Guide to managed print services pt1 - strategy

Printer audits, floor-by-floor walkthroughs and print management software are among the key elements of a successful MPS contract

A report published by research firm IDC in November 2010 predicted that companies the world over will spend more than £2.5bn a year on managed print services (MPS) by 2014, with 20 per cent of UK companies employing 500 or more staff already using MPS.

While those figures imply growing interest in outsourced printing services, it is important to remember the model does not fit every firm’s requirements: plenty of IT departments still either prefer to keep control of their own print environment, or just do not print enough pages to justify outsourcing management and maintenance to a third party.

But for those thinking of taking the plunge, research firms and consultants offer advice on how to assess the suitability of an MPS offering.

Prices may vary

James Duckenfield is co-founder of NewField IT, a Twickenham-based print consultancy and services firm acquired by MPS giant Xerox in May. He points out that while most MPS packages are chosen on cost, actual customer charges can vary significantly according to pricing model.

The utility model involves all-inclusive pricing, where all costs are rolled into one, but the downside, Duckenfield told audience members at a recent MPS conference, is that the customer loses some flexibility and transparency.

With a fixed monthly cost, the MPS provider estimates what the costs are likely to be over the course of the contract by assessing current usage, and then divides the figure into a flat quarterly charge. At the end of year, the actual print costs are totted up and the customer either gets a refund or an additional bill.

“This is easy for the first year, but you don’t know what the costs will be for the second or third year, and there can be big administration overheads,” he said.

The term of the MPS contract is important. Most companies opt for three-year or five-year MPS deals, which mirror typical printer refresh cycles, but 10-year MPS contracts are also common.

“You can write flexibility into the deal, where if you want to hand back equipment you do not have any penalties. This sounds fantastic, but it is bad news for the supplier that is going to build that risk into the contract, and you will usually end up paying for it whether you use it or not,” said Duckenfield.

Research firm Gartner points out that not rigidly sticking to a fixed three- or five-year refresh cycle for certain types of device, especially colour printers, means IT departments can take advantage of the steadily falling costs of those devices over time as technology becomes more print-efficient and the lower cost of consumables associated with them.

It also advises companies to use fewer A3 printers in favour of A4 devices to cut costs, as well as consider smart, programmable MFDs. And when it comes to MPS contracts and service-level agreements (SLAs), companies need to establish a strong corporate governance environment that ensures both the client and provider are clear on who is responsible for what and that MPS efficiency can be measured.

“The customer has to play a role in MPS. They cannot expect the provider to do everything,” added Duckenfield. “And it needs to be clearly understood who does what as part of the planning process.”

Easy fix

Because modern MPS contracts use print management software systems that allow for roaming printing, the terms of the SLAs covering repair times for individual printers or other devices become less important - the user can just walk to another device if something is broken.

“If you can determine that you need a 24-hour response time rather than a four-hour response time, that will reduce your cost,” said Duckenfield. He says a full and accurate inventory is essential before negotiating MPS contracts as it can determine which equipment if any can be reused and provide a better idea of current print volumes, which helps in predicting managed service costs more accurately.

MPS providers will also use simple network management protocol (SNMP) software such as HP’s JetAdmin to take an electronic audit of the devices in use on customer sites, but will back that up with a walk-through that physically logs every printer so nothing is missed. According to Duckenfield, this will enable the provider to build a forensic estimate of print costs, which is normally within five per cent of the actual total.

That walk-through, according to the Computing Technology Industry Association, demands a serious amount of legwork on behalf of the service provider, especially in large companies with thousands of devices and multiple sites, where a technician must scan the building floor by floor, room by room, taking note of printer serial numbers and features such as whether it has multiple drawers.

As such, the service provider is within its rights to seek a contractual commitment from the customer before doing it - and if no deal is struck after the procurement sums are added up, it is likely to charge labour costs at least for its trouble.