Document management systems and color capabilities of new printer-based multifunction products (MFP) are improving productivity, reducing costs and curing headaches by automating business processes. MFPs, by definition, offer centralized office functions like printing, faxing and copying in one device, but the latest "smart" MFPs from manufacturers such as Hewlett-Packard and Lexmark are using embedded software to help streamline processes and cut costs. These manufacturers are partnering with software companies to come up with capabilities that transfer paper-based documents into electronic format for users to streamline workflow and reduce paperwork in their offices, says Don Dixon, a research analyst with Gartner in Stamford, Conn.

Software can integrate an MFP with a company's ERP system, or a document-management system, to streamline paper-based workflow and automate processes.

Dixon adds that pricing is declining for both monochrome and color printer-based MFPs. "There is a 5-10% decline in average selling price for monochrome MFPs, and a 15% decline for color MFPs," he says.

There are no problems with supply, but since manufacturers are changing their inventories around, the old products are going fast. "The less expensive MFPs have a one to three-week leadtime, while the more expensive have a three- to six-week delivery," he says.

Although many corporate office buyers are moving to MFPs to consolidate devices, replacing single-function printers, copiers, facsimiles and scanners for quick savings, the real value comes from the use of smart MFPs, says Mark Barnett, director of US solutions marketing at Lexmark International in Lexington, Ky.

To meet buyer demand for customizable devices Lexmark offers a broad line of products with the e-task interface, a customizable color touch-screen display on the MFP. According to Barnett, the display has the standard buttons for copying, scanning and faxing, as well as nine different icons on the screen customizable by job function.

He says there are significant savings involved in terms of costs in handling, processing and storing the hard copies.

"The real savings are derived from changing the workload process to reduce the overall number of pages printed," says Barnett. "The cost-per-page not printed is zero."

At the same time, Barnett notes that buyer demand for color capabilities in MFPs is "absolutely exploding."

"Color sells and it makes a big impact," he says. "It [document] stands out against competition." For example, new color laser printers from Lexmark and Hewlett-Packard can (through the administrator function) assign which individuals in the office may use color. This controlled use of color allows printers to differentiate monochrome jobs from color jobs to price out different costs per page.

"There is an inherent nervousness about bringing color into the office because it's typically a little more expensive to print color pages," says Tom Codd, director of marketing at HP in Palo Alto, Calif. "We have designed our future MFP products so users will be able to control the usage to print color." HP makes sure that that there is no price penalty for printing monochrome pages when purchasing a color MFP.

Most companies spend 5-15% of their revenue on documents and document management, says Cathy Lewis, senior vice president of marketing at IKON Office Solutions, a distributor of copiers, printers and MFPs based in Malvern, Pa. IKON can perform assessments for companies, study their IT volume and workflow and provide a baseline of their exact costs.

With a detailed evaluation of the costs done, the company can leverage an MFP as a key cost-saving device in the new strategy, often reducing costs by 15-30%, she says.

In almost every case, Lewis says, a company can reduce the number of devices used from 25 to as little as 12 after such an assessment. And through technology like IKON's DocSend, users can scan documents and route them electronically, reducing the costs on overnight delivery.

"You are going to rationalize the portfolio: the number of fax machines, printers and take out traditional copiers and put in the MFP," she says.