Printing outsourcing: how to save on printing with active paper workflow

Any company, even the most generous and richest, does not mind saving money by optimizing all sorts of costs. It is no secret that the larger the company, the higher its costs, for seemingly minor budget items. This is especially true for printing costs, which at current prices for consumables for printers can be truly "gold".
In order not to portray Captain Evidence, we present the data of the well-known company HP.
According to Hewelett-Packard research, the average company spends an average of 6% of its revenue printing. At first glance, it seems that this is a tiny amount. And if a company earns 10 million rubles a year, then 600 thousand rubles are spent on printing. The figure is rather big. But what if you imagine an organization that makes $ 10 billion a year? In this case, the average cost of printing may well be $ 600 million. Even if you reduce HP data by 10 times, it turns out 60 million US dollars. This amount is more than significant for any organization, even the most affluent.
One of the most reliable means of optimizing the cost of printing and paper work in general is outsourcing of printing (this service is also called in-place maintenance).




We must say right away that this optimization method will not work for everyone, but only for medium, large and very large companies, whose activities require the need for paper work in large quantities.
Thus, this post will help you establish processes and save right now or become a useful article for future work.
Recently, in Russia, the practice of outsourcing is picking up rapidly. The transfer of the organization’s printing processes to a third-party company is no exception.
Printing costs very often do not even fall into the structure of IT budgetssince the cost of buying supplies for printing equipment in large companies is sometimes literally “spread out” between other units and refers to the operating expenses of these units. For instance:

• the paper is purchased by the office manager (or an employee of the AXO department),
• printing technology is purchased by the IT department,
• consumables (cartridges) - acquires the procurement department.

Moreover, in each city / branch it can be its departments in one large company, and hundreds of people duplicate each other's work.
Until a certain point, the company simply does not realize how much money it actually takes to service printers and MFPs.

The topic of print outsourcing has already been raised briefly on Habré:

Maslow's pyramid for paper workflow company (source)

What is office printing outsourcing?

Outsourcing of office printing (aka “copy service”, aka “MPS - Managed Print Service”) is a comprehensive service of printing equipment, in which the client pays only for a separately printed copy / page. A copy should be understood as one A4 page, which is the actual result of the machine: printed on a printer, received by fax, copied using a copier, etc. (if you printed on both sides of the sheet, these will already be two copies).
On all new models of printing equipment (copiers, printers, MFPs) a counter of copies is installed. As an exception, printers such as the HP LJ 1000 and 1020 can be distinguished. When working with them, you will most likely have to rely on the stated number of copies at 5% coverage or install specialized software.
There are two ways to take meter readings: manual and automatic. With the manual method, the printer configuration page is simply printed. This is the surest way, but not very convenient, and the data obtained in this way is difficult to take into account automatically.
There is a second option: various software for monitoring printers (PrintMonitor, PaperCut, Printer Activity Monitor, SNMP Discovery, and many others). All these programs show the number of sheets printed, the amount of ink / toner in the cartridge, the approximate replacement time for the cartridge, and much more.
The problem is that this software is designed to work on the network, and some company executives refuse to install such software in order to ensure the confidentiality of internal data.

The introduction of printing outsourcing in the organization is a qualitatively new level of accounting for printing processes , the transition from the abstract plane to the concrete plane.
This is a completely different approach, allowing to a much greater extent to use the unique competencies of the print service provider.
Firstly, almost always, pokopnye contracts are concluded with a specific service level agreement (SLA), which clearly defines the response time of the supplier, the timing of work and troubleshooting. All applications go through the Service-Desk, with the help of which it will not be difficult to track the effectiveness of the provider in percentage terms.
Secondly, you are no longer interested in the quantitative characteristics of the cartridge - how many copies it printed. In between, it is worth noting that few people keep these statistics. In the previous articleWe have already mentioned that when using refilled and compatible consumables, the cartridge life is unstable and unpredictable, therefore, in most cases, it does not print the stated number of prints. When paying for a cartridge (refilled, compatible, remanufactured), you hope that it prints the stated number of pages without any problems. Often, hopes are not met.
Thirdly, with this format of service, you have the right, together with the provider, to fix the print quality that should be obtained at the output.
With quality service should not be:

• stripes on the print
• paper jams
• image distortion
• dots on paper
• toner particles per sheet
• extraneous printing noise

With this approach, both descriptive and quantitative characteristics appear. There is an opportunity not only to correctly configure printing processes within the organization, but also to comprehensively and comprehensively evaluate the work of your supplier.

Obvious and hidden printing costs

The visible part of the iceberg of printing costs is sometimes inferior in size to its main part, which is "under water".

• Cartridges
• Maintenance and repair of printing devices
• Purchase of spare parts
• Purchase of new equipment
• Paper

Hidden costs (invisible iceberg):

• Electric power
• Personal printing of employees and unauthorized color printing
• Wrong print
• Inefficient use of IT department resources
• Losses from equipment downtime (due to lack of consumables or repairs)
• Storage costs
• Labor costs of employees organizing press support within the organization and their workplaces.

What makes the savings

Firstly, cost reduction is primarily achieved through optimization of the printing fleet due to its consolidation - local devices are replaced by those printers and MFPs with high performance that have a lower cost per print. Factors such as a reduction in the downtime of a piece of equipment and a reduction in energy costs are directly related to consolidation. This also includes the unification of equipment.
Secondly, where possible, high volume cartridges are installed. Take the HP LJ Pro 400 M425 as an example. When using a 280A cartridge (2700 copies), the average price of a copy is 57 kopecks; after switching to a cartridge with an increased 280X volume (6900 copies), the price of a print is reduced to 40 kopecks. The difference is obvious.
Thirdly, if a client wants to purchase new equipment, then he receives it on a lease or lease. Thus, the initial costs of the purchase and tax deductions for fixed assets are not borne by the customer. The price for a new device will be included in the copy.
Fourthly, IT department resources are released and it switches to tasks more “intelligent” than replacing a cartridge in a printer.

Payment method

The cost of the copy includes the cost of the supply of consumables, maintenance of equipment, as well as the repair of apparatus together with parts. This may also include the supply of paper and the leasing / rental of new printing devices. The supplier may offer the option of paying for a copy of the contract. What options can be here:

• Traditional payment. Copy printing with a fixed payment copy. This type of payment is most common.
• Single price. Pokopynaya payment of black and white and color printing at a single rate without limiting the number of pages. For many companies, this method is more convenient.
• Fix price. Pokopynaya payment for black-and-white and color printing, which provides for printing the minimum required number of pages at a special rate and printing the rest of the pages at a regular rate. This is done for customers who clearly know their printing needs.

MDS or what vendors offer

The Russian segment of print outsourcing, although small in comparison with the total volume of the print market, has long attracted the attention of global vendors. Three analytical agencies at once (IDC, Quocirca and Gartner) agree that Xerox is the world leader in this segment, which has maintained its leading position for a long period. Together with Hewlett-Packard, they, according to IDC, occupy more than half of the Russian outsourcing market. Other MDS leaders include Ricoh, Lexmark, Canon, and Konica Minolta, which demonstrate understanding of the print market and keep up with the times. Analysts especially note the Kyocera Document Solutions company, which was included in the group of companies that are highly competitive due to intensive development and growth.
MDS (Managed Document Service)- document management system. Many believe that this concept is equivalent to MPS (Managed Print Service)"Print management system." When we talk about MPS, we mean by this abbreviation only print. Workflow is a more global concept. This is a synergy of printing equipment and software. For example, an employee has a document, he scans it and plans to send it to the archive. However, first he needs to index it for future use. The document can be sent for printing or immediately to electronic document management. Kyosera Mita Rus, for example, installs special software on the computer that helps prevent unnecessary printing - before the user prints on the printer, the page cost is displayed on the screen. Involuntarily, the user will once again think about the advisability of printing a document. As part of this service, vendors organize print rooms,
In addition to all the advantages of such a service, it has significant disadvantages. Firstly, this is not cheap, since vendors use original cartridges and spare parts as consumables. Therefore, it is difficult to talk about cost reduction. Secondly, the vendor only serves the printing equipment of his brand. If the customer decided to switch to a vendor, the latter completely updates the fleet of equipment for his brand, which causes the client to “printer” dependence, since in the future, switching to another supplier can lead to serious financial costs. In the light of recent events, dependence on a foreign vendor is especially dangerous. Thirdly, such services are not so relevant for medium-sized domestic companies. For this reason, serious international outsourcing operators are waiting for more favorable conditions.

Advantages and disadvantages of outsourcing

Pros:

• Release of employees from non-core tasks. We have already mentioned that employee costs are a serious expense item for a company.
• Cost reduction. The correct transition to outsourcing reduces from 10% to 50% of printing costs.
• Service transparency. The outsourcer must provide at least monthly reports of printed copies. As a maximum, through the program, the client can at any time verify the operation of the copy-only contract.
• The copy-only contract must be accompanied by a service level agreement (SLA), according to which the client is able to monitor the effectiveness of the provider.
• One supplier (outsourcer) - a single point of responsibility. During the unfair work of the supplier, all the stones will fly in his direction, because he alone is responsible for the park that he “tamed”.
• Smooth operation. For each device, a replacement stock of cartridges is assumed. In the event of a defective copy or a complete waste of toner, the client removes the cartridge from the printer and inserts a new one. The printer prints, work continues.
• Budget design. If the client has information about the amount of paper purchased and knows the price of the copy, then it is easy to calculate the cost of printing and put this amount into the budget. There should be no additional costs.
• Constant technical support. Each customer user must have an outsourcer phone number. For any problem related to printing technology, he can call and consult directly.

Minuses:

• The complexity of recording copies on inkjet devices. In this situation, it is better to replace inkjet printers with laser ones. As an option - separately buy original ink for them and take into account the declared resource with a 5% filling of the sheet. Or print the inkjet as a separate block in the Outsourcing project and do not calculate the cost of the copy.
• Paper sizes other than A4. Pokopyny service is calculated only on the A4 format, on other formats it does not extend. A3 format counts as 2 A4 prints
• Printers without counters. There are printers on which it is impossible to take readings of counters.
• Implementation Issues. The implementation of outsourcing is a global project that requires regional support (if the client has an extensive network of branches throughout the country). Its implementation is a continuous process. Practice shows that the approval of an outsourcing agreement is delayed for 2 months, and a full launch for 3-6 months. In addition, it occurs when regional leaders have their own interests in working with local suppliers. He dreams of centralization and transparency of the press in his worst dreams, so often they do not cooperate with the integrated service provider, but come into conflict with it.
• Trust issues. How psychologically ready are you to transfer the most technically simple part of the IT department’s work to the wrong hands, but at the same time the most time-consuming?

conclusions

Before deciding to switch to a free-of-charge service, you should carefully analyze the situation with printing in the company:

• how much do you pay for printing (per month, quarter, year), taking into account all the obvious costs;
• hidden costs must be considered;
• when choosing a supplier, you need to be guided not only by price, but also by its reputation and experience of successful projects.

In general, as in any other case, it is worth using the old proverb: "Measure seven times, cut once."

Glossary of Terms

Cartridge resource: the cartridge resource is understood not as the amount of toner sprinkled into it, but as the correspondence of the amount of toner to the number of printed documents at 5% (the figure may vary slightly depending on the brand) filling the A4 printed sheet on one side.
Scheduled Maintenance: Maintenance recommended by the manufacturer of the printer.
Legitimate Consumables: Original cartridges or cartridges made from proprietary materials that do not infringe the copyright of the manufacturer.
Disposal of consumables:cartridges are classified as hazardous waste; The liability of legal entities and state institutions for waste disposal is theoretically regulated by the Federal Law of June 24, 1998 N 89-ФЗ “On Production and Consumption Wastes”; but the harsh reality of recycling cartridges has already been described on Habré; cartridge recovery technology can significantly reduce the amount of waste to be disposed of.
Human resources: about 25% of calls to technical support of the company are related to printers; these are resources that could be spent on strategic tasks.
Average price of a copy: this is the price obtained by dividing the average market value of a cartridge by the number of copies of a cartridge declared by the manufacturer; formula for calculating the average copy pricewe described in a previous post .
Print volume: average number of printed documents in a company per month; the easiest way to determine the print volume of a company is to analyze the average volume of purchased office paper.