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Report no |
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Document Production & Print Management |
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Smart City & ICT Partnership Elected Member Sounding Board |
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1 June 2009 |
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Purpose of report
This report provides an update for the Smart City & ICT Partnership Elected Member Sounding Board on the Document Production & Print Management project.
Background
The Finance & Resources Committee approved a Council-wide review of Document Production and Print Management on 22 April 2008. This review was to consider both local printing through Xerox Multi Function Devices (combined printers, photocopiers and faxes), Local Network and Desktop Printers, the Council's Reprographics Unit and Volume Offsite Printing undertaken through the BT Partnership.
This initial report sets out the business case and plans for networking of Xerox Multi Function Devices (MFDs) and establishing a corporate change programme targeted at reducing print volumes. It outlines the financial savings and environmental benefits that will be realised from these actions and indicates the implementation plan and benefits realisation strategy. Further reports will be presented over the coming months on the remaining elements of the review.
Main report
Drivers for Change
Financial drivers include:
The lower unit costs to print or copy on MFDs compared with local and network printers;
The potential to reduce the total number of printers and fax machines across the Council and thus reduce procurement and day-to-day operation costs
Significant potential savings from reductions in the amount of printing undertaken by staff and associated paper usage
Operational efficiency is adversely impacted by the complexity of the Council's printer estate. There are a number of different processes for management depending on type of device and department or location. There is no central register of printer assets and management of costs and re-charges is complex.
A programme which drives cost savings in this area will also contribute to the achievement of the Council's sustainability commitments such as the Climate Change Declaration 2007, the Paper Protocol, energy reduction targets and the Council Carbon Management Plan 2008. For more detail see section 5 below.
Current print volumes and assets
In 2007/08 120 million sheets of A4 were printed or copied within the Council. Of this 62 million sheets went through MFDs and a further 50 million sheets were printed on local or network printers. The estimated total costs of this activity are approximately £1.6 million p.a.
The Council currently has 678 MFDs across the city of which approximately 117 are currently networked. In addition, analysis shows that there are approximately 1,400 network printers and 2,500 standalone printers at sites which also have MFDs. This corresponds to one printer for every three members of staff. There are also estimated to be over 400 fax machines at these sites.
In 2007/08 £58,000 was spent on procurement, installation and maintenance of network printers through BT. In the same period £71,500 was spent on procuring local non-network printers from the main Oracle supplier. Procurement staff estimate that approximately a further £30,000 was spent on printers from other suppliers. Year on year spend will vary but these figures are felt to represent a reasonable, conservative estimate of annual spend.
Implementation Plan
In order to realise cashable efficiency savings the following actions are being taken forward:
the Waverley Court model of networking all MFDs and transferring print volumes to these from local and network printers will be rolled out across the Council. This will then allow the removal of other printers and faxes.
Xerox Device Management (XDM) software will be installed to monitor volumes and assets and manage fault reporting and consumables ordering
reduction targets of at least 15% of overall print and colour volumes will be set and these will be monitored with Xerox Device Management Software
Benefits
Improved management information will improve asset and consumables management as well as fault reporting and annual recharges for print.
Lower printing costs will be achieved and a reduction in paper use through double-sided printing which will be mandated on MFDs. Reduced print volumes and lower waste disposal costs will also be achieved due to these lower paper volumes. In addition, future expenditure on purchase of new and replacement printers and maintenance is avoided as a result of the significantly reduced printer estate.
The XDM software will allow detailed management information about devices and volumes to be monitored thus allowing print reduction targets to be agreed and enforced. The benefits presented in this report are based on targeting a 15% reduction in total print volumes after the transfer of print to MFDs and the conversion of 15% of current colour prints in Waverley Court to black & white to take advantage of the fact that unit costs to print black & white are a tenth of the cost to print colour. An example of comparative print costs on MFDs is given at Appendix 1.
The target figure of 15% for volume and colour reductions is felt by departments to be an achievable level of reduction and could potentially be exceeded in some areas if new ways of working are adopted. Since the start of the Xerox contract in 2007 there have already been significant cash savings and a reduction in overall print and paper volumes of approximately 15%. It is assumed that this reduction is largely attributable to the move to Waverley Court and access to networked Multifunctional Devices.
Studies by Gartner and the experience of other local authorities such as Aberdeen and Lancashire support the print reduction target proposed in this report.
Achievement of all benefits, and in particular savings from volume reductions, will depend on changing organisational culture by means of successful change management as outlined in the next section.
Implementation & Change Management
Networking of MFDs is being carried out in 3 phases as follows:
Main Corporate Network Sites (e.g. Chesser House, City Chambers etc)
Other, smaller Corporate Network Sites
Learning & Teaching Network Sites
It is anticipated that networking and transfer of print can be completed at all sites by the end of the next financial year 2009/10. Due to the phased implementation approach benefits realisation will start at different times. Corporate sites should see benefits in the course of 2009/10 whilst Learning & Teaching sites will see benefits from the start of financial year 2010/11.
Detailed planning and floorwalking by Xerox staff to map printer and fax locations and determine an appropriate future set up will be essential. This needs to include detailed consultation with facilities management staff and managers and staff in areas concerned to ensure that networking and removal of printers meet the operational needs of the business.
Successful change management will be critical in achieving the long-term changes in attitude and behaviour required to realise benefits and make real progress towards sustainability targets. Communications to all staff are essential to ensure end users understand the need for and approach to change. The Waverley Court experience can be used to convey positive messages about the new ways of working and best practice information should be shared (electronically) on an ongoing basis.
Financial Implications
Total costs for implementation of this programme are £230,800. Of this £99,500 will be incurred in 2008/09 and £131,300 in 2009/10. It is anticipated that lower range benefits of £220,000 will be achieved in the first two years. A detailed cash flow statement is presented as Appendix 2 of this report.
The Council Management Team have agreed that this benefit will be used to (1) offset initial implementation costs; (2) pay back the spend to save funding allocated to the project and (3) provide departments with some early benefits in 2009/10. Details are provided in Appendix 3 of this report.
Total annual benefits have been calculated with an upper and lower range allowing for potential variances in the assumptions made. Annual realisable benefits from 2010/11 are expected to rise to between £407,000 and £580,000.
Benefits will be realised at individual cost centre level. Monitoring of volumes against the baseline information gathered can be used to determine actual savings in each area. After recovery of the project costs it has been agreed that individual Departments retain benefits. Some departments have built targets into their 2009/10 revenue budgets.
There is a significant incentive to budget holders to strive to meet print reduction targets where their area can directly benefit from the savings. This is likely to be the most effective way to effect a change in attitude to print across the Council. Departmental benefits profiles are shown at Appendices Three and Four.
Environmental Impact
A number of positive environmental impacts will be seen from the proposed reductions in printer assets and overall print volume reductions. If a 75% reduction in current assets were achieved the following environmental benefits would be achieved each year:
A 56.8% reduction in Greenhouse Gas emissions
A 62% reduction in Solid Waste (excluding paper)
A 55.4% reduction in energy consumption which corresponds to a reduction of 2 million KwH costing £170,000 at current market rates
An 18-27% reduction paper used for desktop printing which equates to ca 100-150 tonnes of paper waste p.a.
Conclusions
There are significant financial and non-financial benefits to be achieved from the actions proposed above. The Waverley Court experience and benefits realised to date demonstrate what can be achieved if actions are taken forward with proper planning and change management.
Recommendations
It is recommended that the Smart City & ICT Partnership Elected Member Sounding Board;
note the current costs and volumes associated printing and the drivers for change
note the need for a comprehensive change management to support the implementation;
note the financial implications of the actions of Phase 1 of the programme; and,
note the positive environmental impacts of the proposed project.
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Jim Inch |
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Director of Corporate Services |
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Appendices |
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Contact/tel/Email |
Hilary Coyne (0131) 469 3985 |
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Wards affected |
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Single Outcome Agreement |
National Outcome: (14) - We reduce the local and global impact of our consumption and production. Local Outcomes:
National Outcome: (15) - Our public services are high quality, continually improving, efficient and responsive to local people's needs. Local Outcomes:
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Background Papers |
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Appendix One - Comparative costs on MFDs
Document |
Format |
Colour/B&W |
Total Cost* |
20 page A4 document |
Single sided |
Colour |
£1.27 |
20 page A4 document |
Single sided |
Black & White |
£0.19 |
20 page A4 document |
Double sided |
Black & White |
£0.155 |
20 page A4 document |
Booklet style - ie 2 pages per side of paper |
Black & White |
£0.078 |
*Total cost to print is calculated from costs per sheet for A4 paper and `click' costs under the Xerox contract which represent the cost per side of paper printed.
Maximum difference in cost: £1.27 - 7.8p = £1.192
Appendix Two - Cash Flow Statement
Lower
Upper
Notes:
Cash flow statements exclude BT Labour costs which will be paid from the core ICT budget.
Benefits assume current contract terms under the Xerox contract which runs for 5 years until June 2012
Discount rate used is the Treasury Green Book rate of 3.5%
Difference between Lower and Upper range depends on rate of double-sided print that is applied to MFD printing and copying and assumptions about the % of non-MFD print in schools that can realistically be transferred to MFDs. An assumption of a 75% transfer has been used for all sites apart from schools where a transfer of 50% of non-MFD clicks has been used to calculate lower range benefits. It is acknowledged that in time, with successful implementation and changes to ways of working these rates may increase thus allowing further benefits to be realised.
Appendix Three - Cost and Benefit Profile by Department
Lower
Upper
Notes:
The benefits split is calculated using actual MFD volumes in Waverley Court and proportionate spend by department on printer consumables which is assumed to reflect non-MFD print volumes
Actual benefits may vary once exact data on volumes by department become known after implementation of XDM software. 2008/09 benefits depend on expeditious volume reduction target setting in Waverley Court.
All implementation costs are recharged in 2009/10 except for those apportioned against the Learning & Teaching Benefits in Children & Families as these benefits will not be realised until Financial year 2010/11 if the proposed implementation plan is followed.
Appendix Four - Net Benefits Profile by Department
Lower
Upper
Plus 7.9m sheets used in Reprographics
Where MFDs are not networked they are used solely as photocopiers
It is acknowledged that removal of 100% of other printers may not be possible for operational reasons in some sites
As reported to the CMT on 3 July 2008. Cash savings of over £200,000 have been realised due to lower costs compared to the previous supplier
Spend Less, Get More: 25 IT Cost Containment Techniques 2006 and Research Paper G00155489 22/02/08 Cost Cutting Initiatives for Office Printing
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