The managed print services market continues to gain momentum as enterprises seek to tackle escalating print costs and drive greater business efficiency. The market is relatively buoyant with 51% of organisations (either already using or planning to use MPS) indicating they plan to increase expenditure on MPS over the next year. The market is characterised by a tightly packed group of leaders: Xerox, HP, Ricoh, Lexmark and Canon.
Quocirca estimates that almost 50% of large enterprises (over 1,000 employees) are now using some form of MPS, with stronger prevalence in very large enterprises. Overall, a further 20% are planning to use MPS within the next year, reflecting the growing maturity of the market. Whilst broader workflow solutions are proving to be a significant differentiator, service delivery remains a key MPS market driver. Quocirca believes that continued investment to drive enhanced service performance through predictive analytics and focus on consistent delivery through integrated back-end platforms is ultimately, what sets the leading providers apart.
On average, organisations have been using MPS for 3 years with an average of 23 locations and 6 countries covered by an MPS contract. The majority (64%) are in the second phase of their engagements – having optimised their fleet and now implementing document workflow tools. Overall, 70% operate a multivendor fleet managed by a single MPS provider (mixed fleet) reflecting the need for strong multivendor support capabilities at the outset of any MPS contract. However, almost 80% indicate that they intend to consolidate on a single brand. Operating a standardised fleet offers a range of efficiency benefits – for both IT management and end-users. Clearly those MPS providers that are able to offer the broadest hardware portfolio are best positioned to address the diverse printing and imaging needs of large enterprises.
A fully outsourced approach pays dividends
Currently, the majority of respondents indicated that they use a hybrid MPS approach, retaining some print management tasks in-house. However, the fully outsourced approach is the one paying the most dividends. Overall, 90% of those using a fully outsourced service are satisfied or very satisfied with the management and performance of their print infrastructure, compared to 68% of those taking a hybrid approach. In fact, while overall respondents reported an average saving of 26% on the cost of printing over the past year through using MPS, it is those using a fully outsourced approach that report the highest savings. Almost 40% of this segment indicates savings of over 30% compared to 24% of those using a hybrid approach.
Certainly, with a full-outsourced approach, organisations can achieve significant cost efficiencies and the scale and experience of the MPS provider can go beyond what is available from internal resources. It can also enable an organisation to drive innovation and change by freeing up internal IT staff to spend on development projects that are more closely aligned to achieving business objectives. Whilst a hybrid approach can help an organisation retain some level of in-house control, it requires robust governance to ensure efficiency and consistent service level quality.
Security and cost are top drivers for MPS
Overall, for the first year, security has risen to the top of the agenda with 75% indicating that this was an important or very important driver. Document security was rated the highest by professional service and financial sector respondents with government, despite their heavy reliance on printing, paying it the lowest priority. Unsurprisingly cost remains a top driver – particularly amongst organisations with more than 3,000 employees and those in the professional services and financial sector. Clearly, despite many of these organisations transitioning to digital processes, the cost of printing is still a key challenge, which they are looking to mitigate through MPS. Service quality follows closely behind; improving service levels through better governance, SLA quality and reporting and analytics is now a key differentiator for the top MPS providers.
MPS is successfully tackling paper to digital workflow
Overall, 72% of respondents indicated that they have some paper free processes and are planning more. For those already using MPS, this rose to 74% compared to 57% that have yet to start MPS. So how well is MPS faring when it comes to helping organisations transition to digital workflows?
A key consideration is the smart multi-function printer (MFP), which when effectively utilised is the foundation to bridging the paper and digital gap. With sophisticated document capture and routing capabilities, these devices can integrate directly with enterprise content management (ECM) and other systems such as enterprise resource planning (ERP). So, for instance, paper invoices or expense receipts can be scanned and routed directly to an accounts application from the MFP interface panel.
Quocirca’s survey revealed that 37% of organisations have a well-defined strategy that maximises the benefits of smart MFPs, with 50% indicating that they understand the value of smart MFPs and are starting to exploit them. Notably, 46% of MPS users have a well-defined MFP strategy compared to just 14% of those that are yet to begin their MPS engagement.
What is differentiating the leaders in the market?
Whilst broader workflow solutions are proving to be a significant differentiator, service delivery remains a key MPS market driver. Leading MPS providers are those making continuous investment to drive enhanced service performance through predictive analytics and a focus on consistent delivery through integrated back-end platforms. There is no room for complacency – the market is increasingly competitive and as MPS providers jostle for position, it will not only be their future strategy to improve business processes that is key to retaining existing customers, it will also be maintaining a secure and reliable and cost-efficient print infrastructure which will be key to retaining existing customers.
Read the summary Quocirca MPS Market Landscape 2015 for more information.