In seek of new and innovative cost-reduction strategies, CEOs across the globe are relying largely on Managed Print Services (MPS) providers, most commonly known as equipment manufacturers and hardware dealerships. While a managed print solution may sound like a good idea, the effectiveness of a true MPS program is depends in large part on who is providing the service.
MPS providers are generally classified as an original equipment manufacturer (OEM), a manufacturer of print hardware, a Supplier, or a Distributor/Hybrid Dealer, a hardware retailer that sells both service and supplies. Companies looking for MPS solutions are generally interested in downsizing their print fleet to reduce hard-dollar costs. Unfortunately, most MPS providers have a business model in which the financial engine relies on increasing sales of hardware and supplies. The result: a very expensive and ineffective MPS solution.
MPS was developed to help OEMs and dealers grow profit margins in a commodity-driven industry where demand was decreasing year after year. The introduction of the cost per print billing method allowed hybrid dealers to combine costs plus profits into a bundled billing agreement that would cost clients a pre-determined amount per print over the length of the lease. As a result, the client seeking sustainable cost-savings would ultimately pay the same or more because the CPP sounds significantly less and is far more confusing that the data-driven, transparent approach to managed print.
Questions to consider:
1) When is the last time I actually used the copier to make a copy?
2) Which costs more: a copy or a print?
3) Why are my employees printing more and more color documents each year when total print volume is decreasing about 10% annually?
4) I’m trying to downsize my equipment fleet. Why is my MPS provider insisting we purchase more hardware?
Problem #1: Equipment
Most MPS providers are also equipment companies. Their goal is to sell equipment, most notably, copiers. The problem with buying a copier in place of a “managed” printer is that it’s unnecessarily expensive and for as long as it’s on lease, it remains a costly liability. Most equipment companies are eager to sell robust machines, often claiming that a high volume device will keep costs down, as long as employees redirect large print jobs to the copier. We recently conducted a survey asking employees if they were most likely to send their print jobs to a convenient, desktop printer or a larger, print-capable copier just a few feet away. On average, 10 out of 10 employees chose the desktop printer. As a result, equipment fleet and related costs stay the same or increase year after year.
Problem #2: Controlling color cost
Anyone that’s purchased color toner for a copier or printer is well aware that it’s significantly more expensive than its monochrome counterpart. Why, then, are OEMs selling color hardware for the same cost of standard b/w hardware? Why is print output decreasing by more than 10% each year while color printing is rising at twice the rate? Manufacturers want to make color printing more available to consumers because selling color toner is exceptionally profitable, so much that a loss on hardware sales is cushioned by the gains on the aftermarket.
The End-All Confusion Solution
Some MPS providers talk about controlling costs through strategic application of behavioral-based “rules”. These rules are designed to educate, advise and control end-user print behavior and can include anything from prohibiting color printing to forced duplex printing. Companies rarely see the benefits of using rules due to the fact that MPS providers utilize that savings to justify purchasing additional hardware.
Implementation of Rules Based Print Initiatives is bar none the most sensible way to cut and manage the cost of print. This method provides companies with the information they need to make sound, long term decisions while empowering end-users to print more efficiently.
The best strategy to make the optimal decisions for your company’s print environment is to truly understand your company’s print environment. The key to sustained cost savings is to put the right devices in the right location with the right processes and the right guidelines to optimize your print environment.
By, Having sold print hardware, service and supplies for more than 25 years, President, Mark Kehoe, developed and grew the first service-based business in the MFP industry where 100% of revenue came from successful implementation and ongoing support of print management programs.