How to Reduce Print Costs

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By Dave Zamorski

The paperless enterprise has long been a prized (but stubbornly elusive) goal of business. Indeed, implementing digital communications across a large organization presents a daunting challenge. But for CIOs, a strategy aimed at transitioning to digital documents and reducing print volumes represents a critical opportunity to reap financial and strategic benefits. 

Businesses continue to spend millions and sometimes hundreds of millions of dollars on the production and distribution of printed materials. Despite this level of investment, print services have traditionally received little C-level attention and have rarely been the focus of concerted improvement efforts. Moreover, because print services are typically dispersed across multiple business units, enterprises lack visibility into their print operations and struggle to understand where to drive improvement. 

By partnering with the business to improve print services, CIOs can significantly reduce enterprisewide costs per printed document. More importantly, they can set the stage for a transition to a digital environment that leverages e-communication to print a significantly lower volume of documents.     

A print services strategy focused on transitioning to e-delivery of bills, statements and business communications and reducing these print volumes can achieve a wide range of benefits, including:

*Reduced printing and postage costs (consider: sending a single piece of mail costs a minimum of $0.41)

*Reduced capital expenditures for equipment, software, manpower and space

*Reduced storage costs

*Leaner and faster processing which is less expensive as the information in electronic invoices is fed directly into a company’s payment and accounting systems

*Positive environmental and sustainability impact

*Faster payment of invoices (can be reduced from 60 days to 1-2 days) 

*Enhanced customer experiences

Another reason CIOs should focus on developing an e-strategy is because global legislative mandates are increasingly requiring the use of standard electronic formats, especially for business-to-government communications.  While many U.S. enterprise businesses have taken steps to utilize e-communications for some marketing and sales activities, few have developed a thorough strategy for e-delivery of bills and statements. Adapting to these regulations will significantly test ERP platforms and accounting systems.

Latin America has been on the forefront of mandated requirements for the use of e-invoicing, particularly in B2B and B2G interactions. Brazil, Chile and Mexico will require all accounts payable and accounts receivable transactions to utilize e-invoicing by 2017.  A new European standard for receiving and processing e-invoices will become mandatory by end of 2018.  While U.S. initiatives are lagging, the trend toward e-communication is clearly gaining momentum.

All of this is not to suggest that businesses throw out their printing equipment and halt paper orders. Many customers still want paper bills, as well as policies, statements and proxies.  And despite projections over the years that print would become obsolete, marketers have found that paper-based correspondence still resonates with customers.  A recent report by InfoTrends found that 97 percent of paper bills and statements are opened, with the average read time between two and five minutes.  Clearly, enterprises will continue to print and distribute huge volumes of paper documents.

In this environment, businesses must focus on reducing print volumes through digital initiatives, while at the same time continuously driving down their costs per printed document.  A strategy that addresses these dual objectives requires a thorough understanding of the existing print environment, coupled with a clearly articulated plan for a future state. 

The first step is a comprehensive assessment of services, operations and infrastructure that applies market-based data to gauge costs in the context of competitive standards. From this benchmark analysis, the business can establish a baseline financial profile, identify the scope of the potential savings opportunity and craft directional recommendations on how best to achieve savings. The assessments also allows for a sustainability audit that underlies the move to e-delivery.

Equipped with an understanding of the current state and scope of the improvement opportunity, the CIO can work with the business to develop alternative scenarios on how best to get to the desired future state.  These paths can include process efficiency improvements, optimization, vendor consolidation, sourcing and e-delivery strategies and provider best practices and capabilities.

The print strategy also requires a thorough assessment of the provider landscape.  The move to e-delivery has added a significant level of complexity to the selection process, as traditional print providers face pressure to invest in digital capabilities. Many are struggling to profit from those services, find their market niche and articulate their value propositions.

The looming digital standards mandates pertaining to taxes, invoices and statements must be addressed. While e-delivery of bills and statements in the United States is expected to account for only 40 percent by 2018, global enterprises must consider the requirements of other countries where they do business, and ensure that they are positioned to be in compliance when the regulatory standards take effect.

Developing a print services strategy aimed at optimizing print operations and transitioning to e-communications across an organization is a challenge, but presents a significant opportunity for CIOs to reap strategic—and  financial–benefits for their organizations.

Dave Zamorski is a senior director and lead of Enterprise Print Services with Alsbridge, a global advisory firm. 

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