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The value of MPS

V.S. Lingam | July 7, 2011
What managed print services can do for your enterprise.

Lee Lee Ken, General Manager (Enterprise Sales and Services) for Asia Pacific at Lexmark answered some questions for CIO Asia recently. Her professional insights on the value of managed print services (MPS) to enterprises today below.

Why should CIOs care about the issue of managed print services and how much of a priority do you think this is currently among Asia’s IT executives?
A key priority for today’s CIO is ensuring a sustainable business model through investments in technologies that enable cost and operational efficiency within an organisation.

While there are many opportunities to cut operational costs in different departments of an organisation, what many CIOs do not realise is the fact that if not monitored, printing costs can result in revenue leaks that often go unnoticed.

In fact, market research has shown that some enterprises spend up to 3 per cent of their revenues on document output. It may seem like a small percentage, but in reality can represent up to US$15 million dollars for a midsize company with annual revenues of US$500 million.

From our conversations with customers, some of whom have experienced up to 30 per cent in savings from proper monitoring and management of print services, managed print services (MPS) is now on the radar for CIOs and IT managers who are looking to minimise operating costs. They are exploring the use of effective technologies as part of overarching technology adoption to maintain a profitable business model.

What are the major drivers for print revenue leaks for companies in the Asia Pacific?
There are many avenues for print revenue leaks within a company that often go unnoticed. These include the use of multiple print devices from different vendors being scattered over various locations. This often results in multiple payments being made to various vendors, when the costs could have been consolidated and collectively reduced.

In other cases, the lack of proper management and monitoring of print use has resulted in some organisations putting out an average of 1,000 pages each month. This amount can be controlled and reduced significantly with printing policies and protocols that could cut down on unnecessary pages.

These situations are especially prevalent in companies with operations spread across a wide geographical landscape like Asia.

Other points of revenue leakage through print infrastructure include:

High percentage of non-networked printers: Research indicates that up to 40 percent of printers and other devices are non-networked. This chalks up additional costs as paper use is increased without the capability to share documents across remote offices.

Lack of centralised management: The use of printers, faxes, copiers and scanners is often unplanned and not centrally coordinated. This results in unnecessary wastage and is a contributor to hidden revenue leaks through a company’s print infrastructure.

High costs and underused equipment: The age of a device and low utilisation often lead to higher spending than needed. Per industry norms, technical support costs within the industry make up approximately one third of IT and helpdesk costs. This is clearly an area where operational costs can be further reduced.

Multiple and complex paper-based workflows: For every dollar spent on printing, another nine dollars in associated costs go into managing paper as part of the business process. The latter amount can be minimised with the simplification of complex paper-based workflows.

What are the key industry influences pointing to more use of the MPS strategy?
A key industry influence driving the increased interest around MPS is the fact that many organisations are increasingly turning to 'the cloud'. Within the printing industry, the saving of information on a server and access and sharing via the Internet points to the need for increased consolidation within a company, especially from a print management perspective.

As the need for management and sharing of content becomes a necessity, MPS offers a host of solutions through intelligent printing devices that allow companies to transfer files and collaborate online in a more effective manner. This has accelerated the uptake of MPS as a result of the managed print services’ utility-based model.

Another key driver for the use of MPS is the increasing awareness among organisations to move beyond rudimentary print solutions and focus on data management and protection. As issues like the security of information within an organisation become a pertinent issue, the management of content from print devices is now a priority, further driving demand for MPS capabilities like software maintenance and professional services.

What sorts of strategies are available for CIOs to address print cost problems and how easy/costly are they to implement?
MPS is a technological approach that ties into a company’s sustainable business model. It allows companies to control their print infrastructure, rationalise the hardware they use, and maximise their investment by creating a customised service level agreement with a strategic partner.

Costs for implementation of MPS vary based on the size of the business and customer requirements for deployment. Other variables that can augment implementation costs also include the type of MPS services used, requirements of the service level agreement and depth of compliance to respective company policies.

Acting as a delivery mechanism to optimise supplies management, provide strategic consultancy and ongoing support of print infrastructure, MPS allows CIOs to directly address print cost problems from the following perspectives:

Workflow optimisation: CIOs can work with a selected vendor to examine business processes related to printing. They can then work together design a print strategy that is aligned with business needs. By embedding software solutions to manage specific daily work processes that can be controlled from the touchscreen of the printer or MFP, the business process can be easily automated and maintained to increase overall performance and efficiency.

Infrastructure rationalisation: CIOs need to understand what they really need for printing and why. Print infrastructure often caters to all needs across an organisation even when this is unnecessary. By evaluating the overall printing architecture of their company with a trusted partner, CIOs can then work out whether or not their printing environments need to be outsourced, outline print options that suit specific departments and monitor related costs to effectively meet business needs.
 
Waste management: By securing an expert opinion on planning and operating their company’s printing estate, CIOs can identify the right functionality and features required to facilitate business processes executed by different departments. This will ensure minimal wastage and increased visibility and control of printing resources at all levels of the business.

Security: Depending on industry or customers, a company CIO may see the need for differing levels of document security. Through a partner, they can then identify printers that enable different levels of security with the correct permissions, protecting important documentation and limiting security breaches and preventing issues like sensitive information falling into the wrong hands.

Control of supplies: MPS allows the CIO to take a central approach to printing through the rationalisation of equipment and supplies. By implementing MPS, CIOs can automate supply orders and maintenance of print devices. This helps ensure the business operations can continue with minimal disruption.

What makes the Asia Pacific region different when it comes to the issue of managed print services and how much is government compliance an existing pressure on MPS?
The large geographical spread of the Asia Pacific region is one of the drivers for the adoption of managed print services. This occurs especially when companies realise the extent to which printing impacts the company’s printing costs, a situation that is often caused by the lack of centralised management.

While different governments in Asia have sustainability initiatives and have operating processes in place to encourage the use of green technologies, there is presently no specific compliance to printing that exerts pressure on companies to drive the adoption of MPS. However, most companies are taking the initiative and continue to adopt MPS as part of their sustainable business model.

How do you see future trends relating to MPS in Asia and what country-specific (Singapore, Malaysia, Hong Kong) trends are increasing its popularity?
Companies across Asia have placed a consistent focus on efficiency and doing more with less. This is not expected to change in the near future. The trend to offset unnecessary expenses is set to drive the popularity of MPS, with analysts predicting growth of over 20 per cent.

At Lexmark, we also believe that this trend represents a tremendous market opportunity for MPS in Asia. In line with this expectation, we have continued to develop intelligent document solutions and innovative software that enables a business to optimise processes in a sustainable and scalable manner.

To do more with less, we have also extended our capabilities to provide content management services with the acquisition of Perceptive Software, a company that specialises in enterprise content management solutions. This has allowed the company to ready itself for the regional MPS demand, strengthening our workflow solutions and broadening our existing portfolio of services offered to customers.

How does Green IT sit with the issue of MPS and what sort of environmental savings are possible using this approach?
As part of our aim to help companies print less and save more, Lexmark strongly believes in the tangible benefits that organisations can reap through Green IT. From an MPS perspective, Green IT has become a meaningful issue that no longer can be dismissed as a trend. There are many opportunities for companies to achieve continued savings in a sustainable manner by being environmentally friendly.

Some of the options that organisations can explore are as follows:

Use of products that meet environmental specifications: Organisations can consider the large-scale deployment of print devices that meet the minimum environmental requirements for product design and make. For example Lexmark creates printing solutions that are compliant with the Blue Angel environmental certifications and are tested for emissions based on the standard. The company also manufactures devices that have innovative features like instant warm-up fusers, allowing for a dramatic reduction in energy use.

Work with an environmentally friendly partner: Businesses can work with a printing partner that encourages reuse and recycling of products. Lexmark has led the way in this area with its cartridge collection programme, allowing businesses to contribute to give back to the environment. This has significantly reduced our customers’ contributions to landfill, having collected 1 of 3 cartridges shipped throughout 2010.

Deployment of green-conscious print solutions: Organisations can look to exploiting software solutions that allow it to experience significant cost savings through reduced print output. Lexmark for example provides solutions like Eco-Mode that automates two-sided printing, fax and copy, enabling up to 50 per cent savings in paper us and lowering overall costs.

Driving business functionality: Companies can even drive workflow efficiency through the use of solutions that are environmentally friendly. An example from Lexmark would be its Print Release functionality that allows users to eliminate the gap between document printing and pickup to reduce the amount of pages printed. The solution serves the dual function of increasing security around printing of confidential documents while enabling a “Print Anywhere” capability as print jobs can be sent from mobile devices, stored on a device and printed at a later time on another device in another country.

What good examples can you cite of Asia (Singapore, Malaysia, Hong Kong in particular) customers who have successful adopted managed print services and what results have they specifically achieved?
A good example of customer success with MPS would be Geodis Wilson, a global freight management company that implemented Lexmark’s Distributed Fleet Management services in Malaysia.
   
As part of efforts to improve workflow efficiency and drive productivity, Geodis Wilson worked with Lexmark to deploy a comprehensive set of fleet management services and capabilities to proactively manage its output device portfolio, improve controls and reduce costs.
 
In just nine months after the implementation, Geodis Wilson reached its projected one-year target of achieving 20 percent in savings with its managed print infrastructure. Additional benefits experienced by Geodis Wilson as a result of the deployment include a significant decrease in output costs, increased visibility into its fleet of devices and the elimination of the administrative burden of device management.

What specific industry verticals do you believe are most suited to adopting the MPS approach and which verticals do you see as likely major growth areas?
MPS should be a consideration for companies of all sizes that are looking to drive down overall operating costs and optimise the overall performance of the business through structural change.

That said, vertical industries with heavy printing requirements such as financial services, transport, aviation and healthcare are most suited to adopting MPS services. A streamlined print infrastructure with proper management can generate up to 30 percent in savings from operational costs.

In Asia Pacific, we have seen extensive traction with companies that have operations spread across multiple markets. As these companies operate in fiercely competitive environments, each with specific requirements, they recognise the need to consolidate print resources as a strategic step towards a viable business model that is sustainable in the long run.

 

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