Document Output: Where is the Cost?

May 13th, 2009 by docusenseadmin under Complexity Simplified. 10 Comments.

Question: The Most Costly Portion of Document Output is?

A) Equipment Acquisition Cost
B) Supply Costs
C) Service Costs
D) Administration and IT Cost

Answer: D

Industry analysts generally agree that printing, copying, faxing (Document Output) is expensive and the costs are largely undocumented and unmanaged in most firms. The cost of document output (measured by adding up acquisition, supply and service expense) is somewhere between one and three percent of total revenue. Acquisition, supply and service expenses are easily measured. However, the costs of managing devices across business networks are much larger and more difficult to measure.

IDC research estimates that for every $1.00 spent in document output costs (acquisition, service and supply) firms spend $9.40 in IT support, administration and document management. So the answer is D.

If workgroups use varied equipment, the cost can increase quickly. Multiple equipment often entails more training, IT expense, multiple vendors, contracts and service options; increasing managing complexity. It pays to try to simplify the equipment and support options.

To plow through the increasing rush of daily information, corporate employees today typically spend up to 45% of their day working on paper and electronic documents. Multifunction printers can play a huge role in streamlining duplicated and often cumbersome processes but it’s extremely important to pick the right mix of equipment for your business.

For more information or advice in making this important business decision contact a support specialist at DocuSense by calling 1-800-422-0080.

DocuSense – Complexity Simplified!

Tags:administrative costs, document management, document output cost, DocuSense, equipment cost, managing devices, service cost, supply cost.

10 Comments

Pozycjonowanie on May 19th, 2009

I never looked at it this way. People, me included, usualy just count the stuff that phisicaly affects the process (B: Supply Costs in this case). I never think about people hired to among other things take care of everything printing/faxing/copying related.

Diety on May 20th, 2009

Ha, this is what I call thinking outside of the box. I think what Pozycjonowanie said is what most people assume straight away. What shocks me is the ratio. 1 to 9.40! I knew IT and Administration were expensive here, but I assumed a 1 to 2.5 max…
Thanks for enlightening me!

Bob Chernisky on May 20th, 2009

Hidden supply costs are also HUGE!

Whenever stats like these come out, the specifics are hard to pin down in an “across the board” way. I am certain that the hidden costs far outweigh the obvious expenses of buying, supply and servicing equipment; however, I am just as sure that the percentages change when you move the survey from large corporate settings (i.e. where they would have full-scale IT support, doc management, etc.) down to an SMB.

That’s our typical printer fleet management customer and we see the supply costs routinely as both very substantial and completely unmanaged. Of course, as mentioned above, the devil’s in the details. Are they more than “Admin and IT”? Who knows, but consider these “Supply Costs” categories:

1. Purchasing — Purchase order expenses; pre-purchase due diligence by buyers; monitoring of consummables’ yield; returning defective toners; tracking MRA credits; etc.

2. Inventory Management — Receiving; warehousing; end-user distribution; etc.

3. Recycling — Those who desire to be responsible environmentally will need to collect, warehouse and dispose of empties, usually involving shipping/handling expenses (or live with a 400-year decomposition period for toners in your town dump).

4. Obsolescence — This is enormous. All the initial costs were already spent, years ago. The consummables were bought in bulk to get end-column pricing. The printers themselves are long gone. Yet all these toner cartridges are still being stored and counted in inventory and will eventually need to be disposed of. Every penny of associated expense is a complete waste!

We added three managed print services clients recently where the sales rep’s found literally thousands of dollars of new O.E.M. cartridges unopened in storage rooms all around the facilities. The only problem? — The customers no longer have those models anywhere in their organizations!

(Be watching for “toner cartridge bargain” on eBay sometime soon.)

Seriously, though, the “soft costs” hidden in every printed page are simply amazing. There are real savings within reach of any company that will simply begin managing this typically unmanaged area of their business.

Robert Severn on June 8th, 2009

Maybe in a large company. In a small design practice, using Macs, we have very, very little time spent on “IT” Our largest expense by a wide margin, is consumables.
We have no “people hired to take care of everything printing/faxing/copying related”, because we don’t need them.

docusenseadmin on June 10th, 2009

Agreed, especially if, in your instance, you are using a color device (supplies can be more expensive). When your equipment doesn’t work properly or needs service (if it’s your only device and you can’t print that day) that has an immense cost. Everyone probably chips in to adjust or get fixed (cost there?)

Larger companies magnify the problem because they are more complex/have more equipment. However, even a smaller company with say, 20 users and 4 devices can experience the IT related costs we were discussing.

docusenseadmin on June 10th, 2009

You hit on some great points. I think you saved the best for last. Summarized: Put a number on the soft costs. Whatever gets measured gets managed!

Ten Things to Consider When Buying a Multifunction Printer: Article 2 « Cost Per Page Solutions on June 12th, 2009

[...] are unreliable, or lack the features and capability to efficiently produce the results you need. Quantifying the cost of unreliability or lack of features is hard to do but most experts agree that [...]

Pozycjonowanie on June 17th, 2009

IT professionals are pretty expensive especialy in big companies. They’re necessary but often they do as little work as possible.

The Six Tenants of the Copier Company (and how you can get a better deal) « Cost Per Page Solutions on June 17th, 2009

[...] costs such as lost capabilities, user frustration, down-time and office inefficiency will multiply the expense tenfold. Why is it so hard to get this right? One reason is that manufacturers [...]

docusenseadmin on June 17th, 2009

Yes, you are right. I don’t know if I’d classify them all that way. You can get pay per incident IT if you are a smaller company and get the cost right.

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