Do Customers Really Need MFPs in the Future?

This blog article is a reflection of my thoughts about the future of Multifunction printers (MFPs) after concluding a visit with a public sector customer in Copenhagen this Spring (2016).

Background

A former customer contacted us at Printix to ask if we could help them as an independent contractor, to evaluate a new Managed Print Services (MPS) contract. Their existing contract was due for replacement and was about 4.5 years old. Their concern was that the new contract was “almost too good to be true”. They could get new equipment, fewer and faster devices, smarter devices, faster first page out, and dramatically reduced mono (50%) and color price (75%). Where is the catch, they wondered? Is there a catch at all … why not just sign?

The Analyses

Before we could start the analyses, we needed some additional information about their existing environment. From their existing print management software, we gathered the following overview: 330 employees, 8 print rooms each equipped with a “copier” Xerox MFP (used for copy and scan only), a HP color single function printer (SFP) and an HP mono SFP. They printed approx. 2.1M pages per year where approx. 10% was copy. In addition, they did 5% scan – approx. 100k pages. In total, 29 pages per employee per day. Color 7.2%, Duplex 31.2%, A3 1% (on two devices).

In the above data there were a few surprises compared with our general market experience:

Only 5% scan: The customer had digitized all their workflow processes so that now scan was only used for documents arriving at the customer in hardcopy. Further, most of the scan was centralized on two Xerox MFD’s in just two of the print rooms.

Only 7.2% color print: Compared with other customers this figure is very low. The explanation was, that nobody wanted to wait for the color print as it took too long for the first page to come out. The printers were setup with a short sleep time to save power. In general, I would normally expect that an average customer would print more than 50% in color.

We did a calculation on the before and after scenario and found that the cost per month for a 3-year contract would be the same with the same before-behavior conditions as described above. (On a side note, in the calculation we included, investment cost in new equipment and a new print management solution, and removal of the old).

The Catch

We also did an alternative future calculation where we changed the before-scenario on a single parameter i.e. increasing the color ratio from 7.2% to 50% – with the result that the customer’s yearly payment would increase with 25%!

The catch for the customer was to control the color printing.

Observation

It’s interesting to observe that despite the fact the customer has removed paper as a vital part of their business workflow, they still print on average 29 pages per user per day, which compared to other customers seems to be pretty high. From the interview, we found that printing has become a “Convenience” thing for the employees i.e. they still like to have paper in their hands in certain situations.

Furthermore, we found it very interesting to see that the need for MFP decreases dramatically when the customer digitizes their workflows. This makes me wonder about market trends and whether or not customers will continue to need MFPs as much in the future?

P.S. Customer prospect note. If the customer were to add Printix, they could save almost the same dollar amount as the cost of the MPS solution on internal servers, helpdesk, IT and user administration!

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