Printing is a becoming a critical business process in the digital era, says Giles Thorpe, Managing Director,CCE.
Printing has always struggled to create a reputation as one of the more exciting and glamorous sectors in the IT industry, which is (in my humble opinion) unfair. We are all surrounded by printers in our office. We all complain when they don’t work and more importantly we’re all conscious of the amount of paper we waste. In the last few years the printer industry has seen a lot of innovation. We’ve witnessed everything from the arrival of multi-functional devices (that can do everything except make a cup of coffee) to the development of a sector called managed print services (MPS). Beside introducing even more acronyms to the already bursting dictionary of IT abbreviations MPS is leading to a dramatic change in the way businesses view printing. Indeed the smart businesses now understand it is a critical business process.
The industry analyst house, Quocirca, recently surveyed enterprises to understand their approach to MPS and the financial services industry, often a leader in IT innovation, said that printing was a critical business process. The main reason for this is the increasing digitisation of everything. For example, many companies now enable employees to scan expenses and email them automatically to the accounts department from an multi-function device (MFD). In the Quocirca survey 72% of respondents saw huge opportunity in integrating paper-based processes with digital ones. Not only will this save on printing and ink costs, it will help to create a more integrated picture of the information flowing around an organisation.
However, any business re-considering its printer strategy needs to understand one key point – the impact this transition is having on MPS service providers and vendors. The traditional business model for the printer industry has been one of ‘rip and replace’, encouraging customers to adopt new hardware each time a refresh comes around. When technology advances as quickly as it does there are clearly some benefits to this approach, but it is not necessarily the right one.
As with every technology innovation, just because it is newer and faster does not mean it is the right approach. When evaluating your printer strategy the critical factor should be understanding what is right for your business. Switching to MFDs can be quite a traumatic process, because streamlining the number of printers in an organisation can have unintended side-effects. For example, on a practical level they are much bigger devices, so where do you put them? If you’re taking printers away from individuals how convenient will it be for those employees to go to the new MFD? Additionally, if you send files digitally to an MFD those files will be stored on its hardware – what is your approach for protecting MFD machines from hackers?
All of these questions can be answered, but the point is that as a customer you do need to work out what is best for your business.
Indeed at CCE, where we have been growing a successful MPS business for many years, we believe that the future trend will be ‘Walk-in and Take-Over’, i.e. that customers will expect service providers to replace some machines, but also maintain some systems so that existing investments are protected.
Of course you would expect us to say that, but we believe the feedback from our customers bears this viewpoint out. This is not just because customers are tired of the ‘rip and replace’ mentality of traditional MPS providers. It is also because contractually it heralds a change in the relationship between vendor and customer with greater control moving to the customer. ‘Walk-in and Take-Over’ is based on a services-led model, rather than selling hardware. At its very heart that means if vendors are to be successful they have to build long-term relationships with their customers. In our opinion (and that of many commentators) it is why traditional product manufacturers are building out their service offering to respond to customer need.
More importantly, from the customer perspective it means there is greater transparency in contracts, particularly around the small print relating to support and termination clauses. Service providers have to be clear about what customers will receive in return for the fees they pay for support, because it is what the business model is built on. Bluntly it is very difficult to hide costs and I’m sad to say this has been a problem in this industry in the past.
Thankfully, the knock-on effect of Cloud Computing and the services-led model means the printing industry is also modernising and long-term it will be hugely beneficial for customers. In particular it will mean discussions around printing will move from cost to strategy, understanding how printing becomes a vital business process and is viewed as one of the cooler sectors of the IT industry – you will never look at your printers in the same way again!
Key considerations for your future MPS strategy:
- Be careful of the contract terms
– If it talks about capital and service costs together, do not sign;
– Do not sign the contract if it includes an automatic renewal clause;
– Be wary of a volume-based contract. Be sure you understand what your volume limit is and how much it will cost if you go over.
- Pricing model
– Be careful to understand the cost-per-print model. For example, if it uses a per impression approach colour impressions cost more, because each colour impression is actually made up of four impressions.
- Seek to understand the annual increases in fees for support and cost-per-page
– Be sure you know what the cost of the termination clauses equate to.
- If you implement new MFD devices
– How convenient will it be for staff to use those devices?;
– How much of their time will be taken up going to and from devices?
– How will you secure the data stored on those devices?