Best Practices for Copier, MFP and PrinterFleet Management

Ken WeilersteinResearch Director

Printer Management Blind Spots

� Few know exactly what equipment they have

� Fewer still monitor supplies or post-acquisitionspending

� Few know what users are operating whatequipment and how they are using it

� Most pay only intermittent attention to fleets

� Organizational responsibility is splintered� Fairly low level of concern — not perceived as a

serious problem or an opportunity

Money is tight . . .

Scale back new projects

Put major investments onhold

Localized deployments

When the economy returns . . .

Time to upgrade

Roll projects forward

Enterprisewide deployments

Economic Contraction — What to Do?

Through 2005, enterprises that activelymanage their printer fleets can savebetween 10 percent to 30 percent of theiroverall printing costs (0.8 probability).

Strategic Planning Assumption

Through 2008, enterprises will spendbetween 1 percent and 3 percent of theirrevenue on document output(0.8 probability).

Strategic Planning Assumption

Savings Opportunity($M)

0.5-4.5

2-18

5-45

10-90

20-180

50-450

Company Size($M)

500

2,000

5,000

10,000

20,000

50,000

Printing Spending($M)

5-15

20-60

50-150

100-300

200-600

500-1,500

How Big Is the Opportunity?

Three Main strategies

� Right-size the fleet

� Control the purchasing

� Monitor and manage the fleet better

Strategy No 1 — Right-Sizing:The Promise and the Problem

The PromiseA smaller but up-to-date and well-integratedfleet will cost less to operate and do a betterjob of meeting user needs.

By 2005, there will be 10 percent fewerdocument output devices (copier, printer,MFPs and fax machines) installed in U.S.corporations (0.8 probability).

Strategic Planning Assumption

Update Aging Printer Fleets

� Many printers are more than five years old

� Few enterprises have a retention schedulefor printers

� Supply costs are declining

� Speed and durability are increasing

� Replenishment intervals are increasing

� There is no MIB or power management on theoldest printers

Digital Copier

Network Printer

Multifunction Systems■ Copy■ Print■ Fax■ Scan

Are MFPs the Answer?

Copiers

Printers

FaxMachines

Scanners

Functions

ScannerPrinter

Fax ModemWith Phone

LineNetwork

Connection

(Via print protocols)

(Via e-mail)

Scanner + Printer = Copier

IT Discovers the Benefits of MFP

� Fewer mouths to feed (supplies, service,maintenance)

� Fewer assets to acquire and track

� Space and power savings

� Shared finishing and paper supplies

� Moves documents faster and at lower cost

Desktop Color Printers� Inexpensive to buy

� Expensive to run

� Color is often used to printeven draft documents

� Coming in under the radarof IT departments

Put Desktop Printers in Their Place

Cost Range(Cents per Page)

5-12

9-20

2-6.5

0.8-1.5

1-2

OutputCategory

AreaCoverage

Workgroup Color

Desktop Color Inkjet

DesktopMonochrome

Workgroup/Departmental Office

ProductionMonochrome

20%

20%

5%

5%

5%

Supplies: The Main Cost Factor

Shared PrintersNo impact on ratios

Security via password

Suitable for small percentage ofprivate documents

Personal Printers1-1 printer-to-user ratios

Security via proximity

Suitable for very high levelsof private documents

Private Printing via Password

Rising Speeds, Falling Costs

Right-Sizing Pitfalls

� Wrong balance of copiers and printers forenterprise’s needs

� Deployments based solely on user-device ratios

� Personal printers return from the ashes

Right-Sizing:The Promise and the Problem

The PromiseA smaller but up-to-date and well-integratedfleet will cost less to operate and do a betterjob of meeting user needs.

The ProblemEnterprises must understand their needs toachieve the right mix of equipment and tomaximize the savings and productivity benefits.

Right-Sizing:The Promise and the Problem

The PromiseA smaller but up-to-date and well-integratedfleet will cost less to operate and do a betterjob of meeting user needs.The ProblemFleet managers need good data to make thecase to LOB managers for removing personalprinters and replacing personal color printerswith workgroup models.

By 2005, 60 percent of all enterprises willhave begun an enterprisewide effort tooptimize document output fleet spendingthrough changes to their purchasing andasset management policies(0.8 probability).

Strategic Planning Assumption

Output Fleet Outsourcing:The Promise and the Problem

The PromiseLower costs and offloadthe management.

SuppliesCosts

To whom it may concern:

The purpose of thisThe purpose of thisletter is to thank youletter is to thank you

for your business overfor your business overthe past year.the past year.

VP MarketingVP Marketing

TraditionalProduct Purchase

ServicePurchase

MaintenanceCosts

Cost perPage

CapitalCosts

To Save, Buy Pages, Not Devices

Lease Cost/Page*Machines 0.03Service 0.01Supplies 0.01Total 0.05

MFP Lease vs. Outsource

Outsource Cost/Page*

0.03/page**

At 0.03 per page,At 0.03 per page,outsourcing would saveoutsourcing would save

$1.08 million over 36 months$1.08 million over 36 months

*Average volume is 1.5 million per month50 Machines Total**Includes cost of machine, service and supplies

Spreadsheet Exercise:Financial Case Study

Output Fleet Outsourcing:The Promise and the Problem

The PromiseLower costs and offload themanagement.

The ProblemEnterprises need better data on pagevolumes to ensure cost savings and costdata to justify the change.

Leverage MFPTechnology

Leverage MFPLeverage MFPTechnologyTechnology

Get Ahead of theColor Tidal WaveGet Ahead of theGet Ahead of theColor Tidal WaveColor Tidal Wave

Eliminate Some PersonalPrinters

Eliminate Some PersonalEliminate Some PersonalPrintersPrinters

Use Assessmentsfor Guidance

Use AssessmentsUse Assessmentsfor Guidancefor Guidance

Use Selective Outsourcingto Buy Pages

Use Selective OutsourcingUse Selective Outsourcingto Buy Pagesto Buy Pages

Eliminate AgingEquipment

Eliminate AgingEliminate AgingEquipmentEquipment

Fleet Management Initiatives

Office Document Assessments:The Promise and the Problem

The Promise

ODAs will give us the information weneed to guide and justify our fleetmanagement efforts.

Enterprise ClassReduce page countsManage workflowPeople/process focus

Ad Hoc ClassReduce cost per pageManage fleetEquipment focus

A Tale of Two Assessments

Enterprise ClassCareful data collectionInterviews, cross-checksLarge sample

Ad Hoc ClassHasty data collectionEstimatesSmall sample

A Tale of Two Assessments

Enterprise ClassStrategic tool$50,000-$150,000CIO sponsoredPay more, save more

Ad Hoc ClassSales toolFree or contingentBuyer sponsoredPay less, save less

A Tale of Two Assessments

ODA Pitfalls

� Focusing too much on short-term cost

� Scope of ODA does not match the role or goalsof the sponsor and is never acted on

� Confusing quality of presentation with qualityof research

Office Document Assessments:The Promise and the Problem

The Promise

ODAs will give us the information weneed to guide and justify our fleet-management efforts.The Problem

Most ad hoc ODAs lack the scope andintegrity to allow the full range of savingsand improvements

We really need a movie, not a snapshot

Printer Management Blind Spots

� Few know exactly what equipment they have

� Fewer still monitor supplies or post-acquisitionspending

� Few know what users are operating whatequipment and how they are using it

� Most pay only intermittent attention to fleets

� Organizational responsibility is splintered� Fairly low level of concern — not perceived as a

serious problem or an opportunity

Meet the Output Czar

� Provides permanency and continuity

� Coordinates output actions across IT,facilities/administration, purchasing and LOB units

� Applies best practices uniformly acrossthe enterprise

� Monitors ongoing fleet efficiency as needs change

� Coordinates output efforts with BPR, CM and otherenterprise initiatives

� Really cares about output

What the Output Czar Is Not

� Manager of all of the people that support andservice the output fleet

� Partisan advocate of one department

� Temporary position

� Budget owner for all output spending

Closing Recommendations

� Right-size your output fleets today —deployments can begin with a pilot and scale up

� Purchase competitively and consider cost-per-page purchasing

� Choose your output document assessmentscarefully

� Make fleet management and usage tracking anongoing process

� Appoint an output czar and align your outputfleets to the changing needs of the enterpriseand strategic initiatives

Best Practices for Copier, MFP and PrinterFleet Management

Ken WeilersteinResearch Director