SMART-SOURCING: Printing out

SME IT

The IT department of Pfizer (India), a leading pharmaceutical player, faced a major problem when it came to printing costs. The IT personnel in Mumbai sensed that everyone, regardless of their heirarchy, wanted an inkjet printer for printouts. This was proving very expensive "� approximately Rs 2.50 per page, not to mention the annual maintenance (AMC) and procurement cost of the printer.

What was the way out? The Mumbai branch had a little over 150 deskjets. It struck a deal with Wipro, the vendor in this case, who provided around 20 network printers and 50-odd deskjets. Today, Nair says that his branch saves more than Rs 1 lakh per month by way of printing costs. This excludes the costs of buying new printers, replacing old printers, cartridges and toners and AMC. This branch alone would save nearly Rs 20 lakh annually. The figures would be very impressive when implemented across the company. Besides, individual consumption of print outs can be tracked so that each business division can be billed separately and accurately.

Pfizer India is not alone. There are many companies that are currently outsourcing their printing needs "� or experimenting with the idea. Worldwide, this trend is common. The best known example in all likelihood is that of the multi-million dollar deal with Ford (in 2004) outsourcing its printing needs to Hewlett Packard (HP). The vendor had promised Ford that it would reduce its printing costs by 20-30 per cent. A tall order, considering that Ford Motor estimates its maintenance and support costs for office printing in the range of $40-50 million.

Closer home, Gati has entered into a contract with a print outsourcing partner "� WeP Peripherals. Voltas, on the other hand, is working with Lexmark and the entire deal for its Mumbai head office is being routed through CMS. With over 250 printers installed in the Voltas head office in Mumbai, the IT department was burden with high number of printer support calls. With an average age of over three years, and with most being personal inkjet printers, the IT department was confronted with high replacement cost of printers, high running cost in terms of supplies besides the suspect quality of cartridges and toners used.

The company decided to leverage management and audit features in Lexmark network printers and outsourced its printing requirements to service provider CMS. The printers are purchased and administered by CMS. Voltas only pays CMS for the number of pages it prints. On an average, Voltas prints between 80,000 printouts a month. Over 100 high-cost desktop inkjet were replaced by 15 laser printers. The remaining printers will be replaced in a phased manner.

A few inkjet printers will be maintained for color printing. We save on capital and service expenditure in buying and maintaining high-end printers. We only pay per page of what it prints. There has been a 75 per cent decline in printer-related support calls. The project was completed less than three months ago, and complete benefits are yet to be realised according to a Voltas spokesperson.

Companies can unburden themselves of the need to think about AMCs, toners, cartridges and purchase of printers. They can focus on their core businesses. From a user level, the software for auditing should improve. It gives printer-wise but not user-wise information. However, these issues can get ironed out. The total market for printing outsourcing worldwide is estimated to be around $20 billion. A Gartner study indicates that most organisations can reduce their printing expenditures by 10-30 per cent. With so many cases in point, it's time that companies experiment with the trend.