Professional Documents
Culture Documents
Print Solutions
Managed
Services
A public
andPrint
private
sector challenge
A Business Tool for the Information Age
Contents
Foreword
03
04
07
Procurement Methodology
11
Implementation
14
User communications
16
Physical layout
17
Optimisation
17
19
20
Conclusion
21
Acknowledgements
22
Intellects Managed Print Group brings suppliers of managed print solutions together to provide the end-user
community with a clear understanding of the capabilities of technology in this area.
Lloyd Adams
Programme Executive
T 020 7331 2189
E Lloyd.adams@intellectuk.org
02
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Foreword
Managed print is by no means a panacea; but, when implemented correctly it can lead to considerable and
tangible improvements, and can bring you one step closer to optimising your business processes, and improving
your overall business performance.
This whitepaper is intended for senior executives and procurement officers who are leading programmes to
deliver significant savings for their organisation. Although a more involved procurement process is required, this
is a rare opportunity to save between 75 and 200 per user per annum for your organisation without the
necessity to make job cuts or take large risks.
Managed Print Services focus on optimising the print environment and ensuring it remains optimised over the
term of the contract with predictable costs. If it is done right significant savings are possible. This whitepaper
discusses how to get it right and deliver two to four times the saving of the equivalent simple component based
procurement.
James Duckenfield
Chair of Intellects Managed Print Group
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
03
Introduction
Budgets
1 Commonly known as Pandoras Box this was mistranslated from the Greek in 16c.
2 In reference to Gartners Research Note 2001: Rightsizing Output Fleets: The Hidden Goldmine.
3 Margarine Effect term coined by NewField IT to describe the distribution of print related costs across many budget codes.
04
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Culture
Strategy
An organisations culture should be taken into
account when deciding on the style of
governance of a MPS; it should be an
important factor when selecting a supplier as
their ethos should be compatible with yours.
The culture of the organisation is important at a
support department level but should also
influence the style of end-user communication.
How much consultation should be conducted?
How are requests over and above the agreed
strategy and policy going to be managed?
Who is going to have the final decision? How
will inappropriate printing be tackled? These
are all questions whose answers will largely
depend on your organisations culture.
Sponsorship
Due to the change in budgets and
responsibilities that may be required very senior
sponsorship is essential to make the necessary
changes. The sponsors role is to sign off the
strategy and back user communication. Ideally
the sponsor will have overarching responsibility
for both IT and facilities and be committed to
the changes required. Success will deliver
significant cost savings, improvements in
corporate responsibility and workplace
efficiency.
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
05
Case study
OGCs guidelines for procurement in this area published in 2008 include a flowchart, the first question of
which is are you looking to replace your fleet on a like for like basis? You may recognise this type of activity.
A large central government procurement department went to market for toner and other stationery items
approximately two years ago for an estimated 40m spend. One consultant approached them asking whether
a software solution to reduce the amount of toner used in the first place would be of interest. They thought it
was a nice idea but all they wanted to do was procure like for like and werent interested in buying less toner.
I would have had to speak to each buying entity, of which there were hundreds, about that.
No
ok
Always lo e
is
m
ti
p
to o
06
Yes
ght
Not the ri h
c
a
ro
p
ap
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
07
Pricing Models
A number of pricing models are available and may vary in their interpretation between vendors:
Base + Click - with or without volume commitment
A base charge is levied that contains all the fixed component of the offering with an
additional charge based on the number of pages (clicks) printed. These will be differentiated
between mono and colour.
Probably the most common approach today
Vendors will include different components within the base or click.
All inclusive cost per Click - with volume commitment and adjustment. (Often referred to as CPI - Cost Per
Impression or Utility Pricing)
A charge is levied for each mono click and each colour click printed. There is often a volume
commitment as all the charges from the Vendor will have been rolled up into the click charges
offered. To ensure the Vendor recovers the investment a minimum volume has to be reached or a
means by which the click charges can be adjusted should the volume rise or fall.
Typically the Vendor will dictate the fleet based on volume throughput and the
requirement for any additional devices will be offered outside of the CPI charging
mechanism.
Flexibility is limited. The charge is based on an understood volume and specified number
of devices in the design. If you want to add more device this may not fit the financial
model and be refused without additional charge.
There is little incentive for the provider to drive output volumes down as clicks are
generating covering costs, revenue and increasing profit.
This pricing model is often supported with ARC (Additional Resource Charge) and RRC
(Reduced Resource Credit) tables. This is a complex method of minimum billing and can
create considerable management overhead. Essentially, if the volume rises the tables
are consulted and the CPI reduces accordingly. Should the volume fall then again the
tables are consulted and the CPI will rise accordingly.
When is a click not a click? Beware of odd numbered duplex jobs. Was that five page
duplex job counted and charged as five images or six?
All inclusive cost per Click with no commitment
Less common these days in corporate business due to the associated risk for the vendor.
However, often found in public sector.
The charges will often be higher than the other pricing models as the Vendor will hedge
the risk of no commitment within the price.
This service may be supported with second hand or reconditioned devices.
Again when is a click not a click?
Base + Pages or Consumables - Usage based pricing with yearly usage reconciliation
A charge is calculated based on the fleet and expected mono/colour volume. This charge is evenly
and predictably invoiced over twelve months with reconciliation at the end of the period to true
up the pages printed and/or consumables used.
If you have high toner coverage (eg, a marketing company) the consumables method
may not be as attractive.
Interestingly if you have low page coverage this method may substantially reduce your
costs.
NB Standard industry coverage is 5% mono & 20% colour. This is based on
the ISO/IEC 19752 standard that calculates page yield from a toner cartridge
based on the toner on the page.
08
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Volume Plan
Sometimes called Evergreen. The device is placed with a lifetime volume which, when reached, is
exchanged for a new device.
If the lifetime volume is never reached then there may be a charge to terminate the device.
Cost per Seat
This is rarely an actual contracted pricing and charging mechanism in the printing and imaging
world due to the variable usage of the service. Its far more common in full outsourcing
engagements.
However, it can be useful as both expressing the current costs in comparison to the future costs.
It is simply taking the Total Contract Value (TCV) and dividing it by the period and number of users
serviced.
Base (flat fee) plus Service Charge Cost plus and/or fixed management fee
Not as common as other charging models. Provider will agree a flat fee based on all the fixed
components of the engagement and charge according to usage.
Lease, purchase or rental
The hardware in a MPS service may be provided in a number of ways. The hardware can be either included as
part of the service or purchased separately by the customer. It is advisable to engage the financial director for
advice and company policy in this area as there are tax, VAT and profit accounting implications depending on
the route chosen.
The vendor may supply the hardware as part of the service having some leasing arrangement (internal or
external) to finance the equipment. The hardware remains the property of the Vendor at the end of the term.
There may be termination charges if devices are removed from the service early. Ownership resides
with the Vendor or the lessor depending on terms and conditions.
The customer may choose to purchase the equipment outright.
Ownership resides with the customer and therefore reduces flexibility within the service.
Additionally the cost of the hardware will have a direct effect on the ROCE accounting model
Return on Capital Employedto execute the business. In other words it will show up on the
bottom line and reduce profit. As the cost of the devices has been borne by the customer there are
no device termination charges other than associated services costs that have been layered onto the
device on deployment.
Some Vendors may offer a rental service for the equipment.
This is often provisioned with second user devices where the risk of the capital has already been
substantially mitigated by previous customers. There may or may not be termination charges for
removal of devices from the service.
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
09
Guaranteed savings
Guaranteed savings are offered by some
suppliers and essentially rely on risk and gain
share approach.
Contract considerations
The majority of MPS contracts are for between
three and five years. However, this is where the
simplicity ends. Is this for a coterminus three
to five years or non coterminus?
(A coterminus contract is where all
components of the engagement mature at the
same point. A non-coterminus agreement
extends beyond the original contract period;
the charge made will increase as the period
remaining lessens.)
A volume based contract may have a very
untidy termination as all the devices may have
started on the same plan but due to varying
usage will terminate at completely different
points.
As with any contract, early termination of
individual devices or the service as a whole
(other than due to failure to deliver) may have
cost recovery implications for the service
suppliers and the customer alike. Consider
these carefully.
10
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Procurement Methodology
Key steps
Determine current state
Before embarking on this procurement exercise
significant effort will be required to understand
the current state. This means assessment of the
users actual requirements rather than what has
developed over time in an organic fashion. The
organic growth of hardware and internal
services to deliver print may cross many budget
codes and will certainly involve more than one
support department including facilities and IT.
The key factors in understanding the current
state are:
Full and accurate inventory
Most organisations do not have an accurate
picture of how many print devices they have
and where they are. Understanding the
device types and their physical locations is
key to re-engineering the environment.
Understanding your organisational
requirements and drivers
MPS integration is a medium to long term
project so it is essential that you consider
your organisations key drivers and ensure
that your MPS incorporates these.
Accurate measurement of volumes
Understanding the current volume split by
mono and colour and potentially what and
who is producing it is a fundamental
element in calculating requirements and the
commercials for both current and future
states. Any inaccuracies at this stage will be
carried through in future calculations.
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
11
Procurement Methodology
TUPE
The Transfer of Undertakings (Protection of
Employment) Regulations 2006 (TUPE), may
need to be considered if there is a service
provision change. Professional advice
should be sought if there is a possibility it
may apply, as the legislation can be
complex.
Budget alignment
The cost base will allow you to gain the
maximum benefit from a MPS project
elsewhere because you will be tendering for
all of the elements of the project. One of these
is to create an accurate cost model and a
mechanism to enable charge back to the
respective departments.
Gaining the support of key stakeholders within
the organisation
Given the spread of the respective print
budgets, responsibilities and users across any
organisation, it is essential to ensure that key
stakeholders are engaged with the project.
Print projects can enjoy a great amount of
visibility within an organisation so it is
important to ensure that you have gathered
broad support in advance.
12
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Procurement Methodology
Determine Strategy
Go to market
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
13
Implementation
This is the phase that moves the organisation from the current printer set-up to the new model (future state).
This phase of transferring to a MPS is critical in many ways: it is the first exposure that the organisation (and end
users) will have of the new service; it is also a learning phase, where both customer and supplier have to adapt
and react to the situations as they change.
The key to a successful implementation phase is collaboration; without this the implementation phase will
almost certainly be extended, lead to frustrations and create additional work that can be easily avoided.
The diagram below shows the phases of a MPS project and the activities at each stage:
Project setup
Implementation
Business as Usual
(BAU)
User communications
IT
Physical layout
Change management
Optimisation
Award of
Contract
14
Testing
Handover
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Implementation
Setting up a Project Board should be considered. Many organisations follow a PRINCE2 methodology, which defines
responsibilities (rather than roles):
If PRINCE2 is not being used then an example project engagement model between your MPS supplier and organisation
is shown below:
MPS Supplier
Organisation
Senior sponsor
Senior sponsor
Account manager
Programme manager
Project manager
Technical specialist
IT representative
Implementation team
Facilities representative
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
15
Implementation
User communications
IT
User consultation
Even if significant user consultation is
undertaken there must come a point when a
decision is taken and consultation ends. It is
not possible to keep all users happy all the time.
In addition, negative views on a future state are
often shaped by previous experiences that are
not relevant, eg, users demand extra devices
because of the unreliability of the current fleet,
not understanding that better devices and
support services will greatly increase device
availability. By the time implementation starts
it is vital that user consultation has finished.
User information
Regardless of whether users are consulted
about MPS decisions, it is vital that all users are
clear about what will happen and when,
otherwise the uncertainty will breed negative
opinions and rumours will circulate that
misrepresent what is planned. Most
organisations have well-established
communications processes to their staff which
can be used.
Training
Most staff will ignore requests to attend
training courses for print devices. However
there are approaches to training that do work:
appointment of a print champion within a
work group. This person will be an expert
user and a point of contact for staff
needing help in using the new print
infrastructure. They can also be the person
to perform low-level maintenance of the
devices, ie cleaning the glass of MFDs,
replenishment of toner and paper,
removing paper jams.
16
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Implementation
Physical layout
The physical layout of the new print
infrastructure should have been defined at a
high level prior to the tender process. However
there is further work to be done once the
contract has been awarded:
if the Invitation To Tender (ITT) has been
based on a snapshot of the current state
then further due diligence will be required
to accurately discover the current state of
all sites within the organisation. This
information will be essential to create a
workable future-state solution design, but it
will also act as a baseline when cost savings
are measured (see Optimisation section).
even if all sites have previously been audited
then checks will be needed to ascertain
whether any significant organisational
changes have occurred which may affect
the design.
at this stage a more detailed device
placement plan will be required, taking into
consideration power and network
requirements, phone points (if fax cards are
used in MFDs) and health and safety
policies.
the customer will need to work with the
supplier to confirm that the specified
models are the most appropriate,
particularly if there has been a product
refresh between the ITT process and
implementation.
Change management
ITIL definition: The goal of the change
management process is to ensure that
standardised methods and procedures are used
for efficient and prompt handling of all
changes, in order to minimise the impact of
change-related incidents upon service quality,
and consequently improve the day-to-day
operations of the organisation.
The change management process will be
similar for a MPS project as for other IT-related
projects but there are some specific
considerations for implementing a Managed
Print Service:
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
17
Implementation
18
Consumables Management
Your MPS supplier will normally provide
consumables as part of the contract. This may
use a reactive or pro-active process, ie. either
you order a new consumable when the existing
one is running low or your MPS supplier may be
able to monitor consumables usage remotely
and ship replacements on a just in time basis.
However you will need to consider:
who orders consumables (if you have a
reactive process)?
whether your firewall will allow the MPS
supplier to remotely monitor usage (if you
have a pro-active process)?
where they are stored: centrally, per floor or
by each device?
who installs them?
how are they removed from site and
recycled?
Dont block the path!
You will expect your supplier to meet an agreed
schedule and provide the necessary resource at
each stage of the project. You must do the
same if you want the project to be successful.
This is especially important for activities that are
on the critical path: ensure that you are not
blocking this path by missing your own
deadlines. Mapping out a realistic project
timeline with budget and resources available in
place and allocated well in advance, will help to
achieve this.
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Investment in resources
The project must engage key areas of the
organisation in order to gain sufficient input to
make the project successful. This will include
the following:
gathering user requirements from
designated area champions
gathering current state data from area
experts
technical input: network topology,
applications, security requirements, etc.
project/programme management: this
resource needs to be identified and
allocated early in the process to assist the
Procurement function in establishing the
true value of the project versus the required
resources to transform.
commercial/legal resource: to assist
procurement in the contracting process
alignment of budgets: in order to
demonstrate the cost saving benefits of a
Managed Print Service, it is essential that
the organisation is able to actually recognise
the financial benefits. If budgets are not
aligned appropriately then funds will
continue to be wasted, even if printing
costs are identified and controlled. This
approach to re-aligning budgets needs to
be committed to as a concept prior to the
commencement of the project.
print functionality
driver compatibility
3rd party print management software
helpdesk solutions
SLA based contracts
technology roadmaps
ongoing innovation
obsolescence
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
19
20
Job role
Responsibilities
Project sponsor
Project management
Procurement
Technical/solution based
procurement.
Legal
IT Department
Facilities/Property
Knows floor/building layouts and all Provide usage figures, toner storage
network/power/phone points. Has locations for all standalone devices.
floor plans of all buildings marked
up with existing copier/MFD/printer
locations. Has usage figures for any
standalone copiers/MFDs which are
provided under the facilities
banner.
Finance
Communications Management
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Conclusion
OH
OH
O
+
O
Expertise
Change Management
OH
O
O
OH
O
Good customer
Good supplier
Savings
Getting a good supplier is an obvious goal for any procurement but equally important for this type of project is
being a good customer. This requires resource, planning and commitment. Up to 10% of the contract value
should be set aside by the customer to provide the resources required to ensure success. Resources from
Facilities, IT and project management will be essential. Planning will be required to ensure you stay off the
critical path and let your supplier achieve your aims.
The key catalyst to get from one side to the equation to the other is a combination of expertise and change
management. As a specialist area most organisations dont have the expertise in-house to analyse the current
state accurately, create solution designs, create the specifications for what can be complex requirements and
contracts. Unless you have this expertise dont try this alone; get in expert advice.
A successful project will deliver high profile improvements to your organisation many times more effective than a
simple like for like procurement.
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
21
Acknowledgements
Authors
Intellect would like to thank the authors from the following organisations who provided the essential input and
expertise throughout the writing of this document:
Canon (UK) Ltd
As experts in print and document imaging solutions, Canon works in partnership with
an organisation to reduce costs by providing print and document simplicity, delivered
securely with environmental commitment. Ultimately we allow you to focus on your
core business, whilst printing less, and on fewer devices.
www.canon.co.uk/MPS
Fujitsu UK and Ireland
Fujitsu UK and Ireland is a leading IT systems, services and products company
employing 14,000 people with an annual revenue of 2 billion. Its business is in
enabling its customers to realise their objectives by exploiting information technology
through its integrated product and service portfolio. This includes consulting,
applications, systems integration, managed services and product for customers in the
private and public sectors including retail, financial services, telecoms, government,
defence and consumer sectors.
www.uk.fujitsu.com
Hewlett-Packard
HP the worlds largest technology company, provides hardware, IT services and
solutions that simplify the technology experience. HPs range of award winning
products and services for imaging and printing help companies improve, manage,
and optimise to increase productivity, reduce costs, and improve business results.
www.hp.com
Konica Minolta
Enhance efficiency through technology, performance increases and cost reduction.
Simplify your print management; reduce and control your costs; ensure data security;
access essential management information; reduce energy use and minimise
environmental impact. You manage your business; well manage your print.
www.konicaminolta.co.uk
NewField IT
An independent consultancy that has successfully helped implement MPS covering
over 75,000 devices. We are not a MPS provider but provide a comprehensive service
including needs assessment; tender and change management and systems
integration. Our expertise de-risks the whole process.
www.newfieldit.com
OKI
OKI Printing Solutions is a global business-to-business brand dedicated to creating
professional printed communications products, applications and services, which
increase the efficiency of todays businesses.
With OKIs Managed Print Services, getting your printer fleet tailored to your real
needs you can improve the way you work, obtain the latest in technology, stop
worrying about maintenance and above all save money.
www.oki.co.uk
Xerox
Xerox transforms business processes through more effective document management.
To cut costs and improve operational speed, organisations outsource a range of
business processes to Xerox. These include financial, administrative, client acquisition
and account opening, and office and print centre optimisation.
www.xerox.com
22
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
Acknowledgements
Contributors
Intellect would also like to thank the representatives from the following organisations for their useful advice and
comments during the completion of this document:
Computacenter
Computacenter is Europes leading independent provider of IT infrastructure services.
We can advise customers on their IT strategy, implement the most appropriate
technology from a wide range of leading vendors and manage their technology
infrastructures on their behalf. At every stage we make our customers businesses
sharper by removing cost, complexity and barriers to change across their IT
infrastructures.
www. computacenter.com/managedprint
The Danwood Group
Danwood are experts in partnering. As Europes largest independent provider of print
and document solutions we partner with the best print equipment manufacturers in
the world. Effective partnerships with our customers enable us to deliver print
strategies that meet business needs and drive document security, efficiency, and
environmental savings.
www.danwood.co.uk
Northgate Information Solutions
Northgate Information Solutions provides software, outsourcing and information
technology (IT) services to the human resources, local government, education and
public safety markets. Northgates Managed Print solution is a key part of our
Conserve range of services and solutions which aim to help organisations reduce
costs, control waste, conserve energy and protect the environment.
www.northgate-is.com/managedprint
SME Computer Services Limited
SME Computer Services Limited provides outsourced IT services to SME and
mid-market customers. The company provides both On-Premises and hosted,
multi-tenanted, infrastructure platforms. Under its Liberator brand, the company
integrates and manages service elements provided by major IT service organisations.
Both customer specific and packaged solutions are available.
Managed Print Solutions are playing a role in getting organisations to re-think their
whole approach to their IT infrastructure. They help to make companies think out
of the box which is where we come in!
www.smecom.com
Procurement and Governance of Managed Print Solutions - A public and private sector challenge
23
Intellect Russell Square House 10-12 Russell Square London WC1B 5EE
T 020 7331 2000 F 020 7331 2040 E info@intellectuk.org W www.intellectuk.org
Intellect October 2010
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