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The Fine Print(ing)

The Fine Print(ing)

Managed print services are on the rise

CIOs are finding that getting printing under control not only saves money, it opens to the door to thinking about printing requirements more strategically.

CIOs are finding that getting printing under control not only saves money, it opens to the door to thinking about printing requirements more strategically.

Office printing never used to be high on the agenda for Michelle Beveridge. That is until she found her company was spending up to $72 per printed page.

As CIO for the global student placement and language testing company IDP, Beveridge manages the IT requirements of an organisation with more than 200 staff in Australia and offices around the world.

Like many businesses, IDP had built up a collection of different printers that were used for general business printing and the creation of marketing posters and fliers. In 2008 the company relocated from Canberra to Melbourne, prompting Beveridge and her team to look into exactly how many printers her organisation had accumulated, and what they were costing it.

“In Canberra we had some very high-end, expensive printers that were on a hire-purchase agreement,” Beveridge says. “The costs were just enormous when you looked at the cost per page, in terms of the lease and consumables and servicing.

“There was one machine that was costing us $72 per page.” Another problem had emerged through some staff purchasing their own office devices. “They buy them for a couple of hundred dollars from Dick Smith, but then they spend thousands of dollars each year on the cartridges for them,” Beveridge says. “All of that was happening because there wasn’t centralised management across all of the devices.”

In other instances IDP was outsourcing its printing to external suppliers.

“By the time we worked out what we were doing, that was enormously expensive. So it made sense to upgrade the printers in each centre so they could do the printing themselves.”

MPS on the Rise

IDP is far from alone in being stung by the hidden costs of office printing, and this has led to a whole sub-genre of outsourcing known as managed print services (MPS). Gartner Dataquest estimated the MPS market as worth US$3.76 billion in 2007.

The solution for IDP was to engage a specialist MPS company, Upstream, which now manages almost all elements of IDP’s printing needs, including consumables and servicing, at an agreed flat rate per page.

“All of the machines are networked and managed by Upstream, so they can look in on the machine and see when it needs maintenance or toner cartridges replaced,” Beveridge says. “We still manage the paper, but they do everything else, and their servicemen are in here replacing things before we’ve even known that they are about to run out of toner.”

According to Gartner’s research vice president for imaging and print services, Ken Weilerstein, MPS generally delivers savings of between 10 and 30 per cent of total printing costs. The savings can come through activities including consolidation of printer fleets, bulk purchasing of consumables, fixed-price servicing contracts, and changes in print policies reduce wastage.

Weilerstein says awareness of savings from MPS has risen sharply in the past 12 months in the wake of the latest recession. “Organisations want it, but they don’t know what they need to do to get it, and they don’t necessarily have the people, expertise and tools to make it happen,” he says. “So when someone comes along and offers managed print services, that is an opportunity for them to make it happen.”

For IDP, Beveridge says the changeover has not been without some hiccups. Most notable was that the MPS contract with Upstream has made the organisation’s printing costs highly visible to its management.

“Before it was dispersed across various departments and consumables, so that expectation needs to be managed,” Beveridge says. “A lot of organisations have never really gone through and added up what they are spending on printers.

“To me printing is a commodity, and it should get to the stage where you print just like any other technology, and you don’t need IT to look after it.”

A similar story is told by CSC’s chief information officer Benjamin Patey. An office consolidation in 2003 was a catalyst for the organisation to investigate its printing costs, and uncovered a ratio of one printer for every six or seven people in the business.

“We had business wins and acquisitions, where we had obtained new offices” Patey says. “These offices came with their own equipment and we found was there was excessive printing and reproduction technologies.”

The investigation also revealed that a third of the fleet was more than three years old, with some devices up to 10 years old, with its printers and copiers generating an inordinate amount of calls to the help desk.

“Some people were bringing in their own printers because they were unhappy that they were working with antiquated equipment that was inadequate or unavailable,” Patey says.

Patey says the decision was taken to rationalise based on the genuine requirements of CSC’s users. That meant culling a large number of printers. In 2003, CSC had approximately 620 printers in its fleet. Today it has approximately 180, despite the organisation having retained about the same number of employees.

Patey calculates that the change has led to a 58 per cent energy reduction, with an equivalent reduction in carbon output, and a 50 per cent reduction in running costs. The ratio of printers to people is now 1 to 25. There are also additional benefits in terms of reduced helpdesk calls.

Patey says it is wise to not underestimate the cultural upheavals that can come with such a task, particularly when it comes to taking away an executive’s personal printer. “We had to be quite firm in terms of what we were trying to achieve,” he says.

“It turned out that it was usually the senior people in the organisation who had individual printers. I needed them to understand the benefits to the organisation of reducing these devices.”

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