Printers The Last Frontier In Corporate CostCutting

August 12, 2008
| By Pete Daly |
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According to Hewlett-Packard, studies by the U.S. Environmental Protection Agency show that the average American office worker uses 10,000 sheets of paper a year.

HP also maintains that some Fortune 500 companies could use up to 800 tons less paper a year — saving themselves $7.7 million — by using both sides of the paper in copiers or printers, also known as duplex printing.

There might be a little marketing hype in those figures, but it is obvious to many office workers that there is indeed a lot of printing and copying going on. The printer-copier industry maintains that many companies, in fact, don't know how much copying and printing they are doing.

"If you ask a CFO what does it cost them when they hit file-print, they have no idea," said Bill Orr, vice president of sales at Michigan Office Solutions.

Printers "pop up like mushrooms" in many organizations, he said. In many cases, the cost of an office printer is under $500, "so it's just a departmental expense to go out and buy one."

"There’s no strategy," said Orr, which makes the investment in printers at some companies "kind of a runaway cost — one of the largest un-audited expenses in corporate America."

Because the individual expenditures are low, "they fly under the radar," he added. "It's kind of out of control."

Tom Senecal, owner of Laser's Resource in Kentwood, said Gartner and IDC, two major research firms that study the information technology industry and its markets, have compiled evidence supporting the industry's claim that printers are "the last bastion of un-audited corporate costs."

"Most corporations in America look under every rock for cost savings," noted Senecal. "When we go talk to most corporations, we ask how many printers do you have? Nine out of 10 can't tell us the answer to that question — which means, if you can't measure it, you can't manage it."

The amount of pages being copied is actually decreasing as more and more documents are electronic, said Senecal, but the amount of pages printed is increasing, precisely because of the burgeoning number of electronic documents being created and distributed.

"We're seeing growth (in the volume of pages printed) in the 10 to 15 percent range inside of most businesses, even though the owners of those companies think they are printing less and less," said Senecal.

That’s thanks to the Internet and e-mail.

Companies like Michigan Office Solutions and Laser's Resource now offer to help a business or organization manage its "fleet" of devices that print, copy, fax and scan.

Laser's Resource has one Grand Rapids area client — a hospital — that has a fleet of 450 devices: 250 printers and the rest multi-function devices that print and copy and sometimes even print/copy/fax/scan.

A statistic the office device suppliers use now is the ratio of employee users-per-device. A two-to-one ratio is not unusual, said Senecal — but it's usually a good indication of where that organization could save money. Ford Motor Co. has a corporate standard of 10 users per device.

Senecal said one of its customers, a large Grand Rapids CPA firm, was found to have a ratio of two-to-one. Laser's Resource mapped the locations of all those devices and the output volumes of each, and helped the CPAs cut the number of devices in half.

In some companies, it traditionally has been a turf issue between departments that ultimately has led to an overabundance of devices. Senecal said often the IT department buys the printers for the computer users and the facilities department buys the copiers, "and the two organizations are not talking to each other." They should be, since now it’s more cost effective to buy one device that can both print and copy — and fax and scan.

A similar situation is seen in telecommunications. Telephones generally used to be a responsibility of the facility manager before phones became an extension of the computer network. Now they usually are a responsibility of IT.

"You have to consolidate the purchase of all devices that put images on paper," said Senecal.

Orr emphasized that the new trends in devices are primarily driven by the proliferation of e-mail and the Internet.

"Copying and faxing are on the decline. Printing and scanning are on the increase," said Orr.

Walkup copiers and fax machines (i.e. stand-alone machines) are being replaced with network MFDs — multifunction devices — that print, copy, fax and scan, he said.

While e-mail has knocked out a lot of the fax traffic, many companies still want facsimile capability because some of the organizations they deal with still use it.

Scanning is adding to the obsolescence of faxing because a scanned document can be easily e-mailed and stored on a hard drive after it is received.

Color printing has proliferated. There was once a cost problem with many e-mails going through color printers because the cost per page of output on a color printer was significantly higher than black-and-white — even if the document coming out was only black-and-white.

"Full color devices nowadays are only fractionally more expensive than a simple black-and-white device," said Orr.

MFDs can range in price from $2,000 to $20,000, said Orr, but he noted that 80 percent of those devices are leased, or rented on a cost-per-page basis.

The larger dealers focus now on full-service management contracts with their customers, using software from the major manufacturers that provides the customer — and its device supplier — with detailed data on all of the organizations' devices, indicating which are in need of service.

Two other major issues now in printer/copier technology are the environmental impact and information security. Toner cartridges now are routinely recycled and duplex printing is of greater interest. Privacy laws regarding personal data is a concern, and credit card numbers and bank account numbers stored by businesses are now a prime target of hackers.

"The manufacturers are more concerned about things like hard drive erase and image overwrite — making sure confidential information doesn't reside on the device after the document has been produced," said Orr.

It was Orr who brought up the “legend” of the paperless office.

"For years they've been talking about the paperless office, and yet our paper usage seems to go up every year. I think the big question is, we keep talking about the paperless office but why do we continue to do more printing? It's really because of the proliferation of the Internet and e-mail," he said.

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