How Do You Rationalize Your Desktop Printers?

Do you, or does your organization have a strategy for desktop printers? If you are like most of the managers I speak to the answer is no. When they do it is typically that desktop printers are not allowed at all or the exact opposite; anything goes! I am not sure either of these are real strategies.

My experiences have revealed very few fleet management providers address the entire desktop fleet and usually ignore the impact of their expense in assessments. If you notice I specifically said fleet management because I believe a broader managed print services engagement includes all of the devices by default.

I think desktop printers are often ignored for the following reasons:

• Their impact on costs is underestimated
  
• They add to the complexity of the project
  
• No one wants to address the associated political issues
  

Impact on Your Document Output Environment

If you believe your desktop printers will not have a significant impact on your expenses you may want to think again. If I look back over some recent clients' environments it is not at all unusual for the inkjet devices alone to look something like this:

• Inkjet devices ranged from 3 to 33% of the overall device population
  
• Inkjet produced pages ranged from 2 to 11% of the total pages
  
• Inkjet driven expenses ranged from 6 to 43% of the total expense
  
• Savings from an effective inkjet strategy ranged from 8 to 65% of the total savings
  

The actual averages would be in the upper half of these ranges, there were a couple of environments included where a first pass at removing desktop printers had already been completed. The message within the data is that most clients are quite surprised by the actual impact of their desktop, and specifically inkjet devices.

Complexity

Adding locally connected desktop printers to a well designed MPS project does not increase the work and complexity beyond the potential benefits. It is understandable why a fleet management provider who is not likely to increase their revenues as a result of this effort would not want to include them. However, you as the client or end-user should be concerned with a component of your document output environment with as much potential impact as the desktop devices may actually have. The actual savings from a good desktop strategy for some of the clients included in the numbers above ran into thousands of dollars per month.

Political Issues

When you conduct a physical survey inside an enterprise you hear every reason why someone needs (deserves) a personal desktop printer. I have had the pleasure of $450 per hour professionals sit me down and present their 30 minute justification.

Security is an issue that no one believes can, or will be challenged but it can be:

• Network printers and multifunction devices have very good secure print functions
  
• How secure is printing a document on a slow desktop printer to leave it sit in the output tray or on the desktop?
  
• Security is in the workflow and not the device
  

Having a personal printer saves time and therefore expense (soft costs):

• What was the cost difference between printing the job on the desktop versus the workgroup device?
  
• How much time was saved and what was the value of the time?
  
• Was printing the job on the desktop device a good investment?
  
• Are you really that busy 8 hours per day?
  

Printing to a workgroup device disrupts my workflow:

• An interesting statistic inside of my data is that a high percentage of users print less than one job per day to a local device?
  

Printing photographs requires a desktop color printer:

• If the photographic printing is that important you should be using color management and printing on a photo grade paper
  
• The above is rarely evidenced by the pages I see sitting on the printer and desktop
  

Let me make it clear that I am not one who believes that every desktop printer should be "yanked" out of an organization but am convinced that there should be a strategy for their deployment within a well managed document output environment. This discussion can provide an outline for such a strategy but obviously will need greater detail based on your unique environment, cost structure and corporate (institution) philosophy.

Does your RFP Reflect your MPS Objectives?

Are you the person inside your organization who is preparing an RFP or bid for Managed Print Services?

If you are, join me for a few minutes while I share some thoughts and observations based on a sampling of RFPs I have recently reviewed from both private and public enterprises. Typically, these documents did not define a course of action or set of services that would fulfill the stated objective of the RFP and resulting project!

Stated Objectives

Below I have summarized the objectives stated by most of the RFPs:

• Improved user access to resources


• Enhanced support for users


• More productive workflows


• Rationalization (right sizing) of asset base


• Better return on investment in assets


• Lower overall expenses associated with document output


• Enhanced management processes and controls


• Reduced demand on internal resources

In some instances document management, sustainability and compliancy were mentioned or stated as future or secondary goals.

Does this represent what you expect from a re-engineered and better managed document output environment?

Course of Action

Of interest to me was that most of the RFPs stated a fairly robust set of objectives as summarized above but did not lay out a course of action or process that would likely deliver more than half of them.

Typically they requested assessment processes to uncover little more than device locations and meter readings; ostensibly to be used for strategy development. This type of limited data largely represents another replacement strategy and will probably not deliver solutions beyond simple fleet management. To maximize your document output environment a robust and comprehensive assessment is needed to provide the depth of understanding required for development of a strategy.

Most either implied or actually stated their focus was on network printers or copiers (multifunction devices); sometimes stating this was a first step in a larger endeavor. While I completely understand the desire to break a project down into manageable pieces and for immediate realization of savings, these pieces should not be completed without consideration of the document output environment as a whole. After all, this departmentalization and segmentation is what created the problem we are all trying to solve.

I suggest you should consider the document output environment holistically, create an overarching strategy and then break the implementation down into manageable pieces if you feel you cannot manage a broader project at once. If not, you will more than likely be developing strategies, solutions and vendor relationships based on components without the necessary interdependencies to achieve all of your objectives; again, back to the cause of the problem.

An alternative is an all-inclusive analysis of the document output environment, development of a comprehensive strategy and implementation plan for short-, mid- and long-term improvements. There will always be fairly immediate actions which can begin the expense reductions desired without compromising the larger objectives. Similar to software development, vendor contracts should be developed as components with windows that allow them to effectively interact with and support future or expanded strategy components.

Services

As would be expected, the services defined by virtually all of the RFPs were limited along the lines of the course of actions. The assessment and strategy processes were limited to network printers or multifunction devices with other important components of a document output environment as little more than secondary thoughts. Mapping locations of devices usually had greater import than understanding user behaviors and workflow.

Defined services were largely confined to supply replenishment and fix/repair services. There were often requirements for volume tracking and reporting but almost always without a stated purpose for this data and definition of the reporting. Usage statistics other than chargeback situations are very important data but only if used in a manner to and purpose of improving the document output environment. Data limited to page volumes and costs provide limited value for re-engineering and improving the document output environment. These are all remnants of technology refreshment based on replacement versus strategy.

Often device rationalization was mentioned as an organic result of the services outlined above rather than with the appropriate level of definition and focus. Comprehensive technology and device rationalization will deliver the greatest possible expense reductions and workflow improvements and should be defined in much greater detail. A limited amount of in-field observation has led me to conclude that this is one of the promises of management print services that rarely get attention after the supply replenishment and fix/repair service are in place and revenues are being realized by vendors. This is a predictable occurrence since most vendors use MPS as a marketing strategy to capture hardware, supply and service revenues with limited in-place processes for the management component.

My suggestion is that you define the management processes with as much detail and level of interest that you apply to the supply replenishment and fix/repair services. The RFPs I read usually ask an inordinate number of questions about attitudes, processes and capabilities to furnish supplies and fix/repair service and virtually none for the strategy development or management component. You should be asking for rationalization of technology and not simply devices.

Summary

After reviewing RFPs and following up with project managers I realize that this is virgin territory for most of you with few good resources to draw on. It is often obvious these documents have been influenced by vendors' sales and marketing efforts and/or the limited view of MPS within the majority of industry participants.

What does this all mean to you? If you answered yes to the question I asked earlier about your objectives it means the difference between achieving none of them, a few of them, most of them or all of them. I am confident that several of the organizations will miss savings of hundreds of thousands to millions of dollars if they accept proposals that are limited to the course of action and services defined in their RFP.

I advise you to step back and think carefully about your larger goals and objectives and independently research managing your document output environment with less influence by service providers, hardware and supply manufacturers and software developers. There are a number of resources available that bring an independent, end-user view to this market space.

If this post caught your interest and makes some sense to you I would suggest you read several of my earlier postings as well:

Managed Print Services, Blind Men & Elephants
Print Management Versus Device Management
Improving Your Document Output Environment

Are You Sure Those Costs Are Real?

If you are one of the many business managers considering entering into a fleet management agreement today how are you measuring the potential savings to your organization? Are they based on real verifiable expenses or projections provided by a print assessment that you or a vendor has performed?

If you are able to accurately accumulate the expenses you have incurred for hardware, service and supplies you are an exception and have the ability to develop precise cost models for your print output.

However, since most organizations have trouble putting their hands on all of this information they must rely on assumptions and projections; this is where the potential problem may arise.

If this is your case, the question you should ask is "how accurately do these assumptions reflect my unique print output environment?"

Hardware Expense

• Are they based on actual monthly lease payments or amortization?


• Are they based on projected amortization and if so do the assumed life cycles meet your actual experiences?


• Are the projected amortizations based on current asset investments or on today's replacement costs?


• Are the projected amortizations based on retail pricing or current market prices?

My experience has been that often the costs of printer hardware are ignored, usually presented as insignificant but probably driven by not wanting to do the homework to accurately develop these cost components. Depending on your actual page volumes per device these costs can be a fairly significant factor and I would suggest should be based on replacement costs for a like asset.

Supplies (Operating Costs)

• Are the costs per unit based on your actual purchasing history or an assumption?


• Are the assumed costs retail pricing or current market prices?


• Are the assumed costs based on the actual ink or print cartridges that you purchase (standard, high-yield, new OEM, compatibles, return program etc.)?


• Have you included all consumables (toner cartridges, fuser units, transfer kits, drum units, ink heads etc.)?


• Did you factor in supply inventory shrinkage, waste and obsolescence?


• What were the monochrome and color page coverage assumptions (five, nine, twelve, fifteen percent per channel)?

This is the area you should inspect since some sales professionals pad these expenses to make their proposal seem much more attractive. It is not unusual to read a proposal where the highest possible cost per toner cartridge is used (standard cartridge at retail) and unrealistic page coverage models employed. If your projected costs were based on anything higher than eight to ten percent (per color channel) you should ask for a good justification. To understand the impact, a fifteen percent (15%) coverage model used by some sales professionals increases your operating cost three-fold. Just because it is almost impossible to accurately measure your actual coverage you should not accept unreasonably high assumptions.

Service & Support (Operating Costs)

• Are the service costs based on actual in-place contracts, care kits or incurred expenses?
• If assumed costs what is the basis for them and are they realistic (e.g. the cost of care kits)?
• Have you included a cost for your internal IT or Technology support?
• Have you included a cost for infrastructure, network connection, wiring and switches?
  
  

This is another cost factor that gets ignored since it can be difficult to find your actual expenses. Unless you utilize internal support software it may be hard to determine what percentage of your time is spent on printer-related issues. There are published assumptions on these topics within the IT industry itself that you can use to base your assumptions.

I am going to go out on limb here and make the suggestion that the current cost projections contained in most proposals will be overstated as will the potential savings. I am not stating there will not be savings but even if they are small to none a comprehensive fleet management program is worthwhile since it provides so many other benefits for you and your constituent internal clients.

Print Assessment or Proposal?

If you are considering a study of your organization's printing environment are you looking for an assessment or a proposal?

The "print assessment" has become ubiquitous with dealers and fleet management providers employing them as a marketing strategy to develop hardware placement and printer aftermarket proposals. While there is no question these assessments provide value to the dealer, how well do you as the client benefit from them?

I suggest that a well designed and executed assessment should deliver something other than a selling proposal as its final outcome; rather providing detailed analysis and reports that enable you to bring your unmanaged print environment under control. Further, it is worth investing in a project that meets these criteria but not in a selling proposal; that is a marketing cost the dealer should bear!

The majority of the assessments that I see (and the tools used to perform them) focus on locating network print devices and their monthly page volumes (ideal for hardware replacement and laser cartridge sales). While vitally important data, it is not enough to develop an effective strategy for your document output environment.

• Many, if not most assessments ignore the local desktop printers which often represent from 40 to 50% of your office printing expense and the greatest potential to drive savings
  
• An assessment should provide you with a technology refreshment strategy that considers effective use of current assets and mid- to long-term technology refreshment; not just wholesale replacement of your asset base
  
• I question the value of identifying usage volumes and costs without understanding the detailed underlying user behaviors that drive them – the assessment should provide the data that allows you to develop print output strategies that maximize productivity at the minimum costs.
  
• Do you desire to conduct a device (fleet) assessment or an assessment of your document output environment? Would you like to understand the workflows associated with the document lifecycle and look for opportunities to improve productivity, quality and production cycles? Is your objective to reduce costs and resource utilization including network bandwidth and storage?
  
• What final deliverable do you expect; a selling proposal, software generated report or one developed from analysis of the data and environmental knowledge
  

Robust and quality data from a well-executed assessment of your document output environment enables you to architect and implement an effective solution that delivers the improvements you envisioned.

With in-depth knowledge of your environment justifiable hardware, software and aftermarket solutions that account for your current situation and address your vision of your future environment can be developed.

I recommend before entering into any assessment agreements you should see what the resulting deliverable will be; a proposal or objective report? Is this deliverable simply a data dump from the collection tools database: is it a canned proposal generated by proposal generation software that is based on hardware placement or device management engagement: or is it a detailed analysis of your unique document output environment with consideration for your personal objectives?

If you are a dealer or service provider reading this post now is where belief part must come in! By providing your clients with a solution developed independent of hardware and based on open standards, you still have the best opportunity for a long-term business relationship. What competitor has a better understanding of their environment and needs or has established and demonstrated a trusted partnership rather than a supplier/buyer relationship?