Developing a Centralized Copier Management Program

Ever since a highly respected IT research and advisory think tank published a study several years ago in which it opined that 1 to 3 percent of an organization's revenue was spent on printing and printing-related costs, managers and administrators have been trying to figure out how to optimize their spend on document printing solutions. You've all seen the hype.

• There's the Managed Print Services (MPS) model where equipment vendors or document solutions consultants try to convince you to throw out all of your distributed desktop inkjet, laser printers and FAX machines so they can sell you larger (more expensive) devices and you can do the same work with fewer machines. Somehow this is supposed to be more "efficient." Never mind that you'll be expected to replace a lot of machines that you own with very expensive new ones.
• There's the procurement model where well-intentioned purchasing managers negotiate with vendors to get the best possible price for copiers/multi function devices (MFDs).
• There's a subset of the procurement model widely used in most levels of government where purchasing officials work with vendors to establish "state contract" prices, which may be significantly lower than "list" prices. It is not unusual to see state contracts provide copiers and MFDs for 50 percent or more off of the Manufacturer's Suggested Retail Price.
• In higher education there's the consortia model where a group of colleges and universities join together to pool their demand in an attempt to leverage a better price.

All of these models have their strong points. There is no doubt that vendors are more likely to extend larger discounts to customers that buy more product. That just makes sense.

The only problem is that they don't address what is, in my opinion, the root determinant of copier costs: The purchasing contracts and volume pricing agreements rarely match copier output rates (copies per minute) to historical demand. The number of copies a machine is expected to make is one of the selection criteria—possibly the most important one—in choosing a copier, and yet it's usually overlooked.

A Daunting Task

Buying a copier can be a daunting task. There are many different features to consider. Copier companies have loaded machines with features we may want but don't need, and we're not sure how to navigate the selection process.

In my experience, most copiers are selected by price. People pick the copier they can afford and attempt to get as many features as they can. Expected volume—matching the device output (CPM) to historical output—generally has little to do with it.

That's where centralized copier management comes in. I'm not talking about a program to replace all of your desktop devices, copiers and fax machines with larger and more expensive MFDs; I'm talking about studying the current use patterns for the entire organization and installing equipment to match those needs, especially in terms of volume. I'm talking about right-sizing devices.

Matching historical data to the recommended monthly output of each device across the entire fleet is the key to optimizing fleet performance. At Chambers Management Group, when we do a copier fleet analysis, we look at the average monthly output for each machine in the fleet. In every study we've done, at least 50 percent of the installed fleet makes 5,000 copies per month or less. However, 70 to 80 percent of those machines are rated at 15,000 copies per month and more. That gap represents expensive over capacity, and it's common in every fleet we've studied.

Follow the Numbers

The first step in developing a centralized copier management program is to find every copier to be included in the program and record as much of the performance and cost data as possible. This should include at a minimum:

• Date installed.
• Cost of the device.
• How acquired (lease, purchase, rental or other).
• Lease terms, including the number of included copies, if appropriate.
• Service terms, including the number of included copies, if appropriate.
• Overage rate, if appropriate.
• Number of copies made since installation.

The most critical data elements are those that allow you to estimate average monthly volume—date of installation and total meter reading.

A lot of this data will be difficult to find. One approach is to visit each machine and it print an "administrative report"—a summary of important events during the life of the machine, including total volume. If you're not sure how to create the report, ask the vendor to train you or provide someone to accompany you.

The administrative report may provide an installation date, and if it does you have everything you need to move forward. If it lacks the date, try tracking the purchase date through departmental procurement records. Or, simply ask the vendor.

Actually, your vendors are an excellent source of the information you need. They may not have purchase price or supply use information, but most service agreements are sold on a per-copy basis, so vendors need to track volume on each machine. Ask the vendor to provide a list of all equipment currently being serviced and average monthly use. Knowing you're working on a centralized copier management project should encourage her/him to provide all of the data you need. We're looking for total volume and length of time the machine has been in place.

There's an App for That

Many vendors will offer to install software to locate machines and track volumes for a week or so. This is problematic on many, many levels. First, we've never seen an app that provided an accurate list of machines, so if you take this route, be prepared to verify that every machine on the list does exist and that the copy totals are more or less accurate. In other words, you still have to visit every machine and print an administrative report. We've seen error rates as high as 50 percent on automated reports.

Moreover, one to two weeks is not enough time to provide a meaningful sample. You're talking about making a decision that may have a value of hundreds of thousands of dollars, so you need reliable data. We recommend that you collect data for at least six months, and a year is better.

Marks on Paper

The key to optimizing any organizations' investment in a centralized copier/MFD strategy is to forget about copiers. Your objective should not be to lease or buy machines. You don't want to fill your buildings with fancy hardware. Your goal should be to establish a process to provide pieces of paper carrying information to the people in your organization that need it. We call it "marks on paper."

When you approach the issue from the marks-on-paper perspective, your problem becomes much simpler to solve. You don't need to worry about which features to choose for each copier or how much to pay for them. The important thing is to tell the vendors what you want to accomplish, provide basic information like machine location and current volume, and let them propose how they would meet your needs and what they would charge per copy to do so.

Volume Tiers

Volume tiers, or volume bands, link the output speed of the device to a range of recommended average monthly volumes. Volume tiers are important because device output rate is one of the most important—and frequently overlooked—device criteria. As a rule, the price of a copier increases by 50 to 75 percent from one tier to the next, so placing a high capacity copier in a location with relatively low demand can dramatically increase the price per copy.

The chart above (see photo tab) shows the relationship between machine output in copies per minute and historical volume for a machine. Charts like this are easily found with a simple Internet search. The volumes defining the tiers may change slightly, but the concepts are the same.

When we can identify the costs to operate a fleet, we usually find that organizations spend $0.05 to $0.10 per copy. A centralized copier management program, one that includes the cost of copiers, service and all consumables—everything except paper and staples—should cost the organization in the area of $0.0225 to $0.0275 per copy for and still allow the organization to locate fully featured copiers where people want to use them.

And that's how to convince management that centralized copier management is a good idea.