Are you turning over every stone to find hidden savings? Procter & Gamble is, and it found millions of dollars, all hidden under thousands of printers and copiers. The consumer products company realised the savings after it hired a contractor to manage its global array of printing devices and the paper and ink cartridges they consume.
Using a managed print services (MPS) provider, as P&G did, is a way to consolidate, centralise and outsource management of your company's printing and copying functions. In return for paying a monthly fee to an MPS provider, you can cut printing and copying costs by 25% or more by leveraging economies of scale and rethinking how many printers you actually need.
Companies have been keen on the idea of copier/printer consolidation since multifunction peripherals were introduced. But MPS vendors such as Xerox, HP and others have taken efficiency to the next level. Not only can they streamline printing and copying operations to help customers save money, but they also claim that they can maximise worker productivity by monitoring what employees are printing, and where and when they're doing it, and then suggesting workflow and process improvements.
With 135,000 employees in 80 countries, P&G prints and copies millions of documents annually. In early 2008, those documents came from 45,000 individual devices, copiers, printers, scanners and fax machines, that were shared by just four employees each, on average.
Offices were free to buy their own devices and supplies, a practice that "was absolutely not efficient," says Caroline Basyn, P&G's director of global business services. She proposed outsourcing printing at all 200 P&G sites to an MPS provider. "I want to manage this whole print fleet as if it was one printer," she says.
Basyn chose Xerox Office Services in September 2008, and P&G is on track to slim its printing and copying fleet from 45,000 devices to fewer than 10,000. Now there are an average of 15 employees using each device. With 65 sites outsourced so far, P&G has reduced printing costs by 27%, paper costs by 30% and energy costs by 40%, according to Xerox figures.
Though Basyn originally chose to go the MPS route to improve efficiencies and help digitise the company, the cost savings can't be ignored. Document printing and processing costs are typically equivalent to 3% to 5% of a company's revenue, according to Gartner. For P&G, that would put such costs as high as $3.8 billion in 2008.
The office environment and its myriad printing, copying, scanning and fax devices has become the new frontier for cost cutting. "Unlike a lot of areas of infrastructure, like data centres, desktops and call centers, we pretty much beat up those in terms of cost savings for years, the office environment with these types of devices has been pretty unmanaged," says Craig LeClair, an analyst at Forrester. That's especially true now that many companies are doing away with office managers, who used to monitor such spending, he says. But he is bullish on MPS as the solution to escalating printing costs.
A true MPS provider offers much more than just a maintenance and ink-and-toner-replacement contract. "This is a contract with a third party that almost plays an advisory role to you," says IDC analyst Angèle Boyd. They provide continuous monitoring of your environment and know where the output is going, how much is being used by different departments and what type of output is being produced.
In the current economy, though, cost savings are the No 1 reason why companies choose MPS, and most are saving 25% to 29% annually on their printing costs, Boyd says.
"There's a proliferation of print device models, consumables end up becoming obsolete in closets, and the number of devices per employee is way too luxurious in most current environments," LeClair adds. "When you can ratchet up the use of these devices from three employees using one device to 10-to-1, you can take a lot of costs out of the environment."