Wednesday, April 28, 2010

Is cartridge spend and toner usage one in the same?

One of the areas I see MPS professionals struggle with in managed print services is the area of explaining the difference between what a prospect has spent on cartridge for a period of time, versus what the professional has determined to be the toner expense based on usage. Many times they want to use the prospect’s spent amount in their assessment /review as the basis for calculating current output costs. This is a big mistake.

The assessment process is designed to capture current output costs in order to build a sound business case to outsource the responsibility of their fleet to your firm. It starts by identifying types of devices, page volumes, internal resources used to support the current fleet, current supplies on hand, current business process for cartridges, service, parts, and how new technology is acquired. Except in the case where an MPS agreement is already in place, the current costs for the prospect are fragmented and not readily known. Sometimes amount spent on cartridges is known for a period of time but this is not necessary to complete the assessment. You are looking for what they pay for each individual type of cartridge used in the output fleet. This might draw attention to what they have spent in this area for a period of time but this is not their expense based on usage for the same period of time.

A proper analysis of toner costs is to apply page volumes by device to the cartridge yield to the cost of the cartridge to determine each device’s cost. Summing all devices then determines the toner cost for the assessment period which is converted to a month’s expense. This might be very different to what the prospect believes is their monthly toner expense.

The reasons for this are many. First it is impossible to match when cartridges are purchased to when they are used. Cartridges are purchased in most cases well in advance of the need. Most companies stock on-hand extra cartridges, and since the print volumes and cartridge yields by device vary, at any point in time you do not know how full or empty a cartridge may be in each machine. Measuring toner usage based on cartridge yields and print volumes account for all the variables mentioned.

A similar example of this would be use of gas in a car. Let’s say a few days before a scheduled trip you filled your tank with gas. When you left on your trip, you had ¾ of a tank. Upon returning from your trip you still had a ¼ of a tank remaining. You did not buy any gas while on the trip. Was the cost of gas for this trip $0? No. While you did not buy gas during the trip, you did use the gas in your tank, let say 8 gallons. So the real expense for this trip would be $24 (at $3/gallon).

Printer usage/expense calculated based on the method described above will account for printers with low volumes, printers with high volumes and the different yields each type of cartridge produces. A very important difference when determining prospects current cost.

MPS can be very rewarding for your business but there are many pitfalls. If you would like to learn more about our approach to MPS, register for one of our workshops. The next workshop is May 10 & 11 in Chicago. You can register at I hope to see your there.

Hard Drives Could Lead to Hard Times on Digital Output Devices

There was a recent interview on CBS News linking the relatively unknown dangers of sensitive data and digital output devices. In the segment, used multifunctional devices were being bought and sold through a warehouse in NJ. Sounds harmless enough, right? Wrong!

Since 2002, nearly every digital printer contains a hard drive, similar to that of a computer. Every time a page is printed, emailed, scanned or faxed from that device, a digital copy is stored. Think about how many times you printed reports that contained proprietary company data; customer data; made copies of personal documents like your Social Security card, Birth Certificate, health records. Then, the lease comes up, or a printer is traded in, and out walks all of that sensitive information. This data can be accessed by removing the hard drive from the printer or copy machine and connecting it to a PC or an erasure station. That is like removing the password from your laptop, leaving all your personal/professional information on it, then selling it.

This might be happening at your office, but also as you take trade-in devices from your customer, it is something to keep in mind. Depending on the printer manufacturer, there are a variety of revenue generating and free solutions that will permanently and completely erase the hard drive. Smells like new revenue opportunity to me! This is also an opportunity to differentiate yourself from your competitors. By taking the time to educate your customers, whether you take the onus on yourself to always erase the drives or sell a solution for your customer to do it first, you are one-step closer to being a solutions partner… not just another copier guy.

Methods to permanently delete these electronically stored copies include software-based solutions, degaussing solutions (erasing), and even physical destruction of the hard drive. Software solutions are available from the printer manufacturer as well as 3rd party solutions. The methodology of the software solution varies greatly, and I would suggest talking to the print manufacturers of the lines you carry for more information.

Even if you are saying, “Of course, I knew this already.” Many of your customer’s don’t, so it’s a compelling reason to get your customer to accept a meeting about it. From there, you have a captive audience, I’m sure, so the door is open to also selling other products and solutions.

Thursday, April 15, 2010

Private Equity Jumps Into Recharge Business

Below is a press release from our friends at West Point Products.

In case you haven’t heard, we are excited to inform you about the acquisitions of West Point Products and Clover Technologies by Golden Gate Capital, a San Francisco-based private equity firm. These acquisitions are the beginning of a portfolio of companies focused on aftermarket imaging supplies. While our two companies will continue to operate independently with focus on our respective segments of the market, our new relationship creates a tremendous opportunity for us to add more value to you.

We are confident that these acquisitions will result in West Point Products becoming an even stronger partner for you in the future, creating growth opportunities for you and your customers. You’ve already become accustomed to our high quality products manufactured in the USA and Canada, our reliable and timely shipping performance, our outstanding levels of customer service, and our industry leading Axess Managed Print Services offering. In addition to these foundational strengths of West Point Products, our product offering will expand to include an even wider variety of toner cartridges, inkjet cartridges, printer parts, fusers, maintenance kits, and refurbished printers. We will also have enhanced empty core collection capabilities and a more robust distribution network.

We wish Tom, Joe and the rest of the WWP team continued success.