How to Calculate and Minimize the Total Cost of Ownership for Printers

Key Questions:

1. What factors contribute to the total cost of ownership (TCO) for printers?
2. How can businesses effectively calculate TCO?
3. What strategies can minimize TCO for print environments?

Understanding the total cost of ownership (TCO) for your print environment is crucial for effective budget management and cost reduction. ManagedPrint helps businesses gain a clear view of their printing costs and implement strategies to minimize these expenses.

This blog will explore the factors that contribute to TCO, how to calculate it, and ways to reduce it for optimal efficiency and cost savings.

Factors Contributing to Total Cost of Ownership (TCO)

1. Cost of Hardware

• Purchase or Lease: The initial cost of acquiring printers can be through direct purchase or leasing over a specified term. Leasing can spread out costs but may include interest, while purchasing requires upfront investment.
• Depreciation: Consider the depreciation of the equipment over its useful life when calculating TCO.

2. Supplies Costs

• Consumables: Regularly used supplies such as toner, maintenance kits, fusers, drums, transfer belts, ozone filters, and staples.
• Frequency of Replacement: How often these supplies need to be replaced based on usage and printer specifications.

3. Maintenance Costs

• Service and Repairs: Costs associated with parts and technician services for maintaining and repairing printers.
• Service Contracts: Most businesses opt for service contracts that bundle supplies and maintenance into a cost-per-print model, simplifying cost calculations. If this is the case for you then you won’t have to audit every consumable purchase and attach it to a specific device as part of the calculation.

4. Cost of Administration

• Invoice Processing: The cost associated with processing invoices from multiple vendors. According to Adobe, this can range from $15 to $40 per invoice, affecting overall administrative expenses.
• Staff Interaction: Time and resources spent by staff managing print services, including interactions with the managed print provider.
• IT Management: Costs related to IT staff managing security patches, firmware updates, and other printer-related IT tasks.

Calculating TCO for Printers

To calculate the TCO for printers, consider the following formula:

TCO = (Cost of Equipment) + (Number of Prints * Cost per Print) + (Administration Costs)

1. Cost of Equipment:

• Include the purchase or lease cost of the printers.

2. Number of Prints:

• Calculate the total number of prints (color and black and white) over a given period.

3. Cost per Print:

• Determine the cost per print, which includes supplies and maintenance costs. This can be obtained from service contracts or historical data.

4. Administration Costs:

• Include costs for invoice processing, staff interaction with the print provider, and IT management efforts.

Example Calculation

Let’s consider a hypothetical scenario:

• Equipment Cost: $5,000 (purchase)
• Total Prints per Year: 50,000 (45,000 black and white, 5,000 color)
• Cost per Black and White Print: $0.02
• Cost per Color Print: $0.10
• Administration Costs: $1,000 annually

TCO Calculation:

TCO = $5,000 (or $120/mo lease – Equipment Cost) + (45,000 * $0.02) + (5,000 * $0.10) + $1,000 (Administration Costs)

Outright Purchase TCO = $5,000 + $900 + $500 + $1,000

Outright Purchase TCO = $7,400 for the first year and then $2,400 for each additional year. If the device was leased, then it would look like this:

Leasing TCO = $120/mo (Equipment Cost) + (45,000 * $0.02) + (5,000 * $0.10) + $1,000 (Administration Costs) = $1,440 + 900 + 500 + 1000 = $3,840 per year for the lease term.

Strategies to Minimize TCO

1. Optimize Print Fleet:

• Assess and right-size your printer fleet to match your business needs. Remove underused devices and consolidate printing to high-efficiency printers.

2. Implement Cost-Per-Print Contracts:

• Consider service contracts that bundle supplies and maintenance into a cost-per-print model. This simplifies budgeting and can reduce overall costs.

3. Automate Supplies Replenishment:

• Use automated systems for supplies replenishment to avoid downtime and ensure bulk purchasing discounts.

4. Enhance Print Policies:

• Implement print policies that encourage double-sided printing, restrict color printing to necessary documents, and reduce overall print volume.

5. Regular Maintenance:

• Schedule regular maintenance to keep printers in optimal condition, reducing the likelihood of costly repairs and downtime.

6. Centralize Print Management:

• Use a single provider for all print management needs to streamline administration, reduce invoice processing costs, and benefit from economies of scale.

Choose ManagedPrint to Help Get the Best TCO

Calculating and minimizing the total cost of ownership for printers is essential for efficient budget management and cost savings. By understanding the factors that contribute to TCO and implementing strategic measures, businesses can significantly reduce their printing expenses.

ManagedPrint offers comprehensive solutions to help you manage and optimize your print environment, ensuring cost-effective and efficient operations.

For more information on how ManagedPrint can assist you in calculating and minimizing TCO for your print environment, contact us today. Our team of experts is ready to provide tailored solutions to meet your business needs.