Controlling Costs Optimizing Infrastructure Improving Workflow through Managed

Controlling Costs, Optimizing Infrastructure, Improving Workflow through Managed Print Services Rick Valenzi Service Principal, Imaging and Printing Group The Hewlett-Packard Company September 23, 2008 © 2008 Hewlett-Packard Development Company, L. P. The information contained herein is subject to change without notice.

Overview

Key enterprise trends Industry perspective—cost “ 90% of all companies do not track printing costs. ” “Average annual document costs are 5– 15% of revenue. ” —Buyer’s Laboratory “ 23% of help-desk calls are printer related. ” —IDC “Most companies could reduce their printing costs by 10– 30%. ” —Gartner —IDC Bottom line Significant improvement opportunities exist for all organizations. “Hard visible costs are only about 10% of the total document cost. ” “IT spends 15% of their time on printing-related issues. ” —IDC “Companies spend 1– 3% of their revenue per year on output fleet management. ” —All Associates —Gartner “Companies can lower their printing costs by up to 30%. ” —IDC 3 Alternative Thinking About Printing

Today’s enterprise print environment Commercial (Third party) • Offset printing • High-end digital printing Total Spend (Burdened Costs) Commercial Production (high-volume transactional printing, centralized reprographics, etc. ) • High volume variable-data transactional print • Medium/high volume, digital color, limited finishing • Prints and copies • Immediate turnaround • Low volume, limited color and finishing • Commodity / “cost per job” • Typically local relationships Declining utilization Production Office Printing • Prints, copies, and faxes Flat utilization • Perceived as expensive and inconvenient • Considered inflexible Fastest growing segment Office Printing • Perceived as free • Unknown and uncontrolled costs • Flexible Source: ALL Associates Group Alternative Thinking About Printing

True costs of enterprise printing Every $1 spent on putting marks on paper involves another $9 to manage it Office Production Commercial 10% 12% 15% Spend by Segment (Commercial, Production, Office) 14% Cost of putting marks on paper 13% Federal Government 13. 41% of Payroll Expense 12% 90% + Burdened costs of managing document lifecycle Document Management Fulfillment & Distribution End-user Interaction Facilities & Labor Document & Content Design IT Support & Infrastructure Administration & Procurement Facilities 11% 88% Spend as % of Revenue 90% 10% 9% Higher Education 9. 94% of Annual Budget 8% 7% 6% 5% 4% 3% 2% 1% K-12 School Districts 6. 2% of Annual Current Expenditure County/City Government 4. 1% of Annual Budget State Government 2. 25% of General Expenditure Source: ALL Associates Group Alternative Thinking About Printing

Fragmented burdened office costs Visible hard costs (5– 7¢) Document management IS support 10% 5% IS infrastructure 5% 5% 47% Administration, purchasing, and facilities 28% Burdened costs End-user time 47– 63¢ Total office document costs 52– 70¢ per page 6 Alternative Thinking About Printing

Key enterprise trends Productivity challenges The average worker: Source: Fujitsu and Price. Waterhouse. Coopers 7 Alternative Thinking About Printing

Worldwide trends in public sector enterprise imaging and printing • Migrate to shared services architecture − Take advantage of economies of scale − Meet critical need for increased collaboration (e. g. , homeland security) • Transform mindset from output device to productivity tool − Solve business problems − Streamline workflows − Meet increasing service levels • Improve end-user experience − Provide consistent user experiences in all locations − Manage the increasing use of color for more powerful business communications Alternative Thinking About Printing

Key enterprise trends Environmental 67% “Green IT” is #1 on Gartner’s list of the top 10 technologies and trends. 80% of enterprises are implementing environmental programs. of enterprise RFQs evaluate suppliers’ environmental aspects. 30% By 2010, about half of the Forbes Global 2000 will spend more on energy than on hardware. * of infrastructure purchasing decisions is based on environmental factors. *Source: Gartner 9 Alternative Thinking About Printing

Balancing the Triple Bottom Line (Profits, People, Planet) Considering the environmental perspective can be key to a successful transformation • Optimize resources • Decrease costs and increase value • Reduce risks (security) • Improve productivity Profits • Lower costs, both tangible and intangible • Provide positive story for CSR report Change management challenge opportunity Planet • Decrease consumption • Increase recycling • Decrease carbon emissions • Maximize flexibility • Keep it simple • Ensure it’s reliable • Meet needs and accommodate some wants People • Eliminate opposition to change • Feel good about printing responsibly Alternative Thinking About Printing

Overview

What have we learned from our customers? Opportunity • Utilize new technologies and convergence. Consolidate devices • Save costs and optimize fleet • 12 Complexity Harmony? Printer, Copier Decision making • Unmanaged environment – Utility model • Address security and compliance • – Productivity MFPs becoming productivity tools • On/off ramps into the network (with user interface) • Streamline paper-based processes • Alternative Thinking About Printing

HP’s approach to enterprise printing Improve IT and business efficiencies Manage Environment Increase IT productivity and system availability Reduce cost Optimize Infrastructure Balance productivity and cost PRODUCTIVITY Streamline workflows and increase compliance / Improve Workflow COST Improve business outcomes Customer needs 13 Customer benefit ROI Alternative Thinking About Printing

Networked? Optimized? Managed? Supplied? Alternative Thinking About Printing

Supplies management? $184 $109 $169 $129 $199 $169 $89 $107 Costly, unused $129 $107 $59 assets sitting in $59 $59 $109 $269 $109 $309 $169 supplies closets $309 $107 $134 $184 $169 $109 $184 $269 $169 $309 $269 Alternative Thinking About Printing

How much do you think your organization is spending? How much do you spend per employee for printing? • How many employees per printer do you have? • How do you determine a costeffective mix of printers and copiers and personal printers? • How do you determine when to acquire and when to retire printers? • Do you have an output strategy? How do you create such a strategy? • Alternative Thinking About Printing

Key Elements of an Optimized Solution • • De pl Discovery and design Procurement Services Deployment management Education and management of change t en m Pl a oy nn • • g • Assessment Financial analysis Detailed SOW Flexible payment options in • MPS t Su pp or t en em • ag • an • Job audit/tracking Reporting/portal Intelligent routing Account delivery mgmt M • • • Multi-vendor support Hardware maintenance Priority phone support Supplies management Alternative Thinking About Printing

Planning • • De oy pl Discovery and design Procurement services Deployment management Education and management of change t en m Pl a • • g • Assessment Financial analysis Detailed SOW Flexible payment options nn in • MPS t Su pp or t en em • ag • an • Job audit/tracking Reporting/portal Intelligent routing Account delivery mgmt M • • • Multi-vendor support Hardware maintenance Priority phone support Supplies management Alternative Thinking About Printing

Planning Assessment Financial Business Case Development Services Statement of Work Flexible Payment Options Alternative Thinking About Printing

Assessment • Understand organizational requirements • Understand end-user requirements Plan and assess • TCO projections Assessment services • Current-state projections Financial business case development Services statement of work development Choose payment method Alternative Thinking About Printing

Financial business case • Understand your decision-making criteria • Develop TCO (total cost of ownership) • Develop financial value proposition/business case • Co-present business case as needed Plan and assess Assessment services Financial business case development Services statement of work development Choose payment method Alternative Thinking About Printing

Services statement of work • Defines scope of solution in detail • Includes ongoing contract deliverables • Includes contract term and pricing schedule Plan and assess Assessment services Financial business case development Services statement of work development Choose payment method Alternative Thinking About Printing

Flexible payment options Level pay − Same predictable monthly payment − Reconciliation at year-end Plan and assess − A pay-for-what-you-use model Assessment services Base-plus-click Financial business case development − Base includes fixed costs (HW, support) − Click, based on pages printed − Transparent, accurate Services statement of work development Choose payment method Cost per Page Alternative Thinking About Printing

Deployment • • pl De Discovery and design Procurement services Deployment management Education and management of change t en m Pl a oy nn • • g • Assessment Financial analysis Detailed SOW Flexible payment options in • MPS t Su pp or t en em • ag • an • Job audit/tracking Reporting/portal Intelligent routing Account delivery mgmt M • • • Multi-vendor support Hardware maintenance Priority phone support Supplies management Alternative Thinking About Printing

Deploy Discovery and design Customer fleet acquisition Hardware procurement Deployment management Management of change and education Alternative Thinking About Printing

Site discovery and future-state design • Detailed assessment of current fleet − Includes utilization data − Includes current condition • Map of proposed fleet (site-specific) − Consistency makes it easy for end users. − Especially with large plants or frequent moves − Same layout − Same/similar device − Same interface • IT Deploy Discovery and design Customer fleet acquisition Hardware procurement Deployment management Management of change and education and facilities requirements Alternative Thinking About Printing

Fleet acquisition Deploy Discovery and design Customer fleet acquisition Hardware procurement Deployment management Management of change and education Alternative Thinking About Printing

Templates, processes, procedures Site implementation Customer • • • Project sponsorship and management Project plan review and approval Communication planning and execution Process communication Training registration Network connectivity/access Print queue creation Facilities and environment changes Physical staging/storage space Deploy Discovery and design Customer fleet acquisition Hardware procurement HP Project management Project plan creation Transition and communication planning Process development Discovery—current-state mapping IT infrastructure analysis Future-state design and workflow Device installation and configuration HP Web Jetadmin (WJA) software implementation • Remote monitoring implementation • Training • • • Deployment management Management of change and education Alternative Thinking About Printing

Management of change and education • Change management communication − Planning − Resources − And experience throughout the implementation • Education services − − • E-mentor Remote instructor led Onsite instructor led Customized education services Increase productivity Deploy Discovery and design Customer fleet acquisition Hardware procurement Deployment management Management of change and education − Improve user adoption − Dramatically reduce risk − Decrease negative feedback Alternative Thinking About Printing

Support • • De pl Discovery and design Procurement services Deployment management Education and management of change t en m Pl a oy nn • • g • Assessment Financial analysis Detailed SOW Flexible payment options in • MPS t Su pp or t en em • ag • an • Job audit/tracking Reporting/portal Intelligent routing Account delivery mgmt M • • • Multi-vendor support Hardware maintenance Priority phone support Supplies management Alternative Thinking About Printing

Support Multi-vendor services Hardware onsite support Priority phone support Supplies management Alternative Thinking About Printing

Support services • Multi-vendor is managed through HP − HP single point of contact − Single point of escalation • Onsite support: − Next-day onsite, 4 hr response − Custom SLAs to meet unique customer needs − Mission Criticality should dictate SLA’s • Priority phone support: Support Multi-vendor support Hardware onsite support Priority phone support Supplies management − Dedicated support teams − Unique PIN number for each customer − Diagnose before dispatch Alternative Thinking About Printing

Supplies management • • Supplies replenishment options: − Web-based ordering via the HP Service Portal − Order via 1 -800 number − Automated toner delivery Toner cartridge recycling Support Multi-vendor support Hardware onsite support Priority phone support Supplies management Alternative Thinking About Printing

Management • • De pl Discovery and design Procurement services Deployment management Education and management of change t en m Pl a oy nn • • g • Assessment Financial analysis Detailed SOW Flexible payment options in • MPS t or pp Su en em t • ag • an • Job audit/tracking Reporting/portal Intelligent routing Account delivery mgmt M • • • Multi-vendor support Hardware maintenance Priority phone support Supplies management Alternative Thinking About Printing

Manage Job Audit/Tracking Reporting/Portal Intelligent Routing Account Delivery Management Alternative Thinking About Printing

Job audit/tracking and management • Captures device, meter, user and job data at network and local devices − Device, pages, toner − File name, pages, sender and time − Sets up database to store captured data − Key is user-level tracking • Data compiled for audit • Data compiled for analysis • Manage Job audit/tracking Reporting/portal Intelligent routing Data compiled for chargeback purpose Account delivery management Alternative Thinking About Printing

Reporting/portal • HP remote monitoring and service portal − − • Device Online utilization and trend analysis downloadable reporting supplies ordering service requests IMAC/D processes and review − Utilize service portal to execute change orders − Ensure consistency in fleet over time − Sync user devices with HP management tools Manage Job audit/tracking Reporting/portal Intelligent routing Account delivery management Alternative Thinking About Printing

Intelligent routing • Rules-based routing − Create rules to automatically route documents to best device. − Customize rules based on print policies. Manage − Send interactive pop-ups to show costs Job audit/tracking and recommend where to print. Reporting/portal • Secure print driver − Encrypts and stores print jobs until authenticated sender arrives Intelligent routing Account delivery management Alternative Thinking About Printing

Account delivery management • Onsite fleet administrators −Care and feeding −Techs to support drivers, queues and networks −Custom deliverables • Account delivery manager −SPOC −Responsible for care and success of each client −Remote, local or onsite −Ongoing fleet management, creep analysis − Periodic fleet and account reviews −Roadmap planning −Contract review Manage Job audit/tracking Reporting/portal Intelligent routing Account delivery management Alternative Thinking About Printing

Key Elements of an Optimized Solution • • De pl Discovery and design Procurement services Deployment management Education and management of change t en m Pl a oy nn • • g • Assessment Financial analysis Detailed SOW Flexible payment options in • MPS t Su pp or t en em • ag • an • Job audit/tracking Reporting/portal Intelligent routing Account delivery mgmt M • • • Multi-vendor support Hardware maintenance Priority phone support Supplies management Alternative Thinking About Printing

Overview

Where do you go from here? Build a Print 2. 0 plan. Improve workflow Manage environment Optimize infrastructure Conducting a Print 2. 0 workshop 42 Performing an assessment Optimizing your business results Alternative Thinking About Printing

Print 2. 0 Workshops Description • Achieve a mutual understanding of the document-related business issues at hand the best way to address them • Facilitate inclusive dialog within large organizations to help surface opportunities for actionable, relevant and high-impact improvement projects Deliverables • Executive-level presentation highlighting key findings and recommendations • Plan (i. e. , roadmap) that shows how to address the problems balancing available resources and priorities over time Key Impacts • Increase awareness of document-related business issues across the organization • Align output strategy with business objectives • Agreement on next steps Alternative Thinking About Printing

Print 2. 0 Workshops Bring together the executive and operational leadership of your organization along to develop an imaging and printing strategy that will align with your IT and business objectives Customer & Industry Research Print 2. 0 Workshop Pre-workshop Interviews HP Imaging & Printing Best Practices Preparation (4 -6 weeks) Half-day Session Post-workshop Presentation (2 -3 weeks after Workshop) Alternative Thinking About Printing

Critical success factors • Assemble the right skills, experience, and decisionmaking power • Provide • Focus strong facilitation skills on your business issues • Willingness to work openly to uncover opportunities for improvement…and take action as appropriate Alternative Thinking About Printing

Print 2. 0 Workshop “Flow” Document-related Issues “Things to Do” to Address Issues Divergence Convergence Divergence Interviews & Research (broaden understanding) Gain Consensus on Issues Identify Initiatives (brainstorming) Prioritize Initiatives Identify Action Items, Issues, and Risks Prepare for Workshop Conduct Workshop Alternative Thinking About Printing

Print 2. 0 Workshop deliverable • Findings summary −Recap objectives and desired outcomes −Review what was learned during pre-workshop research and uncovered during the workshop −Ensure we have common understanding across the team • Recommendations summary −Describe the recommended next steps (i. e. the roadmap) −Identify key risks, issues, and mitigation plans • Next steps −Gain mutual agreement on the roadmap −Determine next steps Alternative Thinking About Printing

Strategy recommendations for ABC Company Optimize Infrastructure Manage Environment Improve Workflow I 1 Analyze existing contracts for SLA / T&C compliance M 1 Deploy network management tools to understand usage W 1 Conduct report generation/distribution Workflow Discovery I 2 Refresh output environment M 2 Establish key metrics and reporting package I 3 Deploy device extensibility capabilities M 3 Define and implement support model W 2 Conduct employment cycle Workflow Discovery I 4 Conduct electronic signature proof-ofconcept (POC) M 4 Establish output environment governance process W 3 Understand current and future needs for document management (archive, retrieve, index) W 4 Review critical crosssystem workflows to understand future areas of improvement Alternative Thinking About Printing

Proposed ABC Co. transformation roadmap 2008 Phase 2 Phase 1 Business Issues • “Right device, right place” • Cost visibility and transparency • Support, availability, reliability • Security, accessibility, connectivity • Vendor footprint • Unmanaged environment • Governance • Financial reporting • Employee lifecycle • Dual entry/maintenance • Too much paper and follow up • Electronic routing • Electronic records management • County, State, Fed regulatory compliance • Insufficient systems integration Mar Apr May Jun Jul Aug Sep I 1 Analyze existing contracts I 2 Refresh output environment I 3 Deploy device extensibility capabilities M 1 Deploy network management tools M 2 Establish key metrics/reporting package M 3 Define and implement support model M 4 Establish governance process W 1 Reporting Workflow Discovery I 4 Electronic signature POC W 2 Employment Cycle Workflow Discovery W 3 Document management W 4 Crosssystem workflows Alternative Thinking About Printing

“The most important discoveries, the greatest art, and the best management decisions come from taking a fresh look at what people take for granted or cannot see, precisely because it is too obvious. ” Source: R. Farson, *Management of the Absurd*. Simon & Schuster: New York, 1996.