Controlling Costs, Optimizing Infrastructure, Improving Workflow through Managed Print Services

1. Controlling Costs, Optimizing Infrastructure, Improving Workflow through Managed Print Services Rick ValenziService Principal, Imaging and Printing Group The Hewlett-Packard Company September 23, 2008

2. Overview • Challenges and opportunities • HP approach • Building a plan

3. Key enterprise trends Industry perspective—cost “90% of all companies do not track printing costs.” —Buyer’s Laboratory “Average annual document costsare 5–15% of revenue.” —IDC “23% of help-desk calls are printer related.” —IDC Bottom line “Most companies could reduce their printing costs by 10–30%.” —Gartner “IT spends 15% of their time on printing-related issues.” —IDC Significant improvementopportunities exist forall organizations. “Hard visible costs are only about 10% of the total document cost.” —All Associates “Companies spend 1–3% of their revenue per year on output fleet management.” —Gartner “Companies can lower their printing costs by up to 30%.” —IDC

4. Commercial (Third party) • Offset printing • High-end digital printing • Flat utilization • Commodity / “cost per job” • Typically local relationships Commercial Production • Production(high-volume transactional printing, centralized reprographics, etc.) • High volume variable-data transactional print • Medium/high volume, digital color, limited finishing • Prints and copies • Declining utilization • Perceived as expensive and inconvenient • Considered inflexible Office Printing • Office Printing • Prints, copies, and faxes • Immediate turnaround • Low volume, limited color and finishing • Fastest growing segment • Perceived as free • Unknown and uncontrolled costs • Flexible Source: ALL Associates Group Today’s enterprise print environment Total Spend (Burdened Costs)

5. 14% Higher Education 9.94% of Annual Budget Federal Government 13.41% of Payroll Expense County/City Government 4.1% of Annual Budget 13% 12% 11% 10% 9% 8% Spend as % of Revenue 7% State Government 2.25% of General Expenditure K-12 School Districts 6.2% of Annual Current Expenditure 6% 5% 4% 3% 2% 1% Source: ALL Associates Group True costs of enterprise printing Every $1 spent on putting marks on paper involves another $9 to manage it Spend by Segment (Commercial, Production, Office) Commercial Production Office 15% 12% 10% 10% Cost of putting marks on paper 90% 90% 88% + Burdened costs of managing document lifecycle • Document Management • End-user Interaction • IT Support & Infrastructure • Administration & Procurement • Facilities • Fulfillment & Distribution • Facilities & Labor • Document & Content Design • IT Support & Infrastructure • Administration & Procurement • Fulfillment & Distribution • Facilities & Labor • Document & Content Design • Administration & Procurement • IT Support & Infrastructure

6. Fragmented burdened office costs Visible hard costs (5–7¢) • Hardware; consumables; maintenance; paper and power IS support • End user; device management; outputmanagement; network management Document management • Document storage and archival;document retrieval; documentdistribution; document captureand indexing 10% 5% IS infrastructure Burdened costs • Network; application programming andmaintenance; software and licensing 5% 4 7 – 63¢ 5% 47% Administration, purchasing,and facilities Total office document costs 28% 52–70¢ per page • Facilities costs; product/service acquisitionprocesses; contract and billing processes;internal service delivery End-user time • Computer interaction; output equipment interaction;preparation, collection, and finishing; problems,errors, and mistakes

7. Key enterprise trends Productivity challenges The average worker: • Information explosion—information doubles every 18 months • Spends 40% of their time looking for information • Spends 150 hours/year seeking incorrectlyfiled documents • Makes 19 copies of every document • Looses 1 out of 20 documents • Spends 25 hours recreating lost documents Source: Fujitsu and PriceWaterhouseCoopers

8. Worldwide trends in public sector enterprise imaging and printing • Migrate to shared services architecture • Take advantage of economies of scale • Meet critical need for increased collaboration (e.g., homeland security) • Transform mindset from output device to productivity tool • Solve business problems • Streamline workflows • Meet increasing service levels • Improve end-user experience • Provide consistent user experiences in all locations • Manage the increasing use of color for more powerful business communications

9. Key enterprise trends Environmental 67%of enterprisesare implementingenvironmentalprograms. 80%of enterpriseRFQs evaluatesuppliers’environmentalaspects. By 2010,about half of theForbes Global2000 will spendmore on energythan onhardware.* “Green IT” is#1 on Gartner’slist of the top 10technologies andtrends. 30%of infrastructurepurchasing decisionsis based onenvironmental factors. *Source: Gartner

10. opportunity • Lower costs, both tangible and intangible • Provide positive story for CSR report • Eliminate opposition to change • Feel good about printing responsibly Planet • Decrease consumption • Increase recycling • Decrease carbon emissions Balancing the Triple Bottom Line(Profits, People, Planet) Considering the environmental perspective can be key to a successful transformation • Optimize resources • Decrease costs and increase value • Reduce risks (security) • Improve productivity • Maximize flexibility • Keep it simple • Ensure it’s reliable • Meet needs and accommodate some wants Change management challenge Profits People

11. Overview • Challenges and opportunities • HP approach • Building a plan

12. What have we learned from our customers? • Opportunity • Utilize new technologies and convergence. • Consolidate devices • Save costs and optimize fleet • Complexity • Harmony? Printer, Copier • Decision making • Unmanaged environment • Utility model • Address security and compliance • Productivity • MFPs becoming productivity tools • On/off ramps into the network (with user interface) • Streamline paper-based processes

13. Customer needs Customer benefit HP’s approach to enterprise printing Improve businessoutcomes ImproveWorkflow Streamline workflowsand increase compliance PRODUCTIVITY Improve IT andbusiness efficiencies ManageEnvironment Increase IT productivityand system availability / COST Reduce cost OptimizeInfrastructure Balance productivityand cost ROI

14. Networked? Optimized? Managed? Supplied?

15. Supplies management? $199 $184 $129 $199 $169 $109 $169 $89 $109 $134 $107 $184 Costly, unused assets sitting in supplies closets $109 $109 $107 $129 $107 $109 $59 $184 $59 $59 $59 $59 $109 $269 $109 $309 $269 $169 $309 $169 $269 $269 $169 $169 $269 $169 $309 $269

16. How much do you think your organization is spending? • How much do you spend per employee for printing? • How many employees per printer do you have? • How do you determine a cost- effective mix of printers and copiers and personal printers? • How do you determine when to acquire and when to retire printers? • Do you have an output strategy? How do you create such a strategy?

17. Key Elements of an Optimized Solution • Assessment • Financial analysis • Detailed SOW • Flexible payment options • Discovery and design • Procurement Services • Deployment management • Education and management of change Planning Deployment MPS • Job audit/tracking • Reporting/portal • Intelligent routing • Account delivery mgmt Management Support • Multi-vendor support • Hardware maintenance • Priority phone support • Supplies management

18. Planning • Assessment • Financial analysis • Detailed SOW • Flexible payment options • Discovery and design • Procurement services • Deployment management • Education and management of change Planning Deployment MPS • Job audit/tracking • Reporting/portal • Intelligent routing • Account delivery mgmt Management Support • Multi-vendor support • Hardware maintenance • Priority phone support • Supplies management

19. Planning Assessment Financial Business Case Development Services Statement of Work Flexible Payment Options

20. Assessment Understand organizational requirements Understand end-user requirements TCO projections Current-state projections Plan and assess Assessment services Financial business case development Services statement of work development Choose payment method

21. Financial business case Understand your decision-making criteria Develop TCO (total cost of ownership) Develop financial value proposition/business case Co-present business case as needed Plan and assess Assessment services Financial business case development Services statement of work development Choose payment method

22. Services statement of work Defines scope of solution in detail Includes ongoing contract deliverables Includes contract term and pricing schedule Plan and assess Assessment services Financial business case development Services statement of work development Choose payment method

23. Flexible payment options Level pay Same predictable monthly payment Reconciliation at year-end A pay-for-what-you-use model Base-plus-click Base includes fixed costs (HW, support) Click, based on pages printed Transparent, accurate Cost per Page Plan and assess Assessment services Financial business case development Services statement of work development Choose payment method

24. Deployment • Assessment • Financial analysis • Detailed SOW • Flexible payment options • Discovery and design • Procurement services • Deployment management • Education and management of change Planning Deployment MPS • Job audit/tracking • Reporting/portal • Intelligent routing • Account delivery mgmt Management Support • Multi-vendor support • Hardware maintenance • Priority phone support • Supplies management

25. Deploy Discovery and design Customer fleet acquisition Hardware procurement Deployment management Management of change and education

26. Site discovery and future-state design Detailed assessment of current fleet Includes utilization data Includes current condition Map of proposed fleet (site-specific) Consistency makes it easy for end users. Especially with large plants or frequent moves Same layout Same/similar device Same interface IT and facilities requirements Deploy Discovery and design Customer fleet acquisition Hardware procurement Deployment management Management of change and education

27. Fleet acquisition • HP • HP Direct • Ordering, shipping, freight, etc. • Installed base • Potential fleet acquisition • Sale and lease-back of the devices • Change management for reallocation • Multi-vendor procurement • Copier and printer products • Gaps, special needs Deploy Discovery and design Customer fleet acquisition Hardware procurement Deployment management Management of change and education

28. Templates, processes, procedures Site implementation • Project sponsorship and management • Project plan review and approval • Communication planning and execution • Process communication • Training registration • Network connectivity/access • Print queue creation • Facilities and environment changes • Physical staging/storage space Customer Deploy Discovery and design Customer fleet acquisition Hardware procurement Deployment management Management of change and education HP • Project management • Project plan creation • Transition and communication planning • Process development • Discovery—current-state mapping • IT infrastructure analysis • Future-state design and workflow • Device installation and configuration • HP Web Jetadmin (WJA) software implementation • Remote monitoring implementation • Training

29. Management of change and education Change management communication Planning Resources And experience throughout the implementation Education services E-mentor Remote instructor led Onsite instructor led Customized education services Increase productivity Improve user adoption Dramatically reduce risk Decrease negative feedback Deploy Discovery and design Customer fleet acquisition Hardware procurement Deployment management Management of change and education

30. Support • Assessment • Financial analysis • Detailed SOW • Flexible payment options • Discovery and design • Procurement services • Deployment management • Education and management of change Planning Deployment MPS • Job audit/tracking • Reporting/portal • Intelligent routing • Account delivery mgmt Management Support • Multi-vendor support • Hardware maintenance • Priority phone support • Supplies management

31. Support Multi-vendor services Hardware onsite support Priority phone support Supplies management

32. Support services Multi-vendor is managed through HP HP single point of contact Single point of escalation Onsite support: Next-day onsite, 4hr response Custom SLAs to meet unique customer needs Mission Criticality should dictate SLA’s Priority phone support: Dedicated support teams Unique PIN number for each customer Diagnose before dispatch Support Multi-vendor support Hardware onsite support Priority phone support Supplies management

33. Supplies management Supplies replenishment options: Web-based ordering via the HP Service Portal Order via 1-800 number Automated toner delivery Toner cartridge recycling Support Multi-vendor support Hardware onsite support Priority phone support Supplies management

34. Management • Assessment • Financial analysis • Detailed SOW • Flexible payment options • Discovery and design • Procurement services • Deployment management • Education and management of change Planning Deployment MPS • Job audit/tracking • Reporting/portal • Intelligent routing • Account delivery mgmt Management Support • Multi-vendor support • Hardware maintenance • Priority phone support • Supplies management

35. Manage Job Audit/Tracking Reporting/Portal Intelligent Routing Account Delivery Management

36. Captures device, meter, user and job data at network and local devices Device, pages, toner File name, pages, sender and time Sets up database to store captured data Key is user-level tracking Data compiled for audit Data compiled for analysis Data compiled for chargeback purpose Job audit/tracking and management Manage Job audit/tracking Reporting/portal Intelligent routing Account delivery management

37. HP remote monitoring and service portal Device utilization and trend analysis Online downloadable reporting Online supplies ordering Online service requests IMAC/D processes and review Utilize service portal to execute change orders Ensure consistency in fleet over time Sync user devices with HP management tools Reporting/portal Manage Job audit/tracking Reporting/portal Intelligent routing Account delivery management

38. Intelligent routing • Rules-based routing • Create rules to automatically route documents to best device. • Customize rules based on print policies. • Send interactive pop-ups to show costs and recommend where to print. • Secure print driver • Encrypts and stores print jobs until authenticated sender arrives Manage Job audit/tracking Reporting/portal Intelligent routing Account delivery management

39. Onsite fleet administrators Care and feeding Techs to support drivers, queues and networks Custom deliverables Account delivery manager SPOC Responsible for care and success of each client Remote, local or onsite Ongoing fleet management, creep analysis Periodic fleet and account reviews Roadmap planning Contract review Account delivery management Manage Job audit/tracking Reporting/portal Intelligent routing Account delivery management

40. Key Elements of an Optimized Solution • Assessment • Financial analysis • Detailed SOW • Flexible payment options • Discovery and design • Procurement services • Deployment management • Education and management of change Planning Deployment MPS • Job audit/tracking • Reporting/portal • Intelligent routing • Account delivery mgmt Management Support • Multi-vendor support • Hardware maintenance • Priority phone support • Supplies management

41. Overview • Challenges and opportunities • HP approach • Building a plan

42. Where do you go from here? Build a Print 2.0 plan. Improve workflow Manage environment Optimize infrastructure Conducting aPrint 2.0 workshop Performing an assessment Optimizing your business results

43. Print 2.0 Workshops • Description • Achieve a mutual understanding of the document-related business issues at hand and the best way to address them • Facilitate inclusive dialog within large organizations to help surface opportunities for actionable, relevant and high-impact improvement projects • Deliverables • Executive-level presentation highlighting key findings and recommendations • Plan (i.e., roadmap) that shows how to address the problems balancing available resources and priorities over time • Agreement on next steps • Key Impacts • Increase awareness of document-related business issues across the organization • Align output strategy with business objectives

44. Print 2.0 Workshops Bring together the executive and operational leadership of your organization along to develop an imaging and printing strategy that will align with your IT and business objectives Customer & Industry Research Print 2.0 Workshop Half-day Session Pre-workshop Interviews HP Imaging & Printing Best Practices Post-workshop Presentation(2-3 weeks after Workshop) Preparation (4-6 weeks)

45. Critical success factors • Assemble the right skills, experience, and decision-making power • Provide strong facilitation skills • Focus on your business issues • Willingness to work openly to uncover opportunities for improvement…and take action as appropriate

46. Print 2.0 Workshop “Flow” Document-related Issues “Things to Do” to Address Issues Divergence Convergence Divergence Interviews & Research(broaden understanding) Gain Consensus on Issues Identify Initiatives(brainstorming) Prioritize Initiatives Identify Action Items, Issues, and Risks Prepare for Workshop Conduct Workshop

47. Print 2.0 Workshop deliverable • Findings summary • Recap objectives and desired outcomes • Review what was learned during pre-workshop research and uncovered during the workshop • Ensure we have common understanding across the team • Recommendations summary • Describe the recommended next steps (i.e. the roadmap) • Identify key risks, issues, and mitigation plans • Next steps • Gain mutual agreement on the roadmap • Determine next steps

48. Strategy recommendations for ABC Company Optimize Infrastructure Manage Environment Improve Workflow W1 Conduct report generation/distribution Workflow Discovery W2 Conduct employment cycle Workflow Discovery W3 Understand current and future needs for document management (archive, retrieve, index) W4 Review critical cross-system workflows to understand future areas of improvement M1 Deploy network management tools to understand usage M2 Establish key metrics and reporting package M3 Define and implement support model M4 Establish output environment governance process I1 Analyze existing contracts for SLA / T&C compliance I2 Refresh output environment I3 Deploy device extensibility capabilities I4 Conduct electronic signature proof-of-concept (POC)

49. 2008 Mar Apr May Jun Jul Aug Sep • Business Issues • “Right device, right place” • Cost visibility and transparency • Support, availability, reliability • Security, accessibility, connectivity • Vendor footprint • Unmanaged environment • Governance • Financial reporting • Employee lifecycle • Dual entry/maintenance • Too much paper and follow up • Electronic routing • Electronic records management • County, State, Fed regulatory compliance • Insufficient systems integration W1 Reporting Workflow Discovery • Implement? W2 Employment Cycle Workflow Discovery • Implement? M4 Establish governance process W3 Document management W4 Cross-system workflows Proposed ABC Co. transformation roadmap I1 Analyze existing contracts I2 Refresh output environment I3 Deploy device extensibility capabilities Phase 1 M1 Deploy network management tools M2 Establish key metrics/reporting package M3 Define and implement support model I4 Electronic signature POC Phase 2

50. “The most important discoveries, the greatest art, and the best management decisions come from taking a fresh look at what people take for granted or cannot see, precisely because it is too obvious.” Source: R. Farson, *Management of the Absurd*. Simon & Schuster: New York, 1996.