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Currently a tech alternative for greater print control and efficiency, Managed Print Service is likely to emerge as a favorite with CIOs in tune with their mobility, cloud, or collaboration plans
By Heena Jhingan
Almost every enterprise today swears by services. The CIOs are busy hunting the best from a plethora of offerings available “as a service”— be it software, video, storage or platform. In some IT savvy enterprise alcoves, the commonly known Managed Print Service offering is already being referred to as Printing as a Services.
There definitely is logic behind that. Managed Print Service has evolved way beyond the concept of cost per copy (cpc) or providing an assessment to right size the fleet. Most Managed Print Services (MPS) today entail the outsourcing of the fleet and document strategy to ensure the customer’s business process optimization goals are met. Experts believe, defining MPS can be a confusing journey and trying to understand all MPS functionalities can be just as daunting. A section of the industry describes it as an end-to-end system designed to manage an organization’s entire document output infrastructure by streamlining supply channels, equipment acquisitions, maintenance support and establishing rules based workflows.
In any form, the key drivers for the uptake of MPS are cost reduction and improving efficiency by rationalizing the print environment, which most Indian enterprises at present desperately need. The market has lately seen enterprises in India using MPS to identify waste and reduce print bills. Having witnessed the scope, more and more enterprises tend to partner with large solution providers to simplify, better manage, and reduce the cost of their print infrastructure.
Vishal Awal, Executive Director, Services, Xerox South Asia quotes an Ernst & Young report that pegs the Indian MPS market Rs. 430 crore and expects it to grow to about Rs. 1350 crore by 2015. According to the Ernst & Young report, BFSI and telecom, being early adopters, are expected to continue to be the dominant spenders of MPS in years to come. Contribution of manufacturing including automobile, FMCG is expected to increase slightly by 2014 from current 20-22%.
The report finds that the contribution from healthcare and energy and utilities sector is currently low owing to the low level of privatization of these sectors. Verticals like media and entertainment, travel, transportation, hospitality and logistics, construction and real estate, government and education are currently less than 3-4 % and are likely to remain low in the coming years.
On the vendor side, the Indian MPS stage is currently well populated not only by OEMs such as HP, Canon, Lexmark etc and System Integrators like HCL, but also with managed service providers led by IT and copier resellers. As the MPS-edge is slowly cutting through skeptical mindsets, apprehension is giving way to an increased awareness and buy-in of the potential customer base.
Analysts see a major push of these services coming from the fundamental shift — shrinking printing spends of the companies. According to research firm Gartner, the first quarter of 2013, the combined serial inkjet and page printer, copier and multifunction product (MFP) market in India, saw a 8.9% decrease from the first quarter of 2012. The report finds that the total end user spending on printing remained almost flat, witnessing a fall of 1%. In the face of such a situation of depleting revenues, the vendors have no choice, but to supplant their traditional print business model with a services and software strategy, one that will provide better margins and arguably tighter, longer relationships with clients.
Seeing a gap where customers demanded a product plus service, with customization for their individual needs, Xerox from being a pure products company ventured into the managed services space. At present, services account for 50% of its revenues. Another key player in the space, Canon expects to garner Rs 100 crore in sales and service revenue this year from its managed document services business in India alone.
Decoding MPS
Nitin Hiranandani, Director – Printing, PPS, HP India explains that vendors could have different offerings depending on their strengths.
“We have a three pillar MPS strategy — optimize infrastructure, manage the environment and improve workflows. Optimizing infra is about devices or the hardware, involves looking at the number of devices vs number of users, volumes of prints, what kind of printers — mono or colour, A3 vs A4 etc, which we enable by our software called the
WebJetadmin, that can be deployed on the network of the customer and through that the customer can look at all the print data,” he says.
He adds, the second important leg is about managing the print environment enabled by security and job accounting solutions. “A secure print environment has become a standard discussion in every enterprise. CIOs have become very sensitive to secure printing, as they realize that one of the obvious sources of information leakage is hard copies. Besides, this has a dual advantage of green. You are actually cutting cost and carbon footprint. It is a win-win all through. Finally, it is about improving workflows.”
Typically every MPS customer is highly customized, notes V. Balakrishnan, Executive General Manager- Market Sales, Konika Minolta, a relatively new player in the Indian MPS space.
As Balakrishnan puts it, MPS, for them includes consultancy, on site manpower, management of access rights. It encompasses various core and non-core activities, there could be over 60 odd services under the fold.
In India, there have been some pioneering enterprises that have taken the lead to embrace MPS. Xerox India boasts of clients like Vodafone, Cisco and Standard Charted Bank. However, for vendors it still a learning period as to what customers want. It is still a phase where both vendors and CIOs are experimenting with how to leverage the service to its best.
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The print strategy
At present, most CIOs are focused at attaining greater efficiency at lower capex and incorporating basic security and management tools that allow retrieving prints anywhere on the network. Going forward, organizations will be compelled to take a holistic approach that factors MPS into their over all workspace strategy and ensure that this is tied to their mobility, cloud, or social business and collaboration agenda.
Experts believe such a comprehensive approach will become more prevalent as enterprise business and IT decision makers will start looking beyond siloed elements of their organization to see the bigger ecosystem and how it needs to flourish to create productive, future-proof workspaces for their resources.
Rajesh Uppal, CIO at India’s top car maker Maruti Suzuki, feels the IT heads of his league shouldn’t be spending their IT energy on printing and the entire activity should be outsourced.
“It makes sense to outsource the entire process if that can bring greater efficiency and cost savings. From our association with Canon, we are looking at cutting printing cost by over 20% and at the same time improving employee device ratio from 2:1 to 6:1,” he says.
Another first mover in MPS space, Yes Bank has been a believer in outsourcing of non-core activities, Suren Shetty, Senior President & CIO says they outsource every bit of IT that is commoditized. Since the bank was using different devices across branches and operating centers, the system lacked standardization. The IT team would spend a considerable amount of time keeping track of the annual maintenance contracts, re-order quantities, and tracing consumables like toners and cartridges.
“Technology in the domain of printing is fairly standardized. It is the service that makes all the difference,” says Shetty.
The strategy was two fold to save capital and bring in smooth efficiency. Shetty elaborates, “ We decided to deploy Canon Multifunction Printers coupled with a managed document services contract. We deployed entry-level MFDs at the branches that house fewer employees and opted for the mid and high-range MFDs for the corporate offices. This helped us save capital expenditure we would otherwise have incurred. Under this rental business model of five years for all the MFDs, Canon will manage all the printing services, including consumables, on a per-click model.”
For real estate developer BPTP that handles global accounts like Merrill Lynch, confidentiality of information was a bigger challenge than management of the devices. They had to manage the volumes and keep them confidential as some of the prints were value documents like the government issued stamp papers. In such a situation, it is always better to have an audit trail on the company’s print, scan and copy activities.
Letting users authenticate and retrieve print jobs, helps maintain confidentiality and reduces wastage. Reports can be generated to have a transparency about who prints what.
Conversely, for industries like retail, where documentation does not happen at a very large scale, print demand is mostly for purposes like in-store signage, billing etc.
Ranjit Satyanath, Customer Care Associate & Senior General Manager, Solutions & Technology, Shoppers Stop explains that if printing is down it affects their communication with the customers.
He says, “With dependency on these printers increasing, it became a challenge for our in-store FMS people to manage the expectation from the user teams. We currently use HP’s MPS only for device management for our 65 stores and four warehouses across 13 cities. We may at an opportune time consider using it in other areas as well.”
Like any other new change in the system, MPS too can be difficult to adapt to. The role of an effective change manager is critical to keep the ball rolling. Balakrishnan observes that under efficient change manager, the rate of success of the project can go up by at least 5%. In Maruti’s case, they chose to take the lead as change managers.
A positive development here is the fact that the SMBs in India are also waking up to the importance of MPS. A report by AMI Partner notes that 18% of these organizations are now using managed printing and publishing services. The study shows that at present, SMBs are not really interested in using device management infrastructure or workflow management and mainly gravitate toward printing done on pay-per-page basis.
Industry watchers feels that it is going to be interesting to see how OEM vendors will break the MPS maze for India’s SMB space. Currently, quite a lot of the print-jobs of these SMBs actually go to the unorganized, so called Print Jobbers (neighborhood print shops that provide printing or copying services). There is definitely a latent demand for “print-solution-in-a-box” concept. There are certain “specialization” opportunities where each Jobber may address different SMB customer segments that include architects, planners, educational institutions etc.
The SMBs also might not be have the budget for sophisticated solutions. Interestingly, Bhaskar Joshi, Head Marketing – Office Imaging Solutions Division, Canon India points out, “The talks with SMBs are now not focused on just printing SLAs, but on service SLAs as well. These customers are looking at print control at a cheaper price point.”
Printing the future
The Indian chapter of the MPS story is still being developed. Several factors like cost benchmarks, poor understanding of benefits of the offering have been keeping the demand low. The vendors too are grappling to provide support in tier-2 and tier-3 cities. Stringent SLAs, under such situations become impossible to deliver. The Indian PSUs have traditionally been a tough segment to crack due their decentralized operations and procurement procedures. More importantly, the segment’s inherent resistance to change has kept this segment quite passive to the trend.
The global market has become attuned to the trend. Canon’s Joshi sees a revolution in the making in the printing space. He says that the traditional in-house print room or central reprographics department (CRD) awaits a big makeover. The growth of digital communications is reshaping the print market, and is impacting the use of print and production methods used to deliver it. These changes are creating opportunities for print rooms not only to win business from outsourced print providers but also to redefine their role within the enterprise.
Increasingly, organizations are using the latest workflow technology to deliver on demand printing services like web-to-print technology that enables print rooms to streamline their print orders through an online portal. Web-to-print solutions are now inching closer to marketing asset management tools offering even greater functionality such as, allowing users to select pre-approved marketing materials such as brochures and customizing them online using design templates. Needless to say, the next couple of years will see significant developments for print rooms.
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