Smart Sourcing Summit: Print costs are out of control
Purchasing and IT need to pull buying from office managers
Tom Stundza -- Purchasing, 10/15/2009 11:23:58 AM
Cost of purchasing and maintenance, then productivity, of office imaging systems are the top two reasons companies are buying managed print services, suggests Ed Crowley, CEO of the Photizo Group imaging technology market research firm. Another reason is the procurement-cost waste generated by uncontrolled office products purchasing, he tells the Purchasing-sponsored Smart Sourcing Summit in Chicago.
Print devices typically are used at just 1%-2% of their capacity. Worse, many companies have uncontrolled supplies acquisition with buying done at the department level, which allows for multiple brands and devices in the corporate inventory. There also are "waste lands" of toner supplies in corporate closets.
The big problem, he says, is that studies show purchasing gets heavily involved in managed print services only 35% of time with information technology (IT) organizations allowing office managers to handle a very big spend. So, most firms have uncontrolled procurement of print supplies (paper and toner, especially) at the department level, Crowley says, yet prices of these supplies typically rise by almost 8% annually.
"The ideal environment would have users having as much printing and copying capacity as they need with supplies being delivered only when needed," Crowley says. But that often is more a hope than a reality. So, he says outsourcing the imaging fleet to a third-party managed print services provider ensures that users' needs are met and the company is "optimizing the imaging environment and optimizing document workflows."
Just looking at the equipment spend, Crowley says the lifecycle for printer or copier is three years yet uncoordinated procurement allows for out-of-date equipment to remain in service and operate badly. The problem is exacerbated since "less than 10% of total corporate print spend is for hardware," he says. Little wonder, Crowley tells the audience that only 3% of corporate revenue gets reinvested in hard-copy printing versus 5% for corporate research and development.
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