It’s usually easy to tell whether a technological trend has arrived by the number of businesses that start to mention it in their marketing and to launch programmes with prominent references to it. So it is with managed print services. Up until a couple of years ago, it would have been hard to find many people in the IT environment with more than a passing acquaintance with the concept, but a number of factors have contributed to push it up on the agenda. First, there has been the consolidation taking place at a hardware level in the print/copier environments as a number of traditionally separate devices (printers, copiers and scanners) have been combined into single multifunction devices. This, in turn, has started to consolidate the purchasing responsibility for those devices which was, historically, split between facilities management/purchasing for copiers and IT for printers.
The process of consolidation has also led to a re-evaluation of the buying processes which, traditionally, has been split between ‘lease’ or ‘click charge’ for copiers and the transactional model typically used for printers. Behind all of these shifts was another imperative driving things forward with greater momentum in recent years: the need to control and cut costs in a time of flat or shrinking budgets. Printer and copier vendors are starting to engage more heartily with the MPS concept and they are seeking to encourage channel partners to help in the delivery of MPS to their customers. Printer vendor partners have the networking skills that are becoming increasingly important in a new environment, where combined print and copier output devices are being placed within company networks, rather than being left in isolation like coffee machines. They also have experience of providing a managed service for other IT functions which could stand them in good stead for helping to deliver a managed print service. What they don’t have but copier partners do is the requisite expertise and financial knowhow to draft and deliver a cost per page contract.
Only game in town
As John Courage, head of managed print services at Hibernia Evros Technology Group (HETG) puts it, the click charge model adopted by copier vendors for the past 20 years is a reactive break and fix model whereas MPS is completely different because it is “proactive, like any other IT managed service.” As an IT reseller, HETG might well feel comfortable in managed service territory but when it comes to MPS the company has taken a slightly less expected route, opting to partner with Xerox rather than its IT and print vendor partner HP. Courage maintains that Xerox is “the only game in town” when it comes to MPS, claiming it has a superior model having provided managed print services to global accounts for the past 15 years with a strong suite of software and a global delivery centre in Dublin. “It far outstrips anything else in the market,” he argues. Overall Courage is pretty scathing of most MPS programmes in place from other vendors. “Lots of suppliers need to say they can provide MPS because customers are looking for it,” he noted, but while suppliers can offer cost per print, “that’s not MPS.” And neither, he hastened to add, is the ability via software to ensure users are only able to print to specified devices when they use a swipe card, something which he dismisses as “not MPS, just security.”
Additionally Courage makes an important point concerning the majority of MPS agreements in place. For instance, in the SME sector, typically customers consolidate their print and copier fleets, refresh or standardise their equipment and reach agreement on a cost per print, pay for what you use model. But according to Courage this is more akin to a financial restructuring of a company’s print and copier costs than delivering a proper MPS. “Customers are paying a sum of money anyway, this is financial remodelling that’s just a better way of paying for it,” he claims. “Any supplier can come in and financially restructure, but that’s not a managed print service.” Courage suggests a true MPS looks at issues like how a customer can improve their processes and if customers need to ask suppliers where the software and the management is, what’s their infrastructure like? Stand first: State of affairs
Paying for what you use, therefore, is not his definition of a proper MPS. The big question is what happens when the service goes live. “If the supplier says ‘there’s a sticker on the device and give us a call if something goes wrong’, that’s not MPS.” Courage suggests that the reason why this state of affairs exists is because the market was heading towards MPS “but you can only buy what’s available on the market. If suppliers don’t have it, they will supply what they do have. They will only do what they can do.”
And there’s no arguing with the fact the market is definitely heading in that direction. According to research specialist Photizo Group, the proportion of hardcopy devices, supplies, maintenance and service bought under an MPS contract globally will grow from 13% of the total hardcopy market in 2008 to over 34% next year. The pressure is on to reduce devices with Photizo Group also estimating that a company without an MPS agreement has a ratio of 2.2:1 employees per hardcopy device compared to 5.7:1 for those with an MPS contract. According to Photizo Group, there are three stages to the customer adoption process of MPS and it’s fairly safe to suggest the vast majority are still in the first two which cover control, optimise (fleet consolidation, right sizing and asset deployment) and asset management (active fleet management covering redeployment, updating, changing and deleting devices based on the economics of operating costs and expected savings).
Optimise
Gartner defines MPS as a service offered by an external provider to “optimise or manage a company’s document output to certain objectives, such as driving down costs, improving efficiency and productivity and reducing the IT support workload.” It believes providers have responded to the demand for MPS by opting to take the low road or the high road or sometimes both. The low road involves snapping up “as many customers as they can by reducing their MPS proposals to the absolute lowest cost per page in return for a stripped-down and simple hardware and service bundle.” Those that opt for the high road are able “to demonstrate the savings and other benefits of MPS to the eager advocates in IT or the purchasing department, as well as to their sceptical colleagues in, for example, the claims department or finance department.” Liam Clarke, director at Bytek MPS, is probably more closely aligned to the cost per page side of the argument. The emphasis is on using print audits and conversations with people on the ground to show customers what their employees need and how they can control and monitor their printing requirements. “I can show how much money they’re spending and how much each individual machine costs to run,” he says. From there, the next stage is to provide customers with a single cost per colour and mono page and enshrine that in a contract.
Where’s the catch?
A major plank of Bytek’s approach is that it gives a guarantee that the rate per copy will never increase for the duration of every contract. He claims other players “reserve the right to increase the service element every year.” According to Clarke, when he works on a deal, “there is a point in the conversation where the customer always asks ‘where’s the catch?’ ” It seems too simple. And when we’re closing, they often say ‘it’s got to be too good to be true’, but it’s there in black and white in the contract. The rate per copy will not change for the lifetime of the contract.” Clarke also makes the charge that most vendor-specific MPS programmes are potentially misleading because they aren’t offering customers the best solution possible but the best they can put together using a single vendor’s products. “It’s not ‘this is the best for you’,” he argues, “but ‘this is the best we have’.” And while a vendor may well have a really good MFP, it could also have “terrible” network printers.
Most vendors are at pains to point out that their MPS schemes can provide multi-brand support to cover a company’s entire print and copier fleet, but there’s also no doubt they would like to replace them with more of their own products. Martin Deignan, sales and marketing director at OKI Printing Solutions, says that one of the advantages is in being able to “control our own prices for hardware and consumables.”
And Gary Tierney, country manager, HP Imaging and Printing Group, Ireland, expresses a similar sentiment when he suggests moving fleets to HP product will make for the most efficient delivery of services and consumables. He also points out that the hardware “is such a small element of the total” of an MPS agreement that includes service and supplies.
No more myths
Tierney says a number of IT resellers have already taken MPS on board although he accepts it is “still not a broad channel play.” To overcome their deficiencies in terms of financially modelling MPS contracts, several IT partners have gone out and recruited people from the office space with the appropriate skills. While the copier channel and vendors have been selling click charge based models for years, the IT channel has “learned exceptionally quickly…all the myths have been blasted by the IT channel going in and bringing efficiencies.”
Tierney states that HP is in a strong position because it has a well-known printer brand with a large customer footprint. The “breadth of HP” is also an advantage because it engages with customers on so many other levels, such as PCs, servers, storage and services. “There are so many touch points with customers,” said Tierney. John Jones, managed print specialist at Datapac, argues that MPS is part of the overall trend to outsource IT services. But whereas companies are happy to monitor their IT infrastructure for potential opportunities and problems, far fewer routinely track their printing and imaging environments. It probably didn’t help that most solution providers and manufacturers made it far from easy to get true cost of ownership figures for printers, copiers or MFPs by bundling capital, maintenance and supplies on a single invoice. The shift to price per copy gives customers a much clearer idea, he suggests.
Huge appetite
Alan Mason, managing director at Ricoh Ireland, says there is a “huge appetite” for MPS in Ireland at the moment, but stresses the importance of recognising that there’s more to it than installing some MFPs and talking about hardware and software costs. “We believe that a true MPS solution should deliver efficiency, security, improvement in process, environmental improvements and, of course, cost savings,” he adds. Ricoh likes to take the concept one step further with its Managed Document Service that focuses on the input, throughput and output of all documents, whether electronic or hardcopy. Kyocera also likes to frame the argument in terms of Managed Document Services. Doug Muir, director of Kyocera Managed Document Services, states that it covers the whole document lifecycle. Unlike some of its rivals, such as Ricoh and HP, Kyocera is 100% channel aligned. There are three channels involved, the service dealers (traditional office copier dealers), IT resellers and system integrators.
The biggest of these for MDS business is the latter, although Kyocera has just launched its Channel Resource Centre website to help service dealers become more involved. As for IT resellers, Kyocera is “working with a small number, around six or seven that have the interest and ability to move into MPS” but it’s a much more simple version where they sell the hardware and Kyocera provides the servicing and management. This is akin to the “financial restructuring” that Courage mentioned where the main requirement is to save money through a low level managed service. “I don’t feel IT resellers are ready to compete on a true managed service,” Muir retorted, “but not every customer wants an in depth managed service.”
Niche area
OKI recognises this in its own way with two levels of MPS. The optimiser is a companywide service where OKI partners can take over all the print functions of a business while a flat rate scheme designed for small business is more commoditised and something an IT reseller could sell over the phone. This is a type of “mini-MPS” which guarantees a certain number of prints per quarter. “Our offerings are quite scalable,” he claims. Copier partners want to do the service themselves but “IT resellers often want us to do everything.
They often just introduce us to the client.” While many IT dealers are familiar with providing a managed service they look on the print function “as a niche area” and they often “don’t want to invest in expertise required to handle MPS.” Another company anxious to make inroads in the MPS market is Konica Minolta. According to James Kavanagh, head of the managed print division at MJ Flood (Konica Minolta’s exclusive partner in Ireland), the vendor is seeking to increase MPS from 15% of its overall business to 50% in three years time. He claims that MJ Flood’s strong market in multifunction copiers, means that “presenting MPS to our own market is very easy to do.” While Konica Minota is very much a challenger, it has a very strong share of colour MFP units in Europe that it plans to build on.
A state of flux
The state of flux that exists in the MPS market between printer and copier vendors, partly brought about by the consolidation of print and copy functions in multifunction devices, is also playing out in an interesting fashion at the customer level. As Kavanagh noted, there is a “grey area between procurement and IT”. Whereas decisions over office equipment were traditionally taken at procurement level, they are now moving to IT as copiers become part of the network.
“We need alignment between procurement and IT,” he argued. “The IT people will make a recommendation for the kit but they have to consider the financial situation, that’s where finance and procurement come in.” Tierney commented that there is “much more joined up dialogue between facilities and IT regarding MPS.” In the past, photocopiers weren’t attached to the network, so “IT wasn’t engaged and they didn’t have ownership of the service.” Things are changing and “IT and facilities have started working together.”
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