More Related Content Similar to Mps whitepaper cxo white-paper (20) More from Larry Levine (20) Mps whitepaper cxo white-paper1. Best Practices for
Starting an MPS Program
The high cost of printing and imaging is no secret. Small-and-medium business through enterprise
level, elementary schools through universities, and manufacturing through retail - the story is the
same, putting marks on paper costs significantly – in terms of money and time. Under pressure to
do more with less, organizations are looking for new and innovative ways to cut costs and increase
efficiency. Gaining control of hardcopy devices with a managed print service will help reduce costs
by 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 it
be 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 2006
through market research surveys, interviews, case studies and conferences. These organizations
have already designed, developed, and implemented successful MPS programs. As the premier
provider of analysis and information dedicated to MPS, Photizo would like individual
establishments 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 presents
the reader with invaluable information and guidance.
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 or
situations that called attention to the fleet of devices and how they are managed? Have acquisitions
or expansion resulted in a more complex and widely dispersed organization? Has the IT department
struggled 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 an
enterprise-wide assessment and analysis is done that additional opportunities for improvement are
revealed. While the objectives may expand, it is important not to lose sight of the source of the
original objective.
The Advantages of MPS
Most 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-volume
transactional documents produced in their data centers, or marketing collateral that is outsourced to
agencies. Still, there is no single category or line item in the budget that captures the costs associated
with personal or departmental communication devices such as personal printers, workgroup printers,
scanners and fax machines. The acquisition costs, maintenance, consumables and support for these
devices are scattered among cost centers and departments throughout the company. The
departmental budgets in turn do not typically segment the expenses associated with printing. They
are hidden in catch-all expense items like “Supplies” or “Office Equipment.” In fact, corporate profit
and 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 is
just the ‘out of pocket’ cost for acquiring equipment, buying supplies for the equipment, and
maintaining equipment. This does not capture the significant costs in paper, end-user productivity
and the time spent by IT providing support for imaging devices.
Many establishments have attempted to standardize on a device manufacturer or a list of approved
devices, often enforced by IT. A peek into cubicles or offices will often reveal a wide range of locally
attached devices that employees have purchased and expensed to meet their specific departmental
needs. In truth, there is very little control over the fleet and it tends to keep growing. Obsolete and
non-working devices, along with their unused toner cartridges and cables, end up being stashed on
back shelves and forgotten.
An MPS project can bring the extent of the device fleet, equipment locations and the total cost of
ownership into light. Many companies are stunned to find that the ratio of employees to devices can
be 3:1 or even lower. Photizo’s survey of 105 companies revealed an average ratio of 2.2 employees
per device.
Furthermore, analyzing the fleet often reveals that many devices are not used efficiently. Devices
meant for high volumes are found in locations where they get used mainly for walk-up copies.
© Photizo Group 2010 PAGE 2 .
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. Without
an 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 variety
of the devices. Support from IT can be staggering as well. According to data gathered by Photizo, an
organization of 750 employees can expect to consume up to 3,700 hours of IT time a year
supporting the printers – a poor use of valuable employees.
Besides the obvious savings potential in
acquisition, consumables, maintenance and Photizo Facts
support to be realized from rightsizing the MPS Benefits by the Numbers1
device fleet and matching machines with
appropriate applications, MPS projects can
also uncover additional areas of benefit. $700K Average annual cost of a hardcopy fleet
firm with 750 employees
Every device in the fleet, even those that sit
idle and producing no work, is consuming 3,700 Average number of IT support hours a
energy. Firms are wasting money on power hardcopy fleet for a firm with 750 employees will
for excess or under-utilized devices. This require per year
has both an economic and an
environmental effect that can be improved
$1M Average total savings that a company
realizes after implementing an MPS program
as a result of the MPS project.
30% Average percentage of savings after
Inefficiencies that are often highlighted by implementing an MPS program
MPS projects can include productivity-
killers like time wasted by printing jobs on 60% Average reduction of hardcopy fleet carbon
inappropriate printers that jam, overheat, or emission after implementing MPS
otherwise cause the job to be reprinted,
hand-collating copies, printing and affixing
labels instead of formatting letters for window envelopes, or excessive paper curl that makes
automated folding and inserting impossible.
The bottom line is that the initial inventory and assessment stage of an MPS project will isolate the
real cost of document production. Once these costs are known an appropriate action plan can be put
in place.
Typically, companies who have implemented MPS for their organizations have seen benefits in cost
reduction, productivity improvements and environmental impact.
The Three Stages
Photizo Group developed the Three Stage MPS Customer Adoption Model that organizations must
execute to realize the full range of benefits available through an MPS solution. Initially the three
stages were developed from customer interviews performed in 2006-2007 and the model has been
validated using data from Photizo’s MPS Decision Maker TrackingTM studies. Recently the model
was refined to include important sub-stages (see the figure on the following page).
© Photizo Group 2010 PAGE 3 .
4. Best Practices for Starting an MPS Program .
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Successful MPS implementations normally go though these three stages:
Stage 1 – Gain control of the imaging fleet
Locate and document all the imaging equipment in the enterprise including printers, scanners, fax
machines and multi-function printers (MFPs) devices. Record the features, usage data and physical
location of each machine. Identify the end-user needs and requirements. Establish policies for
device 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 or
access reasons. And very importantly, craft a communications program to the end-user community
why this change is taking place, and why it is important for them to participate. The importance of
this last step is captured in a statement from a CIO in a large mid-western organization who said “I
never realized how passionate people were about their printers, until I began to take them away.” 1
Developing a plan to achieve strong buy-in and support by the end-user community is critical.
Stage 2- Optimize the fleet, and keep it optimized
Stage 2 activities may include re-allocation of equipment to different areas, assigning devices
optimized for high volume to appropriate locations, reducing the overall size of the fleet, replacing
three or four separate devices with one MFP and standardization of equipment.
The optimization effort is ongoing. Just because a particular configuration or allocation scheme
works initially, that doesn’t mean it will be an appropriate solution forever. The MPS partner should
© Photizo Group 2010 PAGE 4 .
5. Best Practices for Starting an MPS Program .
continue to monitor usage and requirements and then re-balance the fleet when necessary. The
partner should work with you to provide regular reports and recommendations based on their
analysis 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 your
organization optimized.
In addition, there are many additional management and support functions that can be outsourced to
the MPS partner. This includes everything from help desk outsourcing, to on-site staffing for product
support and end-user intervention avoidance, to product re-deployment.
During the first two stages of MPS, most organizations will find that by optimizing their imaging
infrastructure, they will reduce the ‘out of pocket’ imaging costs we described earlier by $225 per
year. This type of infrastructure optimization saved one Fortune 500 organization a total of $27
million over three years.2 While these Stage 1 and Stage 2 benefits are significant, there are even
further gains possible by moving to Stage 3.
Stage 3 – Document management, document workflow and enhance business processes
In 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 job
tickets, implement smart routing to send print jobs to appropriate devices, and introduce the benefits
of document templates, stored content and variable data printing.
This business process enhancement is an important step in moving beyond infrastructure
optimization to business process enhancement. An example of this is a bank taking a manual loan
approval process, which required three days, and creating an automated document workflow and
approval process, cutting the loan approval time to one day.
Firms are moving even beyond business process enhancement to business process optimization. This
entails examining the underlying business process to identify ways to improve the process and create
even greater business efficiencies. An example of this would be to find a way to allow internal
customers to access key information through a self-service human resource kiosk, which could then
produce any required documentation required for medical reimbursement or doctors visits. This
could eliminate the need for a customer service representative to interact with the customer, improve
the 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 level
of skills, processes and staff to provide this type of business process consultation. While many
vendors can provide Stage 1 and Stage 2 services, Stage 3 MPS engagements require significantly
more skills, industry knowledge and process abilities.
In each of the three MPS Customer Adoption Model stages, the MPS partner should manage
planning, needs-assessment, roll out and ongoing management. Due to the very strategic nature of
these engagements, it is important to select a true partner, not just a ‘vendor’. With most contracts
lasting a minimum of three years, this is a long-term engagement, which will require close
cooperation between you and your MPS partner. 3
Photizo has conducted research, one-on-one discussions and profiling of over 3,000 decision
companies 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. Best Practices for Starting an MPS Program .
contributed to their success. A summary of suggestions, based on these findings is presented
throughout the following section.
BEST PRACTICE #1 Identify Objectives and Priorities & Set
Goals
The approach taken by the firm and the MPS vendor, and the order in which a company tackles
various aspects of the printing challenges will be dependent on the objectives, priorities and
deadlines. There are usually internal reasons for starting an MPS project such as a desire to lower
costs. There can be external factors as well, such as adherence to a certain level of environmental
stewardship established by a major customer for the suppliers with whom they do business. If the
company is one of those suppliers, then a key aspect of the MPS strategy will be complying with the
environmental guidelines set down by those important clients.
Another example of external influence is the government guideline for health insurers. Under the
new healthcare reform bill, insurers are expected to allocate no more than 20 percent of their
expenses to administrative costs. Reducing the expense dedicated to document production can help
companies comply with these regulatory requirements.
Identifying the driver for the MPS initiative is important to establish before planning the strategic
and 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 different
ways. Choosing the most appropriate methods will require a clear understanding of what the
company 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 objectives
Setting goals is vitally important to measuring the performance of the internal project team and the
MPS vendor. Clearly defined intermediate and final goals and timelines will allow a firm to monitor
progress and make course corrections if necessary. It is critical to establish goals for each of the three
stages.
This goal setting process should be collaboration with the partner who will be providing the MPS
service. Collaboration with the vendor is important in order to ensure alignment of your objectives
with the vendor’s deliverables. These deliverables will typically be described using a service level
agreement.
© Photizo Group 2010 PAGE 6 .
7. Best Practices for Starting an MPS Program .
BEST PRACTICE #2 Understanding User Requirements
Just as with a software development or any process improvement project, a clear picture of the
requirements is vitally important. Delivering a solution that fails to address some key requirement
can stop a project quickly.
Users may not be accepting of change in the first place. An MPS implementation that leaves them
with a diminished ability to perform functions because the MPS team did not gather all the
requirements can cause a loss of credibility and support. This can severely hamper the ability to
produce 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 correct
any deficiencies before the start of work.
BEST PRACTICE #3 Secure Sponsorship and Dedicated Project
Management
A project that spans multiple departments and multiple locations should not be left in the hands of part-time
staff. 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 is
likely to meet resistance. If the project manager is suspected of playing favorites when equipment
allocation decisions are made, such resistance can cause morale problems or even threaten to derail
the whole project. Consider choosing a department-agnostic project manager or solicit the services of
an outside consultant to assure the staff of an objective approach.
The companies Photizo interviewed that reported the most satisfaction with their MPS projects had
named dedicated resources that represented the company. These resources communicated effectively
with 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 or
the departmental levels, the overall success of the project depends on a broader perspective. The ability to
explain why the organization is electing to adopt the MPS model and how that decision relates to the overall
goals and mission of the organization takes executive-level participation.
BEST PRACTICE #4 Prepare the Organization and
Communicate
Communication between business units and the MPS project team needs to be two-way. The users
need to understand why changes are being considered and be introduced to the big picture – that
message 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 MPS
project team tremendously to understand departmental needs for device availability, duty cycles,
security and features like color or collating.
© Photizo Group 2010 PAGE 7 .
8. Best Practices for Starting an MPS Program .
Be sure to communicate the benefits the
organization expects to realize from the
MPS project and clearly identify new Novartis see this as a change
capabilities and features that will be of value management project because you
to the individual departments and users.
are interfering with the way that
The support of employees and departments people work on a day-to-day basis
is important in the first two stages of the in a number of ways.
MPS project. In Stage 3, their support is
absolutely critical. They will be able to
demonstrate knowledge of their jobs and
help to understand such things as workflows, reviews and approval procedures before the team can
begin to optimize those processes.
Consistent communication with the MPS vendor is an important success factor as well. Even after
the bulk of the MPS project has been completed, it is important to monitor, re-evaluate and provide
feedback to the vendor. Business needs change and the MPS solution may need to be adjusted to get
the most value from the investment that has been made in this new business relationship.
BEST PRACTICE #5 Separate MPS Vendor Services From
Hardware
Choosing a company to be an MPS partner because they distribute the hardware already in use can
be a mistake. Likewise, automatically choosing the hardware manufacturer themselves as the MPS
partner 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 great
MPS partner can generate desired results even if they do not sell hardware. However, a hardware
manufacturer or reseller can also be an excellent partner for MPS services. The key is to match your
requirements with a vendor whose capabilities matching your requirements.
There are certainly some advantages to standardizing on a certain brand or a select set of device
models. There can be savings in parts, supplies, maintenance and training by deploying similar
equipment across the enterprise. And there may be integration issues to consider when choosing
certain types of software and hardware. All these factors can influence the decision about which
MPS provider to use.
Alternatively, the engagement may include supporting the existing fleet of devices and performing a
gradual transition of the fleet to an optimized device mix, rather than conducting a wholesale
replacement of the fleet with new devices from the vendor. In many cases this approach is the least
disruptive method for transitioning the fleet to an optimized state.
The successful professionals Photizo has interviewed stressed that they used a more comprehensive
set of criteria tan simply hardware manufacturer affiliation when they chose their MPS vendor. The
key is to understand the abilities of potential vendors and to select the vendor who can most
effectively meet your firm’s objectives.
© Photizo Group 2010 PAGE 8 .
9. Best Practices for Starting an MPS Program .
BEST PRACTICE #6 Keep the Three Stages in Mind
For most organizations, switching to a MPS model is a change that happens gradually. Photizo’s
expanded three-stage approach is an indication that one cannot simply turn everything over to a
vendor and be finished. To get the maximum results and achieve objectives it is going to take time
and 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. The
work of each stage must be completed before moving on to the next. Rushing to move ahead before
collection of the data or making all the necessary changes can result in wasted effort, lack of support
and unnecessary expense. Jumping from one stage to another and back again isn’t very efficient. It
may take more time to finish the project than would be possible with a more linear approach. The
good 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 the
equipment, recording the details, and then making decisions about continuously re-allocating
devices 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 of
professionals are better able to help handle the requirements of the third stage, which is really about
business process engineering. Though the stages are separate efforts, they are all connected. The
potential 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 of
employees at the company. In many cases they need to foster collaboration and cooperation among
multiple 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 of
each of the three stages. These resources may be the same throughout the project, or they may come
from different divisions of the same vendor. The best resource for a project in Stage 3 could very well
be a consulting company who understands the industry but is not necessarily associated with
printing equipment hardware, software or maintenance company.
BEST PRACTICE #7 Evaluating Vendors
Not all vendors are created equal. As noted earlier, some vendors have very strong Stage 1 and Stage
2 capabilities (infrastructure management) while others have strong Stage 3 abilities (Business
Process 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 customer
satisfaction based upon various vendors’ ability to perform and meet customer expectations.
Developing a clear understanding of the vendors’ abilities is essential to vendor selection. Utilizing
objective third party data is critical. In addition, customer references are a valuable qualification
tool.
© Photizo Group 2010 PAGE 9 .
10. Best Practices for Starting an MPS Program .
BEST PRACTICE #8 Paid Assessments
The 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 to
developing 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, rigorous
assessment is essentially a consulting engagement to help you understand your current state and identify
opportunities for improvement. It requires a high degree of professionalism, knowledge, and a large
commitment 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 recommends
paying for the assessment. Manufacturers, resellers and independent consulting firms are all capable
of providing excellent MPS assessments. However, the best firms provide significant value as part of
this assessment and will charge accordingly.
Summary
Making the decision to engage in an MPS contract is a great first step. Most companies who have
made that decision and have moved forward with well-managed MPS projects have enjoyed cost
savings averaging 30 percent, drastically reduced the size of their printer fleet, improved the
productivity of their staffs, and have decreased the impact their document printing activities are
having on the environment. 1
As you have heard in car commercials, “Your mileage may vary.” Every company is different which
means every solution is different. By following some of the general guidelines in this white paper
and taking advantage of the lessons learned by those who have proceeded along the MPS path, a
decision 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 www.mpsinsights.com.
1
The Case for MPS: Data Justifying the Benefits of MPS. Photizo Group. http://store.managed-print -
services.com/ProductDetails.asp?ProductCode=Webinar+032609.
2
Elliott, R. L., & Kohnert, T. L., How Dow’s Human Element Tamed the Paper Tiger. MPS Insights
Journal http://www.mpsinsights.com/case-studies/
3
2009 Western European and North American MPS Decision Maker Tracking Study. Photizo Group.
http://store.managed-print-services.com/ProductDetails.asp?ProductCode=2009+Tracker
info@photizogroup.com +1 (859) 873-4518 www.photizogroup.com
© Photizo Group 2010 PAGE 10 .