The majority of companies would struggle to put a price on what it costs them to print, copy, fax and scan documents. If they could, say analysts at IT market research company Gartner, they might be surprised, even horrified.
Unbeknown to many, printing has become a costly area of IT operations. "Printers, the supplies associated with them and the support required to keep them operating represent 5% of the typical IT budget," say those analysts.
Not only that, but expenditure on printers, combined with other output devices such as copiers, faxes and scanners, equates to a significant percentage of total annual revenues – between 1% and 3%, according to Gartner estimates.
Reducing those costs is not simply a matter of cutting back on the number of devices purchased. In fact, scanning and printing hardware has dramatically dropped in price over the past decade. Where manufacturers generate an ever-increasing proportion of their revenues is from peripherals such as ink cartridges and support services. Gartner analysts recently calculated that the hardware price represents just 5% of the total cost of ownership of a printer, with consumables such as paper and toner costing 10 times as much over the lifetime of the device.
Plummeting hardware costs, meanwhile, have meant that purchase decisions have been devolved to individual departments and business units, with little thought for the IT team that will be dragged in to provide support and resolve hardware problems with a wide variety of devices made by a wide range of manufacturers. Similarly, consumables have also been purchased on a piecemeal basis, meaning that companies miss out on the discounts they might achieve by purchasing them in bulk.
A small, but growing, minority of companies are getting wise to these issues and are tackling them by implementing better print management practices. They are also making substantial advances in terms of complying with a slew of regulations and laws that govern how business information is captured and stored. These efforts require them to take advantage of emerging technologies and services for printing, copying, faxing, scanning and distributing documents.
Fit for multi-purpose
One way of ensuring cost control and compliance is by deploying multifunction products (MFPs). These devices typically include a printer, a scanner and a photocopier, and sometimes fax machines. One reason for the cost efficiencies to be gained by using MFPs is that while printing and scanning are growing rapidly in many organisations, copying and faxing are decreasing. The result: printers and scanners are much in demand, while copiers and fax machines are grossly under-utilised. By deploying MFPs, organisations can consolidate devices and reduce the management burden of running them.
Another source of efficiency is closer integration between output hardware and electronic document workflows. When paper is converted into an electronic image, it becomes instantly easier and less costly to store, retrieve and share among users. This can be achieved by using dedicated scanners along with specialist capture software, or alternatively, by using the scan-to-email function on MFPs. By using these functions, organisations can rapidly integrate documents into speedy digital workflows.
This can also help with compliance issues, says Gartner analyst Malcolm Hancock. Because the typical multifunction machine has the capability to retain digital images and distribute them to the appropriate destinations on the network for archiving, he explains, staff can contribute to the records management process as simply as they could print off a batch of documents for archival purposes – but at a lower cost.
The principle of imaging hardware playing a more active role in the electronic records management process is also embodied in a technology already commonly available in office printers: the conversion of a printed document directly into a .pdf which can be distributed across the network.
This technology, says Stewart Swinton, Laserjet category manager at Hewlett-Packard UK, is just one of many that demonstrate the increasing ‘IQ' of office printers. "All of our printers have a certain level of intelligence," he says. "For example, some have an embedded print server that communicates with the network when it is about to run out of paper and keeps track of how many pages have been printed. [Printers] are becoming like a kind of PC, in the way they can run different applications."
This elevation of the print device into the realms of an application host is also evinced in the emergence of companies such as e-Copy, which as well as selling hardware, develops open platform software applications for use on devices from multiple vendors. Such applications can, for example, decide where each document is archived on the corporate network.
Another way in which printers can assist companies to meet their compliance targets is through the use of increasingly sophisticated security technologies. In industries such as healthcare and the law, the sensitive nature of the information handled by employees means that leaving a freshly printed document sitting on a device could constitute a breach of data protection laws.
For such companies, printers are available that will hold an encrypted copy of the document to be printed, and only run the print job once the relevant employee has identified themselves at the printing device. This authentication can be performed with a password or pin code, or even using the same security key that allows that employee physical access to the building.
This kind of ‘user-aware' technology can also be used to manage print quotas for individual employees, even when they are constantly on the move around company premises. "We call it follow-me printing," says HP's Swinton. "If you work in a company with many offices, or move around one office, your printed documents can follow you around."
Scanners, too, are playing their part in cost-cutting and compliance efforts. Take, for example, imaging specialist Kodak's PerfectPage technology, designed to streamline the process of scanning documents of varying size and quality.
"Previously, if you were scanning a bunch of financial documents, all of separate sizes and colours, you would have to reset the scanner for every new document," says Hauke Fast, document imaging product manager at Kodak. That has a real cost in employee productivity terms.
With PerfectPage, the digital image is set to the size of the actual document. Kodak's underlying iThresholding technology evaluates the ideal level of contrast for each document, and can realign documents that are scanned at a skewed angle – vital if the digital image is to be read by character recognition software. These improvements are intended to make batch scanning more reliable and less time consuming.
Experienced hands
In spite of these developments, the sheer cost and burden of work involved in complying with legislation such as the Data Protection Act has led many companies to consider outsourcing the whole process of document printing and scanning to more experienced hands.
In both scanning and printing, many suppliers offer managed services and business process outsourcing contracts. The cost savings associated with managed print services, for example, are impressive – both IDC and Gartner research has found that a managed service contract can save businesses between 20% and 30% of annual print spend. A typical managed printed services contract involves a hardware vendor assessing the printing resources within an organisation, and advising how it can be better streamlined to avoid unnecessary cost – such as removing printers that are surplus to requirements. The advantage to the vendor, of course, is that any hardware needed in the future will be purchased from them.
"There seems to be a return to centralised print management," says Jonathon Lodge of Xerox Global Services. "So we've evolved our value proposition. We'll take over a complete fleet of printers and assess the current utilisation. Basically, we rationalise [the client's] office."
A managed print services contract, says Gartner's Hancock, offers a return on investment that increases with the size of the client organisation: "The ability to lace all the management and maintenance costs into one purchasing agreement, as opposed to various separately arranged contracts, offers huge savings because of the volume."
For instance, if printer cartridges are ordered according to demand across the whole organisation, economies of scale will provide significant savings compared to departmental provisioning.
The cost saving associated with a managed printing services contract been repeatedly demonstrated, say IDC analysts, but there are also operational benefits: in a recent survey, 71% of managed print services customers reported that device availability increased.
Slightly different to managed printing services, but also on the increase, are outsourced document scanning and management contracts. Xerox Global Services (XGS) offers outsourced services to customers, priced according to the complexity and cost of managing paper documents. "We can deliver a managed service at the client site," explains XGS' Long, "and set up our own room in the customer's office. That way, we can offer our expertise of scanning and document management, right in the customer's premises."
The company also offers a remote, hosted document management service, whereby documents such as insurance forms from customers can be sent to a Xerox site, scanned and archived there, and then made available to the company over the Internet.
A benefit to partnering with a service provider, says Long, is that it enables both companies to work closely to meet the customers' compliance requirements. XGS will create an auditable system of document management which will ensure customers can easily locate any information they are obliged to present for compliance reasons – something that might prove difficult to manage in-house.
With printing and scanning vendors such as Xerox, HP and Canon offering managed and outsourced services, a question is this: How far they will go to becoming ‘document management' service providers? There would seem to be a conflict of interest between maintaining the core revenue source for these companies – printer and scanner hardware sales – while increasingly advising companies how to reduce the number of printers they need or taking their scanning operations off-site.
XGS's Jonathon Long sees no such conflict of interest. "[Over the last 20 years], there has been a transition away from high-volume centralised printing towards printing at low volumes locally. There is some evidence of a return to centralised printing, but printing itself is on the increase, and we're happy to provide for both models."
Printer vendor Oki recently rebranded itself as Oki Printing Solutions following ‘a shift in focus to include the development of additional software solutions and consultancy expertise'. This rebranding reflects the trend among hardware vendors to offer more a holistic service to their customers. However Chris Gill, the company's regional vice president for EMEA, is keen to assert that this redefinition of the company only goes so far.
Although OKI now offers consultancy on document management issues including information lifecycle management, says Gill, "our expertise still lies in making printers, and that is what we intend to focus on. Calling ourselves Oki Document Services would be severely premature."
What is severely overdue, by contrast, is the adoption of such technologies and services on offer by companies that face serious cost constraints and compliance hurdles. For many, however, the wake-up call may not come until printing and scanning has spiralled dangerously out of control.
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