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General Information
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July 31, 2009
• Vol.31 Issue 20
Page(s) 38 in print issue
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Cutting Costs By Reducing Printed Output
Operating Print Devices Is A Significant, But Often Unrecognized, Expense
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| Key Points
• The aggregate costs from deploying, supplying, and managing various output devices can represent 2 to 3% of a company’s revenues and more than 10% of IT’s budget.
• Most enterprise output environments are overprovisioned and unmanaged and represent an easy source of cost savings through device consolidation and closely matching device capabilities to business requirements.
• Multifunction laser printers represent the foundation of an output device optimization strategy and can also facilitate digitization of paper documents to create paperless workflows. Managed print services can help improve output fleet design and on-going device and supplies management. | | Many a cynic has quipped that despite early optimistic predictions of the paperless office, computers have become the most efficient paper generators since Gutenberg. Studies have found that companies routinely spend 2 to 3% of their annual revenues on documents and related expenses, with printers, supplies, and support accounting for 10 to 20% of the typical IT budget. Yet printing remains a critical element of many business processes, and there’s nothing like paper for document portability and convenience.
Tom Codd, HP’s director of Imaging and Printing Group worldwide sales and services, says that in most cases, IT has no idea how much a company is spending on printing, while Jim Joyce, Xerox’s senior vice president of Enterprise Print Services, says companies typically underestimate their actual printing expenses by 30 to 40%. But John Hankins, managed print services executive at InfoPrint Solutions (www.infoprint.com), says this past year’s economic crisis and the concomitant squeeze on IT budgets has meant a new focus on printing costs. It’s a target-rich environment.
According to Elise Min, research consultant at Info-Tech Research, “The average output fleet presents a low-hanging opportunity for most IT departments to realize savings of 20 to 30% that directly impact the bottom line.” IDC Research found that “companies that have implemented a total print management plan have achieved direct cost savings of between 8 to 41% and significant indirect cost savings.”
 Output Fleet Cost Drivers
One reason printing costs fly under IT’s radar is that manufacturers have been successful in driving down hardware prices. InfoPrint’s Hankins says hardware acquisition is only about 15% of the total enterprise printing cost, with HP’s Codd adding, “The cost of putting marks on paper” is only one-tenth of the total document management lifecycle expense. Personal printers are often vastly underutilized, with Joyce noting some of Xerox’s audits finding printers with usage less than 0.25% of capacity.
Info-Tech’s Min says the biggest printing cost drivers are consumables (paper, ink, toner, and the like) and maintenance, with the consumables’ costs heavily influenced by print technology. She notes that an inkjet’s CPP (cost per page) is about four times that of laser printers, with an analysis by HP showing that the CPP for color lasers is more than five times that of black-and-white.
Paper also represents a non-trivial expense. Codd notes that a simple change such as using duplex printing can save about 25%. Likewise, laser printers with their heated fusers can suck power—more than 500 watts when printing and even 10 to 20 watts in standby. Thus, Codd says a consolidated print environment can save 40% in energy costs alone.
Codd and Hankins both point to the hidden or indirect costs of a large, inefficient, heterogeneous, and complex printing environment. These include such issues as increased help-desk calls, procurement and management of supplies, and the need to administer a range of device drivers and train employees on a variety of printer user interfaces.
Identifying Inefficiencies
Codd says HP uses a three-step process to reduce printing costs and enhance effectiveness. First, optimize the infrastructure by matching capabilities to business requirements; next, actively manage the environment; and, finally, look at ways to streamline business workflows with digital documents.
Optimization begins with understanding what’s already installed, which is why Min says a fleet inventory is a necessary first step. This can be automated by using existing network monitoring tools or with specialized print management software, but it should be augmented with a physical walkthrough of the office environment. The inventory should record both the number and types of devices and their usage vs. capacity, e.g. monthly page counts vs. printer duty cycle or recommended volume. Codd says enterprises should strive for a ratio of 10 users per device.
In addition to targeting underutilized printers, Min also says the inventory should identify older, less efficient devices or those that have generated help-desk tickets, because these are both more costly to operate and create administrative overhead.
Along with a device inventory, Min recommends an assessment of user requirements, with the caveat that it’s important to distinguish between needs—concrete requirements driven by business processes—and wants.
The device inventory and user requirements serve as basis for a redesigned, consolidated output device architecture. Joyce says a common design is the hub-and-spoke model, where hubs of higher-capacity and throughput multifunction printers combining printing, scanning, digital document sending, copying, and faxing in a single unit may serve an entire floor or department, with spokes of smaller networked printers shared by a workgroup, offering convenience.
Having deployed an optimized print environment, ongoing IT management is critical to keeping it that way and avoiding what Codd calls “printer creep.” Depending on the output fleet’s size and complexity, it may be more cost-effective and sustainable to outsource management to a service provider. Service providers also offer procurement options such as equipment leasing or utility billing, in which the provider owns and operates the entire infrastructure and charges by the page.
Going Paperless
Of course, the least expensive printer is no printer, so the ultimate means of output cost reduction is redesigning business processes and workflow to use digital documents rather than paper. Rather than paperless, Joyce says a more realistic goal is “paperless” through opportunistic digitizing of formerly printed information. Codd notes that an optimized output fleet, using MFPs, can facilitate such efforts because MFPs are easily integrated with existing document management, email, or network fax systems, allowing scanned documents to be sent directly to file archives, email addresses, or even FTP sites. 
by Kurt Marko
Cost Reduction Techniques
Short Term: Quick Implementation
• Ban inkjets
• Centralize printing and remove as many personal printers as feasible
• Set printers to double-sided and monochrome by default
• Send print jobs to lowest-cost devices by default
• Educate users on cost-reduction behaviors such as not printing graphically dense documents and using the print area wisely
• Enable aggressive energy-savings settings
Mid-Term: Easy & Sustained Savings
• Centralize, consolidate, and replace older devices with multifunction devices
• Use a management console to enable print roaming and identity verification
• Set up user accounting or quotas
• Renegotiate and consolidate printer service contracts; leverage size and centralization
• Train users on hardware self-support to reduce vendor or help-desk calls
Long-Term Tactics: Invest For Future Savings
• Move to a utility printing model
• Invest in a dedicated print management application to streamline printer management and enable granular cost control
• Outsource highest-cost print services
Source: “Reducing Cost-to-Serve: Print Services”; Info-Tech Research Note by Elise Min; May 6, 2009. |
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