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 user 2006-11-09 at 12:19:00 pm Views: 56
  • #16559

    The great printer dust-up
    from delivering the paperless office, digitisation has given people the
    ability to print directly from their computer and access to a quickly
    expanding, seemingly bottomless pool of information worth
    printing.Freefalling printer prices have produced few savings for
    business as the purchasing of consumables, especially paper and ink,
    has soared.Printing costs have more than doubled over the past three
    years, according to Gartner. The research firm estimates that one to
    five percent of revenue is spent in print – “and two percent is more
    than the rent,” points out one distributor.Managed print services can
    give SMEs a way to rationalise printer fleets, monitor usage and rein
    in costs, and allow them to get on with the business of making
    money.The sales pitch is more difficult than simply selling hardware
    because some of the benefits are more subtle than increased output.A
    managed services reseller can offer a regular agenda of review where
    the volume of paper and toner, as well as the number, position and use
    of printing devices, are recorded and analysed.Identifying the right
    machine for the job and placing it in a position where it will be used
    the most will lift staff productivity and morale.Without an external
    partner in charge of the process, few organisations would bother to do
    so.Outsourcing print management removes it from a customer’s weekly
    schedule, thereby freeing up more time for tasks related to making
    money. A summary of print assets and their usage gives a customer
    greater knowledge of what is happening within its business.And finally,
    managed services can save a customer a lot of money. Exactly how much
    money depends on several factors including the size of the organisation
    and how printing was managed beforehand.

    However analysts, vendors and resellers interviewed for this article claimed potential savings averaged at 30 percent.
    services in IT have brought big savings in time and money to SMEs with
    the external management of networks and PC fleets. “Now it is print’s
    time to come under the microscope and I think there are some huge
    savings to be made,” says Malcolm Hancock, a UK-based principal analyst
    for print markets and management, Gartner.Managed services bring two
    obvious boons to the supplier – ongoing revenue and a deeper engagement
    with the customer. However it also includes the lucrative consumables
    market that often is missed by traditional printer suppliers.Direct
    sales businesses such as Corporate Express and OfficeWorks target the
    front desk with colour catalogues that often snare bulk orders of toner
    and reams of paper among the highlighters, staples and other
    stationery.Managed services wrap up toner and paper into the contract
    which builds in a level of profitability that the box-dropping reseller
    will never see. “That’s exactly the reason a managed print environment
    is so important,” says Gary Cox, managing director of Lexmark Australia.

    The walk-through
    print services begin just like any other traditional sale – with an
    audit of the customer’s current set-up. Typically this involves a
    walk-through the premises noting the location of each imaging device
    and its “owner” or a point of contact.Using management software or
    manually printing off meter readings and other data, a reseller
    compiles a picture of the way in which the devices are being used.Staff
    surveys can reveal workflow patterns, complaints and requirements that
    are difficult to identify in more complex environments.General truths
    emerge from audits. As a rule companies tend to significantly
    underestimate what they are spending on print. They also undercount the
    number of devices, as well as the amount of paper and toner used each
    month.“Machines will only tell you so much. It is important to talk to
    the users as well,” says Peter Burr, marketing director of Print
    Services Australia, a managed print services reseller.Then a reseller
    studies current service-level agreements and lists the support
    organisations involved in maintaining the printer fleet, which include
    device vendors and ink, paper and service suppliers.There are often too
    many suppliers involved in maintaining the printer fleet, each with
    their attending SLAs.SMEs which use devices from multiple vendors can
    find themselves calling a different toner supplier and service company
    for each brand.Managed services lets a customer retain the choice of
    vendors but have the devices operated by a single company, which cuts
    down on confusion and cost.A reseller can become the sole supplier and
    a trusted consultant, says Joe Ciliberto, national product and
    marketing manager for Lanier Australia.“It opens up new doors for
    non-printer related business, all the printers, all their computers,
    which leads to greater profitability.”Rationalising the number of
    models also generates savings. Revlon, a customer of PSA, reduced the
    number of copier models from seven to four, simplifying the printing
    process and reducing staff training.Sometimes saving money can simply
    be a matter of moving a machine’s position. The placement of printers
    affects their usage, and some basic psychology – a printer closer to
    end-users is used more often – could reduce the use of other machines
    with higher per-page print costs. PSA’s Burr says laziness is often a
    major contributor to cost when an employee has the option of doing a
    high-volume print job on his desk printer rather than the dedicated,
    higher-end model down the hall.Other times it might be a matter of
    breaking traditional behaviour. Older employees that witnessed the
    arrival of the fax machine may still continue to print and fax
    documents to another part of the company or elsewhere.Either using
    email or a fax server in the first instance or scanning in a document
    through an MFP cuts print costs, speeds up workflow and enables
    electronic archiving. It is also an opportunity to upsell to an MFP
    with scan-to-email function.

    Colour is becoming more common in business printing.
    used in the outside world with colour certainly stands apart,” says
    Mike Pleasants, director of marketing communications at Epson
    Australia. “Colour says, ‘I’m a professional company and I mean
    business’.”However colour is the easiest way to blow out your printing
    bill. Black and white printing costs can fall to one or two cents a
    page, whereas the best colour is eight cents a page on a colour laser,
    a four-fold increase. The bulk of colour printers cost 15-20 cents per
    page or higher.Using management codes to restrict the use of colour in
    printing can dramatically reduce unnecessary spending. Most businesses
    find that 90 percent of jobs can be done on a mono printer, says Cox.A
    reseller may even recommend outsourcing certain print jobs that are
    high volume or require special production such as saddle-stitching or
    binding rather than advise a customer to buy a machine and produce it
    in-house.These decisions require a reseller to develop skills as a
    business consultant and weigh up the frequency of print runs against
    overall TCO. A real estate agent who prints his own leaflets every
    month might do it in-house for eight cents and not 50 cents at the
    local Kinko’s.The best resellers in managed services are across all the
    features, advantages and disadvantages of lasers, inkjets and MFPs, and
    can pick a solution that will cover a customer’s needs for the lowest
    cost. “A customer is looking for good, sound, solid advice for their
    business and there is no one answer,” says Pleasants. “Understanding
    the person’s business is vital to making the right decision.”

    Decentralise now
    theory can be no more reliable than weather reports. Changing
    circumstances can send good advice out of date and even reverse
    entrenched ideas.Printing is going through just such a reversal now,
    according to Geoff Croshaw, managing director of Fuji Xerox Printers
    Australia New Zealand.For 10 years companies have stored their larger
    printers and copiers in dedicated rooms at the behest of the accounting
    department. Some vendors still back centralisation as a better finance
    model that reduces the amount of hardware and simplifies use and
    management. However Croshaw believes plunging hardware prices have
    given end-users the upper hand. “We will see a decentralisation of
    printer environments over time,” says Croshaw.A decentralised printing
    environment puts the device closer to the user, which boosts
    productivity and staff satisfaction. However it also means more
    machines and often more consumables. Both arguments are well entrenched
    and it is up to resellers to decide whether a customer’s primary
    objective is saving costs or raising productivity.Falling printer
    prices have allowed middle management to make purchasing decisions and
    workgroups are often able to buy their own machine. But the IT
    department remains stuck with the management of the device and its
    consumables during and after the workgroup’s project.A Gartner report
    on print management tools in September last year advised businesses to
    manage, monitor and track their output fleets to lower operating
    expenses.By measuring device usage IT departments can channel printed
    pages to more-efficient (faster) and cost-effective devices or redeploy
    underutilised printers to areas with higher demand, the report
    added.New software tools that can “see” all imaging devices on a
    network allow an administrator to monitor toner levels, take page
    counts and respond immediately to paper jams or more serious

    Previously vendors released their own programs but
    these were often limited in their ability to collect data from
    competitors’ devices. Independently produced programs now on the market
    are vendor-agnostic and can poll machines of all types.The software
    also lets customers calculate how much they are paying to print a page
    on each device or for the organisation as a whole.A usage plan shows a
    company exactly what it is spending and where – a critical step in
    reducing costs which until now has been missing from the SME market,
    according to Gartner’s Hancock.Other recommendations from the Gartner
    report included keeping printer fleets under five years old and
    compatible with the latest management tools.Better management that
    removes bottlenecks in printing should also improve employee
    satisfaction, noted the report.Tech providers stood to benefit from
    regular refreshes of printer fleets and higher numbers of pages
    printed.Of course there is one unavoidable blind spot with software
    management tools which hamstrings the audit process – printing devices
    connected directly to machines by USB.These are more likely to be
    inkjet printers which typically have cheaper purchase prices but much
    higher running costs. The greatest wastage in any company comes from
    the locally connected products bought ad hoc and not through the IT
    department, according to Gartner’s Hancock.These printers can arrive
    through multiple routes into an organisation – a new employee,
    workgroups looking for greater security and convenience or simply a
    well-meaning receptionist – but they end up forming a hidden cost
    within an organisation.Any software tool that provides some sort of
    business analysis can give a reseller the evidence needed to persuade a
    customer to upgrade tired devices.Kyocera provides a TCO calculator on
    its website for resellers to assess all major running costs for a
    customer’s current printer. They can then save this data as a PDF and
    present it to the client.The corporate world is well-accustomed to
    buying managed services contracts for their copier fleets. Photocopiers
    have traditionally been expensive to purchase, difficult to maintain
    and costly to feed, and customers are generally happy to pay for expert
    care.However the waves of consolidation that have swept through other
    areas of IT are only just beginning to break in the copier-printer
    world, and the lucrative corporate market is now in the sights of
    traditional printer vendors.Multi-function printers that print, scan
    and fax as well as copy are biting chunks from the fleshy haunches of
    the copier market and cost structures are under pressure.Although the
    total volume of office paper output is increasing, Gartner research has
    shown that the growth is coming from print, scan and desktop output,
    whereas copy and fax volumes are actually decreasing.

    Nearly all copier vendors have responded by turning their backs on the channel and going direct.
    Australian market now has the largest number of direct-selling copier
    vendors in the world; Sharp, Toshiba, Konica Minolta, Fuji-Xerox,
    Lanier, Ricoh and Canon are all on the list. “Ownership of the customer
    is too important,” says Lanier’s Ciliberto. Though it holds just six
    percent of the plain-paper copier market, Lanier is happy to sacrifice
    market share for profitability, says Ciliberto.Copier vendors see their
    experience in managed services as the key to surviving the coming
    industry shakeout, and some even refuse to train their own resellers to
    avoid boosting competition with their direct-sales teams.Ricoh is one
    vendor that arranges managed services for its direct channel only.
    Managed services for resellers is “just not something we are working on
    at the moment,” says a Ricoh spokeswoman.Lanier also only develops
    managed services with its regional resellers; metro resellers are given
    access to laser printers and low-end MFDs.Kyocera Mita Australia
    pursues a similar policy, holding copiers apart from the printers it
    sells through the channel.Managed services have grown strongly over the
    past three years and now represent 20 percent of printer sales sold
    through its distribution channel. The number of the vendor’s direct MS
    sales for its copiers are “a similar figure”, says Anthony Toope,
    marketing manager for Kyocera.When it comes to printers, Toope claims
    the vendor is in a more limited position than its own channel because
    resellers have a better relationship with their customers and can
    provide other IT infrastructure beyond printing.Some customers specify
    during the tender process that they will only deal direct, but Kyocera
    is committed to encouraging its resellers into managed services. “Our
    success has been very much largely to the support of the resellers,”
    says Toope.The one area where a vendor has more connections is with
    government, but Kyocera has recently launched a program to place
    resellers within that market.The authorised reseller program in April
    with special pricing, support material and training for suppliers
    willing to make the trip to Canberra. “We do want to be quite proactive
    promoting our sales through the reseller channel,” says Toope.Printer
    vendors are more familiar with balancing a channel and direct sales.
    The unspoken understanding is that the top 200 companies and government
    are left to the vendor, while resellers are left alone to chase
    SMEs.However some printer vendors have established managed services
    divisions or launched them in recent years, with OKI one of the
    latest.Lexmark provides more competition than one of its
    managed-services resellers is happy with, who labels the printer
    vendors’ direct-sales departments as his greatest threat.HP continues
    to offer its own in-house, managed services portfolio. A multi-tiered
    approach covers the full gamut, from toner and service through to full
    outsource.“For us it’s all managed services,” says Shane Lucas, sales
    and marketing manager, Imaging and Printing, HP South Pacific.The
    programs are quite specialised and include providing toner to legacy
    machines no longer on sale, a managed service for a single printer or
    break-fix service for over 1000 units.A fully outsourced program can
    involve the vendor owning the fleet and providing printing services as
    a cost per page, as well as project management.However not all printer
    vendors are on top of the managed services game despite the market
    shift. “Our expertise is fairly limited,” admits Epson’s Pleasants. “It
    is a new area for us.”

    Ex-copier resellers are on the street looking for new markets and other vendors.
    South Pacific’s vice president and general manager, imaging &
    printing and consumer group, Christoph Schell, reports that he meets
    two to three times a week with copier resellers wanting to sell HP
    products.HP is promising greater commitment and has rolled out three
    flexible programs designed to give resellers varying levels of sales
    support.With the most basic package, Print Advantage, the reseller is
    essentially a sales agent for the HP service, and the vendor provides
    training and a certification program as well as point-of-sale
    material.Resellers with some infrastructure and knowledge, often moving
    sideways into managed printing services from other areas, are enlisted
    under the ValuePage program. HP provides parts and limited support
    while the reseller maintains the relationship with the customer.The
    third program is for end-to-end resellers with the staff, parts and
    tools to provide a fully managed print service themselves.Copier
    resellers have a significant head-start over traditional IT and printer
    resellers in selling managed services. Their staff are experienced in
    break/fix work on larger machines, they often stock their own parts
    inventories and specialist tools.But the greatest advantage is that
    their customers are already paying for managed services for
    photocopiers. Adding printers and other devices to the list is an
    easier task than selling a services contract for the first time.Despite
    all evidence to the contrary, managed print services will inevitably
    move away from stamping ink on paper towards electronic document
    managementCopier vendors such as Fuji Xerox have led the field, and
    Lanier coined the ugly term “docutivity” more than 10 years ago to
    describe the productivity of producing documents.The corporate world
    has been moving in this direction for some time, albeit slowly. However
    the Sarbane-Oxley reporting requirements, introduced after the collapse
    of the US investment giant Enron, have forced SMEs to face the issue of
    document management, according to Lexmark’s Cox.He believes that the
    entire production of documents now requires management at a much higher
    level. “You can call it printing if you want,” says Cox.Scanning
    technology was the hot topic two years ago, and MFPs can now scan a
    document to email, a file or even more complicated tasks. Some software
    can automatically recognise a document as a company invoice and covert
    the text into data, then index and store it within a database.“These
    kinds of processes speed up the workflow and make huge savings,” says
    Gartner’s Hancock.But now workflow is the new buzzword, and print
    providers are destined to become management consultants that look
    holistically to improve a customer’s entire business through process
    engineering.At least, Lanier is convinced that this is the right
    direction and has employed document specialists to study workflow
    processes.“We are looking at breaking into that IT space to become a
    true IT solution provider for everyone, not just for a photocopier,”
    says Lanier’s Cilberto, who rates the move to managed services as big a
    jump as the shift from analogue to digital.

    Tough path to walk
    managed services may be lucrative, but that doesn’t mean it is easy.
    Customers generally think of print in short-term episodes; the initial
    purchase followed by toner replacements and service calls only when
    needed.The pressure on MPS resellers is to explain the benefits first,
    which can be an uphill battle. “Our potential customers don’t sit up in
    the morning and say, ‘I need to make an investment in a managed
    services agreement’,” says Neil Tilley, managing director of Upstream,
    which claims to be Australia’s largest independent print solutions
    company.The clincher missing from the pitch is that a customer entering
    a managed services contract is not guaranteed to be in a better
    position than its competitors. An MS contract saves a company money and
    makes business easier to run, but it doesn’t buy a competitive
    advantage over its rivals.The reseller must also aim higher than the
    regular contacts in the IT department. Because managed services are a
    strategic rather than tactical sell, resellers must be prepared to take
    their case beyond the IT manager to the CEO.Consequently the sell
    itself is a lot harder, takes much longer and is therefore more
    expensive in staff time to the reseller.Ciliberto observed Lanier’s
    regional resellers making the transition from box-dropping to managed
    services go through a six to 12-month period where they were missing
    their budget targets