Mps whitepaper cxo white-paper


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Best practices for starting a managed print program.

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Mps whitepaper cxo white-paper

  1. 1. Best Practices for Starting an MPS ProgramThe high cost of printing and imaging is no secret. Small-and-medium business through enterpriselevel, elementary schools through universities, and manufacturing through retail - the story is thesame, putting marks on paper costs significantly – in terms of money and time. Under pressure todo more with less, organizations are looking for new and innovative ways to cut costs and increaseefficiency. Gaining control of hardcopy devices with a managed print service will help reduce costsby an average of 30 percent, increase worker efficiency, and reduce the carbon footprint.Regardless of the size or industry, a managed print services (MPS) solution is the right path.Some firms have questions such as: how to start and how to avoid making costly mistakes? Should itbe do-it-yourself or possibly turn the hardcopy devices over to an MPS vendor?Photizo Group has been gathering information from organizations around the world since 2006through market research surveys, interviews, case studies and conferences. These organizationshave already designed, developed, and implemented successful MPS programs. As the premierprovider of analysis and information dedicated to MPS, Photizo would like individualestablishments to take these learnings and apply these to their own MPS program.In this white paper, Photizo provides a perspective on the benefits and trends in MPS and presentsthe reader with invaluable information and guidance.
  2. 2. Best Practices for Starting an MPS Program .What is the Motivation?Why do firms engage in managed print services engagements? Were there specific events orsituations that called attention to the fleet of devices and how they are managed? Have acquisitionsor expansion resulted in a more complex and widely dispersed organization? Has the IT departmentstruggled to solve printing problems? Or, has the hardware vendor made a presentation or proposal?Many executives embark on MPS projects to solve seemingly simple problems. It is only after anenterprise-wide assessment and analysis is done that additional opportunities for improvement arerevealed. While the objectives may expand, it is important not to lose sight of the source of theoriginal objective.The Advantages of MPSMost organizations do not really know the true cost of document production across their enterprise.They may have some well-constructed data on certain subsets of documents, such as high-volumetransactional documents produced in their data centers, or marketing collateral that is outsourced toagencies. Still, there is no single category or line item in the budget that captures the costs associatedwith personal or departmental communication devices such as personal printers, workgroup printers,scanners and fax machines. The acquisition costs, maintenance, consumables and support for thesedevices are scattered among cost centers and departments throughout the company. Thedepartmental budgets in turn do not typically segment the expenses associated with printing. Theyare hidden in catch-all expense items like “Supplies” or “Office Equipment.” In fact, corporate profitand loss statements do not contain a line item for imaging equipment and operating cost. Thus,these costs remain largely unmanaged and out of control.Research by Photizo has revealed that the average cost per employee is over $725 per year.1 This isjust the ‘out of pocket’ cost for acquiring equipment, buying supplies for the equipment, andmaintaining equipment. This does not capture the significant costs in paper, end-user productivityand the time spent by IT providing support for imaging devices.Many establishments have attempted to standardize on a device manufacturer or a list of approveddevices, often enforced by IT. A peek into cubicles or offices will often reveal a wide range of locallyattached devices that employees have purchased and expensed to meet their specific departmentalneeds. In truth, there is very little control over the fleet and it tends to keep growing. Obsolete andnon-working devices, along with their unused toner cartridges and cables, end up being stashed onback shelves and forgotten.An MPS project can bring the extent of the device fleet, equipment locations and the total cost ofownership into light. Many companies are stunned to find that the ratio of employees to devices canbe 3:1 or even lower. Photizo’s survey of 105 companies revealed an average ratio of 2.2 employeesper device.Furthermore, analyzing the fleet often reveals that many devices are not used efficiently. Devicesmeant for high volumes are found in locations where they get used mainly for walk-up copies. © Photizo Group 2010 PAGE 2 .
  3. 3. Best Practices for Starting an MPS Program .Personal printers on desktops are cranking out mass mail jobs at a very high cost per page. Withoutan MPS assessment, these conditions may never be revealed.Devices and consumables are just one part of the cost structure. The costs of maintenance contracts,even if they are negotiated across the enterprise, are based on the number of devices and the varietyof the devices. Support from IT can be staggering as well. According to data gathered by Photizo, anorganization of 750 employees can expect to consume up to 3,700 hours of IT time a yearsupporting the printers – a poor use of valuable employees.Besides the obvious savings potential inacquisition, consumables, maintenance and Photizo Factssupport to be realized from rightsizing the MPS Benefits by the Numbers1device fleet and matching machines withappropriate applications, MPS projects canalso uncover additional areas of benefit. $700K Average annual cost of a hardcopy fleet firm with 750 employeesEvery device in the fleet, even those that sitidle and producing no work, is consuming 3,700 Average number of IT support hours aenergy. Firms are wasting money on power hardcopy fleet for a firm with 750 employees willfor excess or under-utilized devices. This require per yearhas both an economic and anenvironmental effect that can be improved $1M Average total savings that a company realizes after implementing an MPS programas a result of the MPS project. 30% Average percentage of savings afterInefficiencies that are often highlighted by implementing an MPS programMPS projects can include productivity-killers like time wasted by printing jobs on 60% Average reduction of hardcopy fleet carboninappropriate printers that jam, overheat, or emission after implementing MPSotherwise cause the job to be reprinted,hand-collating copies, printing and affixinglabels instead of formatting letters for window envelopes, or excessive paper curl that makesautomated folding and inserting impossible.The bottom line is that the initial inventory and assessment stage of an MPS project will isolate thereal cost of document production. Once these costs are known an appropriate action plan can be putin place.Typically, companies who have implemented MPS for their organizations have seen benefits in costreduction, productivity improvements and environmental impact.The Three StagesPhotizo Group developed the Three Stage MPS Customer Adoption Model that organizations mustexecute to realize the full range of benefits available through an MPS solution. Initially the threestages were developed from customer interviews performed in 2006-2007 and the model has beenvalidated using data from Photizo’s MPS Decision Maker TrackingTM studies. Recently the modelwas refined to include important sub-stages (see the figure on the following page). © Photizo Group 2010 PAGE 3 .
  4. 4. Best Practices for Starting an MPS Program . )*+,-.)."(/0123)4",.2+152-"32.) !"#$%& G2?E+=*FH>II*=2JK>=2;2?AF 1()*2#3(#40 !"#$%&( $!%!*#$#%& !"#$%&) ()*+,$-.-/0* !"#$%"& 15)*678-#088*9%"408808* !""#""$#%& +,$-.-/($-"# 5)*+#:"-#:** ***** (!%%)%* ;(#(:0.0#$ F G>!2 F2= >?A* E*9= ? CD2 ;C >AB* PHOTIZO GROUP !"#$%$"""""""""""""""""""""""""""&"( >2? !2*@ 92= ***2<Successful MPS implementations normally go though these three stages:Stage 1 – Gain control of the imaging fleetLocate and document all the imaging equipment in the enterprise including printers, scanners, faxmachines and multi-function printers (MFPs) devices. Record the features, usage data and physicallocation of each machine. Identify the end-user needs and requirements. Establish policies fordevice deployment and optimal usage levels. Create a corporate-wide ‘print policy’. Define the‘exception’ policy for those individuals who need to have a personal printer for productivity oraccess reasons. And very importantly, craft a communications program to the end-user communitywhy this change is taking place, and why it is important for them to participate. The importance ofthis last step is captured in a statement from a CIO in a large mid-western organization who said “Inever realized how passionate people were about their printers, until I began to take them away.” 1Developing a plan to achieve strong buy-in and support by the end-user community is critical.Stage 2- Optimize the fleet, and keep it optimizedStage 2 activities may include re-allocation of equipment to different areas, assigning devicesoptimized for high volume to appropriate locations, reducing the overall size of the fleet, replacingthree or four separate devices with one MFP and standardization of equipment.The optimization effort is ongoing. Just because a particular configuration or allocation schemeworks initially, that doesn’t mean it will be an appropriate solution forever. The MPS partner should © Photizo Group 2010 PAGE 4 .
  5. 5. Best Practices for Starting an MPS Program .continue to monitor usage and requirements and then re-balance the fleet when necessary. Thepartner should work with you to provide regular reports and recommendations based on theiranalysis of device utilization data and a constant surveillance of end-user needs and requirements.Quarterly or, at least, bi-annual meetings with your vendor are recommended in order to keep yourorganization optimized.In addition, there are many additional management and support functions that can be outsourced tothe MPS partner. This includes everything from help desk outsourcing, to on-site staffing for productsupport and end-user intervention avoidance, to product re-deployment.During the first two stages of MPS, most organizations will find that by optimizing their imaginginfrastructure, they will reduce the ‘out of pocket’ imaging costs we described earlier by $225 peryear. This type of infrastructure optimization saved one Fortune 500 organization a total of $27million over three years.2 While these Stage 1 and Stage 2 benefits are significant, there are evenfurther gains possible by moving to Stage 3.Stage 3 – Document management, document workflow and enhance business processesIn the third stage, the MPS vendor works closely with the organization to analyze existing paper-based workflows and automate them, enable desktop or device-centric creation of electronic jobtickets, implement smart routing to send print jobs to appropriate devices, and introduce the benefitsof document templates, stored content and variable data printing.This business process enhancement is an important step in moving beyond infrastructureoptimization to business process enhancement. An example of this is a bank taking a manual loanapproval process, which required three days, and creating an automated document workflow andapproval process, cutting the loan approval time to one day.Firms are moving even beyond business process enhancement to business process optimization. Thisentails examining the underlying business process to identify ways to improve the process and createeven greater business efficiencies. An example of this would be to find a way to allow internalcustomers to access key information through a self-service human resource kiosk, which could thenproduce any required documentation required for medical reimbursement or doctors visits. Thiscould eliminate the need for a customer service representative to interact with the customer, improvethe customer’s response time and bring many other productivity benefits to the organization.As you begin examining partners for this stage, it is very important to ensure that they have the levelof skills, processes and staff to provide this type of business process consultation. While manyvendors can provide Stage 1 and Stage 2 services, Stage 3 MPS engagements require significantlymore skills, industry knowledge and process abilities.In each of the three MPS Customer Adoption Model stages, the MPS partner should manageplanning, needs-assessment, roll out and ongoing management. Due to the very strategic nature ofthese engagements, it is important to select a true partner, not just a ‘vendor’. With most contractslasting a minimum of three years, this is a long-term engagement, which will require closecooperation between you and your MPS partner. 3Photizo has conducted research, one-on-one discussions and profiling of over 3,000 decisioncompanies engaged in MPS. These companies are all in different stages of the adoption model.Photizo has found recurring themes in these organizations and has identified key strategies that have © Photizo Group 2010 PAGE 5 .
  6. 6. Best Practices for Starting an MPS Program .contributed to their success. A summary of suggestions, based on these findings is presentedthroughout the following section.BEST PRACTICE #1 Identify Objectives and Priorities & SetGoalsThe approach taken by the firm and the MPS vendor, and the order in which a company tacklesvarious aspects of the printing challenges will be dependent on the objectives, priorities anddeadlines. There are usually internal reasons for starting an MPS project such as a desire to lowercosts. There can be external factors as well, such as adherence to a certain level of environmentalstewardship established by a major customer for the suppliers with whom they do business. If thecompany is one of those suppliers, then a key aspect of the MPS strategy will be complying with theenvironmental guidelines set down by those important clients.Another example of external influence is the government guideline for health insurers. Under thenew healthcare reform bill, insurers are expected to allocate no more than 20 percent of theirexpenses to administrative costs. Reducing the expense dedicated to document production can helpcompanies comply with these regulatory requirements.Identifying the driver for the MPS initiative is important to establish before planning the strategicand tactical moves that will be included in the first stage of the engagement.Most organizations want to reduce costs, but that can be accomplished in a number of differentways. Choosing the most appropriate methods will require a clear understanding of what thecompany wants to achieve and when it needs to show results.Some commonly mentioned objectives include: • Reduce costs • Avoid adding new cost • Increase efficiency • Reduce print volume • Implement new technology • Reduce obsolescence • Improve security • Contribute to corporate environmental sustainability objectivesSetting goals is vitally important to measuring the performance of the internal project team and theMPS vendor. Clearly defined intermediate and final goals and timelines will allow a firm to monitorprogress and make course corrections if necessary. It is critical to establish goals for each of the threestages.This goal setting process should be collaboration with the partner who will be providing the MPSservice. Collaboration with the vendor is important in order to ensure alignment of your objectiveswith the vendor’s deliverables. These deliverables will typically be described using a service levelagreement. © Photizo Group 2010 PAGE 6 .
  7. 7. Best Practices for Starting an MPS Program .BEST PRACTICE #2 Understanding User RequirementsJust as with a software development or any process improvement project, a clear picture of therequirements is vitally important. Delivering a solution that fails to address some key requirementcan stop a project quickly.Users may not be accepting of change in the first place. An MPS implementation that leaves themwith a diminished ability to perform functions because the MPS team did not gather all therequirements can cause a loss of credibility and support. This can severely hamper the ability toproduce all the benefits. Doing some work up front will reduce the risk.Talking with user departments, diagramming some of the basic workflow and important functions,and observing as they go about their business can provide a great deal of valuable information.Reviewing proposed solutions with the people that will be affected gives the opportunity to correctany deficiencies before the start of work.BEST PRACTICE #3 Secure Sponsorship and Dedicated ProjectManagementA project that spans multiple departments and multiple locations should not be left in the hands of part-timestaff. Assigning a project manager who may appear to have a departmental bias can lead to problems as well.Any initiative that threatens to remove a printer currently sitting in an employee’s cubicle or office islikely to meet resistance. If the project manager is suspected of playing favorites when equipmentallocation decisions are made, such resistance can cause morale problems or even threaten to derailthe whole project. Consider choosing a department-agnostic project manager or solicit the services ofan outside consultant to assure the staff of an objective approach.The companies Photizo interviewed that reported the most satisfaction with their MPS projects hadnamed dedicated resources that represented the company. These resources communicated effectivelywith internal departments, and worked closely with the MPS partners and equipment vendors.Executive sponsorship is a requirement. Even though many of the changes will be made at the employee orthe departmental levels, the overall success of the project depends on a broader perspective. The ability toexplain why the organization is electing to adopt the MPS model and how that decision relates to the overallgoals and mission of the organization takes executive-level participation.BEST PRACTICE #4 Prepare the Organization andCommunicateCommunication between business units and the MPS project team needs to be two-way. The usersneed to understand why changes are being considered and be introduced to the big picture – thatmessage should come from the executive sponsor. The business units need to participate as well.Asking for their contributions makes them feel they are part of the solution. It also helps the MPSproject team tremendously to understand departmental needs for device availability, duty cycles,security and features like color or collating. © Photizo Group 2010 PAGE 7 .
  8. 8. Best Practices for Starting an MPS Program .Be sure to communicate the benefits theorganization expects to realize from theMPS project and clearly identify new Novartis see this as a changecapabilities and features that will be of value management project because youto the individual departments and users. are interfering with the way thatThe support of employees and departments people work on a day-to-day basisis important in the first two stages of the in a number of ways.MPS project. In Stage 3, their support isabsolutely critical. They will be able todemonstrate knowledge of their jobs andhelp to understand such things as workflows, reviews and approval procedures before the team canbegin to optimize those processes.Consistent communication with the MPS vendor is an important success factor as well. Even afterthe bulk of the MPS project has been completed, it is important to monitor, re-evaluate and providefeedback to the vendor. Business needs change and the MPS solution may need to be adjusted to getthe most value from the investment that has been made in this new business relationship.BEST PRACTICE #5 Separate MPS Vendor Services FromHardwareChoosing a company to be an MPS partner because they distribute the hardware already in use canbe a mistake. Likewise, automatically choosing the hardware manufacturer themselves as the MPSpartner can effectively limit the ability to design the right solution for the organization.The services provided by an MPS vendor extend beyond the support of a certain type of equipment.In fact, the hardware is not the most important component of a successful MPS relationship. A greatMPS partner can generate desired results even if they do not sell hardware. However, a hardwaremanufacturer or reseller can also be an excellent partner for MPS services. The key is to match yourrequirements with a vendor whose capabilities matching your requirements.There are certainly some advantages to standardizing on a certain brand or a select set of devicemodels. There can be savings in parts, supplies, maintenance and training by deploying similarequipment across the enterprise. And there may be integration issues to consider when choosingcertain types of software and hardware. All these factors can influence the decision about whichMPS provider to use.Alternatively, the engagement may include supporting the existing fleet of devices and performing agradual transition of the fleet to an optimized device mix, rather than conducting a wholesalereplacement of the fleet with new devices from the vendor. In many cases this approach is the leastdisruptive method for transitioning the fleet to an optimized state.The successful professionals Photizo has interviewed stressed that they used a more comprehensiveset of criteria tan simply hardware manufacturer affiliation when they chose their MPS vendor. Thekey is to understand the abilities of potential vendors and to select the vendor who can mosteffectively meet your firm’s objectives. © Photizo Group 2010 PAGE 8 .
  9. 9. Best Practices for Starting an MPS Program .BEST PRACTICE #6 Keep the Three Stages in MindFor most organizations, switching to a MPS model is a change that happens gradually. Photizo’sexpanded three-stage approach is an indication that one cannot simply turn everything over to avendor and be finished. To get the maximum results and achieve objectives it is going to take timeand commitment on the part of several individuals within the organization.Photizo’s research has shown that every successful MPS project goes through all three stages. Thework of each stage must be completed before moving on to the next. Rushing to move ahead beforecollection of the data or making all the necessary changes can result in wasted effort, lack of supportand unnecessary expense. Jumping from one stage to another and back again isn’t very efficient. Itmay take more time to finish the project than would be possible with a more linear approach. Thegood news is that there are benefits to be had in each stage.In Stage 1 and Stage 2 the benefits are infrastructure-centric. It is a matter of tracking down all theequipment, recording the details, and then making decisions about continuously re-allocatingdevices where they will be the most useful.Stage 3 on the other hand requires a radically different skill set. It may be that a different set ofprofessionals are better able to help handle the requirements of the third stage, which is really aboutbusiness process engineering. Though the stages are separate efforts, they are all connected. Thepotential benefits in Stage 3 are possible because of the work completed in the first two stages.The individuals involved in Stage 3 must be able to communicate effectively with all levels ofemployees at the company. In many cases they need to foster collaboration and cooperation amongmultiple departments and entities. Some of the parties may be internal and others may be external.Choose resources with the skills, knowledge and experience that are appropriate for the efforts ofeach of the three stages. These resources may be the same throughout the project, or they may comefrom different divisions of the same vendor. The best resource for a project in Stage 3 could very wellbe a consulting company who understands the industry but is not necessarily associated withprinting equipment hardware, software or maintenance company.BEST PRACTICE #7 Evaluating VendorsNot all vendors are created equal. As noted earlier, some vendors have very strong Stage 1 and Stage2 capabilities (infrastructure management) while others have strong Stage 3 abilities (BusinessProcess Enhancement and Business Process Optimization). The key is obtaining objective,quantitative data regarding your vendor’s performance. Photizo’s Decision Maker Tracking Study™has captured satisfaction levels from several thousand MPS engagements in North America, Europe,and Asia.3 This research has shown that there is clearly a difference in the level of customersatisfaction based upon various vendors’ ability to perform and meet customer expectations.Developing a clear understanding of the vendors’ abilities is essential to vendor selection. Utilizingobjective third party data is critical. In addition, customer references are a valuable qualificationtool. © Photizo Group 2010 PAGE 9 .
  10. 10. Best Practices for Starting an MPS Program .BEST PRACTICE #8 Paid AssessmentsThe initial assessment is an absolutely critical aspect of the MPS engagement. Obtaining a professional,objective assessment of your current situation, end-user needs and gaps versus best practices is critical todeveloping the program requirements, initial print policies and vendor requirements.Some vendors will offer a ‘free’ assessment in order to win the MPS engagement. A thorough, rigorousassessment is essentially a consulting engagement to help you understand your current state and identifyopportunities for improvement. It requires a high degree of professionalism, knowledge, and a largecommitment of time if done correctly. It is very difficult to provide this type of assessment at no cost.In order to insure that you are obtaining an objective and rigorous assessment, Photizo recommendspaying for the assessment. Manufacturers, resellers and independent consulting firms are all capableof providing excellent MPS assessments. However, the best firms provide significant value as part ofthis assessment and will charge accordingly.SummaryMaking the decision to engage in an MPS contract is a great first step. Most companies who havemade that decision and have moved forward with well-managed MPS projects have enjoyed costsavings averaging 30 percent, drastically reduced the size of their printer fleet, improved theproductivity of their staffs, and have decreased the impact their document printing activities arehaving on the environment. 1As you have heard in car commercials, “Your mileage may vary.” Every company is different whichmeans every solution is different. By following some of the general guidelines in this white paperand taking advantage of the lessons learned by those who have proceeded along the MPS path, adecision maker can expect to achieve the goals – financial and otherwise. For more information, resources, and helpful articles about running an MPS project, visit us at The Case for MPS: Data Justifying the Benefits of MPS. Photizo Group. http://store.managed-print Elliott, R. L., & Kohnert, T. L., How Dow’s Human Element Tamed the Paper Tiger. MPS InsightsJournal 2009 Western European and North American MPS Decision Maker Tracking Study. Photizo Group. +1 (859) 873-4518 © Photizo Group 2010 PAGE 10 .