The managed print services segment in India has certainly come a long way. It is no longer just about the compulsion of saving costs but reflects other compelling reasons as well.
One of the biggest boosts for the printer market in recent times is the emergence of managed print services (MPS). These services have given printer vendors—for long used to competing on hardware—more room for innovation and differentiation.
The obvious attraction for MPS clients is the initial cost savings that come with switching to a usage-based model rather than investing upfront in hardware. MPS helps organisations achieve savings through consolidation of devices and scale.
MPS basically includes optimisation of purchases by matching the correct speed segment and technology to an organisation’s utilisation need. This helps the organisation to lower the print cost per page and strain on the equipment, thereby reducing downtime.
These factors have kept the ball for global MPS market rolling, and it is expected to grow at a CAGR of 10.75 % over the period 2013-16. Increasing demand for cloud service offerings and cost reduction is providing the requisite impetus to the growth of the MPS market.
The MPS market in India is growing much faster. Going by a survey conducted by Xerox and EY India, India is one of the fastest growing markets in the MPS segment globally. The market size, which was estimated at $80-90 million in 2012, is expected to grow to about $250 million by 2015.
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Many shades of MPS
While the growth rate of MPS is fast, the overall market penetration is low. According to Bhaskar Joshi, Senior Marketing Manager – Office Imaging Solutions, Canon India, a key factor responsible for the low penetration is the fact that the true sense of the service is sometimes lost in its definition. However, he says that MPS is experiencing good traction among the top 2,000 companies in the country, out of which nearly 60% are using some form of MPS—varying from basic fleet management to end-to-end management offering.
“In certain cases some enterprises categorise just ‘printer on lease’ model under MPS, which is incorrect, as the software component is fundamental to managed services. It is the software that forms the management layer,” he says.
Konica Minolta calls its MPS as Optimised Print Services (OPS). Its approach combines consultancy, hardware and software implementation, workflow management and automated services and supplies, all to lower the costs and improve the workflow efficiency. In contrast, players like HP emphasise the security and environmental aspects of their portfolio.
Slow, but steady
In India, many processes are still manual and paper-based, therefore MPS is taking time to see greater adoption. However, there is a big wave coming from digitisation and management of records, which is likely to push the uptake of MPS.
Industry experts feel that for digitisation to take off in a big way, organisations will first need to overcome the challenges of dealing with confusion over the way they take it up. Sometimes, the cost of digitisation is prohibitive and requires expert guidance. Another reason is resistance of the employees to change.
Joshi says while large enterprises have already started adopting MPS, a huge opportunity lies in the SME and government segments, which at present make up only 5 to 7% of the MPS customer base in the country.
Nitin Hiranandani, Director, Printing Systems – PPS, HP India, quotes a Zinnov study, Indian SMB ICT Adoption Insights, that finds 20% of the total 50 million small and medium businesses in India are technology ready. “MPS is gathering significant interest among medium-sized businesses as they seek new ways to get more out of their printing infrastructure and simultaneously reduce costs. Also, as businesses are getting more conscious of their environmental impact, they are looking at reducing printing wastage by optimising their workflows in a better way,” he says.
Hiranandani further says that MPS helps organisations accomplish these goals by creating a secure, centrally managed print environment that streamlines workflows, optimises document output and related business processes and also reduces the overall cash outflow and print related costs..
Virtually all kinds of enterprises, big or small, would benefit from adoption of MPS, as organisations primarily seek cost efficiencies and increase in productivity. A lot of organisations are also driven by MPS for sustainability and security-related objectives.
Not just volume game
V Balakrishnan, General Manager, Konica Minolta Business Solutions, says that for an organisation, buying MPS will always remain a strategic decision. Print volume alone cannot be the determining factor. Many other factors like improving efficiency, gaining agility and rationalising deployed resources to focus on core areas are more important.
According to Joshi, having the right economies of scale is a critical factor for an enterprise to decide the right time to buy MPS. He says, on an average, a large company that has a print consumption of about 2.5 lakh sheets a month is fit to avail MPS, whereas an SME with print volume measuring up to 40,000-50,000 sheets a month can benefit from MPS.
“To be able to exploit MPS to the fullest, the enterprise must not invest in too many MPS vendors, as that does not make economic sense. However, in India, most enterprises feel safer working with at least two vendors, as they always want a backup plan,” elaborates Joshi.
This makes enterprises more dependent on the vendors, as the software applications that form the most crucial piece of the entire MPS stack are mostly vendor-dependent. The applications might not be customisable once an enterprise decides to change its MPS partner.
However, more openness is expected in the days to come. “Vendors at present do not share their application tools,” says Joshi, “but that might happen in the future.”
Apps and more
Vishal Awal, Executive Director – Services, Xerox South Asia, believes work happens anytime, anywhere, causing both challenges and opportunities. Workplaces are being modified under the combined trends of mobility, data analytics, cloud computing and social media—and their impact is reflecting on enterprises’ printing operations as well. Therefore, MPS consumers are now getting more demanding and are more focused on the control tools.
In the enterprise segment, customers are giving more importance to visibility and strategic reporting. This is in addition to the normal requirement of all services (including manpower) being outsourced. BYOD (bring your own device) and use of mobile devices are also becoming prevalent. These trends impact the solution design.
Balakrishnan of Konica Minolta says that SME segment needs are primarily met by VARs and SIs, which have local visibility to their operations. “Size of the solution design and infrastructure requirements too differ for SMEs and large organisations: SMEs tend to prefer light and effective solutions that provide control, whereas enterprises tend to lean more towards standardisation across the organisation,” he adds.
Joshi of Canon says that gone are the days when you could simply talk about benefits of a solution and sell it, as the enterprises now demand real delivery. “Many of our customers have cut the TCO by 10-20% after using our MPS offerings”, he claims.
He further says that the cost of a solution is now secondary. Enterprises demand same service level agreements (SLAs) across branches: one country, one SLA is the mantra. Vendors also need to keep backup equipment in case of problems at the customer end. If one of the printers in a consolidated, managed environment breaks down, then the enterprises demand to know the backup strategy of the vendor.
“Convenience of use and reporting is a must for MPS. Enterprises look out for applications that are capable of enabling anywhere print, authentication and control print quota,” says Joshi. “Also, the need to replace the entire setup at the time of upgrade should not arise.”
The digitisation drive
Awal of Xerox says that owing to the combined trends of mobility, data analytics, cloud computing and social media, it is important to consider the implications for printing and flow of content. Digitisation is a key outcome of these trends.
Managed print services are helping organisations streamline workflow operations and document management, which is largely achieved via digitisation.
Each year improper document management costs businesses crores of rupees in liability, reduced efficiency and lost productivity. Hence it becomes very important to maintain proper document management infrastructure/programme. An organisation should also ensure data privacy and security, regulatory compliance, control and access to information and cost control associated with information processing.
Current trends indicate that the variety and level of sophistication of network attacks is increasing, which result in loss of valuable data, such as personally identifiable information (PII).
Awal says that security is not just a feature on a device; it is a comprehensive effort to understand the vulnerabilities of the entire document infrastructure, protect the enterprises’ most valuable asset, i.e. information, and maintain compliance with all applicable regulations.
For example, employees accessing network output devices can be identified and authenticated at the device.
In the mail room, actionable mail is managed as an end-to-end chain of custody, from signature of the delivering vendor to signature of the recipient. “In centralised print centres, we have advanced printing technologies and trained experts that embed encrypted information so documents have appropriate protection,” says Awal.
Organisations are increasingly realising the importance of digital record keeping, and the adoption of MPS is triggering the digitisation initiatives within organisations. When paper is converted to images, information becomes available at each step of the workflow. This enables automation across business processes and improves collaboration and decision making.
According to Joshi, as of now, MPS is being looked at as a means to cut print cost and keep the content secure. However, reducing paper use and need to print is still a step away. “For this, the workflows will need to be automated, and we will see document management solutions being integrated with MPS,” he says.