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Procurement and Governance of Managed

Print Solutions
Managed
Services
A public
andPrint
private
sector challenge
A Business Tool for the Information Age

Contents

Foreword

03

MPS Procurement: Hidden Goldmine or Pandoras Jar?

04

What is available in the MPS marketplace? Pricing and contracting models

07

Procurement Methodology

11

Implementation

14

User communications

16

Physical layout

17

Optimisation

17

Expertise and resource required

19

Procurement of Managed Print Solutions - Responsibility matrix

20

Conclusion

21

Acknowledgements

22

Intellects Managed Print Group brings suppliers of managed print solutions together to provide the end-user
community with a clear understanding of the capabilities of technology in this area.

For more information please contact:


Carrie Hartnell
Associate Director - Industry Strategy
T 020 7331 2007
E carrie.hartnell@intellectuk.org

Lloyd Adams
Programme Executive
T 020 7331 2189
E Lloyd.adams@intellectuk.org

This paper is designed to provide readers with a supplier-neutral


assessment of the various solutions available to customers, and
how best to exploit these.
Intellects Managed Print Group brings suppliers of managed
print solutions together to provide the end-user community
with a clear understanding of the capabilities of technology in
this area.
www.intellectuk.org/managedprint

02

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

Foreword

Managed print is by no means a panacea; but, when implemented correctly it can lead to considerable and
tangible improvements, and can bring you one step closer to optimising your business processes, and improving
your overall business performance.
This whitepaper is intended for senior executives and procurement officers who are leading programmes to
deliver significant savings for their organisation. Although a more involved procurement process is required, this
is a rare opportunity to save between 75 and 200 per user per annum for your organisation without the
necessity to make job cuts or take large risks.
Managed Print Services focus on optimising the print environment and ensuring it remains optimised over the
term of the contract with predictable costs. If it is done right significant savings are possible. This whitepaper
discusses how to get it right and deliver two to four times the saving of the equivalent simple component based
procurement.
James Duckenfield
Chair of Intellects Managed Print Group

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

03

MPS Procurement: Hidden Goldmine or Pandoras Jar? 1

Introduction

Budgets

The term MPS (Managed Print Services) is


increasingly used in the printing and copying
marketplace. The many definitions and
frequent mis-use of the term provoked
Intellects previous whitepaper Managed Print:
A business tool for the information age. The
paper was developed by leading MPS suppliers
in conjunction with industry experts.

Prior to moving to MPS the constituent parts


are spread across many budget codes. This has
been described as the Margarine Effect3,
although the costs are known, they are
sufficiently distributed to avoid normal cost
control attention; costs when assembled in a
block are taken more seriously.

This paper focuses on challenges you might


face in implementing MPS. There is
undoubtedly a hidden goldmine2 but one
must avoid opening Pandoras Jar.
The procurement of Managed Print Services
(MPS) requires a paradigm shift from the
traditional commoditised procurement
methodology used to deliver print components
to users namely copiers or their modern
counterparts Multifunctional Devices (MFDs),
printers, faxes and their associated
consumables.
In the past, private sector procurement has too
often focused on procuring like-for-like without
any challenge taking place as to whether what
was bought previously was what was needed.
Procurement in this area is all too often over
simplified. In order to deliver the savings
required of the current financial climate the
first question must change to what do we
need now and over the likely term of our
next contract.
Governance
Arguably the most important element in any
project involving multiple parties is governance.
Responsibility must be designated for each
element of the MPS including the strategy,
policy creation, decision making and day to day
operations. These issues are particularly
relevant for a number of reasons:

Assembling the costs into one visible block


requires concerted effort as multiple
department cost codes can be involved and
some costs are often mis-coded in financial
records. MPS seeks to make the distributed
costs transparent so that departments pay a
predictable cost per print. This requires central
procurement of the facilities and a shift in the
budget holders philosophy from buying
components to buying the end product - print.
Silos
Converging technology in the document output
space means that the line between technology
traditionally managed by facilities departments
and that managed by IT departments has
become blurred. The gradual change in
technology and how it should be deployed has
created the market for MPS. Printing, copying,
faxing and scanning infrastructure has grown
organically without a single point of control,
with no planning to exploit the new
technology. It is vital when progressing to a
MPS to define future roles and responsibilities
for support departments such as procurement,
IT and facilities and to work out exactly what is
to be outsourced so that the interface with the
MPS supplier is well understood by all parties.
Be aware that each of these support
departments will be run in their own way and
may well have different outlooks. A common
strategy and senior sponsor is required to allow
everyone to co-operate to achieve a common
goal.

1 Commonly known as Pandoras Box this was mistranslated from the Greek in 16c.
2 In reference to Gartners Research Note 2001: Rightsizing Output Fleets: The Hidden Goldmine.
3 Margarine Effect term coined by NewField IT to describe the distribution of print related costs across many budget codes.

04

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

MPS Procurement: Hidden Goldmine or Pandoras Jar?

Culture
Strategy
An organisations culture should be taken into
account when deciding on the style of
governance of a MPS; it should be an
important factor when selecting a supplier as
their ethos should be compatible with yours.
The culture of the organisation is important at a
support department level but should also
influence the style of end-user communication.
How much consultation should be conducted?
How are requests over and above the agreed
strategy and policy going to be managed?
Who is going to have the final decision? How
will inappropriate printing be tackled? These
are all questions whose answers will largely
depend on your organisations culture.
Sponsorship
Due to the change in budgets and
responsibilities that may be required very senior
sponsorship is essential to make the necessary
changes. The sponsors role is to sign off the
strategy and back user communication. Ideally
the sponsor will have overarching responsibility
for both IT and facilities and be committed to
the changes required. Success will deliver
significant cost savings, improvements in
corporate responsibility and workplace
efficiency.

Defining a strategy is the key milestone on the


journey to MPS. The strategy defines what is
to be outsourced to the MPS supplier, the
ongoing roles of IT and facilities departments,
what is to be rolled out to the users and the key
objectives to be communicated to the business.
User traction
Communicating the strategy to the user
community is an important part of MPS
implementation. The level of importance will
depend on the company culture. In a corporate
organisation used to accepting change from
senior management, little or no user
consultation may be required, as centrally made
decisions implemented across the organisation
are the modus operandi. In a partnership, such
as a law firm, however, one has an opposite
extreme where unless users are taken on the
journey, the change to the working
environment will be rejected and user disquiet
can lead to failure of the project.

Failure to put this governance in place can lead


to increased costs and disenchanted users.
Typical sponsors are C level executives as they
have wide reaching influence across
departmental silos.

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

05

MPS Procurement: Hidden Goldmine or Pandoras Jar?

Case study
OGCs guidelines for procurement in this area published in 2008 include a flowchart, the first question of
which is are you looking to replace your fleet on a like for like basis? You may recognise this type of activity.
A large central government procurement department went to market for toner and other stationery items
approximately two years ago for an estimated 40m spend. One consultant approached them asking whether
a software solution to reduce the amount of toner used in the first place would be of interest. They thought it
was a nice idea but all they wanted to do was procure like for like and werent interested in buying less toner.
I would have had to speak to each buying entity, of which there were hundreds, about that.

You are looking to access the MFD Framework - Reference RM450.


Please use this flowchart to help you determine the most appropriate
route to select your preferred supplier.

Are you looking to replace your existing fleet on a like-for-like basis?

No

ok
Always lo e
is
m
ti
p
to o

06

Yes

ght
Not the ri h
c
a
ro
p
ap

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

What is available in the MPS marketplace? Pricing and contracting models

As with any procurement process there are a


number of ways in which the resulting charge
for the goods or services can be levied and
contracted. However with Managed Print
Services this is an area often not fully
appreciated and understood by the customer.
The end result is commonly an approach that is
selected on perceived benefits and transparency
yet has implications on the quality of the service
or flexibility of the contract.
It is worth noting that most suppliers offer the
MPS service in a component form so that a
number of different components may be
selected and included in the pricing structures
on the next page. However, it is also common
that some of the costs may not be wrapped up
into the ongoing service charge but rather
charged as one off or up-front charges.

For both of the above examples careful


consideration is required of the potential impact
of these additional costs if not included within
the price.
End of term costs need to be taken into
account. For example is the removal of
devices from site included in the cost of the
service?
These considerations are discussed in the
following section. This discussion has been
supported by a survey of the members and
customers of Intellect who have registered
interest in the original Managed Print Services
paper.

For example, some suppliers may have a


Transition charge calculated for a specific
project. Another charge that may need to be
considered is that for IMACDs (Installs/Moves/
Additions/Changes/Disposals).

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

07

What is available in the MPS marketplace? Pricing and contracting models

Pricing Models
A number of pricing models are available and may vary in their interpretation between vendors:
Base + Click - with or without volume commitment
A base charge is levied that contains all the fixed component of the offering with an
additional charge based on the number of pages (clicks) printed. These will be differentiated
between mono and colour.
Probably the most common approach today
Vendors will include different components within the base or click.
All inclusive cost per Click - with volume commitment and adjustment. (Often referred to as CPI - Cost Per
Impression or Utility Pricing)
A charge is levied for each mono click and each colour click printed. There is often a volume
commitment as all the charges from the Vendor will have been rolled up into the click charges
offered. To ensure the Vendor recovers the investment a minimum volume has to be reached or a
means by which the click charges can be adjusted should the volume rise or fall.
Typically the Vendor will dictate the fleet based on volume throughput and the
requirement for any additional devices will be offered outside of the CPI charging
mechanism.
Flexibility is limited. The charge is based on an understood volume and specified number
of devices in the design. If you want to add more device this may not fit the financial
model and be refused without additional charge.
There is little incentive for the provider to drive output volumes down as clicks are
generating covering costs, revenue and increasing profit.
This pricing model is often supported with ARC (Additional Resource Charge) and RRC
(Reduced Resource Credit) tables. This is a complex method of minimum billing and can
create considerable management overhead. Essentially, if the volume rises the tables
are consulted and the CPI reduces accordingly. Should the volume fall then again the
tables are consulted and the CPI will rise accordingly.
When is a click not a click? Beware of odd numbered duplex jobs. Was that five page
duplex job counted and charged as five images or six?
All inclusive cost per Click with no commitment
Less common these days in corporate business due to the associated risk for the vendor.
However, often found in public sector.
The charges will often be higher than the other pricing models as the Vendor will hedge
the risk of no commitment within the price.
This service may be supported with second hand or reconditioned devices.
Again when is a click not a click?
Base + Pages or Consumables - Usage based pricing with yearly usage reconciliation
A charge is calculated based on the fleet and expected mono/colour volume. This charge is evenly
and predictably invoiced over twelve months with reconciliation at the end of the period to true
up the pages printed and/or consumables used.
If you have high toner coverage (eg, a marketing company) the consumables method
may not be as attractive.
Interestingly if you have low page coverage this method may substantially reduce your
costs.
NB Standard industry coverage is 5% mono & 20% colour. This is based on
the ISO/IEC 19752 standard that calculates page yield from a toner cartridge
based on the toner on the page.

08

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

What is available in the MPS marketplace? Pricing and contracting models

Volume Plan
Sometimes called Evergreen. The device is placed with a lifetime volume which, when reached, is
exchanged for a new device.
If the lifetime volume is never reached then there may be a charge to terminate the device.
Cost per Seat
This is rarely an actual contracted pricing and charging mechanism in the printing and imaging
world due to the variable usage of the service. Its far more common in full outsourcing
engagements.
However, it can be useful as both expressing the current costs in comparison to the future costs.
It is simply taking the Total Contract Value (TCV) and dividing it by the period and number of users
serviced.
Base (flat fee) plus Service Charge Cost plus and/or fixed management fee
Not as common as other charging models. Provider will agree a flat fee based on all the fixed
components of the engagement and charge according to usage.
Lease, purchase or rental
The hardware in a MPS service may be provided in a number of ways. The hardware can be either included as
part of the service or purchased separately by the customer. It is advisable to engage the financial director for
advice and company policy in this area as there are tax, VAT and profit accounting implications depending on
the route chosen.
The vendor may supply the hardware as part of the service having some leasing arrangement (internal or
external) to finance the equipment. The hardware remains the property of the Vendor at the end of the term.
There may be termination charges if devices are removed from the service early. Ownership resides
with the Vendor or the lessor depending on terms and conditions.
The customer may choose to purchase the equipment outright.
Ownership resides with the customer and therefore reduces flexibility within the service.
Additionally the cost of the hardware will have a direct effect on the ROCE accounting model
Return on Capital Employedto execute the business. In other words it will show up on the
bottom line and reduce profit. As the cost of the devices has been borne by the customer there are
no device termination charges other than associated services costs that have been layered onto the
device on deployment.
Some Vendors may offer a rental service for the equipment.
This is often provisioned with second user devices where the risk of the capital has already been
substantially mitigated by previous customers. There may or may not be termination charges for
removal of devices from the service.

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

09

What is available in the MPS marketplace? Pricing and contracting models

Guaranteed savings
Guaranteed savings are offered by some
suppliers and essentially rely on risk and gain
share approach.
Contract considerations
The majority of MPS contracts are for between
three and five years. However, this is where the
simplicity ends. Is this for a coterminus three
to five years or non coterminus?
(A coterminus contract is where all
components of the engagement mature at the
same point. A non-coterminus agreement
extends beyond the original contract period;
the charge made will increase as the period
remaining lessens.)
A volume based contract may have a very
untidy termination as all the devices may have
started on the same plan but due to varying
usage will terminate at completely different
points.
As with any contract, early termination of
individual devices or the service as a whole
(other than due to failure to deliver) may have
cost recovery implications for the service
suppliers and the customer alike. Consider
these carefully.

10

Flexibility is often a requirement of the future


service and needs to be a component part of
most service offerings in the current business
environment allowing for acquisitions,
takeovers, closures, etc. It is quite reasonable
to have flexibility built in, but, appreciate that
there is no such thing as a free lunch and the
supplier will, quite reasonably so, build some
cost of risk into the pricing to allow for the
required level of flexibility. An example of this
would be to contract that the fleet may reduce
the fleet by up to 5% without penalty.
Depending on the charging model employed
and the make-up of the customer (new, asset
transfer or second hand) the charge built into
the contract will vary.
Service Level Agreements (SLAs), penalties and
efficiency clauses will clearly have a direct effect
on the charges for the service.
The higher the SLA the higher the charge.
The higher the penalties required the higher
the risk factor the Supplier will build into
the contract charges.
The Supplier is likely to hedge the cost of
an efficiency clause in the pricing.
The contract should be there to protect both
parties from unforeseen exposure and stipulate
how additions to and removals from the service
are charged. The contract should not be a
vehicle to catch out the other party.

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

Procurement Methodology

Procuring a managed print service can be a


complicated procedure: it requires thorough
understanding of the current situation,
consensus in the organisation on an acceptable
level of change and a clear definition of what
is required. This often involves combining
several different budgets and gathering the
views and support of a wide range of internal
stakeholders. It is important to note that this is
at the very least a total cost of ownership (TCO)
based procurement and in more involved cases
an outsourcing procurement requires specialist
expertise.
Printing paradox
In the past, each contract renewal brought
better unit prices, but the total spending has
inevitably risen as organisations have
negotiated to obtain the best price on each part
of the printing workflow (desktop, centralised,
copying, fax, etc). Then they aim to run the
project internally and optimise the fragmented
print strategy and technology. As a
consequence, the budgeted spend is always
exceeded due to decreasing levels of attention
after the initial installation and poor reporting.
Factors causing this may include:
overall volume increases
shift of volume to colour
post implementation addition of devices
or accessories
failure to remove old devices
failure to achieve volume commitments

Key steps
Determine current state
Before embarking on this procurement exercise
significant effort will be required to understand
the current state. This means assessment of the
users actual requirements rather than what has
developed over time in an organic fashion. The
organic growth of hardware and internal
services to deliver print may cross many budget
codes and will certainly involve more than one
support department including facilities and IT.
The key factors in understanding the current
state are:
Full and accurate inventory
Most organisations do not have an accurate
picture of how many print devices they have
and where they are. Understanding the
device types and their physical locations is
key to re-engineering the environment.
Understanding your organisational
requirements and drivers
MPS integration is a medium to long term
project so it is essential that you consider
your organisations key drivers and ensure
that your MPS incorporates these.
Accurate measurement of volumes
Understanding the current volume split by
mono and colour and potentially what and
who is producing it is a fundamental
element in calculating requirements and the
commercials for both current and future
states. Any inaccuracies at this stage will be
carried through in future calculations.

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

11

Procurement Methodology

Unearthing the true costs


Calculating the current costs of the
environment is not a trivial task. There may
be a number of contracts and suppliers that
need to be taken into the equation along
with consumable items that have been
miscoded in a purchase ledger. Only
through an accurate calculation of current
costs can savings be assessed. You may
want to consider soft costs such as
support overheads, electricity usage and
carbon footprint.
Understanding user requirements
Depending on the culture of your
organisation, you should consult your users
prior to moving to the next stage. There
are two reasons for doing this. The first
reason is to accurately assess the user
requirements to ensure they are met by the
future service. The second and arguably
more important reason is to take the users
on the journey to the new environment
rather than have them feel that it is being
imposed on them. These projects are about
change management as much as they are
a technology and procurement exercise.
If user adoption is not achieved the good
work performed in the project will be
quickly undone in following months due to
users demanding additional facilities.

TUPE
The Transfer of Undertakings (Protection of
Employment) Regulations 2006 (TUPE), may
need to be considered if there is a service
provision change. Professional advice
should be sought if there is a possibility it
may apply, as the legislation can be
complex.
Budget alignment
The cost base will allow you to gain the
maximum benefit from a MPS project
elsewhere because you will be tendering for
all of the elements of the project. One of these
is to create an accurate cost model and a
mechanism to enable charge back to the
respective departments.
Gaining the support of key stakeholders within
the organisation
Given the spread of the respective print
budgets, responsibilities and users across any
organisation, it is essential to ensure that key
stakeholders are engaged with the project.
Print projects can enjoy a great amount of
visibility within an organisation so it is
important to ensure that you have gathered
broad support in advance.

Analysing document intensive processes


It is important to analyse document
intensive areas as there may be an
opportunity to re-engineer the process to
reduce the total output. (Though the
activities to achieve this are beyond the
scope of this document).

12

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

Procurement Methodology

Determine Strategy

Go to market

It is tempting to go either to a design or


straight to market following a current state
analysis. Resist this temptation. At this stage
you do not have the mandate for change that
will be required for a successful project.
Developing a strategy is not a long process but
is time well spent prior to moving the project
forward.

There are two valid approaches to go to market


for a MPS:

There are four things that need to be


determined as part of the strategy:
Governance
Designated responsibility for each element
of the MPS, including strategy, policy
creation, decision making and day-to-day
operations.
Project objectives and principles
The objectives for the project along with the
principles the project is going to follow
when problems present themselves should
be decided at this point. The objectives are
essential for user communications and for
taking users on the journey. It is important
to be able to articulate the aims of the
project as an essential part of gaining the
support of key stakeholders. It is also
important to establish what success looks
like and what are the key milestones within
the project.
Placement policy
Placement policy is a fundamental part of a
MPS strategy. Where are devices with
particular functionality sets going to be
placed in relation to users and with what
user to device ratio? What is going to be
the policy regarding the deployment of
personal printers?
Service Level Agreement
The strategy should determine what service
level is appropriate to your organisation.
It should also be noted that service levels may
need to vary depending on the business need
and the design of the solution. KPIs will need
to be established and agreed based on your
requirements, such as:

1. Go to market with a clear brief and accurate


current state data and let the supplier come up
with a solution.
This has the advantage of allowing the supplier
to deliver a creative solution which may present
options that you have not previously
considered. This also allows for a wider range
of suppliers to be considered. This does give
the downside that bids may be difficult to
compare and the procurement process may be
drawn out.
2. Go to market with a first cut solution
This allows you to directly compare bids on a
like for like basis, makes comparisons
simpler and generally results in a faster
procurement process.
A combination of the two methodologies above
can provide the best of both worlds. Create a
sample solution design with sufficient detail to
allow direct comparison but ask for a second
option using the Strategy as a guide.
Going to market without assessing your needs
in the anticipation that the incoming supplier
will do this is of course possible. It will however
extend the procurement process and have a
high risk that the bid price will be substantially
different to the price you eventually pay. This
change may be after you select your supplier
and hence put your original decision in
question.
It is essential to remember that a MPS project
is likely to require a reasonable degree of
flexibility on behalf of both parties to ensure a
successful outcome. The tender process should
help you select an appropriate partner to work
with as well as deliver a commercially sound
solution. The supplier will be managing an
essential part of your business infrastructure so
it is important there is a good organisational fit.

a. continual reduction of Customers Total


Spending for document related activities
b. continual improvement of the service to
completely satisfy the customers needs in
the following areas cost efficiency,
productivity, security, environment

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

13

Implementation

This is the phase that moves the organisation from the current printer set-up to the new model (future state).
This phase of transferring to a MPS is critical in many ways: it is the first exposure that the organisation (and end
users) will have of the new service; it is also a learning phase, where both customer and supplier have to adapt
and react to the situations as they change.
The key to a successful implementation phase is collaboration; without this the implementation phase will
almost certainly be extended, lead to frustrations and create additional work that can be easily avoided.
The diagram below shows the phases of a MPS project and the activities at each stage:

Project setup

Implementation

Business as Usual
(BAU)

User communications

IT

Physical layout

Change management

Optimisation

Award of
Contract

14

Testing

Handover

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

Implementation

Setting up a Project Board should be considered. Many organisations follow a PRINCE2 methodology, which defines
responsibilities (rather than roles):
If PRINCE2 is not being used then an example project engagement model between your MPS supplier and organisation
is shown below:

MPS Supplier

Organisation

Senior sponsor

Senior sponsor

Account manager

Programme manager

Service delivery manager

Project manager

Technical specialist

IT representative

Implementation team

Facilities representative

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

15

Implementation

User communications

IT

For a MPS project to run smoothly it is


essential that users understand what is
happening and why.

Clear policies and processes must be defined


regarding the interface between the supplier
and the organisations IT services department,
to cover the following:

User consultation
Even if significant user consultation is
undertaken there must come a point when a
decision is taken and consultation ends. It is
not possible to keep all users happy all the time.
In addition, negative views on a future state are
often shaped by previous experiences that are
not relevant, eg, users demand extra devices
because of the unreliability of the current fleet,
not understanding that better devices and
support services will greatly increase device
availability. By the time implementation starts
it is vital that user consultation has finished.
User information
Regardless of whether users are consulted
about MPS decisions, it is vital that all users are
clear about what will happen and when,
otherwise the uncertainty will breed negative
opinions and rumours will circulate that
misrepresent what is planned. Most
organisations have well-established
communications processes to their staff which
can be used.
Training
Most staff will ignore requests to attend
training courses for print devices. However
there are approaches to training that do work:
appointment of a print champion within a
work group. This person will be an expert
user and a point of contact for staff
needing help in using the new print
infrastructure. They can also be the person
to perform low-level maintenance of the
devices, ie cleaning the glass of MFDs,
replenishment of toner and paper,
removing paper jams.

logging of calls by an end user. Should this


be to an internal help desk or directly to the
supplier? If internal there should be an
agreed workflow per call type and, ideally, a
single point of contact for all print-related
calls.
diagnosis and rectification of Level 1
minor faults (eg, paper jams). Again, this
can be handled internally or by the supplier.
reporting of Level 2 device faults which
require specialist intervention by the
supplier to fix.
The organisations IT department will need to
work closely with the supplier to ensure a
smooth transition. Specific areas to be covered
are:
design of the print server architecture. This
is something that can often be an
afterthought but can require a significant
amount of work.
agreement over who supports which
components eg, server os/hw
definition of print drivers to be used
network address requirements
creation of print queues
installation of device management software
the handling of specific print requirements,
eg, printing from an ERP system (such as
SAP) or a Citrix environment
Ideally all of the above will have been covered
at the tender stage so that the supplier has
contracted to an approved model.

during the first few days of the new print


infrastructure it is a good idea to have
floor-walkers to help staff. These will often
be provided by the MPS supplier.

16

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

Implementation

Physical layout
The physical layout of the new print
infrastructure should have been defined at a
high level prior to the tender process. However
there is further work to be done once the
contract has been awarded:
if the Invitation To Tender (ITT) has been
based on a snapshot of the current state
then further due diligence will be required
to accurately discover the current state of
all sites within the organisation. This
information will be essential to create a
workable future-state solution design, but it
will also act as a baseline when cost savings
are measured (see Optimisation section).
even if all sites have previously been audited
then checks will be needed to ascertain
whether any significant organisational
changes have occurred which may affect
the design.
at this stage a more detailed device
placement plan will be required, taking into
consideration power and network
requirements, phone points (if fax cards are
used in MFDs) and health and safety
policies.
the customer will need to work with the
supplier to confirm that the specified
models are the most appropriate,
particularly if there has been a product
refresh between the ITT process and
implementation.
Change management
ITIL definition: The goal of the change
management process is to ensure that
standardised methods and procedures are used
for efficient and prompt handling of all
changes, in order to minimise the impact of
change-related incidents upon service quality,
and consequently improve the day-to-day
operations of the organisation.
The change management process will be
similar for a MPS project as for other IT-related
projects but there are some specific
considerations for implementing a Managed
Print Service:

it is important to move quickly: a print


infrastructure is a dynamic environment.
It is particularly important that due diligence
is carried out close to the commencement
of the procurement, to prevent the
information becoming out of date.
it is important to maintain discipline and
freeze any procurement and infrastructure
changes outside the MPS framework. If this
is not done then the project becomes
unmanageable and extra costs creep in.
If changes are essential then they should be
made within a formal change management
framework. It should be noted that this can
be a frustrating time for end users,
particularly if they are waiting to get an
old, unreliable device replaced and find
that this is taking longer than with the old,
informal process.
Optimisation
The demands on an office printing environment
change. In a context of ever-increasing
volumes of information, juggling competing
requirements of quality and sustainability is
no easy task.
Given the far-reaching, but largely concealed,
impact of print on most organisations balance
sheets, a MPS offers an innovative approach to
re-gaining control over costs. A MPS also deals
with a host of other issues brought about by a
maturing information age, such as meeting
efficiency, sustainability and security targets, all
the while taking advantage of the very latest
technology solutions.
A key reason for implementing a MPS is to save
money. If you have carried out a detailed
analysis of current costs you will be able to
identify the Day 1 savings using the future
costs stated in the MPS contract. However you
should be able to achieve further cost savings
once the new solution is live. A MPS should
give you far better data on the usage of the
print fleet than you have previously had, to help
with this. For example, it will tell you if one
department is printing excessively more than
the average for the organisation, pointing to
an issue with internal policies and processes.
Or that certain devices are over-used or
under-used, which could be rectified by
adjusting the device layout.

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

17

Implementation

Your MPS supplier will probably be able to drive


the ongoing optimisation programme; indeed
many MPSs are sold with this as part of the
deliverable, but often it is not practically
applied. You may also wish to consider
whether this will be as effective as driving it
yourself, or bringing in independent help.
The performance of the MPS should be
reviewed by all key stakeholders on a regular
basis, typically every three to six months, and a
plan established to fine-tune the infrastructure
based on an analysis of the available data.
Your end users need to become allies in
reducing print volumes, and therefore cost.
A think before you print campaign can be
effective if the incentives are appropriate.
Linking print reduction to a donation to an
appropriate charity is one way to achieve this,
and may act as a greater incentive for many
staff than simply highlighting the cost savings.
Other considerations
Roll-out
You need to consider the roll-out schedule.
Will it be a big bang or a sequential roll-out
over a longer period? Will you install the
hardware infrastructure first, followed by any
software components or will everything be
installed together? The answers to these
questions will depend on the resource you and
your supplier have available.

18

Consumables Management
Your MPS supplier will normally provide
consumables as part of the contract. This may
use a reactive or pro-active process, ie. either
you order a new consumable when the existing
one is running low or your MPS supplier may be
able to monitor consumables usage remotely
and ship replacements on a just in time basis.
However you will need to consider:
who orders consumables (if you have a
reactive process)?
whether your firewall will allow the MPS
supplier to remotely monitor usage (if you
have a pro-active process)?
where they are stored: centrally, per floor or
by each device?
who installs them?
how are they removed from site and
recycled?
Dont block the path!
You will expect your supplier to meet an agreed
schedule and provide the necessary resource at
each stage of the project. You must do the
same if you want the project to be successful.
This is especially important for activities that are
on the critical path: ensure that you are not
blocking this path by missing your own
deadlines. Mapping out a realistic project
timeline with budget and resources available in
place and allocated well in advance, will help to
achieve this.

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

Expertise and resource required

It is vital for the Procurement function to have a


level of expertise and resources available in
order to run an effective sourcing activity when
selecting a supplier to partner with. However
the expertise required is multi-disciplinary and
not limited to Procurement.
Business case creation
The Procurement function need to be skilled in
articulating the value of the project, both in
terms of business benefits and also financial
returns. This should be captured in a small
number of clear points.

The procurement function should undertake a


comprehensive research activity to ensure that
the prospective suppliers engaged are the most
appropriate fit for the organisation. As the
MPS marketplace continues to mature, an
increasing amount of independent analysis is
available from Intellect and others. Different
suppliers will be able to demonstrate different
strengths and expertise which have specific
relevance to the organisation, for example
international coverage or an industry sector
specialism.
Understanding of technology

Investment in resources
The project must engage key areas of the
organisation in order to gain sufficient input to
make the project successful. This will include
the following:
gathering user requirements from
designated area champions
gathering current state data from area
experts
technical input: network topology,
applications, security requirements, etc.
project/programme management: this
resource needs to be identified and
allocated early in the process to assist the
Procurement function in establishing the
true value of the project versus the required
resources to transform.
commercial/legal resource: to assist
procurement in the contracting process
alignment of budgets: in order to
demonstrate the cost saving benefits of a
Managed Print Service, it is essential that
the organisation is able to actually recognise
the financial benefits. If budgets are not
aligned appropriately then funds will
continue to be wasted, even if printing
costs are identified and controlled. This
approach to re-aligning budgets needs to
be committed to as a concept prior to the
commencement of the project.

It is useful for the Procurement department to


have an understanding or experience in
procuring a technology based solution.
For example:

print functionality
driver compatibility
3rd party print management software
helpdesk solutions
SLA based contracts
technology roadmaps
ongoing innovation
obsolescence

Understanding of components that make up


full printing costs within the organisation, eg,
IMACDs (Installs/Moves/Additions/Changes/
Disposals).
Understanding the MPS marketplace

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

19

Procurement of Managed Print Solutions - Responsibility matrix

20

Job role

Skills knowledge and attributes

Responsibilities

Project sponsor

Strong leadership skills


determination to deliver project on
behalf of their company.

Provides key management backing


for the project and ensures
communications of benefits and
needs are promoted throughout the
organisations.

Project management

Formal management skills


- ability to deliver on time and to
budget.

Day-to-day responsibility for rollout.

Procurement

Technical/solution based
procurement.

Leads the procurement process.

Legal

Knowledge of existing contracts


and leases and any limitations in
terms of novation clauses, early
termination clauses and print
volume commitments.

Provide input into contractual


position with existing suppliers.
Assist with negotiation of contract
with future supplier.

IT Department

Knowledge of printer and printer


driver hardware and software.
Knowledge of print server
architecture and network
architecture.

Provides technical input into the


project.

Facilities/Property

Knows floor/building layouts and all Provide usage figures, toner storage
network/power/phone points. Has locations for all standalone devices.
floor plans of all buildings marked
up with existing copier/MFD/printer
locations. Has usage figures for any
standalone copiers/MFDs which are
provided under the facilities
banner.

Finance

Knows the current value of existing


printer/MFD/copier assets, along
with associated leasing information.
Also has costs of consumables
spend over previous months/years.

Provide costs associated with


consumables and support for
existing printers and copiers etc.
Provide lease costs for any leasing
associated with output devices in
scope of project. Assists with
provision of all current print costs.
Advises on operating versus capital
leases.

User Group Representatives

Understanding of projects goals and


desired outcomes from senior
management together with daily
business printing requirements from
end-users.

Provide input into new service


requirements in terms of
functionality, usability, placement
rules etc.

Communications Management

Marketing comms from someone


who has been trained on MPS.

Ensure the comms are involved with


the strategy and the organisations
policy. Comms should be timely
and accurate, setting expectations
accordingly.

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

Conclusion

MPS Procurement is not simply procurement but a change programme.


To be effective one must take steps to understand the current environment, work out what is really required and
then prepare properly for change. Internal reorganisation of roles, responsibilities and budgets is likely to be
required. Senior sponsorship will be required to make these changes but the results present a rare opportunity
to deliver cost savings, productivity improvements and reduce environmental impact without having to make
redundancies. Successful MPS procurement will be a high profile improvement to your organisation as every user
will be touched by it. Unfortunately failure will be just as public.
Getting it right comes down to the following simple formula:

Secret formula for MPS success

OH
OH

O
+
O

Expertise
Change Management

OH
O

O
OH

O
Good customer

Good supplier

Good MPS project

Savings

Getting a good supplier is an obvious goal for any procurement but equally important for this type of project is
being a good customer. This requires resource, planning and commitment. Up to 10% of the contract value
should be set aside by the customer to provide the resources required to ensure success. Resources from
Facilities, IT and project management will be essential. Planning will be required to ensure you stay off the
critical path and let your supplier achieve your aims.
The key catalyst to get from one side to the equation to the other is a combination of expertise and change
management. As a specialist area most organisations dont have the expertise in-house to analyse the current
state accurately, create solution designs, create the specifications for what can be complex requirements and
contracts. Unless you have this expertise dont try this alone; get in expert advice.
A successful project will deliver high profile improvements to your organisation many times more effective than a
simple like for like procurement.

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

21

Acknowledgements

Authors
Intellect would like to thank the authors from the following organisations who provided the essential input and
expertise throughout the writing of this document:
Canon (UK) Ltd
As experts in print and document imaging solutions, Canon works in partnership with
an organisation to reduce costs by providing print and document simplicity, delivered
securely with environmental commitment. Ultimately we allow you to focus on your
core business, whilst printing less, and on fewer devices.
www.canon.co.uk/MPS
Fujitsu UK and Ireland
Fujitsu UK and Ireland is a leading IT systems, services and products company
employing 14,000 people with an annual revenue of 2 billion. Its business is in
enabling its customers to realise their objectives by exploiting information technology
through its integrated product and service portfolio. This includes consulting,
applications, systems integration, managed services and product for customers in the
private and public sectors including retail, financial services, telecoms, government,
defence and consumer sectors.
www.uk.fujitsu.com
Hewlett-Packard
HP the worlds largest technology company, provides hardware, IT services and
solutions that simplify the technology experience. HPs range of award winning
products and services for imaging and printing help companies improve, manage,
and optimise to increase productivity, reduce costs, and improve business results.
www.hp.com
Konica Minolta
Enhance efficiency through technology, performance increases and cost reduction.
Simplify your print management; reduce and control your costs; ensure data security;
access essential management information; reduce energy use and minimise
environmental impact. You manage your business; well manage your print.
www.konicaminolta.co.uk
NewField IT
An independent consultancy that has successfully helped implement MPS covering
over 75,000 devices. We are not a MPS provider but provide a comprehensive service
including needs assessment; tender and change management and systems
integration. Our expertise de-risks the whole process.
www.newfieldit.com
OKI
OKI Printing Solutions is a global business-to-business brand dedicated to creating
professional printed communications products, applications and services, which
increase the efficiency of todays businesses.
With OKIs Managed Print Services, getting your printer fleet tailored to your real
needs you can improve the way you work, obtain the latest in technology, stop
worrying about maintenance and above all save money.
www.oki.co.uk
Xerox
Xerox transforms business processes through more effective document management.
To cut costs and improve operational speed, organisations outsource a range of
business processes to Xerox. These include financial, administrative, client acquisition
and account opening, and office and print centre optimisation.
www.xerox.com

22

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

Acknowledgements

Contributors
Intellect would also like to thank the representatives from the following organisations for their useful advice and
comments during the completion of this document:
Computacenter
Computacenter is Europes leading independent provider of IT infrastructure services.
We can advise customers on their IT strategy, implement the most appropriate
technology from a wide range of leading vendors and manage their technology
infrastructures on their behalf. At every stage we make our customers businesses
sharper by removing cost, complexity and barriers to change across their IT
infrastructures.
www. computacenter.com/managedprint
The Danwood Group
Danwood are experts in partnering. As Europes largest independent provider of print
and document solutions we partner with the best print equipment manufacturers in
the world. Effective partnerships with our customers enable us to deliver print
strategies that meet business needs and drive document security, efficiency, and
environmental savings.
www.danwood.co.uk
Northgate Information Solutions
Northgate Information Solutions provides software, outsourcing and information
technology (IT) services to the human resources, local government, education and
public safety markets. Northgates Managed Print solution is a key part of our
Conserve range of services and solutions which aim to help organisations reduce
costs, control waste, conserve energy and protect the environment.
www.northgate-is.com/managedprint
SME Computer Services Limited
SME Computer Services Limited provides outsourced IT services to SME and
mid-market customers. The company provides both On-Premises and hosted,
multi-tenanted, infrastructure platforms. Under its Liberator brand, the company
integrates and manages service elements provided by major IT service organisations.
Both customer specific and packaged solutions are available.
Managed Print Solutions are playing a role in getting organisations to re-think their
whole approach to their IT infrastructure. They help to make companies think out
of the box which is where we come in!
www.smecom.com

Procurement and Governance of Managed Print Solutions - A public and private sector challenge

23

Intellect works with and for members to:


develop the UKs capability to support a strong and growing technology sector
improve their business performance by
providing insights into markets and supply chains and constructively influencing
their development
engaging with government and regulators to create the most favourable
environment for growth and employment
maintaining the industrys reputation and championing its strategic importance
sharing and promoting best practice
For more information visit www.intellectuk.org

Intellect Russell Square House 10-12 Russell Square London WC1B 5EE
T 020 7331 2000 F 020 7331 2040 E info@intellectuk.org W www.intellectuk.org
Intellect October 2010
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