This, the first in a series of 4 articles on the topic of generating and tracking output savings, with particular focus on the Managed Print Solutions (MPS) category. This series of articles will cover the 4 legs of a proven procurement-driven strategy respectively. These legs are:
- Benchmarks that need to be applied (as based on a case study of total MPS over a 4 year period);
- Vendor contract re-negotiation;
- The impact of management on paper usage; and
- The impact of management on consumable usage.
Benchmarks that need to be applied
The first step is to make the decision whether to contract a specialist provider of MPS. In order to make this decision you need to apply the fundamental principles of supplier selection and apply the following matrix to your preferred supplier:
- How long has the supplier been in the business?
- Who is the supplier’s present clients?
- Who is the supplier’s past clients? (Use this for referencing purposes.)
- What will the supplier charge you to provide a detailed analysis of your entire copy and print estate?
- What savings do they estimate over the proposed 4-year contract period?
- The last question, and most important question: How do you actually bank the savings?
As an indication of what you can expect, the benchmarks below reflect the total savings that a listed Financial Services Company enjoyed over a 4-year period with an established and reputable MPS:
“This is an actual case study of the outcome for one of our highly valued clients”, Jannes du Plooy, Chief Executive Officer of Solution WorX, told SmartProcurement. “We will gladly exchange the actual detail with serious enquiries only, based on a confidentiality agreement, as the information is obviously sensitive and not for public consumption. The business sense of appointing us as their MPS provider is reflected in the savings that the client banked year-on-year:
- Year 1 = 7%
- Year 2 = 10%
- Year 3 = 13.5%
- Year 4 = 15.5%”
“The irony of this trend lies in the fact that the amount of money to be pared from output equipment, paper and consumables is mostly untapped in the economy. With the present turmoil it has become a business imperative that Chief Procurement Officers and Financial Managers make sure that they have at least analysed the cost drivers of their output devices”, Du Plooy concluded.
**In the next issue of SmartProcurement we will examine how savings are generated using the MPS technique of Vendor Contract Re-Negotiation.
Jannes du Plooy can be contacted on the details below:
Telephone: +27 86 170 5907
Cell: +27 83 397 7739