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Improving Bottom Line Performance Through Optimized Fleet and Document Management

By Bill Melo

While companies continue to examine corporate expenditures in the effort to remain operationally lean, document production infrastructures continue to slip under the radar, resulting in millions of dollars in lost profit annually. Through a document management and output analysis, companies can uncover a wealth of hidden cost savings opportunities and implement a strategy that will drive long-term business efficiency and deliver immediate bottom line performance benefits.

As the size and scope of information systems and content continue to grow within an enterprise, so does the need for a cohesive document management and output (DMO) strategy to effectively control costs and optimize document production infrastructures. According to a recent report from analyst firm GartnerGroup, a document is copied, either physically or electronically, an average of nine to 11 times at a cost of about $18. In addition, output equipment fleets (copiers, printers, facsimiles, scanners and associated supplies) continue to be one of the most under managed and costly assets within many companies, resulting in lost profit of approximately one percent to three percent per year.

Despite the millions of dollars companies lose per year to poorly managed document production infrastructures and the financial impact these costs have on bottom line performance, DMO is frequently neglected by most senior level executives. Today, while leading companies have generally devised and implemented strategies to optimize their IT infrastructure, corporate management of DMO is widely distributed.

In addition, as document production has moved from the copier to the printer, a single-function asset that is generally under-managed, costly and difficult to control, corporate output expenditures have exponentially increased. According to analyst sources, the cost of supplies used to print a single black-and-white page averages five cents per page. In a company that prints 250,000 pages per day, the costs of supplies alone can total a staggering $3.2 million per year.

Despite the growing trend and acceptance of multifunction products (MFPs) that combine capabilities traditionally offered in separate copiers, printers, facsimiles and scanners into one device, many offices continue to be overstocked with separate devices that are outdated, no longer adequately address document production requirements and overburden IT networks and support staff.

Additionally, inefficient processes governing the way documents are created, managed, distributed and organized continue to mire companies in manual-based procedures that monopolize valuable employee time and resources. While a myriad of collaboration software tools are available today to automate and streamline internal reviews and approvals, a vast majority of companies continue to manually process documents, resulting in unnecessary output and human labor costs.

The combined effect of these factors has created an elusive realm called the document production infrastructure and has clouded the ability of senior-level management to gain full visibility to effectively initiate a strategy that places adequate control mechanisms in place. Yet, there is a significant opportunity for organizations to regain control of their document production environments, improve business productivity and efficiency, and uncover a wealth of "hidden" cost-saving opportunities. By implementing a comprehensive DMO analysis and strategy, companies can positively impact bottom line performance by closing the loop between document production, management and output to reveal a hidden goldmine of cost savings.

DMO Analysis - Demystifying Document Production, Management and Output
An expert DMO analysis is an essential first step in devising and implementing a successful DMO strategy, and is an effective means to demystifying DMO expenditures to enable companies to establish long-term process improvements with significant return-on-investment. The DMO analysis consists of a broad measurement and assessment of a company's total document production infrastructure including hardware (equipment fleets), document management software solutions and business processes that drive document production, distribution and organization

With the assistance of trained consultants, companies are engaged in a fact-finding mission that often includes five primary steps to analyze their total document production infrastructure, capture accurate and timely data and devise a cohesive DMO strategy.

The DMO Analysis Process - Key Components
Phase 1 - Project Definition
Defining the project scope and outlining a company's document infrastructure, production and management goals and objectives are the primary steps to initiating a comprehensive and successful DMO analysis. During project definition, project leaders including both internal and external personnel are identified and a targeted project timeline is established, ensuring milestones can be reasonably achieved.

Phase 2 - Data Collection and Measurement
Through in-depth data collection mechanisms including employee interviews, process mapping and print tracking software, consultants can help companies identify problem areas that are most primed for improvement and provide the most immediate cost savings. Data collection efforts may be scaled as time and budget permit to involve a relatively small sample, such as a specific department, floor or building or a broader sample, such as a headquarter location, regional or satellite offices.

To provide an accurate assessment of the current document production infrastructure, a DMO analysis will consist of a thorough examination of four key areas that drive document output expenditures, as well as critical or costly document workflows:

• Fleet Utilization - Identifies the number and physical location of equipment assets enterprise-wide, reviews current usage and technology, integration with legacy operating systems, device to employee ratios, usage patterns and user satisfaction
• Operational and Labor Costs - Reviews current lease and contract agreements, number of invoices, transaction, procurement and outsourcing costs, document output monthly and expected volumes, IT and support staff requirements
• Document Life Cycle Costs - Examines the creation, storage, retrieval, distribution and disposal of documents. These include processes for creating/revising content, bottlenecks, manual labor and outsourcing costs, hard copy and electronic document filing systems, records retention/disposal policies, government regulatory requirements, enterprise-wide document search and retrieval capabilities and requirements, off-site and on-site disposal/storage usage and costs, disaster recovery requirements and current security goals
• Strategic Consideration - Identifies records and secure storage and recovery capabilities and requirements in the event of a natural or man-made disaster

Phase 3 - Analysis and Reporting
Critical to the DMO analysis is a detailed assessment of the data and measurements captured and the creation and delivery of a comprehensive report that enables companies to see the complete picture of their document production environments. A DMO analysis report presents findings, recommendations and custom solutions, as well as serves as a systematic, targeted blueprint to enable companies to successfully attain key optimization objectives and realize significant costs savings. Most often, a DMO analysis report will culminate in a bound report delivered in an on-site presentation.

Phase 4 - Implementation and Improvement
Among the deliverables of the DMO analysis is a recommendation for document production infrastructure optimization. While each case is unique, cost containment is often the foremost priority. Implementation strategies will often encompass time-phased initiatives, targeting "low-hanging fruit" for immediate action and the development of change management strategies for long-term continuous improvement.

Document production infrastructure improvement strategies can vary, but typically incorporate one or more of the following:

• "Right-size" output equipment fleets with high-volume MFPs that combine functions traditionally offered in separate copiers, printers, facsimiles and scanners into one device, and consolidate vendors/invoices by reducing the number of devices within the fleet
• Redirect copy/print jobs to the most capable and efficient devices and improve the physical mapping of equipment fleets on the organization floor for enhanced document production efficiencies
• Decrease costs and foster environmentally friendly corporate practices by reducing the number of pages printed enterprise-wide through print rationalization
• Reengineer digital document workflows and incorporate emerging document management software technologies to reduce network bottlenecks, improve employee productivity and lower costs

In addition, a comprehensive DMO analysis offering will include strategies to account for other spectrums of the document life cycle with document management software. Research has demonstrated that the hard costs of copiers, printers, MFPs, paper and supplies only make up 10 percent of the total cost of a company's output. The other 90 percent is largely attributed to document management processes involving a company's most valuable asset - its workforce .

The integration of document management software solutions into the DMO analysis action plan enables companies to further enhance business productivity and competitiveness by automating day-to-day processes and leveraging more effective and functional MFPs to speed the distribution of vital information assets throughout the enterprise. Software solutions of this nature can not only reduce manual labor costs per document, but also enable companies to more effectively organize, distribute and share information, as well as improve business decision-making and customer response times.

Phase 5 - Control
With a DMO analysis, companies gain unprecedented control of document infrastructures with the ability to sustain improvement initiatives for long-term success and profitability. In addition to regular account reviews, consultants work with companies to implement a variety of control mechanisms that include benchmarking, as well as print tracking deployment and management software to help ensure that cost and control parameters established during the improvement phase are adhered to.

Typically, a print control program allows companies to establish internal costs per page for each printer and then to track and allocate costs to users based on actual consumption. Furthermore, specific print jobs can be routed to certain printers based on pre-determined characteristics such as page length or finishing requirements.

By establishing a departmental print budget and accountability, research shows that employees develop greater discipline over their printing habits. Studies conducted by research firm IDC indicate that the implementation of a print tracking and control system can reduce printing costs by as much as 15 percent.

Benefits of a DMO Analysis
As CFOs continue to search for ways to improve their company's financial integrity in a highly competitive business environment, the benefits of a DMO analysis cannot be undervalued. By taking an enterprise-wide approach to the optimization of document production infrastructures with a DMO analysis, companies can dramatically reduce output costs by up to 40 percent (Figure 1). Additional benefits that increase the value proposition of a DMO analysis include:

• Reduction in output equipment investments, and consumables and operating costs by replacing outdated equipment fleets with high volume, functional MFPs
• Reduced total cost of ownership with MFPs that deliver a full set of productivity features in one system compared to the purchase price of a separate copier, printer, facsimile or scanner
• Decreased burden on enterprise networks resulting in less bottlenecks
• Reduced burden on IT support staff and associated human labor costs with the consolidation of output equipment fleets
• Improved business productivity and efficiency by streamlining document production, distribution and management and reengineering document workflow, enabling employees to focus on higher value activities
• 20/20 visibility for consistent, long-term control over document output expenditures
• Enhanced business competitiveness through the integration of software solutions that automate business processes and leverage information assets to enable companies to make quick, informed decisions and improve response times

Sourcing the Right DMO Analysis Program - Ad Hoc Versus Disciplined
A DMO analysis has the potential to allow companies to reap significant cost savings through an optimized document production infrastructure. However, when sourcing the right DMO analysis, it is important to look for programs that not only account for hardware devices, but also provide in-depth analysis of enterprise-wide document and workflow processes that drive the production, distribution and management of information and other elements involved in the entire document life cycle. These world-class programs will deliver the most improved revenue opportunities - both in the short term through optimized fleet management and through long-term process improvements.

In addition, a world-class, disciplined DMO analysis program will effectively incorporate and align with the goals of senior-level executives including the CEO and CIO and provide a higher degree of change management throughout the enterprise for improved operational efficiency on varying levels beyond the office production room.

To properly evaluate and consider the most qualified partner and appropriate solution, consider the following additional criteria:

• Methodology - Counter to ad hoc programs, a world-class DMO analysis program is based on a disciplined, well-defined methodology to ensure a consistent, proven and established approach for achieving the highest level of quality and continual process improvements, as well a greater degree of adaptability to meet evolving document infrastructure requirements.
• Credentials - Determine the credentials of the individual or team conducting the study and ensure they are trained in a specific problem-solving or quality control methodology such as Six Sigma, as well as have extensive experience working with companies within your industry.
• Tools - Tools utilized for data collection and analysis should incorporate emerging technologies and should not be based on conventional spreadsheets or other inappropriate tools.
• Written Reports - Ask for a sample of a written report, consider the depth of analysis and the logic and clarity behind the recommendation and determine if the recommendations meet the objectives or are merely a means to sell additional products or services.

Conclusion
In the face of an unpredictable and challenging business environment and heightened competition for market share, companies must make every effort to control expenditures and remain operationally lean to sustain the ebb and flow of an unstable economy. From wasted printed pages to an employee idling in front of a copier, companies can no longer afford passive management of out equipment fleets and document production infrastructures that contribute to millions of dollars in lost revenue. By engaging in an enterprise-wide DMO analysis and subsequently developing a cohesive document output and management strategy, companies can pave the way to enhanced business performance and productivity, positively impact bottom line performance and establish a stronger competitive foothold through long-term process improvements.

About the Author:
Bill Melo is director of managed services at Toshiba America Business Solutions (TABS). In this position, Mr. Melo manages the development and delivery of Toshiba's Encompass program for customer document management and output optimization and has leveraged his extensive experience developing Web-based applications for the document imaging industry to lead the development of Encompass Online. With more than 15 years of experience in the document solutions industry, Mr. Melo has managed the implementation of solutions at several U.S. commercial, government and educational organizations. Mr. Melo was the lead inventor on a U.S. patent for Internet-enabled broadcast printing and has another application pending in the field of Internet-based monitoring systems for printers and copiers.

Mr. Melo is a graduate of Toshiba's Six Sigma certification program and holds a bachelor's degree from Montclair State College in New Jersey and an MBA from New York University.

• ¹D. Logan, "Document Management: Assessing Costs and Benefits," GartnerGroup, 27 Sept, 2000
• ¹J. Lundy, "Rightsizing Output Fleets: The Hidden Gold Mine," GartnerGroup, 19 March, 2001
• ¹All Associates Group, 2003
• ¹Keith Kmetz, "The Expanding Role of Document Accounting Systems," IDC, May 2001

Figure 1: Comparative review of a typical document production infrastructure pre- and post-DMO analysis.