Crossing the Document Output Divide

With only 3% of the 4.3 trillion pages printed by U.S. companies under any type of management program, the market is ripe for sweeping changes. As with any adoption curve, the innovators and early adopters have begun this transition.

However, the broad majority of business management either has not be educated on the benefits of managed print services (MPS) or they do not have the necessary empirical evidence to enable a change in their strategy. In other words, if it ain’t broke, don’t fix it.

Of those that do not have a document output strategy, it is this author’s humble opinion they will increasingly look to outsource non-core competencies and innovate by partnering with other companies focused upon particular vertical niches. For instance, do you clean your own offices, or do you hire a janitorial staff that will do it better and a more attractive price point?

There are two core areas that will be impacted in this transition; As with every change there will be winners and losers. Here’s the shake down:

1. This shift will create efficient offerings to reduce document costs for customers by introducing competition. Competition will force best practices to emerge and keep overall pricing for providers in check.
2. The balance of power will shift towards those companies with the ability to think holistically about helping their customers get a handle on their document costs while controlling their costs in a marginalized and matured market.

Even though customers might not be using industry jargon terms, like “MPS” to speak on the subject, the need is evident. Customers are becoming aware of the concept behind MPS. After all, you cannot manage what you do not measure.

Perhaps you, yourself, need more empirical evidence as to whether the winds of change are blowing. Here are some staggering statistics from some of the largest analysts, such as Gartner or All Associates, as cited by Jim Salzer, President of DocuAudit International:

1. Output volume is growing by 11% per year – along with associated costs.
2. For every $1 spent on production of a document, it takes another $9 to manage.
3. By 2010, half of the Forbes 2000 companies will spend more on power than hardware.

Given just these 3 statistics, coupled with the astronomical volume of pages being produced, it is clear demand for focus on this often discounted area of the business will continue to grow. Companies can no longer ignore the fact that document costs will erode their profitability dramatically if they do not manage their costs associated with production and management.

Push or Pull

At this point, the pioneers in providing MPS are still educating their customers (see article: Customers Don’t Know What They Don’t Know) on the benefits of consolidating their fleets of disparate devices, trying to work at strategic levels to encourage adoption across the enterprise.

Steve Munro of Digtal Gateway believes we are experiencing what he calls a “pull” effect, whereby those pioneering a solution often have to educate their customers in order to see results. On the flip side, as knowledge of the need is realized, a “push” effect begins to emerge and rapidly gains momentum, whereby customers begin either pushing their partners to offer solutions or find partners that can and will offer answers – and more importantly – results.

Once this ‘crossing of the document output divide’ occurs, those MPS providers that did not invest in the services and offerings necessary to participate will be reduced to a commodities based business with ever decreasing margins and detrimental business tactics when viewed in the context of long-term growth and health of a company

Prophecy or Paranoia

With all of this being said, what key indicators can you look to as proof MPS has gone mainstream? That is a very sound question, indeed. Let’s examine a few of the key signals that indicate momentum of this evolution is at hand.

• First, the industry’s niche outlets of information (ImageSource and Office Technology) have been talking about this for a few years now, and with an almost fevered pace almost seem to be dedicating entire magazines to nothing but MPS these days.
• Second, it’s on Gartner’s radar, who will be releasing their MPS magic quadrant in the very near future. This typically means there is awareness of the issue at the Fortune 500 level – at the very least.
• Third, rising energy costs, inflation, a looming recession, and environmental concerns create a breeding ground for cost cutting initiatives. As companies battle rising costs, they seek every avenue available to keep costs of doing business in line. If these indicators continue to put pressure on businesses, look for change to be accelerated.

But when will MPS reach its tipping point? It may be soon, but most experts seem to believe we have less than 2 years before the “buzz phrase” MPS becomes a traditional business term like TCO or ROI.

MPS is a strategy, but can mean many things to many individuals. However, it is not a paranoid delusion to get customers to buy more ‘stuff’ – although many would care to distort the truth in their favor. Even though the definition is somewhat debated, the reality is that customers are in need of help. As they themselves wrestle with if they should even care, and how to mop up the mess that is inevitably discovered once the reality of need sinks in.

There is a long road ahead of both provider and customer, but the best in the business are on a path to create best practices in order to cross the digital output divide and truly help customers.

Image courtesy of Luca Galuzzi

Ken Stewart’s blog, ChangeForge.com, focuses on the collision between the constantly changing worlds of business and technology. Ken is also the Director of Technology at Kearns Business Solutions.