Taming the Paper Tiger

by Phil Britt and Tom Moore

Remember the predictions about the "paperless office?" Despite forecasts that paper will some day magically disappear in this era of electronic communication, businesses today are printing more than ever. And the cost of printing all these pages is hitting the bottom line of corporate America.

Industry experts estimate that the average one billion dollar company can spend between $10 million to $30 million on printing, and be unaware of the magnitude of this cost. That ratio, about one to three percent of revenues, apparently holds for companies around the world, according to printer manufacturer, Lexmark International. Lexmark offers the following statistics that illustrate this trend:

  • Xplor, an organization that tracks the digital hardcopy printing space, estimates that paper use is growing 6 percent to 8 percent each year, and that the number of pages printed in 2005 will be more than twice what it was just 10 years before.

  • The average worker prints 33 Internet pages each day.

  • For every one billion dollars of revenue, an average corporation prints an astonishing 88 million sheets of paper—a pile over seven miles high. That comes out to 88 pages per $1,000 of revenue.

  • According to GartnerGroup, 95 percent of documents are still held in paper format. Moreover, some 50 percent of today’s printers are more than five years old; devices more than 10 years old are three to five times more expensive to operate than new ones.

Ironically, the Internet and electronic communications are the biggest drivers behind growing enterprise printing today, according to Art Smith, vice president, worldwide software solutions marketing and operations, Xerox Office Systems Group.

The Internet makes it easier to get information from one place to another within and outside of the enterprise. For some companies, that means that printing costs have risen even as they try to use more electronic communications. And it’s only going to get worse, unless CIOs, CFOs and CEOs take steps to gain control of corporate printing.

Savings Opportunities
Companies that evaluate their printing infrastructures can reduce costs by up to 20 percent, according to Lexmark. So, a one billion dollar enterprise that is spending the industry average of $10 million to $30 million annually can save $2 million to $6 million in output-related costs every year.

These savings come from optimizing output assets, printing more intelligently and streamlining business processes by moving paper-based information back into the electronic realm. Getting a better handle on printing costs is becoming easier with new software from printer manufacturers that allows organizations to track costs, such as supplies, printing devices, maintenance and overhead, by department.

Printing Solutions
While many companies have yet to grasp the full costs of printing today, others are trying to get a better handle on their printing costs. Consultants and printer vendors, such as Lexmark, Xerox and HP, are working with customers, not only to deploy more efficient printers, but also to better use electronic information to manage, reduce or replace printing.

For instance, Lexmark offers its PrintXchange product to provide a single point of control for all print resources on the network. PrintXchange centralizes printer administration and provides seamless distribution and printing functionality.

Another way that companies are managing their printing costs is by deploying printers at the department level, rather than using personal printers or centralizing printers at the corporate level, according to Xerox’s Smith. Companies are discovering that department-level printers, which operate at 20 to 40 pages per minute (black and white), can save significantly on printing costs, in terms of printers themselves and in supplies.

Another approach that companies are taking revolves around distributing their printing out from the data center to give remote users the ability to get printouts from the nearest company location, says Renee Zaremba, HP Solutions product manager. Companies are putting these printers on networks, rather than using direct connections, to enable multiple users to access them and to provide better management capabilities. Zaremba advises companies to examine their spooling and print management capabilities in this client/server architecture, as it is quite different than what would be found in a data center/centralized printing model.

For its part, HP improved its management capabilities, as well as adding more computing power in some of its newer printers that will start to come on the market in the spring. Making printing devices Internet-capable is one of the company’s major thrusts, as officials see online printing—where users log in via a Web site—as one of the critical changes in the way companies are printing today.

When possible, companies are also using the Internet to eliminate the need for some printing, or pushing the onus of printing onto its trading partners. For example, if customers (business or consumer) request a document, the help desk will often direct them to a Web site where they can download the document in a PDF or other format, and offer customers the opportunity to print the document out on their own equipment.

Along these lines, many companies are putting annual reports and other commonly printed documents on their Web sites or on CD-ROM. This gives users the option of printing all or part of the documents, in color if they choose, at the nearest printer, rather than waiting for mail or fax copies, which may be of poorer quality.

Adding Internet and Wireless Features
HP’s 8150 mfp printer, features a 32-page-per-minute printing rate, and incorporates copying and digital sending capabilities. With the 8150 mfp, a company can scan a document, then send it over the Internet to another printer, fax machine or e-mail account (as a PDF document). This is generally less costly than a typical fax, and allows for the delivery of full-color documents, not available with most company fax machines.

In addition to going online, many companies are adding wireless capabilities throughout the enterprise in order to provide anytime, anywhere functionality. For example, HP’s color laser 4550 works with any wireless infrared handheld device. All the user needs to do is come within a couple of feet of the device and click "print" on the handheld device to start the process.

One of the newest product developments at HP brings advanced computing functionality and intelligence to the printer. HP’s embedded virtual machines let companies use Java applets to perform complex tasks. HP is partnering with third-party software companies to provide printers with additional Java applications and intelligent capabilities.

Printing Professionals Turn to the Web for Business
A Xerox Corporation survey conducted from the show floor of On Demand 2001, a digital printing and publishing conference, found that printing professionals are using the Internet to drive profits. Topping the list of uses: informational Web sites, e-mail or Web job submissions, and communications with customers.

The majority of respondents—almost 70 percent—said they are currently using the Internet to conduct business and increase revenue and profits. Other results from the survey revealed that:

  • 64 percent of respondents expected at least 20 percent or more of print jobs to come through the Web in the next three to five years.

  • 41 percent could foresee a day when more than half of their revenue will come from non-printing services, such as database management.

  • 65 percent felt the Internet has dramatically changed how they deal with customers.

Respondents to the survey also said they are currently using the Internet to complement their traditional businesses in a variety of ways. Three-quarters of the print professionals have an informational Web site, and 69 percent use the Internet to allow submissions of print jobs by e-mail or over the Web. Print professionals are finding other uses for the Internet, as well:

  • 46 percent of respondents are using the Internet for communications with the designer and printer, while 69 percent use it for customer communications.

  • 41 percent use the Internet for online proofing.

  • 49 percent track customer jobs online.

  • 37 percent use the Internet for customer file storage.

More than 200 people participated in the survey.

New options also deliver additional functionality to reports printed from mainframe computers. Large mainframe reports are traditionally printed at central locations and hand-delivered to recipients. But Data21 Inc. has introduced a set of products that use e-mail, FTP and Web sites to expedite and reduce the cost of reporting printing. The company’s JES2Mail and JES2FTP products allow electronic delivery in multiple formats, such as Adobe PDF, HTML, RFT, comma delimited and plain text. For VSE and OS/390 mainframe environments, the software products allow users or administrators to access the spooling environment and order reports or order customized reporting options. Reports can be sent to a local server or LDAP server, or directly to a user. The software works with traditional report distribution packages, which reside on the mainframe.

Tackling Back-Office Applications
To date, much of the focus of enterprise printing has revolved around front office applications (letters, management reports, etc.). But enterprise printing vendors are starting to add more back-office capabilities, as human resource management, customer relationship management and enterprise resource planning systems become more automated. Printing for many of these items previously was outsourced to external print houses. But with the cost of color printing and printers coming down, many companies are bringing this type of printing in-house.

Because documents from these applications often include confidential information, printer security is becoming more of an issue, according to HP’s Zaremba. In response, HP is offering four different levels of security with its printers—some of which even have the capability of printing negotiable checks, along with other documents. Information is secured through smart card technology, personal identification numbers and encryption/decryption software.

New Software
Even companies that don’t make any printers are getting involved in enterprise printing, working with firms so that they print fewer unnecessary jobs and print only what’s needed, according to Abbey Pinard, vice president of marketing for Mobius Management Systems.

Mobius’ Search and View, for example, allows a company to electronically assemble packets of information. Together, these packets represent a full report. But only one full report may be needed. The other users would print only one or two packets.

Companies can also use Mobius’ ViewDirect technology to print out sections of a report rather than the full documentation and send only the appropriate information to the desktop of the user, who then may elect to print all of it or nothing.

Other printing activities have been eliminated altogether by implementing applications like electronic bill presentment and electronic bill payment.

Coming: More Color, Memory
Beyond increasing use of the Internet, enterprise printing will see other market changes coming soon.

In the next few years, Xerox’s Smith foresees color printing becoming much more common throughout enterprises. To date, color printing has been held back by cost and speed. Color printers and supplies cost more and the color printers work more slowly than their black and white counterparts. But those differences are becoming smaller and smaller and could go away in as little as three to four years. Color printing provides enough advantages that there is already some increased use, even though there is still a significant cost differential, says Lexmark’s Pinard.

While the price of printing infrastructure plunges, companies are also getting more bang for their printing buck as more memory is embedded into the new equipment. Printers themselves are coming out with enhanced memory systems that can store documents, to be printed later. Financial services companies, for example, are getting away from printing hundreds of thousands of stock forms, some of which may become outdated before they are ever used, according to Jim Aubrey, manager of the Financial Services Industry Sector for Lexmark. "Compliance and other changes (e.g., a name change for a bank) have led to spoilage rates as high as 40 percent," Aubrey says. "Now, companies can print the right number of forms with the right information."

Phil Britt and Tom Moore are freelance technology writers for the Washington News Bureau. They can be reached at

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