Multi Functional Devices - Why benchmark the procurement - running costs?

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BenchmarkMFDs.jpgAlthough very basic when compared with the multi-functional devices (MFDs) sold today, many of the same sales techniques are still used to trap unwary photocopy machine procurers, says Alan Low of Purchasing Index (PI), who ran a London office equipment company in a past life.


“It is recognised as an industry where the size of the installed base provides substantial opportunities for suppliers to enhance profits through the sale of after-sales services and supplies,” says Low. Over-specifying the model and including extras, such as stapling, etc., can add to the upfront cost and upgrading machines can also prove to be expensive, especially if it is early in the machine’s lifecycle.


Leasing or renting can also present challenges. What interest rate should apply? What length should the primary lease period be? What happens with MFDs that continue to be used after the primary lease period ends? Should you opt for minimum billing?


Operational and organisational issues also play a role. What if the organisation, division or business unit downsizes or is sold? How does one factor-in other organisational changes, such as new operational requirements, or the requirements to print less or more?


The complexities around MFD procurement and management can be ameliorated through understanding what other organisations are doing and how they manage these challenges over time, explains Low. “Sharing information in a structured and anonymous way can give participating organisations very useful insights into how the market is changing and how other procurement professionals are managing the supplier relationships.”

 

AlanLow_2013.jpgIn previous reports PI has found that the next cost per copy (rental + copy costs / number of copies) can vary by as much as 170% when comparing highest to lowest costs.


PI’s benchmarking methodology takes into account:
• Capital/leasing/rental costs
• Maintenance costs
• Paper costs
• Fleet numbers, age and utilisation
• Net cost per copy and utilisation
• Minimum billing
• Cost avoidance strategies
• Contract and SLA management
• Service and account management by the suppliers
• “Green” and environmental issues


For many years the paperless office has been predicted but never achieved; the need to manage the costs of printing and the security issues around MFDs is vital. If you would like to discuss benchmarking MFDs and other technology related spend categories, please contact Alan Low at alan@pibenchmark.co.za or Margie Mann at Margie@pibenchmark.co.za.
 

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