices. Independently produced programs now on the market are vendor-agnostic and can poll machines of all types.

The software also lets customers calculate how much they are paying to print a page on each device or for the organisation as a whole.

A usage plan shows a company exactly what it is spending and where – a critical step in reducing costs which until now has been missing from the SME market, according to Gartner’s Hancock.

Other recommendations from the Gartner report included keeping printer fleets under five years old and compatible with the latest management tools.

Better management that removes bottlenecks in printing should also improve employee satisfaction, noted the report.

Tech providers stood to benefit from regular refreshes of printer fleets and higher numbers of pages printed.

Of course there is one unavoidable blind spot with software management tools which hamstrings the audit process – printing devices connected directly to machines by USB.

These are more likely to be inkjet printers which typically have cheaper purchase prices but much higher running costs. The greatest wastage in any company comes from the locally connected products bought ad hoc and not through the IT department, according to Gartner’s Hancock.

These printers can arrive through multiple routes into an organisation – a new employee, workgroups looking for greater security and convenience or simply a well-meaning receptionist – but they end up forming a hidden cost within an organisation.

Any software tool that provides some sort of business analysis can give a reseller the evidence needed to persuade a customer to upgrade tired devices.

Kyocera provides a TCO calculator on its website for resellers to assess all major running costs for a customer’s current printer. They can then save this data as a PDF and present it to the client.