Licence to print money

Utilities spent £13 million more than they needed to on printing this year because of poor control of print procurement, writes Sally Wright.

Printed documents are a fundamental communications tool for utilities, and will remain so for the foreseeable future. The sector has realised that electronic and physical communications need to co-exist in the real world, and that customers have to be reached through a balanced range of media.
As companies look for ways to reduce costs, they would be well advised to examine their print procurement. Latest figures from a study by Pitney Bowes predict that UK utilities will over-spend by more than £13.2 million on print in 2011. If practices do not change, the sector faces paying over the odds to the tune of £113 million by the end of the decade.
Utilities commission a wide range of printed documents, including marketing collateral, information leaflets, bills and newsletters. Typically, these documents originate from many different offices and departments, including finance, HR and marketing. Most of the people currently commissioning print on behalf of the business are unlikely to have an in-depth knowledge of the print market, understand average market prices, be used to managing print contracts, or have sufficient volumes of print to commission that they can negotiate best prices. Consequently, choice of supplier and job pricing is more often based on a historic relationship than a detailed understanding of the market.
Engaging a third party provider would address the issue, but companies need to be knowledgeable of best practice before embarking on such an agreement. The first step is to conduct an audit of current practices. This will give an idea of the minimum savings on offer, and whether there are economies in excess of this to be made.
However, print management services offer more than cost savings. They examine the customer’s full range of requirements, including not just cost reduction, but also improved and more responsive print, better service levels and job status information, and control over brand consistency. They also consider the potential role of added-value services, perhaps more refined job submission processes, artwork services and approval routines.
The utility should guide the outsourced provider as to its priorities when it comes to improvements to be made – for example, improving green policy may be favoured over universal cost efficiency. These values will also influence the benchmarks and service level agreement (SLA) set in place to monitor the progress of the arrangement, such as final cost reduction, service quality and management transparency. The provider should be incentivised to reach agreed targets year on year and deliver sustainable cost reduction.
As utilities’ central financial managers and commissioning departments will favour cost transparency, firms should seek out print management solutions that offer dashboard applications that allow them to view jobs that have been commissioned and produced. This enables the customer, in conjunction with the provider, to accurately monitor the quality, quantity, cost and frequency of output. A near real-time window on everything that is being commissioned allows better commercial management, better financial control, plus the maintenance and management of central standards and procedures without the need for expensive management time.
The idea that the utilities sector can benefit from more centralised print management is not a new one. There have been various studies over the years demonstrating that businesses across sectors could better manage their print. However, the recent Pitney Bowes study has exposed the true scale of the savings that utilities can achieve through centralised print management. As companies realise the enduring importance of printed communications in a multi-channel world, they are under pressure to achieve more with reduced means. The figures clearly demonstrate the wasteful outcome of inaction.
Sally Wright, international marketing director, Pitney Bowes Management Services International.