Why a longer-term managed print service outshines a shorter-term agreement

Many small and medium businesses in Australia tend to focus on ‘big picture’ goals, like revenue and growth. However, when it comes to managing costs, many are guilty of letting so-called ‘small’ budget items fall off the radar. Added together, though, these perceived smaller costs – such as printing – can do some serious damage to your business’ bottom line.

Research from IDC has revealed that less than a third of businesses track their print-related IT helpdesk and support costs. In addition, less than half of businesses track hardcopy costs routinely. When these costs are uncovered, it’s often a surprise to CIOs to discover that company print spend accounts for a substantial portion of their IT budget and resources, and consumes 1 to 3% of total annual revenue.

Long-term vs short-term

Increasingly, businesses are turning to Managed Print Services (MPS) to help them digitise their workflows, increase workplace efficiencies and manage their costs. In fact, estimates are that an MPS can save up to 30% on your printing costs as well as up to a 14% reduction in print-related helpdesk calls.

So, what exactly is a Managed Print Service, and how could it benefit your business? An MPS is an agreement between a company and a provider that specialises in print management. It usually comprises the lease of print, photocopy and scanner devices and consumables, such as toner. It also generally involves a service component, which covers the installation of the equipment, routine maintenance and repairs, as well as training.

Aside from cost savings, one of the main benefits of an MPS agreement is being able to outsource the responsibility for this crucial area of your business to a third-party provider that’s an expert in printing. Freed of the tasks related to managing your printing, your staff can focus on higher-value work.

A key component of a Managed Print Services agreement is the term of the managed print agreement, which provokes much discussion within businesses and within the industry in general. In Australia, MPS term lengths generally vary between 36 and 60 months, with 60 months the norm. Both short- and longer-term agreements each have their pros and cons, which we explore below.

What’s the difference between short-term and long-term managed print?

Costs

The most clear-cut difference between a short-term and long-term managed print agreement is going to be the cost. One of the biggest advantages a longer agreement term has over a shorter one is a lower monthly cost. This frees up valuable cash flow for you to direct to other, more important, areas of your business.

Here’s an example. Say your managed print spend was $100/month on a 60 month agreement. This could work out to be $125/month on a 36 month agreement, increasing your yearly spend by $300. While the cost may appear lower as there are 2 fewer years compared to the 60 month agreement, it is unlikely that your business will cease printing after 36 months and will therefore need to renew your agreement. So over a 60 month period, your spend will be $1,500 more expensive (if your renewed agreement was on the same terms).

On the other hand, a shorter agreement term attracts higher monthly costs, as the provider has fewer months to spread their hardware costs over. Despite higher costs, many businesses may view the shorter term as more favourable as it gives the perception of greater flexibility and ability to upgrade equipment. Which brings us to our next point...

Flexibility & equipment upgrades

There is no real difference between agreement lengths when it comes to flexibility. You may assume that a short term agreement means that you can upgrade to newer technology faster, as soon as the contract is ready to renew. In many cases, replacing or returning equipment at the end of a 36-month or shorter agreement will mean that you are prematurely retiring equipment that is operating perfectly well, especially if it has been well maintained.

The reality is that a good managed print provider will be prepared to work with you throughout the agreement, no matter the agreement term, to adjust to your changing business needs. So the real difference for flexibility really comes down to the supplier, with some being more rigid than others.

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Forum prides itself on the healthy, long-term relationships we enjoy with our clients. We provide flexibility in our Service Level Agreements (SLAs) for maintenance and device replacements and are open to clauses being added to an agreement to support upgrades in exactly such a scenario. This gives our clients the peace of mind to ensure their business is future-proofed. When it comes to optimisation, our CRM’s are regularly checking and reporting on utilisation to ensure your current managed print setup is aligned with your requirements. During this process, we will be suggested ways to fine-tune your costs, hardware and software, so that you’re getting the most value out of your managed print agreement with us.

If you’re concerned about warranties, Forum holds a great relationship with all the manufacturers we work with, so we can acquire extended warranties to match your agreement term.

Support & relationship

The length of an MPS agreement does not change the level of support you’re receiving. However, long-term MPS agreements allow for a greater depth of strategic planning which can strengthen your relationship with a provider.

A longer MPS agreement term is recommended for companies planning on staying with the same MPS provider and equipment. This avoids having to agree on your next MPS cycle every couple of years, including deciding on the most suitable equipment for your business.

A long-term strategic MPS partner like Forum Group will work with you at the outset of your agreement to identify your business needs and make sure you’re not locked into unrealistic minimum print volumes or unnecessary A3 printers. And during the life of the agreement, we’ll continually adapt to changes within your business, help optimise your utilisation and reduce your spend.

The final analysis

While short-term MPS agreements can make you feel like you’re less committed to your provider and therefore less exposed to financial risk, this perceived freedom can cost you in several ways. As discussed, higher monthly costs, premature replacement of equipment and less time for strategic planning all come under a short-term agreement.

If your business prints very high volumes per month, your hardware may benefit from being replaced after a shorter period, however, if you’re anticipating your business will still be around in the next five years and you’re looking to establish a long-term working relationship with a trusted and professional managed print provider, a 60-month agreement will yield some strong benefits.

Get the right long-term MPS for your business

You can be confident that the maintenance, management and support of your printers will be in safe hands with Forum Group. We offer a true managed service – not an old-fashioned, outdated and inflexible lease agreement.

Our managed print services challenge the traditional model. We work to complement digital transformation, rather than restrict it, and our tailored options ensure you’re only paying for what you only need.

Get in touch

If you want to be confident you’re getting the best value out of your MPS get in touch.

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