3 Major Reasons why Managed Print Services Providers still lose Money Today.

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Managed Print Services continues to be one of the most profitable ‘inventions’ of the printing industry for multiple reasons. One is the growing awareness of its benefits among customers, but also because of its increasing remote monitoring and remote management possibilities.

But still, many Managed Print Services Providers are losing money today. Why? A pure lack of fact based action oriented information at the right time! I often use the metaphor ‘information in your hand’.

1.   Wasted toner

Supplies are a major part of the common Price per Page offerings. Depending on it being a mono or color page, the supplies component can be from 60% up to 85% of the Price per Page calculation. Customers don’t feel the pain, nor the consequences, of replacing toner or other customer replaceable units too early. They simply respond to the information the device provides. Understanding the wasted toner percentage per supply and being able to immediately report and act on this matter has a drastic impact on the bottom line. Just make the calculation for yourself, what would the financial impact from removing 5% - 8% wasted toner would be for your company.

2.   Toner consumption is above the agreed levels

A high toner consumption should be a very profitable business for the Managed Print Services provider. In many situations it is not. It turns out to actually be the opposite. The back office has the idea that too many supplies are shipped to the customer, the finance department sees a negative trend in profitability of this customer and support sees no excessive usage of the devices. This immediately points out the weaknesses in what I called before ‘information in your hand’. Coverage information is crucial to maintain profitability on a contract level and across your entire business. Understanding and keeping track of this coverage at supply, device and customer level makes excellent sense to identify toner consumption and having the opportunity to immediately respond and act on it. A customer discussion about additional payments always requires evidence in your hand, otherwise it always ends up with ‘empty statements’.

3.   Unauthorized usage of supplies or toner fraud

In cases where an MPS provider only manages part of the devices at a customer, it is well known that supplies ‘disappear’ or switch between managed devices and devices owned by the customer. If this accidentally happens it is not a big issue, but there are still a lot of blatant violations. Managed Print Services Providers should get to the top of the matter and identify the causes. Having a track record of which exact supplies have been attached to the specific device combined with the entry percentage level and exit percentage level of those supplies give immediate indications of unauthorized usage or so called ‘toner fraud’.

At the end of the day, it all comes down to my earlier used metaphor of ‘information in your hand’. Information should be accurate, immediately action oriented, available to the right person(s) and timely at any given moment. When I used to work for Compaq back in the day, we used the term Zero Latency Enterprise - information available anywhere, anytime, any device.

I wouldn’t be a good Sales Director if I don’t preach just a little bit to the choir :-) We have made the transformation for you from relative ‘useless data’ into ‘information in your hand’. Instant available, accurate and action oriented. If you are interested in increasing your profitability and staying ahead of the competition, don’t hesitate to contact me directly.

Mark Kouwenberg [email protected]

+31 6 24 77 26 62