At the announcement, in Berlin yesterday, HP backed up its promise to slash printing costs by pledging refunds on any shortfall on projected cost savings offered new clients.
In addition to launching its new MPS division and Printing Payback scheme, HP announced it is extending its partnership with Canon, plugging the gaps in range with Canon’s scanning and multi function devices.
According to HP’s figures, global enterprises will spend £172bn on printing this year, and the costs of managing that information are even higher. “For every nine dollars spent on software and hardware, nine are spent managing that information,” says Bill DeLacey, the general manager for EMEA at HP’s imaging and printing group. “We’re very confident this service can deliver what companies need right now. How many ways can you automatically slash six per cent off your overheads so easily?”
Services
While HP had been great at selling printers and software, it has not capitalised as well as it might on the service provision, admitted DeLacey. “We’re great at supplying printers, but weren’t great at toner fulfilment or devising per click packages or service management,” he said. With nine dollars being spent on management for every dollar spent on hardware (according to Gartner), and margins on products diminishing, it is imperative to get a services offering ready, he said.
Under the HP printing payback guarantee, any qualified enterprise that does not make the cost savings that HPs consultants project for them, within 12 months, can receive a cheque refunding the shortfall. “Companies want a supplier that can mitigate the risk for them,” he said.
Analysts have described the move as a new form of outsourcing, but without the legal technicalities that often make service level agreements of outsourcing unenforceable. “We [the analysts] were taken through the details of the scheme in great detail, and I can tell you the scheme’s been very well thought out,” says print services analyst Leigh Worthing at market research company IDC.
Savings
The savings will come from three sources. First by eliminating infrastructure costs, then by cutting the cost of managing devices, and finally from creating better workflows, said DeLacey. Workflow consultancy would enable HP consultants to make efficiencies by fine tuning business processes, by eliminating paper work and duplication of effort. It is here that the relationship with Canon is critical, he said. “In the high end scanning systems we lacked some products, and Canon's S5 and S6 products have the high definition finishing capability we need,” he says.
Ultimately, the move shows that printers are commodities but their part in information management is of enormous strategic importance to companies, said DeLacey. “It was becoming increasingly apparent that enterprises wanted a better service. Our acquisitions – we bought 32 companies last year, as well as EDS – and partnerships have tied things up for us,” he said.
