Issue #0420/1 - A recent survey by IDC shows that IT managers are still not paying enough attention to Total Cost of Printing while Facilities, Operations and Purchasing managers have a better handle on the situation.
‘Nobody knows …’ goes the classic song. It appears from a recent survey by IDC of nearly 400 IT, Facilities, Operations and Purchasing Managers that the old criticism that ‘nobody knows’ the cost of printing is a belief that is set to ‘die hard with a vengeance’ (to use another entertainment reference).
Although the situation has clearly improved immensely over the last five years or so, we still see that almost 20% of IT Managers are unable to determine positively if, and who, is monitoring the Cost of Printing.
One would have thought that a corporate IT department would have a good grasp of the cost of hard copy IT equipment within their organisation. This is certainly true of PC, server, networking and software infrastructure and might be true of the purchase and installation of certain printer hardware. Over recent years observers have watched the gulf between IT and FOP (Facilities / Operations / Purchasing) departments begin to narrow as corporations pull the provision of information communications technology into one pool but the recent data from IDC shows that IT departments still are not in control of costs and have less idea than the FOP departments of the cost of hard copy provision to their organisations.
By title or department name, who in your company currently tracks costs for hardcopy devices and related supplies and support?
FOP managers traditionally were in control of corporate copier fleets but were kept clear of the printer fleets because they were the domain of IT. However, the survey shows that FOP managers are more knowledgeable than IT managers about the scale of expenditure and about the monitoring of those costs – only 13% of the FOP managers are unaware of the monitoring of costs, in comparison to 18% of IT managers. Doubtless this situation arises largely from the fact that IT departments traditionally have focussed on ‘technical’ issues and support while FOP departments have held a more cost structured focus.
Figure 1
Who should be monitoring the Cost of Printing?Clearly, from this survey, there is some doubt in the minds of both IT and FOP managers that cost monitoring should be their responsibility – 19% of them answered that they either don’t know who monitors costs (Someone Else, No One or Don’t Know) or that the end user departments themselves should monitor their own costs.
Far worse in the IT department than in FOP departments, managers seem quite happy to specify, purchase, install and support the hardware with little or no interest in ongoing cost to the organisation. Twenty three percent of IT managers are in the position of really not knowing where costs are monitored against only 16% of FOP managers.
One could surmise from this data that 47% of IT managers do not consider the monitoring of costs to be their responsibility. This is in sharp contrast to FOP managers, 76% of whom know that monitoring is undertaken within their departmental grouping.
But … there is some duplication of answers – in other words, some organisations appear to duplicate cost monitoring, with 25% of respondents indicating that more than one department fulfils that function.
Figure 2
How often should running costs of hard copy devices be monitored?
Which of the following describe how often hardcopy device costs are tracked?
It is almost frightening to think that less than 40% of all managers surveyed think that print costs are monitored as a matter of routine across the entire company. Almost an equivalent proportion monitor costs only when a specific initiative demands that type of activity.
Where would companies be if they manufactured product without knowledge of the cost of materials used in the manufacturing process, or if they ignored the cost of human resources in costing their operations? How can a company determine its overheads if it is not monitoring costs? What effect does print wastage have on the bottom line?
Consultancies tend to put a figure of about 3-5% on the proportion of revenue that is typically spent on print. This might seem relatively insignificant but it is also generally accepted that it is easy for a company to make savings of at least 30% on print costs and suggestions have been made that some may save 50% or more – simply by managing devices properly and consolidating resources.
If this is the case, this means that a $20bn company potentially stands to save between $180m and $500m a year on print costs – not to be sneezed at!
Again, almost one-fifth of managers believe that costs are never monitored or they have no knowledge of any monitoring.
Tracking has to be routine, even if it is periodic rather than continuous. However, there are enormous benefits for companies to track print costs continuously. Expenditure can be applied to individual cost centres, allowing more comprehensive customer billing, identifying excessive wastage or misuse and making the determination of company overheads more accurate and meaningful.
Figure 3
How important is knowledge of the ongoing cost of hard copy?Purchasing hard copy is not just a question of buying a piece of machinery. TCPglobal published an article in its December 2002 Christmas issue (#0224) entitled "A dog is for life, not just for Christmas". We’re talking about ongoing costs that can run to four times the purchase cost of the device over just three years without blinking an eyelid and some companies will run to many more times the purchase price than this.
How important is the running cost of a hardcopy device in relation to your purchasing criteria?
Just to add to the apparent irresponsibility, less than 50% of managers consider that running costs are a very important factor in the purchase procedure while 52% reckon they are no more than ‘quite important’. Doubtless, focus is placed on specifications and performance, together with purchase cost, rather than on real cost to the organisation over the life of the hardware.
Again we see the FOP departments placing highest importance on these factors, with a 50/50 split ‘Very Important’ against no more than ‘Quite important’, in contrast to the IT departments where only 46% place high importance on running costs.
Even amongst respondents that do place high importance on running costs, there is two-and-a-half times more likelihood that they will only place high importance on running costs rather than an extreme importance.
Using data published in TCPglobal over the past few weeks, this could make a financial difference of 122% in the cost of running single-pass workgroup colour laser printers over three years or 178% in the cost of running workgroup mono laser printers. Is there such a quality difference between the two sets of hardware and the print qualities achieved? Why would an organisation knowingly spend more than twice, or almost three times, the amount it needed to unless inadequate information, knowledge and understanding is applied to the purchase procedure?
Let’s face it – at a cost saving of £2,200 ($4,000 / €3,300) per printer over three years, for every 40 workgroup mono printers on the corporation fleet, an additional person could be employed! Which is the more valuable resource? It has always been the human resource that has been cut back in times of hardship when seeking logical reductions in ongoing costs (overheads) could avoid some of the hardship.
Almost every organisation on the face of the earth could make savings in print costs. It is bad enough that the mindset of the typical office user causes huge quantities of paper to be used, for instance printing emails that should never be committed to paper, but it is not hard to find situations where every scrap of paper output, even emails, is printed on inappropriate media such as expensive letterhead.
Further wastage is caused by users lacking the motivation to make sensible adjustments to print settings as appropriate to particular types of print job. This is not entirely their fault – I absolutely identify with the infuriation factor of having to enter the properties area of the print driver to change paper source or page layout settings. It is much easier just to hit ‘print’ and have every job output to the default settings.
But, how many users would entertain the thought that default settings could be set to print 2-up on the page and duplex, or that toner save settings could be used for 80% of print jobs?
Who knows? If the holders of the purse strings could just recognise the habits and customs that are prevalent within their organisation, together with making a sensible choice of hardware, then solutions and processes could be set in place to counter the appalling wastage and reduce print costs radically.
What seems essential is that the purchase procedure in large organisations must be rationalised so that clear responsibilities are defined for the Cost of Printing. If accountability for running costs were to be made a requirement of the department that chooses the hardware in the first place, then perhaps the choices would be more carefully thought out. One of the major failings in the provision of hard copy services is a lack of accountability.
‘Nobody knows’ would be an extreme accusation to lay at the door of large organisations because there are many that have very precise knowledge and understanding of the cost of providing hard copy services and many more that are becoming increasingly knowledgeable. However, what is clear from this survey is that not enough managers are in possession of that knowledge and understanding and, worse, many do not seem to care – probably because it is a complex issue.
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