Printing culture

Despite the advent of the so-called ‘paperless office’, high-end printers remain in demand in the Middle East’s enterprise sector. CIOs are yet to find ways of reducing paper wastage and printing costs.

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By  Vikas Kaul Published  April 10, 2005

|~||~||~|Printing and copying costs are a substantial overhead for enterprises not only in the Middle East, but also around the world, and yet most CIOs are not budgeting for these costs. Printing costs at companies account for as much as 15% of their overall expenditure, according to research firm Cap Venture. 90% of enterprises do not track printing costs.

After all, their CIOs were told that the rapid technology advancements would help create a ‘paperless office’. Enterprises have not yet woken up to the magnitude of printing costs they are incurring on a daily basis.

“In reality, people pay attention to the price of printer hardware and neglect the cost of printing. The concept of total cost of ownership (TCO) is not on the priority list of most enterprises. Businesses should realise that printing cost can easily end up being four to ten times more than the original cost of the hardware,” says Maki Nagao, product manager at Kyocera Mita.

Toshiba shares Nagao’s sentiments. The vendor says businesses tend to think of printing costs in terms of the price of the hardware and ignore the cost of day-to-day printing. “According to our estimates, most large enterprises are spending approximately 1% to 3% of annual revenue on managing printing, scanning, copying, faxing and document management devices,” says Pradeep Kumar, country manager for Toshiba Gulf.

Kumar says printing costs are usually not apportioned under a single overhead. They tend to be part of costs for stationary, IT and administration, which in turn are attributed to different departments. Whatever the reason, most companies do not know how much money they are spending on printing. Enterprises need to assess their printing costs before it becomes a serious issue.

The market for enterprise printing solutions is growing rapidly in the Middle East. Madar Research says enterprises in the GCC region spent US$880 million on printing solutions in 2004. Saudi Arabia had the lion share of 58%, followed by the UAE. According to IDC, the printing shipments in the region grew by 33% in 2004. Furthermore, Madar Research forecasts the printer market will grow at an average of 17% every year between 2005 and 2009.

These numbers conclusively contradict the concept of a ‘paperless office’. If anything, the growing pervasiveness of IT has helped increase the demand for printing. “Introduction of IT applications such as Microsoft Word, PowerPoint and e-mail have increased printing usage by 40%,” says Dan Smith, office product manager at Xerox.

These figures suggest an underlying trend in the corporate space, says Nagao. “The amount of available information has increased dramatically, so it is quite natural to see an increase in the volume of day-to-day printing. The actual documents being printed have also changed. We are not only printing official documents such as reports or statements, but unofficial documents such as e-mails and web pages as well. Al these contribute to the culture of printing,” he adds.

Internet is also contributing toward the increase in document printing. With the internet infrastructure being rapidly established throughout the Middle East, employees does not only easily share electronic files, they are also easily transferred via the internet and e-mail. Scanning has also increased the demand for multi function platforms. Kazim Mankani, area manager at Konica Minolta, believes enterprises and their employees are communicating more and sharing information via printed documents.

“Networking among employees within an enterprise and also outside the organisation is very strong. Documents are sent to individuals or [workgroups] on a regular basis and most of the time these documents have to be printed,” says Mankani.

Increased networking also means there is a shift from ‘print and distribute’ to ‘distribute and print’ culture. While the latter adds to convenience, it invariably leads to increase in printing output. “Hardcopy is still popular for reading and filing in organisations. In the fields of finance, investments and judiciary, hardcopy is still necessary to keep as a proof of document,” says Toshiba’s Pradeep Kumar.

Furthermore, the nature of printing solutions is also evolving due to the growing market demands. Enterprises are deploying sophisticated enterprise resource planning (ERP) solutions in order to streamline their day-to-day workflow, making printing quite an easy task. “It has been a trend all over the world to develop ERP systems that are more flexible. In the past, many ERP systems did not utilise the many features printers offered. Now, this is changing. Printer vendors have increased compatibility between IT systems and printers, making it possible to utilise more printer functions,” Nagao explains.

In addition, dot matrix printers are being replaced with laser or Led printers. Inkjets are no longer in use at the enterprise level. “Dot matrix printers are not long-lasting and the cost of consumables is too high. If you take a three-year time frame, laser printers works out 60% to 80% cheaper,” says Mankani. “Colour printers are becoming popular in the enterprise space due to their advanced functionalities. “It is also popular due to power point print outs because they are in colour and get noticed at once,” he adds.

Another new trend in the enterprise space that is contributing toward the increased utilisation of high-end printers is the move toward document management systems. “Unified document management systems in large enterprises are an offshoot and an integral part of the ERP packages that have been implemented by these organisations,” says Ranjit Gurkar, general manager of Brother International (Gulf).
Although the demand for document management systems remains low because the concept is still in its infancy, Gurkar is confident it will take off over time. Enterprises in the Middle East are realising the benefits of centralised documentation.

They are able to scan all paper documents, convert to electronic files and store them in a centralised place, like a file server. “They can also have a back-up of these files and store them in different locations. This ensures the safety of the files if an incident such as fire occurs, destroying the original paper documents or files,” Gurkar adds.
Major users of such solutions in the Middle East are utilities, banks, government and educational institutes.

“Early adopters have been those who do not have time or money to waste. Many of these are newly established companies. Mobile operators are also big on this technology,” says Amin Mortaza commercial category manager, imaging & printing group at Hewlett-Packard Middle East.

Although the region is catching up with the US and Europe in terms of using new solutions and technology, the awareness of high printing costs remains low. “TCO is a huge subject in the western Europe. Currently, the trend in these markets is to look at the lifetime costs. In the Middle East, TCO is still in the embryonic stage. The concept extends only to the cost of consumables, says John Spreadborough, general manager, international sales at TallyGenicom. “Most enterprises are not aware of existing costs, but there is a growing awareness that they need to understand the exact cost and potential savings.”

Printer vendors like Canon believe that greater awareness of TCO is a must if enterprises want to boost their business performance and save resources. It says companies should invest in printing solutions that meet their requirements well into the future. “Our hardware maybe expensive, but we are very competitive on TCO. With one high-volume account in Kuwait, we got the customer to trade in its old machine from another vendor. We bundled in free software. Now, this company’s running cost has dropped by 50%,” claims Walid Amin, business solutions manager at Canon Middle East.

There are different ways in which TCO can be minimised. For instance, Toshiba has multifunction devices that can be shared over different networks in order to reduce costs. Since these devices are multifunctional, enterprises need to deploy fewer machines for their printing needs. Prince Denzil, CIO of Siemens Middle East, says one multi-functional printer can replace three machines. “Costs have come down substantially after we switched to these printers. The cost of running our printers were growing enormously and we had to find a way of trimming these costs,” he adds. “We decided to go for a complete printing solution rather than just the printer,” he adds.

Kyocera has developed software that can check the costs of running a printer. It provides end users with information on how much resource enterprises can save over the lifetime of printers by selecting the right printer with the lowest TCO. Brother laser printing devices come with an electronic meter that helps monitor costs and usage. At the push of a button, the machine prints out details such as the number of prints produced, the yield and balance life of the drum and toner cartridge, the balance life of other print volume related parts and the number of paper jams.

In the case of laser multi function devices, the print out shows the breakup of the number of prints in fax, copy and printer mode. As printing volumes increase, such data can serve as a guide to decide on the type of printing devices needed for specific departments or workgroups. A few, simple operating norms can also help reduce costs and utilise printing resources efficiently. Having a printing limit for every user also helps avoid unnecessary printing of documents. Businesses should also look at distributing documents via e-mail.

In addition, laser printers are more economical than inkjets and centralised printing works out to be cheaper than desktop printing. However, centralised printing has the issue of printer congestion. “There are printers that are overused and underused in a company. Since nobody tracks printer volumes periodically, no one knows exactly which one is overused and which is under used,” says Kyocera’s Maki Nagao.

Some vendors offer software that automatically collects the print volume from printers so that administrators can analyse and optimise the devices by swapping the overused, slow printer with the underused high-speed printer. This is called ‘device optimisation.’ Once businesses know how many pages each output device prints or copies, they can calculate how much money has been spent on the printing cost of each device. End users can then calculate how much money they can save by replacing their high cost-per-page printers with low cost-per-page machines.

Some printers bundle network administration software that has a built-in e-mail notification system, which alerts the network administrator of any problems, or malfunction. It can also monitor a printer over the internet. Technology is changing all aspects of printing. Xerox and Konica Minolta are offering cheaper and more effective toners. Xerox has released a product where the drum and the fixer have been separated.

The product to watch out for is perhaps Canon’s multifunction embedded platform application (MEAP), which is a Java-based application software platform embedded in the new generation of Canon printers called the iRi range. MEAP provides the new device with extensive capabilities to either add or remove additional application functionalities. “The good thing about MEAP is its open source nature. It provides opportunities to develop customised software applications for third-party vendors for customer requirements,” says Canon’s Walid Amin. “If successful, the initiative might herald the open source era in an industry that has largely operated with proprietary technologies.”

As business requirements change and evolve, the need for sophisticated small, fast and cost-effective printers will grow. For instance, in countries like Europe and the US, ATMs have built-in laser printers, which provide customers an account statement on A4-size paper on demand. ”The demand for printing will remain high in the enterprise space because corporations will always need to print documents,” says Brother International’s Ranjit Gurkar. ||**||

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