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Home > By DEPARTMENTS > Green Operations > Office Greening for Operations Cost Reduction, Productivity & Health

Desktop Printing Costs are Largely Hidden

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Businesses still fail to grasp the financial impact of unnecessary and poorly managed distributed business printing.

VJ Joshi, Executive VP of HP's Imaging and Printing Group recently spoke about how customers can take control of their entire imaging and printing environment to boost productivity and reduce costs by up to 30 percent.

Efficient Behaviors Save Energy and Money

Inefficient use of documents and printers cost far more than paper and ink supplies. Printing files then faxing or rescanning them is wasteful and inefficient.

Printing has become a costly area of IT operations for today's large enterprise. According to Gartner, "Printers, the supplies associated with them and the support required to keep them operating represent 5 percent of the typical IT budget."

A study by Lyra Research indicates that few network managers and IT departments track printing costs at all.

By carefully evaluating the total cost of owning printers and other hardcopy solutions – the cost to buy them, plus the cost for supplies and support over the life of the devices – the large enterprise can establish a solid foundation for a plan to significantly reduce costs. CAP Ventures goes further, concluding that, "It is those companies that cannot consider hardcopy to be a core asset, but nevertheless produce large volumes of hardcopy, that are in the greatest danger of wasting money by not considering a total cost of ownership model in relation to their hardcopy output devices."

"You will be shocked to find that we convert paper to information, information to paper up to 11 times without adding any value" he said.

Typically companies have no idea of the true costs of imaging and printing; according to Gartner between one and three per cent of business revenue is spent on direct hardware supplies and services but Joshi claims that's not all it costs the business. "The average annual document costs are between five and 15 per cent of revenue, all the way from less than one per cent for the oil industry to the advertising industry spending 14 per cent of revenue in managing documents and processes".

Reducing the number of printers on individual desktops and introducing printers shared by up to 15 people can reduce ink and toner costs by 70 per cent and paper costs by 67 per cent, with overall costs for producing marketing materials down by 30 per cent.

Total cost of ownership (TCO) is the subject of a study of large enterprises undertaken by Gartner Consulting for Hewlett-Packard (HP.) In this study, Gartner Consulting identified a number of cost categories that contributed to TCO for printers and other hardcopy resources in the companies surveyed.

"For every dollar the enterprise spends on imaging and printing, the direct hardware cost is only 10 per cent of that, 90 per cent of the cost is hidden." Joshi blamed support costs, driver management and overall document management

"For the last 22 years we've had a lot of document based processes that are very unstructured."

HP has identified the top five drivers of hardcopy costs based on research by Gartner and other industry observers and on HP's own studies of more than 100 companies.

1. Ratio of printers to users

According to HP's studies, large enterprises tend to have far more printers than they need, with an average ratio of printers to users of one printer for every 4.4 people.

2. Use of desktop vs. departmental printers

This issue is closely related to the ratio of printers to users. As individual desktop printers have dropped in price, many employees have begun to use them instead of using departmental or workgroup printers. It is easy to attempt to justify this by citing the low cost of personal printers. Some may even argue that individual printers increase productivity because users do not waste time walking to a shared printer. These are fallacies. The purchase price of individual desktop printers can easily be outweighed over time by the cost of consumables; toner cartridges or ink cartridges for personal printers tend to cost more per page than those used for workgroup printers.

3. Number of printer models and technologies used for printing

The absence of a coordinated strategy for managing hardcopy resources, along with the reluctance to dispose of aged equipment, inevitably results in a hodgepodge of printer types, models and technologies in the enterprise. This in turn leads to money and time wasted on having many different types of supplies in inventory, operating under multiple maintenance contracts, keeping up with a variety of printer driver updates and coping with increased help-desk demands.

4. Age of printer fleet

Gartner estimates that, "For most enterprises, more than half of their printer fleet is over five years old." * Like any piece of equipment, a printer is more likely to break down more often if it is an older model. Consequently, service costs go up due to the number of breakdowns that occur, and productivity goes down every time a printer is out of commission.

5. Inefficient supply chain

Typically, the payer, supplier and user of hardcopy devices operate completely independently of each other in the large enterprise today. One example of supply chain inefficiency resulting from this disjuncture is the tendency for the purchasing department to stock up unnecessarily on toner, paper and other supplies, in some cases perhaps even for devices which are no longer being used. Another is the problem of individuals bringing in personal printers without telling anyone and using general funds to pay for supplies.

HP has been the worldwide market leader in printing since introducing its first inkjet and LaserJet printers in 1984. The company has sold more than 300 million inkjet printers since then and, in 2006, shipped its 100 millionth LaserJet printer. HP's imaging and printing intellectual property portfolio includes more than 12,500 patents worldwide.

Edited by Carolyn Allen, owner/editor of California Green Solutions
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