Total cost of printing – What’s in the cost-per-page?

HP

Most companies do not understand the total cost of general office printing. Many factors contribute to the cost of producing a printed page, including both hard costs and related costs. HP takes all costs into consideration when looking at the total costs of printer ownership.

As you work toward better managing your print environment, it is important you recognize every factor contributing to the total cost of general office printing – and exactly which costs are taken into consideration in determining the cost-per-page charged when receiving Managed Print Services (MPS).

HP

Why cost-per-page?

The concept of MPS was established to benefit organizations wanting to understand a true cost of printing, while expecting best-in-class service for their print devices. HP supports this approach by breaking down the acquisition and support costs expected over the lifetime of the device, and establishing a page rate that takes all these costs into consideration.

The risk of maintaining the device in optimal working condition, as well as providing supplies at the lowest cost, is a responsibility HP embraces as an MPS provider. HP commits to the cost-per-page contractually, and must rely on best business practices for maintaining the highest level of service provided at the lowest cost of conductingbusiness. We are continuously looking at our processes and looking for ways to improve upon them, keeping the customer experience foremost in our review process. HP makes the best possible choices affecting service delivery, support provision, supplies quality, and consultation – while providing a unique customer experience – in order to remain your service provider of choice. HP accepts all the risk and promises a best-in-class service experience as a result.

Total costs of printing

In the example provided to the right, hardware acquisition represents less than 25% of the total cost of ownership, while repairs, support, maintenance, and supplies make up more than 75%.

Cost Breakdown

The cost-per-page breakdown in Figure 1 uses the example of an HP Laserjet in the 4000 series. Toner, maintenance and repair costs are obtained from the customer to document the hard costs of supporting this device. Approximate costs have been provided in our example (see Figure 2). In addition, HP has gathered information over the years to calculate the time required to perform related support tasks, such as supplies inventory management (Toner Handling), processing of an invoice from a vendor (Invoicing) and IT helpdesk support to exchange a toner cartridge or to alleviate a paper jam (IT/Help Desk). The unit costs provided in this example result from an applied algorithm to determine the amount of time and the related cost of each of these tasks, as it relates to producing a single printed page from the device.

The Estimated Total Savings is a percentage resulting from applying your costs (actual and related costs) to the cost-per-page HP would charge to provide MPS for this device. Independent studies suggest a savings of up to 30% on internal printing costs could be expected1 when deploying MPS. Our example documents 23% overall savings. The information depicted in Figure 2 is similar to the information HP can provide your organization in a proposal for MPS.

HP

Why we need your actual costs

Our ability to provide you with an accurate representation of your total cost of printing is dependent on understanding your actual costs of purchased supplies and break/fix services over the past several months. You will be asked to provide actual costs during the discovery period as we work together to better manage your print environment. When you do, we are better able to pinpoint an accurate percentage of potential savings once you initiate HP MPS services. Industry standards can be used to support the process; however, our experience has shown organizations are more interested in seeing calculations based on actual costs rather than using industry standards.

Pay for print MPS business model

MPS is most cost effective when organizations pay only for the pages they print. Many copier service providers will establish a minimum page volume for a device each month, ensuring the MPS provider of a consistent payment for services. While this approach is understandable, often the minimum is established at a higher volume than the organization is currently printing, causing an inflated cost-per-page when the customer prints less than the minimum. The opposite is often true in the same pricing scenario, in that a maximum page volume can be established by device. When an organization prints more than the cap, a surcharge penalty or higher page rate kicks in that greatly affects the overall cost of printing. Some organizations experience both these penalties. In the HP MPS business model, our customers pay only for the actual pages printed with no minimum and no maximum penalties or surcharges.

In Summary

HP MPS takes into consideration all costs related to producing a printed page when determining the individual cost-per-page charge for each device included in an MPS agreement. You pay only for actual pages printed. When you provide your actual costs for supplies and service, HP can use the data to determine the potential cost savings possible through the implementation of HP MPS. Our 20+ years of experience plays a big role in how we deliver services and consultation. The result is HP works hard to keep print support costs contained while we accept the associated risks of delivering MPS. HP provides you with a unique and valuable customer experience as we work together to better manage the costs of general office printing.

1 Photizo Group, “A CXO’s guide to Managed print Services,” March 2011

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