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There are many reasons why organizations outsource their print operations. Procuring and managing the consumables to run a print fleet alone is a major challenge. However, the most common reason for outsourcing print operations is that it is a relatively fast and simple way to reduce costs and redirect precious information technology (IT) resources to critical programs.

If you are considering outsourcing your print operations, one of the most important things you can do is understand the costs involved. By taking the following steps, you can better understand your print-related costs and the investment needed to transition to a managed print environment.

Step 1: Estimate the current costs of your print operations
Identify and account for all printing-related costs on an annual basis. Start by collecting the costs for the past three years. This will help determine any trends that can be used to develop a five-year forecast. The costs should include the following:
  • Help desk calls
  • On-site support (break/fix/repair)
  • Depreciation for printer/copier/scan/fax devices (capitalized devices only)
  • Existing vendor leases
  • Paper supplies
  • Facility supplies
  • Facility space for “Copy Centers”
  • Labor costs for company employees in Copy Centers
  • Fax telephone lines
  • Network port fees
  • Power consumption
  • Printer, copier and multi-function printer (MFP) purchases
  • Supplies usage (this includes reviewing old invoices and purchases from your central purchasing department to get the total costs of supplies)
  • Contracted or ad hoc warranty and repair costs

Sources for this cost information include a complete assessment of your print environment and user feedback. A good assessment will look at user requirements (interview of users is essential), copies of invoices and receipts and your internal accounting and finance systems. It will also capture usage over time, as page volumes often change. Using a third-party, objective consultant to conduct the assessment is highly recommended.

Step 2: Estimate the cost to transition to a managed printing environment
The following elements represent the one-time costs your organization should account for when transitioning to a managed print environment. The estimate may include outsourcing your print fleet operations to a third-party vendor.

  • Facilities reconfiguration costs (pulling network cables or power)
  • Project team labor (do not include if an outside vendor is selected)
  • Purchased services (video, etc.)
  • Recharge labor (non-IT departments)
  • Materials and supplies
  • Travel expenses
  • Software licenses (Pharos, PrintFleet, etc.)
  • Lease terminations (perform cost/benefit analysis)
  • Disposal costs for all legacy devices
  • Equipment sales/donations (printers and toner supplies)

To estimate the costs of your future print operations, it is recommended that you consider both a prospective managed print vendor’s estimates and an independent third-party consultant’s estimates. The independent consultant should provide insights regarding vendor pricing models, service level agreements and the best vendors to consider for your environment.

Step 3: Conduct an “Economic Evaluation” for your future print environment
We recommend that you start with a seven-year model. The model should consist of two years for transition and five years of steady-state print operations.

Include any trend growth in expenses that you identify when reviewing the previous two years of operation. Incorporate any projected technology refresh costs. One-time costs should equal up to two years of transition costs. This will vary depending on whether it is an outsourced vendor implementation or an in-house program. Include internal and external costs that will be required to transition to the managed print environment.

The baseline costs should represent what the expense would be if your organization continues with the current mode of operation, without transitioning to a managed print environment. As a rule of thumb, plan for a one-time cost equal to five percent to 10% of the outsourced print service total contract value.

What to expect
Based on our "Decision Maker Tracking Study," and client experiences, you can expect to receive the following cost benefits by transitioning to a managed print environment.

  • A cost reduction of as much as 30% in hardware, supplies and service acquisition for the imaging fleet for a five-year program.
  • Reduction of 10% or more in the time spent by IT staff in supporting the imaging fleet. You can also free up resources to engage in more strategic projects.
  • Avoid implementation risk by employing an independent expert in the field of managed print services to guide the planning and deployment program.
  • Address resource and expertise constraints by outsourcing the print operations to a high expertise partner to bring objective capabilities and human capital to implement “best practice” based solutions.
  • Cost savings in the first two months of the optimized operations can fund the fees associated with the initial phase of the project, when an independent consultant is involved.

Calculating the overall cost of your current print operations takes a little elbow grease and time. Once you start the process, you will be amazed at how much money and IT staff time is spent managing your print operations. Once you have an idea of the costs, the benefits of transitioning to a managed print environment can reduce print spend and help minimize IT staff time.

Mario Díaz is the vice president of consulting at Photizo Group, a global consulting and market intelligence firm, and has more than 25 years of strategic marketing and business development experience, including executive management positions at Apple, Avnet, Toshiba, IO Data Centers and QMS. Learn more about managed print outsourcing.

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