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Analysis

One more way to save during the downturn
Louella Fernandes By: Louella Fernandes, Principal Analyst, Quocirca
Published: 3rd April 2009
Copyright Quocirca © 2009
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The tough economic climate has led businesses to tighten their belts and, as a significant cost centre, IT is often the focus for cost reduction measures. Many organisations have frozen new capital expenditure and are looking to make much better use of their existing assets.

However, since IT is a critical part of today's business, driving innovation and productivity, any reduction in IT spending needs to be carefully considered. Strategic investments, combined with flexible financing and delivery options, can help businesses achieve rapid cost reductions in the downturn. As previous downturns have illustrated, such actions can help organisations emerge much stronger and competitive when the recovery comes.

One area where significant cost reductions can be made is in printing. For many organisations printing costs are uncontrolled due to the fragmented purchasing of devices and consumables across departments and locations.

There are some simple measures businesses can take to lower print costs. Switching to duplex printing on supported devices, for instance, can make an immediate impact on paper usage.

Even more saving can be realised by fully leveraging the functionality of a multifunction printer—in particular, document capture and workflow capabilities. When combined with 'follow me' printing—whereby documents are printed only once a user authenticates the job at the device using an authentication code, proximity card or smart card—wasteful printing can be eliminated, increasing efficiencies and reducing the costs associated with excessive paper consumption.

Meanwhile, these days many businesses are sweating their assets and delaying hardware upgrades. This is a viable approach for printers whose lifetime can go beyond the three- or five-year depreciation cycle, which is often more an accounting issue than a matter of reliability. However, replacing outdated inefficient devices with higher performance and energy efficient MFPs should not be ruled out completely, particularly for business critical applications. Indeed, by not upgrading outdated devices, the downtime and inefficiency will eventually cost businesses far more than the replacement of older equipment.

Though many businesses rely on printing, they do not have the tools, expertise or resources to fully understand the total cost of ownership of their printer fleet. This lack of visibility can be a huge drain on costs. One way to mitigate this is to use managed print services (MPS). MPS can offer cost reduction along with improved efficiencies in the short and long term.

MPS entails the assessment of current print costs, optimisation of the printer fleet through consolidation of devices and continuous management of the print environment. It can also provide organisations with access to skills current IT employees do not have, especially where staff cuts may be forcing workers to do more work with fewer resources. MPS can benefit large enterprises as well as small and medium businesses.

Most printer and copier vendors offer some form of MPS, either as a fully outsourced service or as a more modular set of services, which enables a business to retain some control of its print environment if it so wishes.

MPS can certainly be a wise investment in a recession, where the focus is often on short-term cost reductions. These services can provide organisations with visibility into their print costs very quickly through the use of discovery and remote monitoring tools which can provide insight into what is being printed, where and by whom. In the long term, optimising the print environment can also have a significant impact on costs, particularly through device consolidation.

Businesses may be operating a ratio of one device to five employees or even less—best practices suggest that device consolidation is considered whenever an organisation's user-to-device ratio falls below 10:1 to avoid excessive expenditures associated with equipment redundancy. This has implications for IT support, the purchasing and storage of consumables and the use of office space. Transforming the print environment by reducing the number of devices can also reduce energy consumption significantly, providing another cost saving.

With the increased focus on reducing capital expenditure, MPS also provides an alternative approach to the traditional model of purchasing printing. The current budget pressures mean many businesses have to rethink how IT purchases are financed and delivered—and some are moving from classic upfront capital expenditure to operating expense-based equipment leases. These pay-as-you-go models can make a lot of sense for the print environment.

MPS can offer predictable monthly payments based on cost-per-page contracts which cover hardware, supplies and pre-emptive service. This is certainly more attractive than the traditional ad-hoc and unplanned purchasing of supplies, and the downtime associated with device failure.

The print environment may not be the obvious choice to invest in during a downturn but those organisation who don't take steps to measure the cost of the printing are leaving themselves open to further escalating costs.

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