Lucrative Print Run

Defined as the management of devices,
processes, technologies and manpower, to
deliver a set of cost-effective print solution-the managed print services (MPS) have gradually gained a mind-share of OEM vendors. Be it Canon, Xerox, HP, Epson or Ricoh, almost all the printer OEMs are banking high on the enterprise sector for the document process outsourcing needs. With the evolution of customized plans, including price-per-page usage, solution providers play a definite role in monitoring the devices and services as well as management of consumables. Of late, printer OEMs have walked straight into the premises of corporate, enterprise and government sectors as the system integrators and solution providers in India were largely apprehensive. This business model has a recurring revenue stream, and the partner ecosystem is yet to gear and equip itself for the 'mysterious' opportunity in India.

The channel-vendor model for managed print services puts both the parties in a win-win situation. In a managed landscape, local solution providers transform into a facilitator of vendor capabilities, that include network monitoring, printer performance, instant restocking of ink and toner cartridges, and on-site maintenance. With hardware as a service (HaaS) model, vendors are optimistic about the document work flow management. Photizo Group, a consulting and research firm, believes that MPS will account for 35 percent of the total imaging market in 2012. Digital imaging and photographic solutions company, Canon India eyes Rs 100 crore revenue from MPS by 2011. It has close to 20 large enterprise clients, such as automaker Maruti and IT firm MindTree, as well as other customers in FMCG, pharmaceutical and banking sectors.

Puneet Datta, Assistant Director-Marketing, Business Imaging Solutions at Canon India, referring to a recent study said that the total addressable MPS opportunity in India will grow at a CAGR of 20 percent. "The reason for this growth will be the inherent advantages and benefits, that managed print services bring to an organization," said Datta. One of the biggest challenge faced by the MPS players in India is the lack of awareness among the CXOs about the deployment and benefits of MPS. Datta believes, that the diversified geographic span of various large and medium organizations leads to a vast amount of time being spent in gathering actual print infrastructure data in real time. "The unorganized consumable market also has a dampening effect, as the customer is unable to have a first look on the real savings in up-front run cost as compared to genuine consumables supply. The real challenge ahead of any of the MPS providers is to get its channel infrastructure geared up for handling MPS customers," he said.

The relevance of managed services in the SMB sector is gaining traction on account of lack of in-house skilled manpower. High capital investment is required for an infrastructure apart from the cost and efforts, that go into running such an infrastructure. "The SMBs are increasingly recognizing the monetary and workplace efficiency benefits of migrating to a managed services solution. Managed services provide users appropriate contract and optimization of processes with automated supplies, controls around the usage, job accounting and rules-based printing that provides significant cost savings," said Datta. According to him, MPS has become the obvious choice of organizations, as they increasingly seek to reduce cost and release resources to focus on other important tasks more directly connected to the their main goals. Naturally, most of the SIs have entered into this space for long-term benefits. "As the demand for MPS grows in India, more and more SIs that were into the IT manged services space have seen a lot of synergy into taking care of the extended IT infrastructure including all network peripherals, as not only does it become the logical progression, but it adds to their revenue and bottomline growth," concluded Datta.

Vipin Tuteja, Executive Director-Marketing, Business Support and International Business, Xerox India believes that India presents huge growth opportunities for Xerox Global Services as large businesses continue to use paper and traditional means of storage and there is an increased need for automation within enterprises. "The MPS market has evolved over the years, and today it has become a core business process in every enterprise. Enterprises, which have not yet leveraged MPS are looking at it as a potential business enabler. There are several factors that have led to the growth and the need of document management. One of the prominent factors being observed in document management space is that most of the medium and large organizations are consistently on the lookout for ways to cut costs and increase profits," said Tuteja. Xerox Corporation has already entered into a global five-year MPS contract to manage Fiat Group's print operations, that could reduce an estimated 30 percent operational cost.

Initially, when MPS was introduced in India, there was a lot of uncertainty among organizations due to the storage and bandwidth cost concern. "Now, the situation has changed a lot, and for good. I would like to stress here, that while adopting a technology, organizations should look for long-term objectives and not just the low-cost factor. That is the reason Xerox has always stressed for long-term contracts," said Tuteja. In the present complex business environment, documents constitute an integral part of the overall organization. However, as the volume grows, organizations find it really tricky to manage them effectively. According to him, Xerox pioneered MPS practices that others have now adopted, such as advanced needs assessment, monitoring and management of the fleet and user demand and change management to rally users behind MPS and help them cope with the transition to well managed office printing. "Looking ahead, Xerox's enterprise managed print services initiative will likely forge the way for the overall MPS market in similar areas," he added. “Xerox office services can enable organizations to save costs up to 20 to 25 percent as well as help them to go green. Xerox offers a wide range of extensions to MPS, including CRD and mailroom outsourcing, telecommuter support, document-centric process optimization and outsourcing, vertical market programs and production print center staffing," asserted Tuteja.

Nitin Hiranandani, Director-MES (Imaging and Printing Group) at HP India believes that one of the most important reasons behind the MPS momentum is the awareness of organizations that outsourcing non-core competency tasks will enable them to focus on their core business proposition. HP performed a detailed assessment of the customer's existing imaging and printing infrastructure and collected all relevant information about usage patterns in the organization and the current snap shot of the costs incurred. "With the increased pressure on CIOs and management teams to reduce costs and inventories, it has become crucial for enterprises; to make printing operations economical, environment-friendly and competitive enough to have a positive impact on the company's finances. These increasing pressures have established a strong base for the relevant printing solution in the current environment and MPS is one of them," said Hiranandani. HP IPG has 2000 customers in telecom, IT, manufacturing and BFSI domains globally, who use the company's managed print services offering.

According to Hiranandani, customers have certain expectations when it comes to the implementation of MPS in their organization. HP's offerings in this category help reduce total costs (direct and indirect costs) of enterprise imaging and printing. Though the cost of the services depend on various factors such as the service employed, size of the enterprise, and printing needs, HP managed print services help organizations achieve cost savings of up to 30 percent through strategic management of their output print environment that minimizes costs, and maximizes business results. Hiranandani said that, HP provides proactive end-to-end management of an enterprise's imaging and printing environment. "Our industry-leading network infrastructure and asset management capabilities enable remote and secure installation, configuration, maintenance, monitoring and management of an organization's imaging and printing environment," he added.

The enterprise segment is a key growth area for HP, and the company works closely with the public sector-including legal and education, as well as the manufacturing and services verticals. To cater to the specific needs of each of these segments, HP announced the set up of its dedicated new business division, 'Managed Enterprise Solutions' that focuses on deeper engagement with customers and greater focus on building and growing MPS to help customers drive down costs and improve productivity. "HP is enhancing its channel-led MPS with select channel partners, known as office printing solutions partners, wherein the company makes a great investment in business tools and programs which enable reseller partners to offer MPS to customers. In addition, the enterprise business division recently launched new products and solutions for the enterprise customers in India to accelerate customer business results, and had the largest ever roll-out of new work flow solutions," concluded Hiranandani.

The Game Changers

The managed print solution providers are all set to maximize their revenue by leveraging the printer OEMs' capabilities together with their integration expertise. The managed document services are still at a nascent stage and the vendors usually go directly to large and mid-sized companies, but for SIs/SPs, it not only gives recurring benefits, but the solution implementation helps in cash-inflow throughout the contract period as well. Among the notable system integrators in this space, Quadsel Systems and System Tech have well-equipped positioning in the MPS domain.

Quadsel Systems that has offices throughout the southern region has emerged as one of the leaders in managed print services. The company has an association with printing and imaging major, HP and has implemented and executed some major projects, including one mega deployment in the manufacturing sector. "The managed services are growing in tandem with cloud, and the market trend around managed document services is very promising," said Girish Madhavan, Director, Quadsel Systems. The company's MPS vertical is growing at a rate of 20 to 25 percent on a YoY basis.

Founded in 1988, System Tech has grown close to a Rs 100 crore company, that provides IT infrastructure and management services with a strong managed print services portfolio. The company maintains a premium partnership with HP and its core focus area include delivery of comprehensive solutions through expertise approach. System Tech offers IT infrastructure consultancy services and imaging and printing solutions to manufacturing, telecom and software development verticals as well as small and medium enterprises.

Delhi-based Challenger Computers has recently debuted with Canon Image Square, that showcases a strong printing and imaging portfolio. With an objective to tap the large enterprises and corporates, the company facilitates the customers with live experience of document solutions. With a range of high-end printers, including MFDs and scanners, the company is banking high on Canon's partnership. "Challenger has a comprehensive range of solutions around managed print services, and we are optimistic about the market prospects," said Manoj Gupta, Director of Challenger Computers.

Chennai-based Precision Group that has a turnover of more than Rs 200 crore has strategic partnerships with Toshiba and HP. With a set of solutions around managed print services, the company serves its customers through branches in Bengaluru, Hyderabad, Coimbatore, Madurai, Trichy and Mumbai. Its solutions are based on the core product offering that include fax, copiers, scanners, laser jet printers, servers, accessories, plotters and peripherals.

The Champ(s):

Quadsel Systems and System Tech, are the two significant players in the MPS deployment and management. These two have emerged as the solution champions for their assessment services, pre and post implementation consultation, and technology integration. Both these have a strong MPS portfolio with solution specialization.

Muntazir Abbas
(muntazira@cybermedia.co.in)