3 ways CIOs can use outsourcing to save millions on printing
A Fortune 1000 organization can spend upwards of $100 million dollars a year on printing, depending on the industry. Yet due to lack of central oversight and ownership of the print management function, much of that money is wasted. Indeed, some enterprises have trouble estimating of total print costs at all.
“Print is dispersed across a number of different business units — marketing, procurement, facilities and IT,” says Lisa Meath, managing consultant with outsourcing consultancy Alsbridge. “In most cases, however, there’s no big-picture perspective on how and where to drive improvements and costs reductions. Plus there’s no direction regarding where to start and how to create the most beneficial business impact.”
Financial services and insurance, for example, have traditionally been very paper-intensive. And many had invested in internal print capabilities that are increasingly inefficient and obsolete. While outsourcing these operations could save them money, the complexity of transitioning the work to a third party has prevented them from doing so in the past.
However, a strategic approach to sourcing enterprise print operations can help address this problem. And CIOs are ideally positioned to champion this particular cost containment effort.
“For the CIO it’s an opportunity to not only reduce costs but to drive strategic change across the enterprise, specifically by building the foundation for the transition to e-communications,” Meath says. “Given their holistic view of the organization’s business systems, CIOs have a unique opportunity to unify disparate business units and drive operational improvement and cost reduction related to print-related activities.”
Improving print operations can also lay the groundwork for increasing digitalization by becoming more discriminating about what is printed and what isn’t. IT leaders can spearhead a three-step process for evaluating and streamlining enterprise printing services.
The first step is analyzing and benchmarking the organizations entire print environment to understand in detail where, what, why and how materials are being printed. “Based on that assessment, the organization articulates their long-term objectives for the future state and outlines a strategy to get there,” says Meath. That plan may include process efficiency improvements, optimization, vendor consolidation, or other new sourcing strategies.
Next, IT leaders should integrate print providers into the IT service delivery mix, applying project management discipline to this process. Many companies, particularly in print-intensive industries have invested heavily in technology that is now obsolete. “The complexity of the transition and switching from existing operations to a service provider has been a huge obstacle,” Meath says. “The way to overcome that obstacle is through process discipline that breaks down the key milestones, deliverables and deadlines to keep the project on track. Integrating print providers into the IT service delivery mix is the process of breaking down those isolated islands of print operations.”
At this point, CIOs should focus on improving the consistency, speed and reliability of print production through continual workflow improvements that result in shorter print runs and faster turnaround time. Optimization includes streamlining processes and implementing appropriate automated solutions. This will also involve consolidating and rationalizing print centers.
This step requires changing processes that may have been in place for years that are causing expensive and time-consuming bottlenecks in the printing process. “We’ve seen process optimization initiatives reduce touches per job by 40 percent, and increase capacity and productivity by 20 to 30 percent, says Meath. “The result is reduced cost per job, streamlined processes, workflow improvements and increased efficiency.”
Meath has seen such print transformation efforts yield cost savings from 30 to nearly 50 percent, eliminating a large capital expense for a non-core business process. In addition, some CIOs have developed print centers of excellence that focus on consolidating operation and eliminating unnecessary printing, enabling their enterprises to utilize industry best practices for both printing and digital transformation.
There are significant IT-specific advantages as well. “From a CIO perspective, benefits include enhancing the focus on internal innovation vs. managing print and print-related processes that are not core to the business,” says Meath, pointing out that in midsize business up to half of all IT help desk calls are print related. “Specifically, you reduce the workload of IT support staff, and free them up for more strategic and higher [return] organizational objectives.”