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Managed Print Services and Beyond: How You Can Cut Costs and Go Green While Increasing Employee Productivity

Executive Summary Did you know that print costs typically consume 3% of total revenue for businesses today? For many organizations, this is nearly equivalent to the amount spent on research and development each year. According to the Photizo Group, a recognized thought leader in print services management, hardcopy costs are the last bastion of uncontrolled spending within organizations today—regardless of industry. But times are changing. Companies are discovering that better management of printing activities can significantly lower costs and have a positive environmental impact. Managed Print Services (MPS), when extended to include electronic document management and workflow solutions, offer an opportunity for companies to eliminate up to 30% of their total print costs, increase employee productivity by enabling faster, paperless processes, and significantly reduce the environmental impact of their business. This paper provides an overview of the real costs of hardcopy printing today, exposing both hidden costs and lost opportunities to improve productivity and minimize environmental impacts. It then explores the many advantages of MPS and explains what a typical engagement involves. And finally, it provides helpful information on how to get started with MPS and what to look for in an MPS partner.

The High Costs of Uncontrolled Print Services Printing services are ubiquitous today. Walk into any office area, and you will likely find several printers, faxes, and copiers within reach of nearly every employee. Many employees have a printer in their own cubicles or offices. Within most organizations, hardcopy printing fleets have proliferated without significant executive oversight. This happens, in large part, because the cost of basic imaging equipment can be low enough that the decision to purchase it is left to departments and work groups who, it is believed, are in the best position to understand their printing needs. So it’s not uncommon for an organization of 2500 people to have 1200 or more imaging devices. But given the current economic crunch, more companies are critically analyzing their cost structures and asking, “How much are printing services really costing us?” The answer is often surprising. According to industry research firms, the cost of purchasing, maintaining, and operating print devices typically consumes 3% of total revenues—close to what most businesses spend within their research and development budget. Total printing costs span a number of areas, including:  Device utilization and environmental impacts  Supply costs and equipment support services  IT services for device set-up and integration  Print activities and lost productivity  Document management and workflow inefficiencies

Device Utilization and Environmental Impacts One of the biggest drivers of hardcopy costs is having more devices deployed than users actually need. Purchasing decisions are usually made at the departmental level rather than at the enterprise level— without a real understanding of current device utilization and true departmental printing needs. Given employee preference for personal, in-office printers, this can lead to the purchase and deployment of too many light-duty machines with a high per-page printing costs. Meanwhile, higher performance, lower-cost devices down the hall are often underutilized. The differential in terms of cost per page can be as high as 2 cents—adding up to hundreds of thousands of dollars for organizations printing millions of pages per year. Deploying printing fleets in this manner is not only inefficient and unnecessarily costly, but it also leads to significant environmental impacts that organizations need to monitor more closely due to government regulations and internal corporate social responsibility initiatives. Photizo Group, the leading provider of

managed print services market research, estimates that for a firm with 750 employees, the average cost of a hardcopy fleet is over $700,000 per year. This fleet will require over 3,700 hours of IT support, it will use over 33,000 kWh of electricity, and produces over 189,000 pounds of carbon dioxide (CO2) emissions 1 (the equivalent to the total CO2 output of 16 cars for an entire year). Electrical usage and CO2 emissions grow dramatically as the size of the company increases (see Figure 1), so when organizations have more hardcopy devices than they need, these costs and environmental impacts can balloon quickly.

Figure 1: Photizo Group analysis of energy consumption

At the same time, inappropriate use of lightweight printers drives up paper utilization and costs. For example, many of these simple devices lack duplex printing functionality, which doubles the amount of paper used per job.

Supply Costs and Equipment Support Services While device purchases are typically made at the departmental level, supply orders and service call requests are usually handled by administrative assistants with little or no technical training. So it’s not uncommon for large companies to have tens of thousands of dollars invested in unusable ink cartridges and other supplies because they were purchased for the wrong type of device. At the same time, hardcopy devices need occasional service and repair, so organizations subscribe to costly extended warranty and repair contracts or bring in local repair vendors. The maintenance situation is aggravated by the tendency of organizations to have more devices than they need, and to over-utilize light-use devices so that internal mechanisms wear out faster. Service and repair costs can quickly spiral out of control.


Hidden Assets: Reducing Cost, Improving Productivity, and Protecting the Environment.

IT Services for Device Set-Up and Integration IT departments typically spend 10% of their time supporting hardcopy fleets rather than focusing on business-critical initiatives that improve competitiveness and efficiency. Generally, the larger the printing fleet, the more time and effort IT needs to spend setting up new devices; installing device-specific printer drivers; integrating high-efficiency devices with other IT applications to enable end-to-end, paperless processes; and helping employees fix problems. Supporting a large fleet can require thousands of hours of IT support each year—the equivalent to millions of dollars of IT costs that could be redirected to more strategic initiatives.

Print Activities and Lost Productivity While people prefer to have their own personal printer in office environments, they often don’t realize the potential productivity drain caused by these devices. For example, many choose to use their slower, lightweight device to print large documents—sometimes waiting five minutes for the job to finish rather than sending it to a high-efficiency machine that could complete it in less than a minute. This kind of inappropriate device use leads to overheating, paper jams, frequent ink replacements, and other hassles that further consume employee time and attention. Alternatively, sometimes the best printer for a particular job is a five-minute walk to and from an employee’s office. When you multiply this time by how often they need to go there every day, you can quickly assess how many minutes of employee time are wasted each month due to poor print workflow and planning.

Document Management and Workflow Inefficiencies

Cost Analysis According to Photizo Group, hardcopy printer fleet costs grow dramatically with company size, as shown in the following table. Note that this data does not consider other less visible costs such as work flow inefficiencies and excessive paper costs.

Over-reliance on simple, lightweight printers, faxes, and copiers limits an organization’s ability to deploy solutions that make operational “Typical” Company Hardcopy Annual processes paperless and more Cost Size Devices Device Cost efficient. More sophisticated Small 199 90 $93,213 document workflow solutions enable Medium 749 340 $350,838 integration between smart, Large 2,499 1,136 $1,170,554 multifunction devices and enterprise Global 9,999 4,545 $4,683,623 applications. They can, for instance, allow employees to scan receipts Source: Photizo Group Analysis Using Primary Interviews and MPS into networked devices and send Assessment Data data to an enterprise application for auto-routed approvals and faster processing. Taking advantage of these types of opportunities requires a more strategic approach to hardcopy fleet acquisition and utilization that minimizes use of smaller, less functional personal devices.

Managed Print Services: Enabling Greater Visibility, Control, and Opportunity

The net effect of ad-hoc deployment and management of hardcopy printer devices is spiraling costs and lost opportunities to strategically lower printing costs, optimize workflow, and minimize environmental impacts. But it doesn’t have to be this way. MPS can help your organization—regardless of size—address their printer fleet challenges and realize substantial cost savings. What exactly are managed print services? MPS is a comprehensive document management service offered by a print services specialist who can manage the hardware environment and document workflow in a way that enables an organization to achieve specific cost savings, efficiencies, and controls over IT support loads. When correctly designed and implemented, the results of MPS programs can be substantial. The Photizo Group analyzed over 100 MPS engagements of large companies and found that the average cost savings were $1 million—or a 30% reduction in hard costs per year. At the same 2 time, the companies reduced their fleet’s environmental impact by an average of 60%.

Key Elements of an MPS Engagement While there’s no universally agreed-upon definition of MPS, industry analysts and leading MPS providers generally agree that any MPS program involves four key phases: plan and assess, deploy, manage, and support. The following table summarizes the key elements of each phase. MPS Phase Plan and assess





Purpose Accurately determine current print-related needs, costs, energy requirements, and usage patterns; identify problem areas; and develop fleet redesign strategies that may include device consolidation and redeployment, as well as selective replacement to optimize fleet capabilities and utilization Procure, install, and configure new or redeployed imaging and printing devices

Monitor and optimize the day-to-day management of the printing and imaging environment. Includes staffing for service, parts, and supplies management to minimize costs and keep devices running reliably, as well as recommendations for continuous optimization and proactive, continuous monitoring of fleets. Provide on-site or remote support for ongoing needs and measurement of stated objectives

Elements Enterprise-wide output and energy assessment Financial model (cost justification) Statement of work for evaluation and implementation

Implementation of transformation and transition plans Map of current infrastructure Design of future state Technology deployment Hardware and software deployment Enterprise communications to facilitate change management Ongoing management of the “steady state” Initiation of device monitoring Steady fulfillment through a service portal Technology refresh Technology roadmap refinements Launch of accounting systems and optimization processes Management of a responsive priority helpdesk Automatic replenishment of supplies Measurement of SLA compliance via structured reporting Establishment and refinement of a device support network

Photizo Group paper: Hidden Assets: Reducing Cost, Increasing Productivity, and Protecting the Environment…

For many MPS vendors, this four-phase approach to MPS focuses almost exclusively on hardcopy fleet management. However a more progressive approach to MPS practiced by some service providers like Ricoh views MPS as a full life-cycle process for managing both hardcopy fleet and document workflow. Ricoh’s approach, which they call Managed Document Services (MDS) incorporates change management planning and program execution to help organizations facilitate a smooth transition to a more efficient hardcopy fleet, centralized device management, and new print and document workflows. The assess-manage cycle is on-going to continuously refine printing services so they remain optimized for the business as printing, document needs, and work flows change over time.

Advantages of MPS Ideally, managed print services are delivered as part of a trusted partnership with the customer to measurably improve hardcopy print fleet efficiency, quality of service, and cost savings (in terms of supplies, maintenance, IT, and electricity) while minimizing environmental impacts and optimizing document workflow for operational efficiency. The right external MPS provider can help your organization realize significant advantages in terms of cost, operational efficiency, and environmental impact. 

Cost advantages: With the right MPS program, you can reduce total costs by an average of 30% and improve key metrics related to cost, such as employee per device ratios. These cost savings are typically the result of fleet consolidation and right-sizing equipment for the job, selective replacements with high efficiency, multi-function devices; reduced device supply and paper requirements; lower energy costs; and reduced IT and maintenance costs. Operational advantages: MPS programs can help your employees perform work faster and more effectively—whether it’s through the use of fast duplex printing or automation of paperintensive processes and routing of scanned documents for faster processing or easy storage within document management systems. You can also adapt MPS programs to accommodate business growth through acquisitions and international expansion, while maintaining a single point of contact for all hardcopy requirements and operational issues. Environmental advantages: Research confirms that MPS can reduce your organization’s environmental impact by up to 60% by reducing the number of devices in your fleet, minimizing electricity usage and your carbon footprint, and reducing paper usage. Ideally, the service provider can also work with you to determine corporate social responsibility (CSR) targets and develop appropriate recycling programs and environmental initiatives.

A Closer Look at the Advantages of MPS Let’s take a closer look at some of the advantages of MPS using real-world scenarios to illustrate how they can be achieved. For example, you can:    

Optimize management of hardcopy fleets, supplies, and printing activities Embrace greener printing Enable paperless processes that increase productivity Facilitate better security and regulatory compliance

Optimize Management of Hardcopy Fleets, Supplies, and Printing Activities Before implementing an MPS program, most firms have a ratio of 2.2 employees per hardcopy device —a clear indicator that they have too many devices and are likely struggling with excessive maintenance costs and inefficient printing activities. With an MPS program in place, you can boost this metric to as high as 5.7 employees per imaging device while improving printing service quality and availability. Changing this ratio in any organization has a ripple effect of cost and operational benefits that include:

   

Consolidate and replace devices with more “right-sized” equipment to reduce the number of devices, boost device utilization, and achieve significant savings from reduced maintenance and support fees (which are typically bundled with the MPS engagement). Optimize print workflow to ensure that users print to devices that reduce per-print page costs, minimize paper use, and complete jobs faster. Centralize handling of printing supply orders and maintenance contracts by experts, enabling greater economies of scale, fewer incorrect orders, and reduced service rates. Use universal print drivers to minimize the need for IT staff to connect PCs to devices and free up scarce IT resources for business-critical activities.

As the following table indicates, the savings can reach into millions of dollars for large and global businesses. “Typical” Cost Small Medium Large Global

Company Size 199 749 2,499 9,999

Hardcopy Devices 90 340 1,136 4,545

Annual Device Cost $27,964 $105,252 $351,166 $1,405,087

Source: Photizo Group Analysis Using Primary Interviews and MPS Assessment Data

Embrace Greener Printing By implementing an MPS program that right-sizes your printer fleet, increases use of more efficient devices, and encourages employees to embrace greener printing, you can significantly reduce your total energy costs and carbon footprint. Making this investment can go a long way towards achieving CSR objectives and boosting corporate images in the marketplace. As noted previously, it’s not uncommon to realize a 60% reduction in a fleet’s environmental impact. For example, Ricoh’s MPS engagements promote recycling, energy conservation, and environmental preservation by reducing fleet sizes and energy needs via use of efficient, multi-function devices. These devices minimize device and consumables waste; offer quick wake-up from sleep modes (which significantly reduces energy consumption), and enable high-speed duplex printing/copying (duplex copying at the speed of one-sided copying). Consolidating several stand-alone printers into single MultiFunction Printer (MFP) workgroups can save hundreds of dollars on an annual utility bill, while reducing carbon emissions. Networked systems offer even greater energy and resource saving capabilities, such as electronic file sharing. Ricoh also promotes environmentally conscious manufacturing, distribution, use, and recycling of equipment. Thus far, through customer MPS engagements, Ricoh has:     

Recovered 98.41% of the material from end-of-life equipment Diverted 43 million pounds of equipment from landfills since 2000 De-manufactured 12 million pounds of equipment Recycled 74 million printer cartridges since 1997 Pledged to cut 12% of global CO2 emissions by 2010

So by partnering with the right MPS vendor, you can extend your green initiatives all the way to end-ofuse management and realize an even greater global impact.

Enable Paperless Processes that Increase Productivity MPS providers can use software to monitor and analyze your processes; determine the “who, what, and how” of print volumes; and map your processes to assess which ones are truly dependent on printing, copying, and faxing. Armed with this insight, you can identify opportunities to migrate to electronic format. In some cases, this will require using enterprise applications with intelligent routing and networked, multifunction devices to accomplish some of the following example tasks:   

Direct the scanning of documents, such as travel and expense receipts, directly to any employee’s personal “home folder” so they can be uploaded into an expense management application and automatically routed to the correct manager for approval Send employee pay-check information via a PDF or other file instead of a printed form to minimize paper costs and speed delivery of information Pay providers and issue invoices electronically for faster, more efficient processing

Increasingly, companies are moving to paperless information capture and transfer, even in areas of reporting, invoicing, and payments that have traditionally resisted the idea of a paperless operation. A key element of success in reducing the reliance on paper documents is the ability to integrate imaging equipment into the enterprise application environment.

Facilitate Better Security and Regulatory Compliance Effective data security and regulatory compliance is a business imperative in many industries. For example, if you’re in the healthcare industry, you need to ensure that all employees comply with the Health Insurance Portability and Accountability Act (HIPAA) by keeping patient records confidential. In some cases, you even need to prove that you’re in compliance and have the audit trail to prove it. Regulators need to ensure that these records are not being printed out haphazardly or left in an output bin for someone without proper access rights to find. MPS programs can help you achieve more effective security and mitigate compliance risk through software that delivers authentication and access control capabilities. For example, MPS can deliver lockprint capabilities that enable you to assign a personalized code to each employee who must manually enter the code into a printer before the device will print a hardcopy. This type of workflow control ensures that the right person is physically present at the time of printing so that documents don’t inadvertently fall into the wrong hands. MPS software can also be used to block certain employees from printing certain enterprise data, such as employee records, salary information, customer lists, and corporate financial information. You can also use software to monitor and manage the end user—for example, you can see who has printed what and when, right down to each individual job. So if there is a breach in security, you have complete visibility into the event.

The Critical First Step: A Comprehensive Printing Assessment The first step toward realizing the benefits of MPS is to have an experienced professional perform a thorough assessment of your current document output environment. Experienced consultants analyze your current printing usage and process. A good assessment will describe in detail the state of your document environment that includes a hardware inventory, maps of the physical location of all output devices, and opportunities to increase the document effectiveness and efficiency. The areas considered by this analysis are:

        

Device survey and usage Networking control Host printing Electronic distribution Archiving or current document storage systems Document print workflow Document security Environmental impacts and waste Customer satisfaction related to output quality, production speed, emissions, functionality, startup speed, and availability

The data gathered during the assessment is used to design and implement a customized MPS solution that will achieve your goals for reducing print costs, increasing employee efficiency, and lowering energy usage. A full-service MPS vendor can also provide a full outsourcing consulting engagement. This service helps you identify the cost reductions and productivity improvements you can achieve by delegating your entire document-related environment to the vendor. In this scenario, the MPS vendor assumes responsibility for the people (governance and culture impacts), processes (workflow procedures), and technology (IT and Content Management platforms, facilities, hardware, and software).

What to Look for in an MPS Provider Most MPS engagements last at least three years, so selecting the right partner is critical to the success of an MPS engagement. After taking the time to understand your organization’s requirements and objectives and securing the buy-in of the executive team, evaluate various MPS providers in terms of: 

Key capabilities: Do they provide the scope of services you need today and would like to utilize in the future? For example, you may want to start with basic fleet management, but then step up to document workflow solutions that increase productivity. Or you may want to start with remote monitoring services and eventually move to on-site management in a document center. If so, you need to ensure that your MPS provider offers these services. Customer references: Ask the MPS providers for customer references that demonstrate their ability to meet customer needs swiftly, evolve services as needs change, meet savings and energy targets, staff with appropriate resources, and maintain a solid working relationship over time. Measurement and reporting: Find out how the MPS provider will monitor and report on their service quality and whether they have met targets for savings, energy efficiency, and increased efficiency.

Discover the MPS Advantage For over ten years, Ricoh teams have been helping organizations use managed print services to reduce their spending on output while improving quality and service. For more information about how Ricoh can help you discover the MPS difference, email us at, or contact a local Ricoh representative today.