“It is not the ship so much as the skillful sailing that assures the prosperous voyage.”
—George William Curtis (1824–1892)
In the IT world the fleets we refer to tend to be those of printers and multifunction devices, but the sentiment still rings true – despite their endless capabilities, printers are only as good as the people who use them. You would not send an inadequately provisioned and crewed ship out into the treacherous high seas, and you should not float a fleet of printers in the white waters of business without careful analysis and preparation. Gartner, however, asserts that “many organisations manage office printing loosely, or not at all”.
There is, then, plenty of potential for resellers to help companies equip themselves for the stormy seas of business. An estimated 1-3% of total revenue is spent on printing and Gartner suggests there is a savings opportunity of 10-30% in current spending to be made by businesses if they manage their workgroup printing better.
Unlike the consumer market, workgroup printing does not require the same kind of up front offering mentioned in our previous instalment. “I think cost per page is important and the running cost is important; the look and all that doesn’t really matter, unlike the home market,” said Jeff Lau, National Sales Manager, IT, for Samsung, which is venturing into the workgroup market.
The workgroup printing market varies in other ways, too. Daryn Rickwood, NZ Country Manager, Imaging & Printing Group for HP, said of the sales process: “It’s a more consultative process with workgroup printers. The workgroup printer market really isn’t price led – it’s about the offering.
“The consumer market is purely based on price and functionality. When you look at the workgroup printing market, there are really three things that we associate with it: running costs, a reliable and dependable brand, and productivity.”
Canon NZ’s National Sales Manager – Office Imaging Products, Tony Phibbs, said that the devices are often financed, “allowing the businesses to embrace future trends as they come to market and they are servicing significantly larger volumes.” Workgroup printers are bought for the betterment of the work environment and its associated workflow.
Lexmark’s Marketing Manager, Stephen Bell, and Marketing Manager ANZ for Fuji Xerox Printers, Tom Lewis, both pointed out that the workgroup market is less about one “catchall” product such as an all-in-one and more about providing a variety of machines that meet the needs of the employees. “People are able to wear the cost of specialisation,” said Lewis of the workgroup printing market.
Bell explained how specific needs of individuals or departments will influence the requirements of a workgroup printer fleet. You need to provide the right amount of A3 and A4 printers, the right balance of colour and mono devices and the right targeted features such as hole-punching and stapling, high capacity input trays or printers that can handle a range of envelope sizes. Bell continued, “I guess one of the things that is more critical about the workgroup printing mark is that you need some data and information that helps you draw conclusions to make the right decisions. The problem that most of our customers have is getting the time to collect that information and then knowing what to do with it when they’ve got it.”
As resellers in the printing market, you are constantly battling the problem of commoditisation which introduces a standardisation of products and makes it harder to sell on ‘point of difference’. Gartner said, “print epitomises a market that is highly commoditised” and, as such, many print technology providers have had to seek to differentiate their offerings “by selling their products in the context of richer-margin service offerings (such as managed print services) and by introducing difficult-to-emulate enhancements in consumables of some print technologies”.
Comworth’s Sales and Marketing Manager Lloyd Jenkins agrees: “You can’t make money just on hardware, and it’s getting increasingly difficult to make money out of consumables. So it’s got to be about a managed service and adding value to it, otherwise they’ll just buy them off the internet.” Lexmark’s Bell is philosophical: “All markets commoditise over time,” he said. His advice is to do more for the customer than simply sell a printer or consumables by getting to know their business needs. “Overtime you’re going to need to align what you offer with the customer. That way they will come back because you have helped their business compete more effectively, he explained.
Historically, managed service packages were used mainly by the photocopying sector, but now they are available for printers too. As Samsung’s Lau pointed out, there seems to be a convergence between the printing and copying markets; therefore, it is even more imperative that there be value-add offerings in the printer market. The managed print services model can help a business’s productivity by cutting down total ownership costs, improving print planning, budgeting and utilisation, and minimising printer downtime. The print partner will manage the end user’s printing, allowing the company to focus on its core business and not on the problem of printing.
“Ninety percent of companies do not track their printing costs and I think that managed print services will actually change the way businesses think about how they print in their company. It will become a more important part of how people reduce cost in their business,” said HP’s Rickwood. Lewis of Fuji Xerox Printers reminded us that, from an end user point of view, everyone wants to reduce their spending, and the first step to doing that is to know what you are actually printing. Managed services make printing behaviours and patterns very visible to the end-user thanks to the reports that are produced.
Resellers are able to leverage the information gleaned from these reports to produce a printing solution, tailor-made for the business. George Kharoufeh, Product Manager, Printers, for Kyocera Mita Australia, explained the value proposition, saying, “Managed services are giving resellers an option to make more margin than selling just the hardware up front and hoping the end user will come back to them for on going consumables supply. Managed services allow resellers to lock in their customers to a program that usually benefits the end user in terms of cost-savings and productivity, and also the reseller in terms of margin and a long term customer.”
In fact, according to Lewis of Fuji Xerox Printers, the SMB market is an untapped opportunity in regards to managed print services. He predicted that “there’s going to be increasing penetration of managed print into those [SMB] markets”. But it must be done in a way that is both achievable for the resellers and profitable for the end user business.
Although not every business is ready to embrace managed print services, it remains a good opportunity for resellers. In regards to the suitability of managed services, HP’s Rickwood said that “It depends what sort of business you are and why you need network printers.”
And as Kharoufeh of Kyocera stated, “It’s all about the customer’s needs.”
Fleet optimisation offers a further level of managed services and consulting opportunities that may be taken by the channel in terms of consulting opportunities, according to Fuji Xerox Printers’ Lewis. Canon’s Phibbs agreed, explaining that “Managed services offer customers visibility of their costs and functionality, increased reporting, auditing, remote support, and ultimately total print optimisation – that is, ensuring that the right job is printed to the right device in the most cost effective way, whilst maintaining the appropriate levels of urgency for the end user.”
But optimising a printer fleet is a complex matter. “There is no magic number,” said Bell of Lexmark, who suggested that eight to 10 employees per device could work well, but insisted that this is heavily dependent on the print speed, quality and quantity required. Gartner’s research shows similar findings, and their March 2008 Q&A research paper said that the user-to-device ratio should be treated as a descriptive, rather than prescriptive, metric. It continued: “Most organisations are ripe for printer right-sizing, with five or fewer users per printer typical in large corporations. The optimum ratio varies with the specific office, the nature of and pace of the work done there, and the print volumes, so there is no magic user-to-device ratio. Simply reducing the number of devices to an arbitrary ratio may not go far enough in some cases, leaving savings on the table. In other cases, going too far can impede worker productivity and result in a backlash that undermines the entire effort to manage office print.”
Fleet optimisation and consolidation is already apparent. Lewis of Fuji Xerox Printers has noticed a general trend towards the consolidation of single function devices into a smaller number of multifunction devices. He told The Channel that “within the defined environment of the workgroup printer market, what you are seeing is that people are now moving from a largely distributed model with a lot of single function printers around to [having] fewer single function printers and more distributed multifunction printers.” He accounted for this by saying that the dropping price of multifunction printers has made them more accessible, so it now makes more financial sense to give employees the added options of copying and scanning. Canon’s Phibbs has also noticed the push towards employing more multifunction devices saying “they offer a reduced footprint, in conjunction with increased functionality and significantly lower operational costs”.
Ink jet printers are playing a small role in optimisation too, although the vast majority of workgroup printing is still done by laser devices, whether they be single or multifunction printers. Ink jets could, however, be deployed as subsidiary devices to provide colour printing support or as a personal printer for a senior manager who needs to print confidential information. Lewis of Fuji Xerox Printers maintained, “Most businesses look towards laser because it has a much lower running cost”.
These days when people choose a printer, they are looking for more than just a box that can print pages. “As the market is becoming increasingly commoditised you can’t expect printers and MFPs to be these things that just sit on the end of a desk and print pages. The contribution that they make to the business’s success is becoming more important. People are starting to look for more capability in their product,” explained Bell of Lexmark.
Lexmark has also noticed a trend towards electronic storage. “What we’re finding today is that most companies don’t want to store information on paper, they want to store it on their networks and servers because it becomes much easier to find and it’s more secure,” explained Bell. Part of optimising the printing cycle is about making it easy for people to store and find information electronically (and by storing it on the network they make it available to co-workers) so that they can find it and print it out only when they need it. Jenkins of Comworth has also noted a growing tendency to use the multifunction printers as a “springboard into document management”.
Intelligent, electronic storage not only reduces printing costs but also increases sustainability. In fact, printing is one of few areas where being sustainable actually reduces financial outlay. Lewis of Fuji Xerox Printers noted, “The push for sustainability and the push to drive costs down go hand in hand – it’s just accelerating the need for people to look at printers in that context.” All the current trends in workgroup printing seem to support the drive for greater sustainability – consolidation means fewer printers are on standby; intelligent storage leads to fewer pages being unnecessarily printed; and managed services and optimisation trends are leading to better use and deployment of printers, often reducing energy and consumables usage.
One way to help end users be more sustainable is, of course, the recycling program. These programs are supplied by many of the manufacturers and distributors, as we explained in our consumer printing article, and resellers should play their part in promoting them to the end user. Samsung’s Lau thought that “being able to provide green initiatives like recycling toners and double-sided printing is going to be more important [in the future]”. Kyocera’s Kharoufeh agreed, stating that “more customers are more aware of their impact on the environment, and reducing printing is one way of lessening that impact”. He explained that sustainability takes place at all levels, from Kyocera’s 100% recycled packaging that only uses soy or vegetable dyes in the printing process, to their toner container which can be totally recycled after use. Most printer manufactures have their eye on the green target, producing everything from energy efficient devices to Fuji Xerox’s virtually waste free solid ink sticks.
Lexmark’s Bell also mentioned that there is a move from “a more generic sustainability to a more focused sustainability – now customers are not just saying ‘show me how sustainable you are’ but they are saying ‘show me how I can reduce the amount of energy I use, or the amount of pages I use’.”
Although wireless printers do not appear to be a major force in the workgroup market due to the security and reliability risks they may impose, and the fact that most offices still tend to be wired, Lexmark’s Bell said that “all the mediums are promoting mobility, so it’s definitely something that’s on the boil”.
The need for wireless printers tends to be application based – perhaps in a warehouse, an employee’s home or where employees often change work stations to set up in temporary workgroups. You may even have people working in remote sites who need to print out information at headquarters. Bell’s advice to resellers is to remember that the solution you are selling does not necessarily have to reside within the four walls of the office – the service that you provide extends beyond that and must cater to the employees’ working needs both in the office and at home or on the road.
Lewis of Fuji Xerox Printers said the market is “moving to a much more consultative approach”, which may include print audits where the print partner researches and analyses the distribution and use of devices throughout a company then sells a specific solution.
When it comes down to it, optimisation and managed services are the hot topics so, as Lexmark’s Bell put it, resellers need to “take the time to find the hidden need”. Jenkins of Comworth is certain that it is all about taking the hassle and the risk away from the customer through managed services and click charge agreements. “Customers are happy to pay extra for the confidence of knowing that the machine is going to work and there’s going to be toner when they need it and it won’t break down,” he said. Single and multifunction printers have a multitude of capabilities that could be the answer to your customer’s problems, so resellers should try to understand a few of those more advanced capabilities and how they may be applied in a printing solution.
Research shows that one in six documents is binned before it is ever read. Despite this, the vast majority of businesses do not manage their printing. Perhaps the problem is one of time; many businesses simply do not have the time to manage their printing despite the large savings to be made through fleet optimisation. Add to this Bell of Lexmark’s earlier point that companies rarely know what to do with information even if they have had the time to collect it, and we see a pattern emerging. This is an area where businesses seem to be floundering and resellers are in a prime position to help.
“Organisations that have the right balance between printers and MFPS will have the most appropriate platforms and one that allows them to leverage the capabilities to drive more than just pages, to drive greater contributions to the success of the business,” Bell clarified.
Workgroup printing is about providing a solution that will save businesses money through optimisation while maintaining a long term relationship with their print partner.