Consumables Management
Here’s a twist on the coverage equation and a great question to ask yourself as you draft up that managed print contract: How do you ensure that the customer won’t order more toner than they actually use for printing?
Just like most of us, customers do not like to be surprised by a sudden lack of toner when a big print job needs to happen right now. So it’s very tempting for managed print customers to purchase and stow away excess toner.
“What you get in this scenario is a closet full of ‘just-in-cases,’ but those ‘just-in-cases’ are in the customer’s closet, not yours,” says Herman in regards to the excess toner.
The contract pitfall here is that customer-driven toner and supply-ordering arrangements in managed print contracts have the highest risk of cost overruns and waste, and all that extra toner is coming right out of your bottom line.
The fix? Make sure your contract spells out that you are in control of toner management by giving you final say on toner and supply orders, says Herman. This wise move can help you create contracts that are less prone to abuse, and help avoid the day when all that unused toner you bought for a customer gets put up for sale on eBay.
Service
Customers like to maintain the investments they’ve made in their technology, and printers are no exception. So when you ask yourself “how do I manage the service risk of an aging fleet of printers?” you’ve arrived at potential contract pitfall No. 3.
Mixed-vendor printers of every type are commonplace in most businesses, such as networked monochrome printers in an accounting department that work just fine and are not budgeted for replacement. But there’s a maintenance cost attached here, which must be addressed in a managed print contract. Do you keep your printer technician certified on older machines, while you buy and maintain a parts inventory? Or do you re-certify the technician on new, higher-end MFPs, or hire an extra technician? This runaway expense scenario can be avoided by understanding and leveraging vendor technical support services.
Choose a print vendor with services built into the managed print service contract that you sign, says Herman. This gives you the flexibility to choose what machines the vendor should service, and what machines you want your technicians to take on. “This way, a managed print provider can service just the printers he wants to pick up the risk on,” adds Herman.
Inventory
Being able to respond quickly to your managed print customers needs for toner, parts and supplies means that inventory needs to be parked pretty close nearby in order to be over-nighted out as needed. This creates a working capital risk as inventory sits on shelves, and with the cost of energy expected to continue to fluxuate, shipping supplies when energy prices are high can introduced unexpected costs that batter your profit margin even more.
Project this shipping challenge out over the length of a typical three-year managed print contract and it becomes easy to see how if inventory and supply management is not written clearly into a managed print contract, the cost burden can fall squarely on you.
Herman points though that some vendors, such as Xerox, include free shipping of toner and supplies in their contracts. This puts the burden and expense of the managed print supply chain on the vendor, not you.
Program Choice
The perceived value of best-of-breed technology solutions does not translate well into the world of managed print services. When you consider the mission-critical relationship between the printer, it’s toner and supply components and it’s network applications, managed print programs that rely on multiple, mixed vendor hardware and software modules have the highest risk of failure. Maintaining a contracted SLA is easier if you go with a single vendor solution from a vendor that offers the widest range of options for the most number of markets. “This makes it nicer for you too, the managed print provider, because if something goes wrong you’ll also have that classic “one-throat-to-choke,” says Herman.
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