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Defining and Discovering The DocuMess Donald W. Thurman Chief Strategy and Marketing Officer, Danka Office Imaging

Abstract This white paper describes a common affliction found today in the modern office environment: the unknown, unmanaged, and uncontrolled output, input, and workflow of documents in an organization. Danka refers to this widespread and costly problem as the “DocuMess.�


DankaŽ White Paper. Copyright Š 2003 Danka Office Imaging. All rights reserved. The information in this document is subject to changes without notice. Danka Office Imaging assumes no responsibility or liability for any errors or inaccuracies in this paper. June 2003


INTRODUCTION

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Most organizations have it. And although you may not know it by any label, you’ll recognize its description: the unknown, unmanaged, and uncontrolled output, input, and workflow of documents in an organization. At Danka, we’ve named this widespread and costly problem the “DocuMess.” This common dilemma costs businesses around the world billions of dollars in inefficient technology utilization, excess supply and service costs, and lost worker productivity. Fixing the problem can dramatically improve document workflow and reduce total output costs by up to 40%. As a consequence, uncovering and resolving the DocuMess is emerging as the new front line in the management of office technologies.

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WHY IT’S IMPORTANT

“IDC end-user research has confirmed that companies spend approximately 10% of their revenue on document production, management, and distribution.” IDC White Paper, May 2001

Documents are essential to business communications; it’s a primary means of communicating both inside and outside the organization. So it’s not surprising that companies invest significantly in document-related equipment, supplies, processes, software and people. What is surprising, however, is the magnitude of the costs associated with document output. IDC, a global market intelligence firm, reports that companies on average spend 10% of their revenues on document production and distribution. (IDC White Paper, May 2001). No matter how big or small your company is, 10% of revenues is a substantial expense. Unfortunately, in many cases, a lot of that expense is being wasted. Business consultant CAP Ventures puts it this way:

“Document production and processing absorb a large and growing portion of corporate resources, staff time, and budget. The process to develop and produce business communications is fraught with inefficiencies.” CAP Ventures Research / May 2002

It is frequently the culture of a company – and not a well thought-out and executed strategy – that dictates output activity and, ultimately, the cost of the output process.

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What’s worse, much of this expense is “hidden” because it’s buried in a lot of different places throughout a typical organization. Gartner, a leading technology research firm, has found that most output-device users in a workgroup do not have the slightest idea of what they’re paying for output. (Gartner Technology Analysis, February 2003.) As companies look for ways to do more with less resources, uncovering and addressing the substantial inefficiencies associated with document output is becoming an increasingly important, and strategic, priority for executives – from purchasing managers to department heads to CIOs, CFOs, and CEOs.

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SYMPTOMS OF THE DOCUMESS

Top 5 Signs You Suffer from the DocuMess 1. Randomly placed desktop printers, off-line copiers, workgroup printers 2. Some devices overused, while other sit idle 3. Proprietary systems that don’t connect to each other or your corporate network 4. Multiple service companies to deal with when something goes wrong 5. Rising supply and service costs with no way to account for usage…real costs remain unknown.

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Many of today’s inefficient document output processes stem, somewhat ironically, from the technology advances of recent years and the resulting use (or misuse) of that technology. At the forefront are the low-volume desktop printers that have proliferated throughout most organizations, in large part because their low initial price tags usually place them under the radar of capital expenditure policies. Although these devices do provide a measure of convenience to individual users, they carry high ongoing supply costs. Inkjet printers in particular have been responsible for smuggling highcost color output into the office mainstream. High cost-per-copy also is an unfortunate and common attribute of many workgroup printers in use today. Further complicating the issue is the ongoing deployment of digital systems, which has powered a convergence in functionality that has blurred the distinction between copiers and printers and given rise to “multifunction” devices. User behavior contributes to the problem. Many documents are utilized for presentation purposes, both internally and externally, and they’re more effective when output in full color – even though the cost is higher. Finalizing presentation materials also can be time consuming because lowand mid-volume output devices don’t have sophisticated finishing options, and outsourcing the job to the organization’s Central Reproduction Department – or a third-party vendor such as Kinko’s or Staples – isn’t a readily available and convenient option for individual users. In addition, the widespread availability of easy-to-use copiers and printers have made documents more transitory in nature. Instead of duplicating them once and permanently filing them for future reference, many users have adopted a “print on demand” philosophy whereby they print a document when they need it, throw it away when they’re done, and print it again the next time they need it. While new document technologies have the potential to deliver tangible benefits – including lower, not higher, costs – because of a lack of a strategic framework, many companies find themselves with a clutter of disparate copiers, printers, fax machines, and multifunction devices scattered throughout the organization. Most digital systems are not properly utilized, and many of them aren’t even connected to the network, significantly hindering their effectiveness. And because this jumble of output devices has been acquired by different departments and business functions, multiple groups have assumed the ownership of purchasing decisions, supplies reordering, and service contracting. As a consequence, output activities remain largely decentralized, leaving most businesses unable to properly leverage their investments in document technologies, track workflow and bring accountability to output costs, or make optimal use of the time and effort that employees spend on document output. This all-too-common problem of costly, inefficient document output is what we at Danka call the DocuMess. Typical symptoms include not matching the right output device with the requirements of a specific job, with the simplest jobs going to the highest cost devices; expensive equipment that’s under-utilized or sometimes not used at all; different workers throughout the organization buying their own supplies; the use of multiple service companies, resulting in extra costs, uneven uptime performance,

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and confusion over whom to call when something breaks; and a fair amount of employee grumbling about all of this. As we’ve discovered in working closely with all different types of organizations, the inherent inefficiencies of the DocuMess can significantly impact productivity and profitability. Cost of Ownership

Printer Model/Speed

Price*

Cost/Page ($)***

Duty Cycle**

Yearly Cost

HP LaserJet 1200/ 15 ppm

$399

6,900

0.0091

$753

HP LaserJet 8150/ 32 ppm

$1,999

25,000

0.0113

$3,390

Xerox Phaser 5400n/ 32 ppm

$2,149

25,000

0.0119

$3,570

Lexmark W810/ 35 ppm

$2,099

25,000

0.0129

$3,870

HP LaserJet 4200/ 35 ppm

$1,099

25,000

0.0136

$4,080

Xerox Phaser 4400n/ 26 ppm

$1,399

9,400

0.0146

$1,647

Brother HL-2460/ 25 ppm

$900

9,400

0.0148

$1,669

Brother HL-1450/ 15 ppm

$349

6,900

0.0169

$1,399

HP LaserJet 5100/ 35 ppm

$1,439

9,400

0.0191

$2,154

HP LaserJet 2200/ 19 ppm

$649

6,900

0.0212

$1,755

Lexmark T520/ 20 ppm

$699

6,900

0.0234

$1,938

Xerox Phaser 3400n/ 17 ppm

$699

6,900

0.0262

$2,169

*Web price or estimated street price ** IDC-defined alternative duty cycle, pages-per-month *** includes price of printer amortized over 5 years and consumables (does not include maintenance or paper costs), assumes 5% toner coverage IDC White Paper, December 2002

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DON’T WAIT FOR THE “PAPERLESS OFFICE” TO BAIL YOU OUT

“Individuals use paper at certain stages in their work not because they are unwilling to change, but because the technology they are provided with as an alternative to paper does not offer all they need.” “The Myth of the Paperless Office” / 2002

Predictions of the paperless office have been around for at least three decades, but there’s no evidence to support the argument that electronic technologies will replace paper anytime soon – if ever. In fact, many of these technologies have actually increased the amount of copying and printing. A study by IDC, for example, that the introduction of e-mail into an organization increased paper consumption by an average of 40%. When you think about it, it makes sense. Personal computers have made it easy for virtually everyone in a company to create their own memos, letters, and reports – dramatically increasing the volume of original documents. (Remember when these tasks were delegated to word processing departments?) In addition, today’s advanced distribution technologies have made it simpler than ever to send those documents to multiple recipients. Along with faster, more accessible copiers and printers – which have greatly facilitated the duplication of documents – electronic tools such as e-mail make it as easy to send a document to 100 people as it does to one person. And what do most recipients do with important electronic documents they receive? They print them, of course. Paper, in fact, has certain attributes that make it necessary and even desirable. In “The Myth of the Paperless Office,” researchers found the physical properties of paper (thin, light, porous, opaque, and flexible) accommodate human actions such as grasping, carrying, folding, and writing. In addition, paper supports important aspects of knowledge work, including the composing of documents (although it usually is done electronically, authors frequently refer to hard copies of other documents as they do so), reviewing the work of others (hand-written notes still rule), and collaborative activities where workers go over documents with colleagues. The fact is that paper continues to play a vital role in business communications. Although many organizations are taking advantage of software to provide users with electronic options for their document distribution, effectively managing paper output is a critical component of solving the DocuMess.

Sheets of Paper (Trillions)

Paper Use Through the Decades 140 120 100 80 60 40 20 0 1930 1

1940 2

1950 3

1960 4

1970 5

Year

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1980 6

1990 7

2000 8

2010 9

EDSF Report September/October 2002

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ASSESSING THE MESS

Ingredients for a Successful Assessment 1. A trained and experienced assessment consultant who is not wedded to a single vendor’s solution 2. On-site evaluation of your current systems, processes, and device utilization, including interviews with end users 3. Automated data collection tools to track document workflow and device usage; coverage analyzer to measure the amount of ink/toner used on a crosssection of documents 4. Detailed Cost Recovery and Return on Investment analyses 5. Specific recommendations to streamline document workflow, improve productivity, and reduce costs

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The first, and most important, step in solving the DocuMess, is a professional document output assessment. The purpose of the assessment is to help a business develop a strategic framework for their document workflow and thereby determine the most cost-effective and efficient way to deliver output. A thorough assessment takes into account not only an organization’s current needs and existing environment, but it anticipates future requirements as well. Most assessments begin with a detailed, objective evaluation of an organization’s fleet of analog and digital output devices, including copiers, printers, fax machines, and multifunction devices. An experienced consultant (or, in larger engagements, a consulting team) conducts an onsite visit to determine device placement. Interviews with end-users establish the processes in place and help to identify unproductive practices. Software tools are used to capture data on how specific devices are utilized, while a coverage analyzer determines the amount of ink or toner used on a sample of different types of documents. From all of this information, the assessment will yield a clear picture of the actual costs and usage patterns along with a valuable analysis of cost ratios (such as cost per device, cost per employee, and return on investment.) An effective assessment provides users with specific recommendations to improve their document output processes and systems. Examples include replacing older analog equipment with fewer but more powerful and versatile digital devices, connecting devices to the organization’s computer network to leverage existing investments and optimize usage, and adding integrated software that provides users with intelligent output choices and accurately tracks costs. To ensure the validity of recommendations, industry experts advise using an assessment firm that offers multiple options and isn’t wedded to a single supplier. A Gartner study of output assessments noted that vendors who also are manufacturers “are more likely to push their own products” – even though they’re “supposed to be vendor-agnostic and find the right solution for the customer no matter what.” (Gartner Technology Analysis, February 2003.) Expect to pay for a comprehensive assessment. The price can range from a few thousand dollars for a small, single-department study to tens of thousands of dollars for an organization with a large, complex fleet of output devices across multiple locations. Most organizations find, however, the cost of the assessment to be a small fraction of the benefits received by implementing the associated recommendations. In fact, the overall return on investment from improving document systems and processes usually is substantial and rapid.

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BENEFITS OF SOLVING THE DOCUMESS

The Savings Can Be Huge “Savings estimated to be up to 40% of output spent in the typical large corporate enterprise will go directly to the bottom line. This is not only a real possibility but also a high probability.” Gartner Technology Analysis / February 2003

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Solving your DocuMess can yield substantial benefits, including vastly lower output costs, higher productivity, and improved output quality. Industry expert Gartner recently released a report showing that companies who overhauled their document output on an enterprise-wide basis reduced their output costs by up to 40%. According to Gartner, these savings stemmed from both lower costs involved in the acquisition of equipment as well as the ongoing costs associated with running the equipment. Our own experience at Danka verifies that substantial savings are both real and attainable. For instance, a combination of upgraded hardware and new software that we installed at Baptist Health Care has reduced outsourcing costs by 35-40%. A similar solution helped an Ivy League university cut in half the time it takes to print financial statements. New workflow processes at The Polk Company, a database marketer, raised output volume by 30% while simultaneously cutting overtime by 30%. And a fast high-volume system at Louisiana State University’s Health Science Center enabled just-in-time forms printing, reducing space requirements by 75%. The fact is, the benefits of solving the DocuMess are widespread and substantial. Because most workers have some sort of role in document output, even modest improvements in processes and costs can have a major cumulative impact when multiplied across all users in a department, office, or entire organization.

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CONCLUSION Want to Learn More? For more information about the DocuMess, and how you can solve the problem in your own organization, please

Conversely, the DocuMess, if ignored, can be hazardous to your company’s bottom line. Advances in document output technology offer tremendous benefits, but users need to make intelligent choices about their document workflow, which output devices to install, and how to best utilize and maintain them. The good news is that solving the DocuMess isn’t that difficult, especially with insights and guidance from industry professionals. And the benefits of doing so can be substantial.

contact me via email at Donald_Thurman@Danka.com

About Danka

or 770-290-2010.

Danka helps customers improve their businesses through a suite of document output solutions and more than a quarter century of experience. The company’s offerings include best-of-breed imaging products; document workflow software; professional assessment, design, and integration services; and ongoing technical service, support, and supplies. Danka has developed two comprehensive, flexible solutions designed to solve the DocuMess: Danka @ the Desktop and TechSource. About Donald Thurman

Donald Thurman is a veteran of the document management industry and a pioneer in the development of its print-and-mail segment. He’s held successful executive and entrepreneurial positions with several industry leaders, including Danka, First Financial Management, Xerox, Anacomp, and eMag Solutions. Thurman currently directs Danka’s strategic development and spends much of his time collaborating with clients on innovative solutions to their document output challenges.

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