Copiers cut corporate costs

By Adam Gifford

Any business buying a printer or copier over the next couple of years will have to face the fact the two devices are fast becoming one and the same - and could be also a fax and scanner as well.

The business will also have to weigh up the value of colour versus black and white, and whether it should go for a more powerful machine rather than outsource jobs to a copy bureau or printer.

But the old rules still apply, warns analyst Roger Calvin of Auckland firm Independent Printer Review.

"Potential purchasers of high-end colour machines have to engage in very intelligent analysis before they buy. They can't just take any sales rep's answers at face value. They have to dig deeper on what it costs to run," Mr Calvin says.

"Often they're told about things like toner costs, rather than drums and transfer kits. I personally consider the amount of information for end-clients in the market is very poor."

He says users must consider what they will be using the machine for.

"If you compare the application, different machines win out for different scenarios."

He says there is clearly a convergence, with printer manufacturers pushing their machines into areas previously the domain of copiers, and copier manufacturers offering copiers which can serve as printers where required.

Canon last week launched a new range of multi-function devices (MFD) incorporating copier, network printer, fax and scanner into the same device. According to IDC, in 1998 MFD shipments worldwide were just over 4 million, making a $US9 billion market. This year sales are expected to jump by almost 50 per cent and should pass the 12 million mark by 2003 when the market is estimated to be worth $US27 billion. In the inkjet-based MFD segment, Hewlett-Packard leads the US market with a 56 per cent share, followed by Canon with 29 per cent.

Canon's monochrome GP series ranges from the GP160, aimed at the "small but serious office", to the GP 605, which will print 60 pages a minute as well as stapling options.

There are four new colour MFDs, with the top-of-the-line CLC2400 capable of spitting out 24 colour pages a minute.

Mr Calvin says while MFDs are ideal in some situations, firms must carefully analyse their potential use of each function to make sure they are not paying a premium for unused features.

Despite the promise of the paperless office and the increasing sophistication of digital document exchange and storage technologies, "print volumes will continue to trend up," Mr Calvin says.

"Printing costs are a substantial percentage of any company's fixed overhead."

Mr Calvin has conducted cost comparisons of doing copying in-house or outsourcing.

He concludes that even quite small companies can make substantial savings on their printing bills by having their own colour copier.

His comparisons were between printing in-house with a Hewlett-Packard colour laser jet 8500 or 4500 model printer against using a copy centre's colour copier, or getting four-colour printing done by a commercial printer. The capital costs of the copier were spread over a 36-month lease cycle.

For a single-sided company newsletter on A4 paper with colour, copy centres could not compete at any volume. Up to 1000 copies, the job was cheaper done in-house. Over that number, commercial printing was the most cost effective, as it was also for a double-sided and folded flier - the only issue there was time. It would take about six hours to print 1000 copies on the CLJ 8500 and 10 hours to print them on the CLJ 4500.

According to Mr Calvin's calculations, 500 copies of a double-sided A3 newsletter 2with colour would cost $603 to produce in-house, compared with $1635 at a copy centre. It does not take many such runs in the course of a year to claw back the cost of an $18,000 machine, he says.

Mr Calvin says there are other advantages to in-house document production, including security, flexibility, the ability to make last minute changes and to produce things in small volumes when they are needed.

There are less likely to be the large inventories of unused and out of date printed material gathering dust in office corners.

He says many organisations are moving to the model of distributing documents electronically, so they can be printed on demand, distributed before printing or customised by branch or regional offices as required.

Tom Smith, the Boise, Idaho-based product marketing manager for the 8500 series printer, says the worldwide trend is for in-house printing to become an increasingly important part of corporate life.

Desktop publishing software is becoming increasingly easier for the ordinary business user and the power of the latest version of Adobe Acrobat is making PDF (portable document format) the standard for interchangeable digital documents, Mr Smith says.

United States figures show printers account for 370 billion pages a year, with 12 per cent of them in colour. Some 490 billion pages are produced each year on copiers of faxes, almost all in monochrome.

Commercial printing accounts for 3 trillion pages a year, about half in colour, making it a $US85 billion dollar industry.

A significant chunk of that printing will be done in-house in future.

He says in-house printing is growing in New Zealand and Australia at twice the projected rate, as small and medium companies see the competitive edge it can give them.

Cards returned to the firm by purchasers indicated that worldwide, 27 per cent of CLJ 8500 printers were bought by firms with one to nine employees, and 24 per cent were bought by companies with between 10 and 99 staff.