Managed-services vendors begin by assessing a company’s device usage and developing a plan — a floor plan, that is — for a right-sized fleet. By positioning devices at optimal locations they can almost always reduce the number and improve usage. The right kind of equipment can also make a difference. Metro Health, a hospital in Grand Rapids, cut its document costs in half by replacing a mishmash of expensive machines, including rarely used large-format copiers, with Hewlett-Packard multifunction devices. “Having standardized parts and consumables makes everything easier,” says CIO William Lewkowski.
It’s not just about machines, though, but also behavior. Some companies simply produce too many documents. Lexmark reports the average company prints 1,000 to 1,200 pages per person per month, a figure it says can at least be halved by moving from hard to soft copies (see “Well-Documented” at the end of this article). “Many CFOs are interested only in the hard costs,” says Gary Bourland, vice president of worldwide solutions and services for Lexmark. “But the more relevant impact comes by attacking the business processes and eliminating print wherever possible.” Experts says the cost of the equipment typically amounts to only 20 to 25 percent of the total cost of ownership.
Some companies actually want to increase their document output. At InterContinental Hotels Group headquarters in Atlanta, Xerox Global Services helped reinvigorate an on-site printing center. “The center now resembles a retail store, versus the look of a loading dock, which has proved to be inviting to customers,” says Eric L. Hardaway, vice president, global technology, at InterContinental.
By getting employees to do their printing and copying in-house rather than at an expensive print shop, volume has tripled and savings have exceeded $1 million per year. “When we were buying on-demand printing, it was at a premium, with no thought as to price,” says Hardaway. “Stressing the availability of an in-house service allows for quick turnaround and drives down the price.”
Hardaway is so pleased with the results that he has expanded the practice of strategically placing multifunctional devices at hotels that are corporately managed throughout North and South America.
Terms of Engagement
Nearly all managed-print-services contracts are priced on a per-page basis (black & white at 2 to 3 cents a page, color at 7 to 10 cents a page), a fee that includes the equipment lease. Companies can keep their own equipment and have the provider manage it for them, or buy new equipment outright, but leasing is the most popular option. “In the managed-services area, one thing the customer is really looking for is a predictable monthly cost versus a large upfront cost,” says John Hankins, worldwide offering manager for services at InfoPrint Solutions Co., a joint venture between Ricoh and IBM.
For security reasons, banks and some government institutions may want to buy and dispose of their own equipment, and other companies may see financial benefits in buying. Health First decided that the durability of certain equipment used in low-volume locations made outright purchasing more cost-effective.