Transcript Slide 1

Managed Print Program Launch:
Reducing Costs and Enhancing Penn’s Sustainability Posture
- Printing at Penn: Current State
- Managed Print Services (MPS), defined
- Fleet Dashboard Tool & MPS Portal
- Strategy Summary
- Evaluation Process
- MPS Business Case:
- School of Veterinary Medicine
- School of Dental Medicine
http://www.purchasing.upenn.edu/MPS/
Brent Friedman
Sourcing Manager
Purchasing Services | Business Services Division
www.purchasing.upenn.edu
July, 2013
Data Sources:
BEN Financials; IDC; Gartner; Papercalculator.org; Purchase and usage
reports from respectively named suppliers. Data cross-validated, where
applicable.
What do you know that you know?
FACT: In most establishments, the true cost of office printing is unknown.
Printing at Penn: Current State
Known Annual Cash Outlays for Print Support
$675,000
Print Devices
$825,000
Paper
$1,250,000
Energy
$2,000,000
Ink & Toner
$2,450,000
Copier Leases
$0
$500,000
$1,000,000
$1,500,000
$7,200,000
$2,000,000
$2,500,000
$3,000,000
The True Costs?
FACT:
In an unmanaged print environment, the
true costs of office printing are typically
2-3X the known costs.
What do you know about printing costs?
Known costs, new printer
with a 4-year lifespan
Cost Component, Typical Employee
Printer ($250, basic B&W laser)
Paper ($4/ream)
Toner ($110)
Energy ($3)
Real costs, new printer with
a 4-year lifespan
Month
Year
Cost Component
Month
Year
$60
Printer ($250, basic B&W laser)
$5
$60
$4
$48
Paper ($4/ream)
$4
$48
$13
$156
$13
$156
$3
$36
$3
$36
Break/fix service, parts & maintenance
$10
$120
IT Support
$10
$120
Incorrect, unused, or abandoned print jobs
$8
$96
Toner held in inventory
$2
$24
Real estate costs
$2
$24
Staff time, ordering & maintaining supplies
$5
$60
Disposal costs
$1
$12
$5
$25
$300
4 Year Total Cost of Ownership: $1,200
We know this example cost model to be
directionally true, based on 20+ years of
Managed
Print
Services
industry
benchmarks.
Toner ($110)
Energy ($3)
$68
$816
4 Year Total Cost of Ownership: $3,204
Unknown Annual Costs
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Carried ink and toner inventory; waste, end-of-life, Ben’s Attic
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Staff time spent ordering and managing supplies
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Internal time and cost for LSP support
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E-waste disposal
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Waste due to incorrect and abandoned print jobs
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Over-specified print devices
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No standardization of print fleet
• Environmental
Penn’s Annual Paper Consumption
974’
Penn consumes a stack of paper equal to……?
Annual Office Paper Consumption
 60,000,000 sheets
3.5
Miles
 12,000 cases
 285 tons
 Less than half is
recycled-sheet
Penn consumes enough paper to displace 25% of Central Park….
Central Park, New York City
A Managed Print solution drives sustainable printing behaviors that reduce paper consumption.
Environmental Impact of Penn’s Paper Consumption
6,000,000
gallons of water in manufacturing
6,500
148
trees
cars’ worth of annual CO2 production
Annual Printer Purchases & Ink/Toner Consumption
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>1,000 new devices
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#1 category of non-computer hardware spend (>$350K)
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8 OEM brands, 144 models
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No device standardization
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No significant rationalization efforts
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>10 tons of electronics
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Net add, several hundred printers per year
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>25,000 cartridges
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#1 category of spend with Office Depot (>$1.4M)
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266 cartridge types
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Less than half are recycled/compatible brand
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>5 tons of e-waste
Additional Data Points
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90+ instances of MPS on campus; wildly variable rate structures
• B&W: $0.004 - $0.25
• COLOR: $0.04 - $0.14
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Ratio of ~1.25-1.75 local printers for every networked print device
Ratio of ~1.50 print devices per employee
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2,000+ staff hours to manage supplier contracts and order/maintain consumables
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$1,400,000+ spent annually on ink & toner
• $400,000 savings if Penn used compatible and remanufactured toner cartridges
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$2,000,000+ in carried ink & toner inventory on campus
• Costs $ thousands per year in lost opportunity costs and cash flow restrictions
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Average institutional cost per page: $0.15 - $0.25 (conservative)
Managed Print Services (MPS)
What is Managed Print Services?
Managed print ≠ networked printers.
Managed Print Services (MPS) is a service that analyzes and manages
document input/output devices to:
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improve efficiency and productivity
reduce electronic, paper, and plastic (ink/toner) waste
reduce the total cost of office printing
reduce support burden to IT staff
manage the printer fleet with greater visibility and control
MPS typically includes:
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multi-function printers (MFP’s), copiers, scanners and fax machines
ink/toner supplies
preventive maintenance
parts and break/fix service
equipment up-scaling and down-scaling flexibility
guaranteed service level response times
single contract for increased buying process efficiency and buying power
usage reporting and analytics
MPS: How does it work?
Print Assessment  Optimized Print Environment
A print assessment process typically includes:
1. Physical walk-through of print environment; floor plan mapping of devices
2. Data Collection via software tools (“DCA” – Data Collection Agent)
3. Business process evaluation and key end-user interviews
4. Optimization recommendation to client, tailored to precise client requirements
RIGHT-SIZED
BEST PRACTICE
FINANCIALLY SMARTER
SUSTAINABILITY-FOCUSED
Unmanaged Print Environment
Networked Print Environment
Large Workgroup Printer
Local Standalone Printer
Optimized Managed Print
Environment
MPS Program Benefits
 Waste reduced
 Increased service levels
 Better sustainability posture
(or same-day, if required)
 Free-up staff time
 Reduce costs
High toner usage on documents can
be costly, especially color
Costs unaffected by high toner usage
12 Ways Managed Print Services Can Reduce Costs
1. Optimization of the print fleet: right size & location for the volumes generated
2. Implementation of duplex printing
3. Reduction of printed pages
4. Optimization consumables/toner usage
5. On-demand consumables supplies – no need to keep inventory
6. Proactive support and maintenance
7. Consolidation of parts and service expertise requirements
8. Fewer devices, fewer device types
9. Increased product reliability
10. Energy efficient print devices
11. Consolidation of supplier relationships
12. Enhanced leverage through campus-wide print volume
Implementation of a robust MPS environment typically reduces print costs by 25-40%.
Fleet Dashboard Tool & MPS Portal
Dashboard Main View
Fleet View
(Local or Global)
Supply Levels View
(Local or Global)
Individual Device View
Service History View
(Local or Global)
Penn’s MPS Portal: Single location for all MPS information
http://www.purchasing.upenn.edu/MPS/
Strategy Summary
Strategy Summary & Proposal for Improvement
SITUATION:
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>20,000 print devices on campus; net add several hundred year-on-year.
Penn acquiring over 1,000 new print devices per year; net add “hundreds” annually
3 suppliers providing some form of Managed Print Services; inconsistent fees charged
Inconsistent buying practices for supplies; inconsistent pricing schemes among suppliers
Penn pays up to 10x more for office printing than what it could cost
Current practices are financially unsustainable, notwithstanding the environmental impact
>$7.2M
(that we know )
TARGET:
• Develop a highly flexible, scalable managed print framework that can be leveraged by anyone at Penn
• Set the standard for office printing across campus.
PROPOSAL:
• Constitute a cross-functional core team than can:
• identify school/center/department/building(s) with a desire to implement a Managed Print program
• assess the marketplace (including incumbents) for capabilities
• execute a formalized RFP, selecting a preferred supplier partner through a weighted scorecard approach
• implement, measure improvements, broadly communicate success, and enroll more participants
BENEFIT:
•Best pricing/value on campus
•Enhance Penn’s campus sustainability posture
•Impact local job market & economic inclusion efforts
•Implement best-in-class business practices for office printing
•Free up staff time currently spent managing/supporting print devices, supplies, and supplier relationships
•Reduce cost, on-campus supplies inventory, direct & indirect waste, while improving Penn’s overall cash flow
The Approach to Building a Strategic MPS Framework
1. Identify business areas seeking an MPS solution; validate interest
2. Inform incumbent suppliers of intent to go to market
3. Gather internal requirements and volumes
4. Draft a formalized Request for Proposal (RFP) Document
5. Finalize internal sponsorship, alignment, and requirements
6. Send RFP to market (proposals received October 12)
7. Evaluate proposals, short-list suppliers
8. Conduct parallel, competitive print environment assessments with short-list
9. Evaluate finalists’ print optimization recommendations
10. Award contract; define the overall MPS framework
11. MPS Program Launch
12. Continuous Improvement, Ongoing Evaluation
Overall Project Timeline
Month
Milestone
January, 2012
Observations
February, 2012
Opportunity Confirmed; Internal business areas identified for project
March, 2012
Suppliers Informed of Intent
April, 2012
May, 2012
Fact finding, data gathering, marketplace conditioning
June, 2012
SDM Confirmed - ~250 printers
July, 2012
SVM Confirmed - ~330 printers
August, 2012
ASC + 3 standalone Departments Confirmed - ~400 printers
September, 2012
RFP Sent to Market; Project Status to IT Roundtable
October, 2012
RFP Due, preliminary evaluation
November, 2012
RFP evaluation, continued
December, 2012
RFP evaluation complete; short-list discussion
January, 2013
Short-List Presentations
February, 2013
Pilot Assessment Kickoff
March, 2013
Pilot Assessment Period
April, 2013
Pilot Assessment Period
May, 2013
Pilot Assessment Complete by May 31.
June, 2013
Final Evaluation Team meeting. Award Decision, strategic MPS preferred supplier announced
July, 2013
Implementation, Initial Savings/Benefit Forecast
August, 2013
Implementation
September, 2013
Implementation
October, 2013
Major Project Update; Achievements Reviewed, Savings/Benefit Re-forecast
SUMMARY: Why do this, and why now?
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Highly attractive MPS account in a very competitive market
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Access to printing subject matter expertise and superior print technologies
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Unified reporting of print data against established measures
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Volume leverage: Best-in-class service levels and overall value for business areas that opt-in
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Minimally effective implementation provides significant and irrefutable cost savings and environmental
benefits
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A robust, flexible MPS strategy:
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complements Penn’s Climate Action Plan
further supports the American College and University Presidents’ Climate Commitment
saves money, drives sustainable behaviors, and is a best-practice
is increasingly in demand across Penn’s campus
• It is the right thing to do.
Evaluation Process
Scoring Methodology for RFP Responses
Method Employed:
Since all suppliers fundamentally meet the basic requirements for MPS, we will score each RFP
question response relative to the competition. RFP sections will be prioritized and weighted.
Scoring Key:
5 – “Best answer, most desired response”
4 – “fourth best”
3 – “third best”
2 – “second best”
1 – “Least desired response”
0 – Unable to Score; Not Applicable; Completely Fails Penn Requirement
Evaluator Comments:
All evaluators are encouraged to use the ‘Comments’ section with each RFP question to help support
future evaluation team discussions.
Special Circumstances:
If you do not possess adequate expertise or information to make an informed ranking on a particular RFP
question, input “0” for all responses on that question.
This will force a “wash” on that question and not affect the overall ranking in your individual scorecard.
Purchasing will account for this in the overall tabulations.
Commercial & Financial Risk Evaluation
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Commercial analysis focuses on:
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ability to meet Penn’s diverse customer and delivery requirements
collection of incumbent supplier performance feedback
financial solvency to continuously grow the company and adequately fund operations
known and potential litigation risks
ability of Penn to influence the product offering and marketplace
(typically) understanding Penn’s negotiation position; ability to achieve a high value cost structure
(typically) contract legal terms and conditions
When reviewing a company’s financials, we analyze:
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overall financial solvency of the firm
ability to support continued operations for anticipated contract term
ability to support current indebtedness and simultaneously continue internal investment for growth
financial assets to support upswing/downswing in business during term
Other Considerations
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Scalability
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OEM agnosticism
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Holistic document management capabilities
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Ability to maintain leading edge on industry trends, technology
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Ability to implement a unified program across a single campus with
highly diverse customers
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Local economic inclusion
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Ability to benefit the most people at Penn
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Ongoing process improvement and continuous cost savings
Team Evaluation Process
Major activities for RFP evaluation:
1. Written RFP responses
2. Supplier presentations
3. Pilot assessment evaluation
Award Decision
Ended May 31
Written RFP
Responses
(5)
On-Campus
Presentations
(2-3)
June 17, 2013
Pilot Print
Assessments
(2)
Award
(1)
• Approach: Relative ranking by
weighted scorecard
• Approach: Short scorecard used
by evaluation team
• Approach: Identify business
areas for parallel assessments
• Approach: Reconvene
evaluation & extended team
• Goal: Scoring results used to shortlist
• Goal: Validate written RFP response
content
• Goal: Determine which supplier best
“fits” in Penn environment
• Review findings, assessment
experiences, and review supplier
recommendations
• Goal: Validate short-list by written
RFP scoring
• Goal: Gain comfort with level of
expertise
• Goal: Determine if MPS
recommendations fit typical Penn
requirements.
• Goal: Determine if enough data
and pilot experience exists to
make an informed, data-driven,
defensible award decision.
MPS Rationale
School of Dental Medicine
Maria Mejia, IT Director
School of Veterinary Medicine
Smith Ragsdale, IT Director
Business Case for MPS:
Client Profile:
• 632 Students & Residents/Post-Docs, 285 Faculty (including full-time and adjunct), 283 Staff
• 213 print output devices
• Complexities:
• Remote faculty practice locations: On-campus, Bryn Mawr, 34th & Market Street (University City)
• Patient confidentiality concerns; HIPAA
• Student privacy; FERPA
TOP FIVE REASONS FOR MPS:
1. We have no idea how many printers the school uses and how much it costs us
2. Save money, especially following print assessment and right-sizing activities
3. Make better use of existing assets
4. Increase customer service levels for all printer-related issues
5. Allows Dental IT to “get out of the printer business”
BONUS: Practice what we preach – we are an electronic practice!
2nd Floor Schattner
Most Severe Case: A Printer Per Person
Unmanaged
environment
Nearly a Printer Per Room:
4th Floor Levy
Unmanaged
environment
Success in Similar Environment:
5th Floor Levy
Fully managed
environment
Side by Side: 3rd Floor Evans
Unmanaged
environment
Fully managed
environment
Business Case for MPS:
Client Profile:
• 425 Students, 235 Faculty, 600 Staff
• Number of print output devices: NO IDEA
• Complexities:
• Remote campuses: New Bolton Center and Working Dog Center
• Vet hospitals: Preponderance of stand alone printers
• Student printing
TOP FIVE REASONS FOR MPS:
1.We have no idea how many printers the school uses and how much it costs us.
2.Allows Vet IT to “get out of the printer business”
3.Save money, especially following print assessment and right-sizing activities
4.Increase customer service levels for all printer-related issues
5.Seems like a really good idea
Ryan Veterinary Hospital
3rd Floor
(Asset DB tool used to map printers & cost)
Ryan
Veterinary
Hospital
First Floor
MPS Project Evaluation Team:
Eric Bowden
Lena Buford
Kim Byrd
Brent Friedman
Maria Mejia
John Mulhern, III
Smith Ragsdale
James Tarver, PhD
Omar Telan
Susan Tracey
Annenberg School for Communications
Annenberg School for Communications
Graduate School of Nursing
Purchasing Services
School of Dental Medicine
ISC Technology Support Services
School of Veterinary Medicine
SAS/Chemistry
ISC Technology Support Services
University Lab Animal Resources
Special thanks to our extended team and others that contributed to the project:
Ray Aull
Par Bowler
Clare Din
Dan Garofalo
Tom Gudmundsen
Chris Hanson
Vira Homick
Susan Kennedy
Justin Klein Keane
Andrea Kreiner
Mark Mills
Melissa Muth
Kristin Nelson
Warren Petrofsky
Colleen Reardon
Purchasing Services
Business Services
SAS Computing
Facilities and Real Estate Services
Business Services
Facilities and Real Estate Services
Purchasing Services
Business Services
SAS Computing
Facilities and Real Estate Services
Purchasing Services
ISC Information Security
ISC Technology Support Services
SAS Computing
Purchasing Services
About Penn Purchasing
Penn Purchasing Services:
Our Role
Strategic sourcing is an institutional procurement process that continuously improves and
re-evaluates the purchasing activities of an organization. Sourcing is considered one
component of supply chain management.
Key Responsibilities:
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Draft, negotiate, execute supplier contracts
Assess and mitigate risk
Maximize value for Penn’s supplier investments
Transaction review & approval
Develop entrepreneurial sourcing strategies
• (RFI, RFQ, RFP, Reverse Auctions, Negotiation Planning)
Mission Statement:
To leverage our institutional knowledge, procurement expertise, and technology
in order to provide solutions to our customers and optimal financial return-oninvestment to the University.
Penn Purchasing Services:
Strategic Sourcing
Traditional Role
“Purchasing”
Modern Role
“Strategic Sourcing”
Marketplace Analysis
Penn Purchasing Services:
Uncovered Value
Where Strategic
Sourcing Delivers
Added Value
Penn Purchasing Services:
Sustainability Initiatives
Toner Cartridge
Recycling
Writing Instrument
Recycling
Office Depot Tote
Delivery Program
Point-of-use
In-line Water
Filter/Coolers
Shift to 10-30% PCR
Paper
Penn Purchasing Services:
Economic Inclusion & Supplier Diversity
Penn seeks to encourage local business growth, empower diversity
and women business owners, provide women and minorities with
greater access to the skilled and higher-paying trades, and create jobs.
• Over $90M invested annually with local, small businesses
• Recognized as a leader in higher education supplier diversity & economic inclusion