A guide for public sector buyers of printers, copiers and multi-function devices.

Purchase power for cost reduction

A guide for copier and printer buyers in:

- Local Government

- Central Government

- Education

- Emergency Services

- NHS

- Social Housing

Purchase power for cost reduction | A guide for public sector buyers of printers, copiers and multi-function devices.

The economic backdrop for public sectorAs we move on from the 2015 General Election, spending commitments and plans for the next few years will become clearer. As government settles into a new term, we’ll also gain increasing clarity around public sector policies and budgets.Chancellor, George Osborne has ordered non-protected government departments to find £3bn in savings in the current financial year. It comes ahead of a deeper cuts programme to be announced in his Budget.

Here is what we know so far about the cuts:

• Education (non-schools) - £450m• Health (non-NHS) - £200m• Environment, Food and Rural

Affairs - £83m• Culture, Media and Sport - £30m• Transport - £545m• Communities and Local

Government - £230m• Business, Innovation and

Skills - £450m

• Home Office - £30m• Justice - £249m• Defence - £500m• Foreign and Commonwealth

Office - £20m• Energy and Climate Change - £70m• Work and Pensions - £105m• HM Revenue and Customs - £80m• HM Treasury - £7m• Cabinet Office - £17m

“ We’ve accessed RM1599 and we’re saving over £1,500 a year. The greatest savings have been on the new colour capable device – 34% less for lease rental and 51% lower for service.”

RM1599 customer

So, whilst the wider economy is improving, budget holders of schools; higher education; further education; local government; emergency services; NHS and social housing organisations are still going to have a tough time balancing the books whilst doing everything they can to create a progressive and efficient environment. Against this agenda, budget associated with printers, copiers and multi function devices (MFDs) will be constrained.

Purchase power for cost reduction | A guide for public sector buyers of printers, copiers and multi-function devices.

The Crown Commercial Service approach to the situationThere will continue to be pressure for business managers, bursars and IT finance functions to do ‘more with less’, at the same time as providing a more technologically progressive and digitally-enabled learning and working environment.

However, what’s good to know is that these organisations can benefit from a purchasing scheme, established by the UK Cabinet Office’s Crown Commercial Service – RM1599. This important new scheme is simplifying the procurement process and saving money for central government departments; local government; the education sector; and the NHS.

The goal of the scheme, known as the RM1599 Framework, is to provide savings for the UK public sector through centralised and standardised procurement, with a focus on sustainable cost reduction. The framework agreement is split into several categories or ‘lots’, covering MFDs, technology services, managed print services and print audits.

RM1599 offers public sector organisations a pre-defined, pre-approved list of products to simplify the choice of equipment. It provides a reduced procurement process including a simple one-touch award process that dramatically cuts the time to contract, and offers cost and efficiency benefits. With RM1599 public sector organisations of all sizes, from primary schools to central government departments, benefit from the centralised purchasing power of a large organisation.

The hidden cost of purchasing The purchase of the school printer/copier is exactly the sort of exercise that can benefit from streamlined and automated processes. Consider the volume of devices that are leased, managed and serviced and it’s easy to imagine how much cost and workload is duplicated. Similarly, contracts that are negotiated individually are unlikely to deliver the same bulk discounts that can be negotiated when representing the needs of the whole industry. However, the financial situation is a more complex and diverse – with purchase workflows that differ school-by-school.

The combined scanner/printer/copier is intended to make life more simple and straightforward. Chosen properly, procured professionally and managed efficiently, the device should save the organisation time and money and become one of the most valuable pieces of technology around the establishment.

However, with multiple steps along the way – the shortlisting, selection and servicing process for Multi-Function Devices (MFD) can divert valuable time and investment away from core tasks and duties in education.

Identifying the hidden cost of purchasingThe purchase process for MFDs depends on the procedural controls and requirements of each and every environment. Some schools have more robust levels of financial prudence and governance than others. But even in the most flexible and empowered environments, there is the risk (and probability) for the end-to-end sourcing and maintenance process to take up more time than is desirable.

“ By using the new framework, the school is saving 90% on the new Xerox MFD agreement, plus over 80% on the service contract.”

RM1599 customer

“We’re saving £939 a year, that’s 54%.”

RM1599 customer

Purchase power for cost reduction | A guide for public sector buyers of printers, copiers and multi-function devices.

The table below represents a classic workflow of the process, together with indicative timings for how long each task can take.

7. Contract review – Detailed review of terms and conditions

1.5hr Crown Commercial Service compliant

8. Purchase requisition – Instigating preferred purchase order process

2hr RM1599 portal

9. Supply & provisioning – Liaison and logistics – IT liaison

1hr 1hr

10. Maintenance and monitoring x 3 years – Quarterly supplier/consumables management

24hr Automated

Total = 40hrs Total = 4.5hrs

Traditional process

RM1599 process

1. Define device, service and purchase requirements – Understanding the office, IT, user needs – Formalise service, usage, technology requirements – Establish preferred purchase process

2hrs 1hr (Xerox-steered)

2. Supplier briefing – Meet, brief and request quotes x 3 suppliers

3hrs -

3. Supplier proposal assessment – Meet suppliers x 3 – Assess quotes and proposed technologies x 3

3hrs 0.5hr

4. Supplier shortlisting – Detailed review of preferred proposals x 2

1hr Crown Commercial Service Direct Award

5. Supplier & device selection – Device demo – Internal buy-in/agreement – IT integration

2hr 2hr

6. Pricing/negotiation – Finalise usage, term, service charge costs

0.5hrs Crown Commercial Service Direct Award

The hidden cost of acquiring and maintaining the MFD can be quite significant, as the table above demonstrates. If you add complex IT/usage requirements, poor-performing equipment and in-efficient internal processes - the differential can be more significant.

Purchase power for cost reduction | A guide for public sector buyers of printers, copiers and multi-function devices.

The very visible costs of the MFDAs we’ve explored already, the hidden costs can mount up. But, the majority of the operating cost of the MFD is occupied by the leasing, servicing, maintenance, click/usage costs and consumables. For environments with multiple devices, the annual running costs can equate to a significant investment that has parallels with staff salaries – and a relationship with headcount.

Agreement costs can pale into insignificance if the contract terms & conditions are prepared (or amended) in an exploitative manner. Several high-profile cases have highlighted schools, colleges, local government and charities being penalised excessively by unethical click-cost, termination and maintenance clauses.

The RM1599 framework addresses the potential threats within these contracts by providing a fully negotiated, Cabinet Office-compliant and transparent approach to pricing.

6 criteria for MFD cost controlWhether purchasing MFDs from your local copier dealer, catalogue reseller, purchasing group or IT services provider, there are 6 criteria to consider in order to achieve best value and cost-control from the agreement.

Crown Commercial Service has explored and incorporated these considerations into the RM1599 framework, ensuring a best practice approach from end-to-end.

Traditional price risk

RM1599 risk

1. Lease exposure – Complex and rogue lease agreements and contractual sharp practice

High None

2. Local price exploitation / Seller-setting price

– Pricing/manipulation practices of traditional reseller High None

– DIY comparison/negotiation/procurement High None

– ‘Free device/colour click’ deals from IT reseller High None

– Private company buyer groups/frameworks Low None

3. Tariff transparency – Excessive and exploitative usage charges

Medium None

4. Inflation liability – Exposure to service, lease, usage cost price increases

Medium None

5. Investing in outdated devices – Paying for end-of-life / sub-standard estate

Low None

6. Support uncertainty – Sub-standard support / maintenance agreements

Medium None

Purchase power for cost reduction | A guide for public sector buyers of printers, copiers and multi-function devices.

Institutions benefiting from cost controlA significant number of organisations around the UK benefit from the cost and budget control provided by RM1599. Schools; higher education; further education; local government; emergency services; NHS; and social housing organisations are universally seeing their budget go further and are able to achieve more from resources they have at their disposal.

Crown Commercial Service, RM1599 and XeroxWith a mandate and exclusive focus on public sector organisations, RM1599 is the only framework that has been developed by the public sector for the benefit of its not-for-profit constituencies. savings, efficiencies and purchase intelligence are maintained within Crown Commercial Service for the development and optimisation of purchasing programmes within the public sector. Whilst other purchase frameworks may be exclusive, they have an underlying commercial agenda and focus on investment return – whether from subscription or savings-linked models.

In 3 years of operation, Xerox and RM1599 have demonstrated a typical saving of 50% in terms of school contract, service and operating costs on off-the-shelf devices (ie Lot 1). Xerox has worked collaboratively with key stakeholders in the industry to further the cause and impact of RM1599 by ensuring that public sector organisations not only benefit from low cost, low risk, low friction procurement process – but also industry-leading technology that has the power to enhance learning and work environments.

RM1599 – a 5 point summary

Best price on Xerox technology Negotiated to make price match impossible.1

234

5

Best guidance Consultative process for device selection, pricing and return-on-investment calculation.

Best practice on procurement process and contracts Process and compliance assured by Crown Commercial Service.

Best Xerox MFD devices Best-in-breed portfolio curated to cater for all requirements.

Best support Industry-leading installation and support standards across UK.

“ Xerox has typically saved RM1599 customers 50% on their MFD costs.”

Stephen Young UK Frameworks Manager

Join over 1,000 public sector organisations that are already benefitting from the RM1599 framework.

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