THE FINE PRINT(ING)

CIO Magazine - March-April 2010

CIO’s are finding that getting printing under control not only saves money, it opens the door to thinking about their printing requirements more strategically. By Brad Howarth

Office printing never use to be high on the agenda for Michelle Beveridge. That is until she found her company was spending up to $72 per printed page.

As CIO for the global student placement and language testing company IDP, Beveridge manages the IT requirements of an organisation with more than 100 staff in Australia and offices around the world.

Like many businesses, IDP had built up a collection of different printers that were used for general business printing and the creation of marketing posters and fliers. In 2008 the company relocated from Canberra to Melbourne, prompting Beveridge and her team to look into exactly how many printers her organisation had accumulated, and what they were costing it.

“In Canberra we had some very high-end, expensive printers that were on a hire-purchase agreement,” Beveridge says. “the costs were just enormous when you looked at the cost per page, in terms of the lease and consumables and servicing.”

“There was one machine that was costing us $72 per page.” Another problem had emerged through some staff purchasing their own office devices. “They buy them for a couple of hundred dollars from Dick Smith, but then they spend thousands of dollars each year on the cartridges for them,” Beveridge says. “All of that was happening because there wasn’t centralise management across all of the devices.”

In other instances IDP was outsourcing its printing to external suppliers.

By the time we worked out what we were doing, that was enormously expensive. So it made sense to upgrade the printers in each centre so they could do the printing themselves.”

MPS on the Rise

IDP is far from alone in being stung by the hidden costs of office printing, and this has led to a whole sub-genre of outsourcing known as managed print services (MPS). Gartner Dataquest estimated the MPS market as worth US$3.76 billion in 2007.

The solution for IDP was to engage a specialist MPS company, Upsteam, which now manages almost all elements of IDP’s printing needs, including consumables and servicing, at an agreed flat rate per page.

“All of the machines are networked and managed by Upstream, so they can look in on the machine and see when it needs maintenance or toner cartridges replaced,” Beveridge says. “We still manage the paper, but they do everything else, and their servicemen are in here replacing things before we’ve even known that they are about to run out of toner.”

According to Gartner’s research vice president for imaging and print services, Ken Weilerstein, MPS Generall delivers savings of between 10 and 30 per cent of total printing costs. The savings can come through activities including consolidation of printer fleets, bulk purchasing of consumables, fixed-price servicing contracts, and changes in print policies reduce wastage.

Weilerstein says awareness of savings from MPS has risen sharply in the past 12 months in the wake of the latest recession. “Organisations want it, but they don’t know what they need to do to get it, and they don’t necessarily have the people, expertise and the tools to make it happen,” He says. “So when someone comes along and offers managed print services, that is an opportunity for them to make it happen.”

For IDP, Beveridge says the changeover has not been without some hiccups. Most notable was that the MPS contract with Upstream has made the organisations’s printing costs highly visible to its management.

“Before it was dispersed across various departments and consumables, so that expectation needs to be managed,” Beveridge says. “A lot of organisations have never really gone through and added up what they are spending on printers.

“To me printing is a commodity, and it should get to the stage where you print just like any other technology, and you don’t need IT to look after it.”

A similar story is told by CSC’s chief information officer Benjamin Patey. An office consolidation in 2003 was a catalyst for the organisation to investigate its printing costs, and uncovered a ratio of one printer for every six or seven people in the business.

“We had business wins and acquisitions, where we had obtained new offices” Patey says. “These offices came with their own equipment and we found there was excessive printing and reproduction technologies.”

The investigation also revealed that a third of the fleet was more than three years old, with some devices up to 10 years old, with its printers and copiers generating an inordinate amount of calls to the help desk.

Awareness of savings from MPS has risen sharply in the wake of the latest recession
“Some people were bringing in their own printers because they were unhappy that they were working with antiquated equipment that was inadequate or unavailable.” Party says.

Patey says the decision was taken to rationalise based on the genuine requirements of CSC’s users. That meant culling a large number of printers. In 2003, CSC had approximately620 printers in its fleet. Today it has approximately 180, despite the organisation having retained about the same number of employees.

Patey calculates that the change has led to a 58 per cent energy reduction, with an equivalent reduction in carbon output, and a 50 per cent reduction in running costs. The ration of printers to people is now 1 to 25. There are also additional benefits in terms of reduced helpdesk calls.

Patey says it is wise to not underestimate the cultural upheavals that con come with such a task, particularly when it comes to taking away an executive’s personal printer. “We had to be quite firm in terms of what we were trying to achieve,” he says.

It turned out that it was usually the senior people in the organisation who had individual printers. I needed them to understand the benefits to the organisation of reducing these devices.”

In some instances CSC has allowed staff to retain personal printers, but in each case the decisions is based on a formally requested business justification, such as a requirement for secure printing around a specific account.

Taking a Swipe at Print Costs

While the paperless office is as far from reality as ever, Weilerstein says many organisations are getting increasingly creative in reducing their print usage, such as through poll printing (also known as follow-me printing or card-swipe printing). Rather than having a staff member’s print jobs pushed out to a dedicated printer, they are required to walk up to the device and swipe their card before the job is processed.

“What they are rally doing is authenticating themselves,” Weilerstein says. It’s a nice opportunity to protect documents from people walking off with the wrong ones, and preventing clutter at the printer where people go digging through a pile of paper to find their work. And it’s a way to do away with jobs that get printed two or three times because people are impatient and print multiple jobs.”

It is a solution that Patey says CSC is implementing at its Melbourne office. “You are bound to find waste in printer trays if you walk around the office at the end of a typical day,” Patey says. “Follow-me secure printing not only reduces the amount of paper and toner that a company consumes, but also adds security.”
Patey estimates that the new process could eliminate up to half of the printing that takes place within the organisation today. Once deployed in Melbourne, he intends to implement the new process in other CSC offices.

For an increasing number of organisations, getting the management of printing under control opens the door to thinking about their printing requirements more strategically, but the path is not necessarily easy.

“It is relatively straightforward to show the opportunity and act on the opportunity to save money on the printing part.” Weilerstein says. “But as the value that you are delivering becomes more complex, it involves more people, touches more closely on what the organisation does, and it’s more complicated to sell it and more complicated to carry it out as well.”

This has been the case for another Upstream MPS customer, PFD Food Services. The diversified food services business operates a large fleet of trucks out of 65 locations around Australia. Having gotten printing costs under control in part by outfitting its fleet with multifunction devices, the next stage for PFD was to look at how it could use these devices more strategically.

PFD’s group IT manager Richard Cohen says one of the first problems to solve was keeping track of the paperwork relating to each delivery, which relied on drivers bringing signed delivery receipts back to the base, Barcodes were added to the invoice documents, which are scanned on the multifunction devices and reconciled against PFD’s systems.

“This solution led to every one of our branches getting a multifunction device, and they get a standalone printer as a failsafe,” Cohen says. “A branch will print their invoices, our drivers deliver their goods, leaving an invoice with the customer and bringing a sign-off version back into the office.”

Cohen says this has made life significantly easier for his staff, as they can quickly identify any discrepancies. “If you wanted to locate a particular invoice, you used to have to sift through archive boxes,” he says.

Cohen says he is also keen to make greater use of the scanning functionality of the devices. “Any time we print a document, we look at the technology and ask how else can we disseminate that,” Cohen says.

Change is coming in the form of younger workers who have no ingrained history of printing out documents

Savings Keep Trucking Along

For the diversified technology and stationery company 3M, a four-year-old MPS arrangement with Hewlett-Packard is also delivering benefits in business processes.

Computer operations manager Ross Murphy says 3M has eliminated use of three and four-part documents in its warehouse, thanks to the implementation of Adobe’s Centre Pro forms software by HP and its partner Indigo Pacific.

“We don’t have to buy any pre-printed stationery, as the forms solution creates the document for us, and we are able to add a barcode on to that document,” he says. “So we are able to consolidate three or four business processes into the one document.”

Murphy says this process also incorporates the occasional requirement for the attachment of hazardous goods documentation. There has also been an improvement in the accuracy of information being recorded, as well as a saving through eliminating the need for pre-printed stationery.

“Now that is all automated, the processing in the shipping office has dramatically reduced,” Murphy says. “The trucks are able to get out quicker, because the trucks wait on this documentation being prepared.”

Another project sees 3M and HP working with the content management software company Perceptive Software to install a document management and imaging workflow system. The first project involves processing the hundreds of faxed orders that 3M receives that would have been previously imported manually into the 3M order-entry system.

The new system captures faxes coming in to 3M and converts them into TIF images that are distributed depending on the fax number they were sent to. Murphy estimates that 3M is saving $170,000 annually from that project alone, which will be replicated in other projects within the company. This includes statement processing and invoicing, where 3M will also replace pre-printed documents. Because this provides 3M with a n opportunity to redesign and customise its forms, Murphy says it may be possible to reserve banner areas on the page for marketing communications messages.

Over time Murphy expects that 3M will move increasingly to electronic document processing, reducing its print requirements, and he is not alone. CSC’s Patey is also looking at additional ways to reduce its overall printing output, while Beveridge believes that IDP’s print requirements will diminish, as the universities it works with begin accepting paperless application documents.

Beveridge also points to the change coming from the increasing proportion of younger workers who have no ingrained history of printing out documents.

“There’s generational change, but it’s also about the equipment and the software,” Beveridge says. “Even the new iPads AND THE Kindles will start to make a difference as to whether people print something and carry it or view it online.

“But it’s the ability to be able to scribble that isn’t quite there yet – I don’t think the people who sell highlight pens should be worried just yet.

“To me printing is a commodity, and it should get to the stage where you print just like any other technology, and you don’t need IT to look after it.” Michelle Beveridge CIO, IDP

“Follow-me secure printing not only reduces the amount of paper and toner that a company consumes, but adds security.” Benjamin Patey CIO, CSC Australia

VicSuper’s Mailroom Goes Electronic

Getting great value from the handling of printed documents isn’t restricted just to their creation. The technologies of scanning and optical character recognition have been used by businesses since the 1990’s, but are increasingly being called upon in support of a newer concept called the digital mailroom. The idea is that wherever possible, incoming documents are scanned and their data extracted and fed into workflow processes for faster handling.

Melbourne-based superannuation fund VicSuper is amongst the latest to take the plunge, installing a large-scale scanner from GBC for its mailroom. Documents are opened by the device and scanned with minimal intervention form human operators, with data extracted by EMC’s Captiva content management software.

VicSuper’s manager of employer operations, Janine Westerbeek says VicSuper currently receives around 450 mail items each day – much higher on peak days – and around 70 per cent of these mail items contain cheques.

“We wanted to look at ways to decrease the amount of manual processing involved,” Westerbeek says. “So the idea was that rather than have people entering data, to see if that could be automated, and let software do that as far as possible.”

According to VicSuper’s executive manager of employer services, Dean Pearce, this ties into the organisation’s greater goal of improving service to customers while maintaining its low fee structure.’

“Our members and employers are looking for faster turn-around times, so when they are putting paper in they want to see that turned around a lot quicker,” Pearce says.

In the case of processing member contribution, Pearce says that seven ago a five-day turnaround was fairly reasonable. “But these days members want to see that on their account immediately,” Pearce says. “We’ve got to get faster, but we don’t want to add a squillion people behind the scenes.

“We’ll never get to a paperless office, but in terms of paper volumes, ours are down dramatically – we must have dropped nearly half a million sheets this sort of technology enhancement.”

The goal is to bring some processes down from a matter of days to as little as an hour. VicSuper is currently implementing the new technology for processing rollovers, having linked six previously disconnected systems.

Once this is in place, Pearce says VicSuper will be able to look at any document that is arriving by paper and apply the same technologies to achieve similar efficiencies.

“You’ll be able to ask the question of why is anything leaving the mailroom,” Pearce says. “You can basically re-engineer the whole operation so it is much more efficient and working better for the whole organisation.

“That gives you the opportunity in the future to diversify your head office, and opens a whole lot of doors that we are a few years away from, such as flexible working hours and people working from home. If we are only dealing with images, we can start to look at those things. So it has potential to revolutionise the way VicSuper operates, and that’s what I’m particularly excited about.”

ILG Taps Into Print Savings

For independent Liquor Group managed print services are enabling its members to design and print their own marketing material

For Australian liquor buying cooperative Independent Liquor Group, solving its printing requirements also requires the cooperation of its 12,000 customers.

ILG wholesales alcohol to independent liquor stores, hotels restaurants and large clubs in NSW and Queensland, and acts as a conduit for promotions from the liquor companies. Many of its customers work together in groups, to compete more effectively against the larger chains undress brands such as Little Bottler and Porters. According to its general manager of information technology, Roger Miller, ILG is always keen to pass along promotional opportunities from the many companies that it buys from. But he says getting promotional material including posters and fliers out to his customers has been challenging. “There are about 170 ‘Little Bottlers’ out there alone,” Miller says. “What we used to do was go to a (external) printer, with quite a bit of lead time, who would print out posters of various sizes and configurations and send them out to each of the stores.

“But when they got there they threw away two thirds of them because the format didn’t apply for that product in their store. And there was very little flexibility for changing things.” So ILG entered an integrated MPS arrangement with Fuji Xerox, initially for 80 of its Little Bottler stores, that saw it deploy Fuji Xerox Docuprint C3210dx colour laser printers. This immediately delivered a 20 percent cost reduction per printed page. ILG has also partnered with retail promotion specialist SignIQ so that each store can now use its device to design and print the specific marketing material that they want.

“None of them have an IT department, and are quite small stores, so it has been a bit of a learning curve for them,” Miller says. “What we send them is something akin to a spreadsheet, and the SignIQ software customises it to the particular requirement of the store, and then they print it out and all of the background and graphics are generated locally in their own PC.”

Store owners can also now create their own customised signs for their own promotions, or even for other products that they sell, such as cheese. “It gives them more of an opportunity to concentrate on marketing in their own particular store to their own particular clientele,” Millers says. “A lot of these guys are not graphic designers. Its another service that we can offer our customers to make it a little easier for the to compete with the chains.” Miller says another benefit is that ILG does not need to send complete artwork images electronically. “It minimises the transmission speeds that are required,” he says. “Perhaps in ten years transmission speeds won’t be a problem, but right now it still is a factor when you are sending graphics around.”