Today’s enterprise operations offer little in the way of low-hanging fruit, IT systems and back office operations have to a large extent been reengineered and improved; outsourcing has driven efficiencies and offshoring has yielded additional cost savings.
So where is the next big savings opportunity? The answer may lie in print services. ISG has observed that organizations that combine outsourcing with comprehensive process improvement initiatives and automation of key print functions can achieve savings that range between 25 percent and 35 percent.
While IT costs are typically centralized and relatively transparent (and therefore subject to analysis and improvement), the print services function tends to be distributed among disparate business units. This lack of end-to-end ownership and visibility into total costs means that print often slips under the radar of traditional performance improvement initiatives.
And consider the size of the prize: according to Xerox estimates, organizations with 500+ employees spend $322B annually on document printing and related activities; for many businesses, print services costs rival or exceed IT spend.
Most print operations today involve high equipment and staffing requirements, and are managed using labor-intensive processes and outdated technology. Automated and web-based ordering processes are rare, resulting in fundamental performance issues, primarily in slow turnaround times for internal clients.
A closer look at key metrics underscores the savings opportunity: On average, a print production job in a large business organization requires 45 to 65 human touches. While these numbers are comparable to those of conventional commercial printers, innovative print shops that utilize automation average between 15 and 20 touches.
In addition to savings from outsourcing and consolidation of vendors, process improvements and integrating automation into work flow can yield 50 percent capacity and productivity improvement. For example, a major U.S. government printing facility that implemented an automated platform eliminated 65 percent of the human touches on over 40 percent of their volumes, resulting in 50 percent+ improvements in capacity levels and productivity increases.
Although businesses are clearly embracing digital channels, paper-based communications remain an important component. Research shows that over 95 percent of bills and statements received by mail are opened and read, with the average recipient spending 3-4 minutes reviewing them.
As a result, businesses are increasingly focused on using these documents as marketing channels. This approach – sometimes referred to as “TransPromo” or statement-based marketing – involves finding ways to improve readability, add color, drive multi-channel interactions and create room for tailored promotional and educational messaging.
A process improvement initiative aimed at optimizing design and delivery (while minimizing cost and maintenance) can help inform a channel-agnostic approach to document communication. So, rather than abandoning print for digital, or managing them as discrete towers, businesses are seeking to leverage the strengths of both media.
With improvement initiatives in IT and business processes yielding diminishing returns in many cases, executives tasked to identify cost reduction and rationalization opportunities would be well-served to consider print services. The print function’s largely untapped improvement potential, coupled with the emergence of a range of innovative process automation solutions, makes for a promising combination.About the author
Mr. Kopp, Partner, Global CFO Services, is an expert in Finance & Accounting (F&A), Procurement, Call Center, Facilities Management, and general business process alternative sourcing, to include outsourcing, shared services, off-shoring and process reengineering.