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Printing industry benefits from recession

The recent economic recession drove large-scale MPS adoption among larger corporates, causing much growth and competition in the market.

By Ilva Pieterse
Johannesburg, 10 Nov 2010

When most companies were forced to take a hard look at minimising running and operational costs, many turned to managed print services (MPS) as a way to 'do more with less'.

The three phases of MPS

By Holger Groenert, manager of product marketing at Itec Distribution
Phase 1 - Analyses the current output situation, understanding the volume of documents flowing through an organisation and the costs associated with printing, sharing and updating them.
Phase 2 - Implements controlled output, which can be done in two ways. Companies can either outsource the entire printer fleet to a service provider or implement print management software and keep the document output management under its own control.
Phase 3 - Monitors the process on an ongoing basis to evaluate expected cost savings and efficiency improvements against expectations.

“MPS is a methodology used to optimise a company's print environment,” explains Andrew Griffith, product manager for office products at Konica Minolta.

According to Pierre La Grange, divisional manager of enterprise print services at Bytes Document Solutions, MPS has changed quite significantly over the last few years. “MPS has evolved from what used to be termed 'facilities management' in the late 80s and early 90s. The big differentiator and advantages that we have now comes from the technology,” he says.

Much of the confusion about this concept today stems from the way it is perceived. “MPS is an operational philosophy, not a software package,” he says.

Holger Groenert, manager of product marketing at Itec Distribution, concurs: “MPS is still very much viewed as the application of a software that tracks what is being printed in an organisation and by whom,” he says. “But it is so much more than that.”

La Grange explains that the 'facilities management' methodology of years ago has greatly changed and matured over the last few years. “MPS is quite a specialised field and should be left to those whose area of expertise it is,” says Griffith.

Out of recession born

The recent dire economic climate has been a steadfast influence in the current popularity of MPS uptake among larger corporates, especially locally.

“The economic crisis forced a lot of companies to assess the cost associated with every item on the production line,” explains Griffith. “This change in thinking has caused MPS to evolve from a trend among big corporates to almost becoming a prerequisite.”

According to Groenert, the recent local uptake of MPS can be seen as an economic necessity born out of an unsure financial climate.

“The industry is growing - there are not only more demands, but clients are expecting more from their service suppliers,” he says. Groenert believes this has all led to clients being more educated about the market and in a position where they can make demands. Machine rental contracts, he explains, often span up to three years, which greatly limits the ability to reduce costs.

“Clients now have a good idea of where they should expect value, especially when it comes to their well-scrutinised running costs,” Groenert explains. “They are also very aware of the competition in this industry.”

Saving money

So how much does a company stand to gain from making use of an MPS?

MPS benefits

By Andrew Griffith, product manager for office products at Konica Minolta
* Improved business outcomes through improved and streamlined workflow.'
* Improved IT and business efficiencies by effectively managing the business environment (increase IT productivity and system availability - IT staff will not have to focus on attending to these types of problems and can be freed up to spend more time managing other crucial aspects of the business's environment).
* Reduced costs through optimising the document production infrastructure - balancing productivity and cost.

“Print costs can be responsible for up to 3% of a company's expenditure,” explains Groenert. “An MPS strategy not only optimises a business' print environment, but it works to continually reduce output, so cost-savings occur on a continual basis.”

La Grange explains that not only does an organisation see direct return, but indirect return as well. “A lot of savings can be made in the areas of procurement and finance within the organisation by consolidating invoices, for instance. Employee time is also a valuable resource that can be optimised - take for instance the time it takes a staff member to try and rectify a paper jam. With an MPS, this becomes a non-issue.”

The print environment is a business expense like any other, explains Griffith, but one that is traditionally neglected.

“Companies look at sales costs such as electricity and telephone calls, but somehow documentation is not considered,” he says. He believes it is because business still often regards its print environment as a 'necessary evil'. “As an operational expense, it should be viewed as more important than the phone and electricity bills because the potential cost-savings are so high.”

Simply taking into account the reduction on variable expenses such as toner and cartridges, paper, and hardware, should build enough of a case for the business to start taking its print environment into account.

Added-value benefits

According to La Grange, MPS provide benefits that stem beyond cost-savings, and there are other variables that need to be taken into account. “All businesses are not only focused on saving costs,” he says.

He believes a good relationship with the supplier is of utmost importance. “Contracts fail when there is a breakdown in relationship. An agreement needs to be based on more than just a handshake,” he says. “It is imperative to have proper metrics and a solid contract in place.”

The industry is growing - there are not only more demands, but clients are expecting more from their service suppliers

Holger Groenert, manager of product marketing at Itec Distribution

According to Griffith, security should play an integral part in deciding on a service supplier. “With printing technology today, data is transferred, stored and distributed in digital format. Security measures should include encryption, firewalls, password protection and even biometric authentication.”

Groenert believes another main focus area should be green computing. “MPS helps to get the industry greener. If an organisation is printing less, there is less carbon being emitted and less trees being cut down.”

SMEs must come to the party

A current challenge in the industry is the lack of interest from small to medium enterprises (SMEs). Griffith believes that although MPS are largely utilised by the bigger corporates, they are scalable enough for SMEs. “An MPS strategy could be relevant even if the company has only one device,” he says. “The analysis of an organisation's business document workflow and associated costs are universal and efficiencies can be improved and costs can be potentially reduced no matter what the size of the organisation.”

He believes there is a lack of awareness among SMEs to the benefits an MPS strategy can hold for them.

Groenert agrees that although SMEs are showing some interest, there are not enough that are considering this service. Most MPS models cater only for companies of a certain volume of employees. “There is great potential to apply different licensing systems for smaller companies, especially those based around licences per device. These models can make a big difference to the smaller guys.”