Print vendors push for paperless office

Why are printer manufacturers keen to highlight print costs?

The industry is developing into a nation of print addicts. As technology develops and the potential for working in a paperless environment becomes viable, the reality is that the office paper mountain grows daily. Everyone receives email, but prints it out. When a useful Web page is found, it is printed it out. When preparing a presentation, it is printed out - 15 times, just to get it right.

Recent research has come up with some staggering facts about the cost of printing. Estimates from CAP Venture Group, Ashburnham Group and Gartner Group put the total burdened cost of printing at between six and 15 per cent of a company's revenue. That's a lot of printing.

Furthermore, hardly any UK companies have any form of print reduction or even print monitoring policy, whereas up to 50 per cent of our European counterparts have such strategies in place.

The message currently being purported by a variety of document management companies, IT integration specialists and even some printer vendors is, quite clearly, that companies are spending far too much on printing.

A recent survey compiled by ByLine Research for document management company AFP Technology set out to ascertain whether the paperless office is likely to remain a myth and, if not, where the business opportunities lie.

Of the 100 IT directors or IT managers of medium and large companies that were interviewed, 65 per cent said email would be the primary role of document delivery in five years, up from two per cent today. Most expected to see a reduction in paper usage as fax and the post become less popular, but few realistically expect to be 100 per cent paperless. Other key findings were that nearly two-thirds of companies print four out of every five documents they produce. Paper is still the primary means of storage, even though 74 per cent said it was the most expensive way to store documents.

There is reluctance to throw out the filing cabinet.

While cost reductions, less filing and lower distribution costs were cited as reasons for moving to electronic document management, many factors are hampering the transition. According to the survey, customers continue to demand printed output for data such as invoices. Documents are considered to be more secure in hard format, especially when delivered through the post. Also, the penetration of email in consumer markets is low and a cultural demand for printed output persists. Paradoxically, 53 per cent of respondents said the technology necessary to change was too expensive, even though most believed electronic document management systems were more cost-effective than current methods.

So why is the transition to a less-paper office taking so long? Keith Bloodworth, managing director of AFP Technology, says: 'The early days of the paperless office failed because it only went so far, but the network infrastructure and applications are there. Today, we require people to be far more receptive because we're living in a 'show me now' society.

This will be the catalyst for change because people need instant access to information, wherever they are.'

It is curious that the campaign to drive down the cost of printing has been joined by a printer vendor. Lexmark is encouraging customers to reduce its printing costs in an advertising campaign endorsed by business guru Sir John Harvey-Jones.

'It's not saying offices should be printer-less, it's saying they should print less and be aware of the costs involved,' said Kevin Stiff, Lexmark sales specialist at distributor Midwich Thame.

While Lexmark's campaign is essentially a marketing ruse, Kevin Spinks, marketing director of Lexmark, said: 'The truth is that if I ask any of our customers how much printing is costing their organisation, they don't have a clue. Cost may play a big part in the purchasing decision, but after that there is virtually no monitoring of costs.

'The printer market is now a commodity market and you need to tell the customer to think about printing and make it a selling point. You can increase efficiency if you have a print reduction strategy.'

It is precisely this question of commoditisation that has forced Lexmark to consider expanding further into the consumer market by aligning itself with internet TV and digital cameras.

Speaking to PC Dealer recently, at Lexmark's headquarters in Lexington, Kentucky, Dennis Straub, general manager of internet printing, said the combination of high bandwidth availability and internet TV will be a catalyst for higher demand for consumer inkjet printers and printing applications.

Although Lexmark's corporate salesforce has been briefed to promote the costs of printing as a business-critical issue, the vendor has not asked its channel to embrace the idea. Spinks says: 'It is our remit to educate companies about the opportunities because we have the knowledge and expertise to do it. Besides, the channel is multi-vendor and multi-product and we are not asking resellers to become printer experts. We will work on their behalf.'

However, Stiff believes the formulation of a print strategy is something the reseller can be involved in and benefit from. 'Any initiative would have to be vendor-driven in the first instance, but the process is about educating users and they can be taught to recognise the opportunity by the reseller,' he said.

Ultimately, the impetus for any printing strategy has to come from within the company itself, because it is conceptual rather than being product-led. But as paper usage continues to grow, it is clear that the cost of printing is something all companies need to look at, which may in turn provide the channel with a business opportunity.

Next week's analysis focuses on the paperless office in the Soho market.