Ascher Group, LLC

9457 S University Blvd #175· Highlands Ranch · Colorado · 80126

Phone (866)683-1994 · Fax (720)554-7988 · Email info@theaschergroup.com

© 2002 - 2009 Ascher Group, LLC

 

Ascher Group, LLC

9457 S University Blvd #175· Highlands Ranch · Colorado · 80126

Phone (866)683-1994 · Fax (720)554-7988 · Email info@theaschergroup.com

© 2002 - 2009 Ascher Group, LLC

 

So what is involved with a Document Output Study?

 

Although the number of Copier Price negotiation firms is numerous within the marketplace, the number of firms that can offer output analysis and design are few. The key difference centers on the fact that cost savings come more from the correct copier / printer and fax choice than merely the negotiation of the pricing. In other words, making sure that the right manufacturer, speed, model, configuration and capabilities are selected in the first place.

 

The processes to get this done are somewhat simple in concept but require an extensive document management analysis experience to accomplish. The majority of the firms simply lack this knowledge due to the preponderance of copier sales experience. Although most copier companies offer and train their reps to accomplish basic analysis they always focus on a process in which their copiers always are the result. Additionally, these analyses are geared to produce the highest cost copiers and features. For example, if an analysis uncovers a need for booklet finishing the result will automatically result in a model that feature this type of finishing regardless of speed. What is missing from this analysis is a basic Economic cost comparison of the next best choice. If the need is for only 100 such booklets a month even Kinko’s could accomplish these for $20 dollars or so. This kind of cost would need to be weighed against the cost of a model that features this type of finishing. If the copier that features booklet finishing costs $40 more a month than the right sized copier, that then the recommendation should be to not get this type of equipment.

 

The Process

•  Measure costs, type of work, volumes and environment for all output devices within the scope of the study.
•  Benchmark current equipment with cost, utilization and features.
•  Analyze the technical needs for print, copy, fax, scanning and Enterprise Document Management system integration.
•  Develop fleet reduction model for all affected equipment.
•  Develop detailed equipment configurations including speed, paper handling, connectivity and all options.
•  Bid all equipment and service needs; and measure results against benchmark.
•  Negotiate leasing / purchasing and service contract terms.
•  Implement equipment, train end-users.
•  Measure invoices against expected cost savings and adjust system accordingly.
•  Repeat from beginning as new equipment and / or facilities are added.

 

Some of these areas do require a bit more experience than other areas. The more complicated steps are:

 

Measure costs and volumes for all output devices within the scope of the study.

Measuring costs to most people seems simple enough but there are three very large pitfalls here.

1. The typical company run “costing study” usually makes the first mistake here and that is ignoring any piece of equipment that does not have a monthly invoice. Printers and Faxes typically have a minimal number of monthly invoices as compared to copiers. It is not unusual to see these units purchased rather than leased and depreciated. Additionally, these units typically do not have supplies included within any maintenance contracts. In order to safely account for all costs the study needs to account for the purchase method for each piece and determine if there is an equipment corresponding depreciation schedule or lease for each piece. Additionally, the study needs to account for all supplies through an exhaustive office products and IT supplier invoices and reports for all supplies and maintenance costs.
2. The second large error is usually performed by copier vendors during either paid for or “free” analyses. This error surrounds the costs related to printers. The typical copier vendor analysis measures the volumes related to these devices, but only the network connected ones, and uses estimated costs to evaluate the costs. The danger in doing so is that very few printers actually have the costs that are as high as their estimates. The reality behind this practice is that by using inflated printer costs the copier vendors are more likely to show a costs savings by migrating prints to a copier. Over all of the studies that the Ascher Group has reviewed and audited from these copier vendor studies, not one has ever accounted for print costs correctly. To give you an example of this we can use a customer of the Ascher Group. This company had received three proposals from vendors based on an analysis each vendor had performed. Their problem was that each was using cost savings from eliminating HP printers and outsourced copying to justify their solution and each had a different cost associated with these elements. The vendors ran the gamut on costs with three different cost structures from $5,800 to $7,100. The Ascher Group performed a thorough analysis of the actual costs and found that the real number was closer to $3,600. The difference was that all vendors used an average cost per impression on the HP printers and estimated outsourcing costs. When the Ascher Group did the analysis actual invoices were assessed to come up with a monthly cost for each item.
3. The third large error comes from both copier vendors and company run studies, namely not accounting for all printers when accounting for volumes and cost. This mistake is a little more prevalent for the copier vendors. This error comes from the collection method and the printer connection. Typically, copier companies will use a network collection program that measures the network print jobs as they pass through the network print server. All of these programs measure the details from a job (such as user, page numbers, B&W or Color and device printed to) and record these details in a database. The issue is that not all printers are connected to the network or go through a print server. Printers can connect through several means but the most prevalent office printer will be either networked or parallel. The programs miss the parallel printers or the desktop printers. These units typically account for 25% - 33% of the volume and between 15% - 20% of the cost of the total printer system so not accounting for them totally will lead to incorrect results.

 

Benchmark current equipment with cost, utilization and features.

Utilization and Features benchmark also contain two pitfalls:

1. Utilization is usage divided by the functional maximum monthly volume rating. So what is the functional maximum monthly volume rating? That is the pitfall. Manufacturer’s regularly brag about inflated monthly volume ratings that mean little to the end user. The reality is that all manufacturer’s monthly volume ratings must be viewed with a jaded eye. Very few machines can actually live up to these standards and if you pressed the copier vendor to guarantee that they would you would see some very fancy dancing. For example, Ricoh rates their 1027, a 27 page per minute B&W copier, for 45,000 copies a month. At that volume the drum would need to be replaced about every 6 weeks. The only way you could get the unit to run that kind of volume is if you gave the technician a cube in your office.
2. Features review for most typical studies are nothing more than an inventory and alternative cost analysis. The idea behind this section of the study is not only to tell what is currently out there but also to functionally determine what alternative will provide cost and process savings. In order to do so the study should delve into how often the current features are being used, by whom and why. Additionally, future system improvements need to look at current systems not only in cost and volume but reasoning. For example if the study uncovers heavy overnight packages from field offices to headquarters, one might make the jump that scanning would eliminate these costs. However, these overnight charges might be the result of legal documents that need to be stored in their original format or scanned in a controlled method for legal reason.

 

Analyze the technical needs for print, copy, fax, scanning and Enterprise Document Management system integration.

This step is a natural flow from the benchmark but contains two additional pitfalls even if all things have gone correctly up to this point.

1. When assessing network printing needs it is important to look at all applications that will be printed from. The typical assumption by companies is that printing is printing. The typical assumption by copier companies is that the best print boards are always needed. The reality is somewhere between the two. Network, non-mainframe, printing typically breaks down to categories, PCL and PostScript. Currently, all copier manufacturers ship their copier print boards with PCL and have an option for PostScript. The study needs to determine which printing method is needed for each unit that will be used before writing the specs. Mainframe printing however does not breakdown as simply and there are many formats that copiers cannot accomplish, (without additional equipment) that a typical HP LaserJet can.
2. Scanning by copiers and faxes have been around for more than 6 years. It is important to realize that scanning unto itself solves no problems (and often creates more issues). Although document retention law allow for scanning rather than retaining the original it is only with strict scanning procedure and storage methods that must always be followed. Further, scanning from a copier is nothing more than that, scanning. It does not index a document so that you can find it later or store a document for you. Scanning should only be used as part of an overall electronic document management system or to replace faxing.

 

Develop fleet reduction model for all affected equipment.

Fleet reduction is a lot like herding cats. Once you have one areas solved another issue arises. Copier vendors always make this issue look simple by putting into their proposal simple terms like, “reduce printers by 50%” or “eliminate 25% of the copiers”. But what they fail to address is the impact of office flow or employees efficiency. For example, AG conducted a fleet study for a client who had already reduced their copier and printer fleet by 40% as per their copier vendor’s recommendations but were starting to feel some pain. After a thorough analysis the problem was discovered to be that the vendor failed to lay out the new configuration and simply reduced units by usage and cost savings. The problem that arose was that several departments had no output devices within even 100 feet. In order to accommodate this issue many of the departments had used their office supply budget to purchase new printers thus negating any of the cost savings expected under the new system. When accomplishing fleet reduction make sure that office layout, function and departmental needs are taken into consideration. Fleet reduction is a large cultural change that takes a lot of planning.

 

Develop detailed equipment configurations including speed, paper handling, connectivity and all options.

After all the work of putting together the study and analyzing the results this step is where the cost savings get some guarantees put to them. Of all things that a company can do to reduce copier, printer and fax costs this step provides the largest impact. Copier companies love to get vague bids that simply include a client current fleet numbers or bids that break down the units by segment based on current speeds. This gives the vendor a lot of room to get creative and show meaningless value adds such as scanning without any due diligence as to the cost savings. Careful planning needs to go into the specs for the copiers to ensure that all avenues have been researched and the exact speeds, paper handling requirements, print board specs, facsimile and scanning capabilities have been determined. Once this has been done, evaluating the bid results become simply putting all of the information into a spreadsheet to evaluate because all bids will be apples to apples. If you have ever visualized your bidders in meetings conferring over you RFP trying to position themselves as the best respondent, trust us the meetings will be much longer and more intense if your bid is nailed down to every detail.

 

Negotiate leasing / purchasing and service contract terms.

If it were not for bad copier contracts there would be no contracts at all. This is the part of the process that guarantees your cost and process savings and protects your organization for unforeseen costs. We will quickly go over this area because it is long and arduous. The main things to avoid in contracts involve Cost per Copy Agreements, fixed term service agreements, non-cancelable service and no service guarantees. This is a short list and by no means complete but it is a starting point.

This gives an idea of some of the major pitfalls than can come up in the process of setting up and performing a Document Output program and analysis. There are always more items to add and new one’s come up every day but the general idea is that this process needs to be done completely and with a well laid out plan.