Key pricing models for managed print services procurement

While most Fortune 500 organizations have started procuring Managed Print Services (MPS) worldwide, enterprises have very less visibility on the best practices and negotiation methodologies followed during the procurement process. MPS have evolved from a simple CPP (cost per page model) to diverse models such as Base + Click, and Base + Consumables. Currently, enterprises procuring MPS have very less transparency from vendors with respect to pricing and total cost of ownership.

While managed print services optimize the print cost of an enterprise, vendors do not pass the full benefit to the enterprises. The key aspect of negotiating a best-in class MPS contract lies in estimating the accurate print volumes during the beginning of the contract.

Prices for MPS are calculated based on volumes committed by the enterprise

• A CPP (cost per page) model with a volume commitment is the most preferred models for procuring MPS services worldwide
• The CPP models take into consideration the cost of hardware, toner, printer maintenance, spares, repair cost, etc.
• The organization pays only for cost per page thereby converting the CAPEX to OPEX
• Once the enterprises give the print volume commitments, vendors perform a TCO and ROI calculation to estimate the minimum number of devices that needs to be installed to achieve the ROI  
• This calculation also takes into account the current page yield (the average amount of ink or toner consumed) of the organization
• The number of printers is also estimated depending on the employee to printer ratio