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MPS Savings
Managed Print Services
(MPS) is still a hot topic
and major growth area in the
print industry. But it is far
from being new. The most
successful vendors have
been at it for more than a
decade and some enterprise
customers are now in their
second or even third contract
term. Having initially been
won over by the promise – and
delivery – of savings of 30% or
more, do customers have such
high expectations second time
around? And, if they do, are
they realistic?
Renewal rates running at
90% or more might suggest
that satisfaction levels remain
high; that people have a
realistic expectation of future
savings; or that the complexity
of changing supplier is so great
that suppliers can get away
with delivering less while the
Where’s my next 30%?
What happens after you have made 30% savings in the initial
MPS implementation? Where are the savings going to come
from next time around?
memory of previous anarchic
printer states are still fresh
in the memory. Or perhaps a
combination of all three.
Henry Blum, Marketing
Manager MPS at HP, EMEA, says
that we should not get hung on
the 30% fgure, which can be an
over-simplifcation of an MPS’s
benefts.
“The initial benefts of an
MPS are 30-40% cost saving
compared to the initial state.
Thereafter the additional savings
are not very much: 2, 3, 5% a
year. They are small but they are
still signifcant,” he said.
“You must also consider that
without on-going attention you
will start to fall back into old
habits. In any organisation there
is continuous change – people
move around, departments get
relocated. In existing clients we
have a ton of change orders
to implement all the time.
Somebody is moving home,
moving department, moving to a
new offce. Every time they come
back and say we would like
your help. So without on-going
attention you will see rising costs
that you need to manage.”
Nor, says Blum, should we
underestimate the complexity
involved in delivering MPS, both
for providers and customers
themselves, as “whenever you
switch vendor you have to go
through a serious educational
process.” No wonder so many
customers renew their contracts
long before the expiry date.
According to Simon Hill,
sales director for UK &
Ireland at Nuance Document
Imaging Solutions, the famous
‘stickiness’ of MPS contracts is
most apparent when customers
implement MPS-related solutions
such as Equitrac for cost control,
accounting and charge-back and
eCopy for integrating MFPs with
enterprise applications.
“MPS is going beyond simply
deploying devices in the right
place and cost avoidance
and encompassing business
automation, improved workfows
and document management.
The relationship between
MPS providers and customers
is deepening and becoming
stronger as they look to increase
productivity rather than drive
down costs. As loyalty becomes
stronger it makes the proposition
more sticky and makes it more
diffcult for a competitor to win
back that business,” he said.
Trust and knowledge
Business process optimisation
(BPO) is the the third phase of an
MPS after feet optimisation and
on-going device management.
Customers are made aware of
the signifcance of this stage
from the outset, but it takes
time for all parties involved to
develop the trust and knowledge
necessary to tackle BPO. This
is another reason why the
temptation to stick with an MPS
provider is so great.
“The majority of clients
only go for Phase 1 and 2:
optimisation and management
of the environment. Improved
workfow is something they don’t
touch to start with; typically it is
too complex, too high risk,” Blum
explained.
“When we frst go into a
company, there is not a good
enough understanding on our
side of what the benefts and
possibilities are. Processes
are deeply engrained in an
organisation, so as a vendor you
can’t go to a pharmaceutical
company, for instance, and say
‘We know how to improve your
processes’. The key difference is
that later we can say ‘We have
other clients who have benefted
from doing things this way’.
“Where paper-based
information gets transferred
into electronic information and
vice versa is where we can add
a lot of value. We can say to an
insurance company that collects
all claims over a week and
MFPs like Lexmark’s new X548
act as on- and off-ramps to
electronic workfows
Simon Hill, sales director for UK
& Ireland at Nuance Document
Imaging Solutions
“The initial benefts of
an MPS are 30-40% cost
saving compared to the
initial state.”