Managed printing: a license to print money

During the global financial crisis, the opportunity to save 10-30 per cent on anything made it an automatic winner, and managed print services (MPS) appeared as a beacon in the dark.

The concept owes much of its soaring popularity to the GFC: although vendors had started offering bundles of print services as early as 2000, it took the economic shock for end users to widely embrace the concept.

Here was an approach which meant the capital expense of buying printers, and the ongoing challenge and cost of managing and resourcing them, could be overcome by outsourcing the management of the print fleet, and paying a monthly charge calculated on the total print volume – which was an operating rather than capital expense.

Printer companies were keen to push the concept. They had, according to analyst firm Gartner, seen a 40 per cent decline in the average pages printed per month per user since 2006. People weren’t going to be buying as much paper, toners or printers in the future and vendors need to find a new stream of revenues. Enter managed print services.

While corporates led the charge to MPS during the GFC, the public sector has been a fast follower, and Gartner claims it will be a $US10 billion global market by 2015.

In 2011 the Federal Department of Finance and Deregulation announced its Major Office Machines Machines (MOMs) coordinated procurement arrangement, which includes first whole of government Managed Print Services (MPS) Panel and the MOMs Equipment and Support Panel. Agencies covered by the Financial Management and Accountability (FMA) Act 1997 must transition to one of the panels by the end of June.

MPS isn’t being mandated for now, but all agencies are expected to at least request a quote for MPS to test its value before deciding how to proceed. The four vendors on that panel are CSG Enterprise Print Services, Canon Australia, Konica Minolta Business Solutions Australia, and Ricoh Australia (besides these vendors, organisations such as Smartprint, Fuji Xerox, Fujitsu, HP, Lexmark and Pitney Bowes offer MPS).

“MPS was included as an option in the MOMs coordinated procurement arrangement following consultations with industry and agencies prior to the tender being conducted in 2010-11, on the basis that, in some circumstances, MPS can provide benefits, for example, reduce capital requirements,” a Department spokesperson said. “It is also an opportunity for the application of MPS to the Commonwealth government market to be tested.”

DOING THE NUMBERS Talk about capex and opex in the corporate sector and you get instant engagement as the notion of tax breaks looms. However, tax breaks aren’t on government agendas; instead, the light bulb moment for government is “definitely when you talk about the average 30 per cent cost reduction from managed print services,” according to Anthony Cogswell, executive general manager for global services, Fuji Xerox. “With the scale of government agencies, when they extrapolate that it becomes quite an appealing conversation,” he continues. “The impact on carbon becomes quite a factor of interest too: it can be mid to high 20 per cent (benefits), so there is a sustainability and carbon impact.” While printing has traditionally been an afterthought for most IT shops, once they understand the full costs – including environmental and productivity – they are often keen to review their operations. Luke Maddison, Canon’s group manager of business marketing, points to Gartner statistics which indicate that 3 per cent of an organisation’s budget can be spent on printing. He says MPS can save up to a third of that, especially when the MPS solution is constructed as part of a broader workflow management overhaul. Cogswell also points to a cyclical interest in MPS that reflects election cycles and government foci. At a time when the federal government is edging to an election with a surplus on its mind, he expects MPS will be more seductive a proposition than ever.

Transformative power. Kevin Noonan, public sector research director for Ovum, says that beyond the purely financial opportunities, agencies could start to benefit from the workflow transformation that can be achieved on the back of a transition to MPS and more sophisticated document management.

In most MPS arrangements the MPS provider supplies and maintains the printers. These are networked to the vendor, so it can schedule preventative maintenance and consumable supplies to be delivered. MPS solutions can be structured so that users see exactly how much their print job would cost if they print single sided, duplex, colour or black and white to help them to decide if they really can afford the print run.

“In some organisations it has been quite transformative but some have involved scuffles of the ‘my printer vs your printer’ nature,” Noonan says, noting that there has been evidence of poorly handled change management where users were “told it would be relatively transparent and it won’t hurt a bit. Well, it has hurt quite a lot.”

Nevertheless he said that MPS has generally proved successful in the public sector and that it can have “a transformative effect with significant security advantages.”

It’s not just Federal departments that can benefit from MPS; it’s an approach gaining traction in all levels of government.

Yarra Valley Water staff with Craig Lindley (right), manager of IT operations.

Yarra Valley Water, a Victorian Government owned water retailer, took the plunge three years ago, signing with Canon. According to CIO Leigh Berrell a print audit uncovered 85 print devices, from six different vendors, all requiring different consumables to be sourced and stored. These were serving a workforce of 650 people spread across five buildings.

The MPS contract negotiated with Canon saw the installation of 13 large Canon printers, and three smaller devices. The printer to employee ratio went from one per seven workers to one per 40, and costs associated with printing fell $100,000 a year.

Craig Lindley, manager of IT operations, said there were also environmental benefits as people moved to duplex printing, swapped colour for mono prints, and reduced wastage as a print job was only executed when people swiped their card at the printer – meaning print jobs weren’t forgotten and then repeated. The swipe card has also ensured privacy is maintained as the person who orders the print has to be at the printer to collect it.

The Sydney Cricket & Sports Ground Trust, meanwhile, has been using managed print services from Smartprint since 2005 according to network, security and systems analyst Ken Malycha. It has seven copiers and 24 printers handling around 35,000 colour pages and 55,000 mono pages per month.

Tailor made. With an IT shop of just three people, the ability to offload printer management to a third party was attractive – as were the Service Level Agreements (SLAs), which demand two hour response times and 24 hour fixes. If a machine suffers the same fault three times, it has to be replaced.

“Our approach is very tailored,” explains Anthony Cogswell, executive general manager for global services with Fuji Xerox. “We start with analysis of the environment to validate the cost base, the infrastructure, strategy and plans.”

The company then builds technical solutions to match and deliver against the SLAs – which can be slightly different for government than corporates, often having a focus on secure print- and-release and auditability.

Cogswell says that beyond print some agencies are making multi-function devices the “on-ramp” for a workflow management solution. “We inject all types of information,” he says. “They may want to scan hard copy to the document repository, send invoices to accounts programme, and may ingest that data from that. It reduces the double keying.”

Of course, print itself is under assault from the rash of mobile smartphone and tablet devices. Cogswell says this has had only limited impact so far in terms of print output, but that Fuji Xerox expects there will be a growing use of tablets rather than paper.

It’s already happening at Yarra Water where meeting agendas, board papers and executive reports are routinely provided on iPads rather than “six inch stacks of paper” according to Berrell, and in the future the NSW Department of Education and Communities, a recent MPS convert, expects that tablets will in time increasingly challenge print. – Beverley Head

This feature originally ran in the April-May 2012 issue of Government Technology Review.

SEVEN SLAS FOR SUCCESS WITH MPS Support your walking distance policy. State, for example, that the primary printer should be 8 metres from the user’s desk, with a fallback printer available no more than 15 metres away. Deliver user satisfaction. Require your vendors to poll users regarding their satisfaction levels, and set a score that is acceptable under the SLA. Achieve user uptime. Set expectations for the percentage of the working day that users should be able to print, copy, fax and scan. Manage the rollout period. Establish an acceptable period for the new print solution to be installed and operational. Supply replacement and replenishment. Require the vendor to keep a spare set of supplies on hand; when they are installed, the vendor should be obliged to replace the spare within two days. Help desk and repair. Set expectations for response to a help desk (e.g., 100 per cent of calls answered in two minutes) and repairs (e.g., onsite repair within four hours for 96 per cent of the time). Prompt billing. For example require statements showing page counts to be delivered within 20 days of the end of a calendar month.