Managed Print Program Launch: Reducing Costs and Enhancing Penn ’ s Sustainability Posture

1. Managed Print Program Launch:Reducing Costs and Enhancing Penn’s Sustainability Posture • Printing at Penn: Current State • Managed Print Services (MPS), defined • Fleet Dashboard Tool & MPS Portal • Strategy Summary • Evaluation Process • MPS Business Case: • School of Veterinary Medicine • School of Dental Medicine http://www.purchasing.upenn.edu/MPS/ Brent Friedman Sourcing Manager Purchasing Services | Business Services Division www.purchasing.upenn.edu July, 2013 Data Sources: BEN Financials; IDC; Gartner; Papercalculator.org; Purchase and usage reports from respectively named suppliers. Data cross-validated, where applicable.

2. What do you know that you know? FACT: In most establishments, the true cost of office printing is unknown.

3. Printing at Penn: Current State

4. Known Annual Cash Outlays for Print Support $7,200,000

5. The True Costs? FACT: In an unmanaged print environment, the true costs of office printing are typically 2-3X the known costs.

6. What do you know about printing costs? Known costs, new printer with a 4-year lifespan Real costs, new printer with a 4-year lifespan 4 Year Total Cost of Ownership: $1,200 We know this example cost model to be directionally true, based on 20+ years of Managed Print Services industry benchmarks. 4 Year Total Cost of Ownership: $3,204

7. Unknown Annual Costs • Carried ink and toner inventory; waste, end-of-life, Ben’s Attic • Staff time spent ordering and managing supplies • Internal time and cost for LSP support • E-waste disposal • Waste due to incorrect and abandoned print jobs • Over-specified print devices • No standardization of print fleet • Environmental

8. Penn’s Annual Paper Consumption 974’ Penn consumes a stack of paper equal to……?

9. Annual Office Paper Consumption • 60,000,000 sheets • 12,000 cases • 285 tons • Less than half is recycled-sheet 3.5 Miles

10. Penn consumes enough paper to displace 25% of Central Park…. Central Park, New York City ~25% A Managed Print solution drives sustainable printing behaviors that reduce paper consumption.

11. Environmental Impact of Penn’s Paper Consumption 6,000,000gallons of water in manufacturing 6,500trees 148cars’ worth of annual CO2 production

12. Annual Printer Purchases & Ink/Toner Consumption • >1,000 new devices • #1 category of non-computer hardware spend (>$350K) • 8 OEM brands, 144 models • No device standardization • No significant rationalization efforts • >10 tons of electronics • Net add, several hundred printers per year • >25,000 cartridges • #1 category of spend with Office Depot (>$1.4M) • 266 cartridge types • Less than half are recycled/compatible brand • >5 tons of e-waste

13. Additional Data Points • 90+ instances of MPS on campus; wildly variable rate structures • B&W: $0.004 - $0.25 • COLOR: $0.04 - $0.14 • Ratio of ~1.25-1.75 local printers for every networked print device • Ratio of ~1.50 print devices per employee • 2,000+ staff hours to manage supplier contracts and order/maintain consumables • $1,400,000+ spent annually on ink & toner • $400,000 savings if Penn used compatible and remanufactured toner cartridges • $2,000,000+ in carried ink & toner inventory on campus • Costs $ thousands per year in lost opportunity costs and cash flow restrictions • Average institutional cost per page: $0.15 - $0.25 (conservative)

14. Managed Print Services (MPS)

15. What is Managed Print Services? Managed print ≠ networked printers. MPS typically includes: • multi-function printers (MFP’s), copiers, scanners and fax machines • ink/toner supplies • preventive maintenance • parts and break/fix service • equipment up-scaling and down-scaling flexibility • guaranteed service level response times • single contract for increased buying process efficiency and buying power • usage reporting and analytics • Managed Print Services (MPS) is a service that analyzes and manages document input/output devices to: • improve efficiency and productivity • reduce electronic, paper, and plastic (ink/toner) waste • reduce the total cost of office printing • reduce support burden to IT staff • manage the printer fleet with greater visibility and control

16. MPS: How does it work?Print Assessment Optimized Print Environment A print assessment process typically includes: Physical walk-through of print environment; floor plan mapping of devices Data Collection via software tools (“DCA” – Data Collection Agent) Business process evaluation and key end-user interviews Optimization recommendation to client, tailored to precise client requirements RIGHT-SIZED BEST PRACTICE FINANCIALLY SMARTER SUSTAINABILITY-FOCUSED Unmanaged Print Environment Networked Print Environment Optimized Managed Print Environment Large Workgroup Printer Local Standalone Printer

17. MPS Program Benefits • Waste reduced • Increased service levels • Better sustainability posture • Free-up staff time • Reduce costs (or same-day, if required) Costs unaffected by high toner usage High toner usage on documents can be costly, especially color

18. 12 Ways Managed Print Services Can Reduce Costs Optimization of the print fleet: right size & location for the volumes generated Implementation of duplex printing Reduction of printed pages Optimization consumables/toner usage On-demand consumables supplies – no need to keep inventory Proactive support and maintenance Consolidation of parts and service expertise requirements Fewer devices, fewer device types Increased product reliability Energy efficient print devices Consolidation of supplier relationships Enhanced leverage through campus-wide print volume Implementation of a robust MPS environment typically reduces print costs by 25-40%.

19. Fleet Dashboard Tool & MPS Portal

20. Dashboard Main View

21. Fleet View (Local or Global)

22. Supply Levels View (Local or Global)

23. Individual Device View

24. Service History View (Local or Global)

25. Penn’s MPS Portal: Single location for all MPS information http://www.purchasing.upenn.edu/MPS/

26. Strategy Summary

27. Strategy Summary & Proposal for Improvement • SITUATION: • >20,000 print devices on campus; net add several hundred year-on-year. • Penn acquiring over 1,000 new print devices per year; net add “hundreds” annually • 3 suppliers providing some form of Managed Print Services; inconsistent fees charged • Inconsistent buying practices for supplies; inconsistent pricing schemes among suppliers • Penn pays up to 10x more for office printing than what it could cost • Current practices are financially unsustainable, notwithstanding the environmental impact >$7.2M (that we know ) • TARGET: • Develop a highly flexible, scalable managed print framework that can be leveraged by anyone at Penn • Set the standard for office printing across campus. • PROPOSAL: • Constitute a cross-functional core team than can: • identify school/center/department/building(s) with a desire to implement a Managed Print program • assess the marketplace (including incumbents) for capabilities • execute a formalized RFP, selecting a preferred supplier partner through a weighted scorecard approach • implement, measure improvements, broadly communicate success, and enroll more participants • BENEFIT: • Best pricing/value on campus • Enhance Penn’s campus sustainability posture • Impact local job market & economic inclusion efforts • Implement best-in-class business practices for office printing • Free up staff time currently spent managing/supporting print devices, supplies, and supplier relationships • Reduce cost, on-campus supplies inventory, direct & indirect waste, while improving Penn’s overall cash flow

28. The Approach to Building a Strategic MPS Framework 1. Identify business areas seeking an MPS solution; validate interest 2. Inform incumbent suppliers of intent to go to market 3. Gather internal requirements and volumes 4. Draft a formalized Request for Proposal (RFP) Document 5. Finalize internal sponsorship, alignment, and requirements 6. Send RFP to market (proposals received October 12) 7. Evaluate proposals, short-list suppliers 8. Conduct parallel, competitive print environment assessments with short-list 9. Evaluate finalists’ print optimization recommendations 10. Award contract; define the overall MPS framework 11. MPS Program Launch 12. Continuous Improvement, Ongoing Evaluation

29. Overall Project Timeline

30. SUMMARY: Why do this, and why now? • A robust, flexible MPS strategy: • complements Penn’s Climate Action Plan • further supports the American College and University Presidents’ Climate Commitment • saves money, drives sustainable behaviors, and is a best-practice • is increasingly in demand across Penn’s campus • Highly attractive MPS account in a very competitive market • Access to printing subject matter expertise and superior print technologies • Unified reporting of print data against established measures • Volume leverage: Best-in-class service levels and overall value for business areas that opt-in • Minimally effective implementation provides significant and irrefutable cost savings and environmental benefits • It is the right thing to do.

31. Evaluation Process

32. Scoring Methodology for RFP Responses Method Employed: Since all suppliers fundamentally meet the basic requirements for MPS, we will score each RFP question response relative to the competition. RFP sections will be prioritized and weighted. Scoring Key: 5 – “Best answer, most desired response” 4 – “fourth best” 3 – “third best” 2 – “second best” 1 – “Least desired response” 0 – Unable to Score; Not Applicable; Completely Fails Penn Requirement Evaluator Comments: All evaluators are encouraged to use the ‘Comments’ section with each RFP question to help support future evaluation team discussions. • Special Circumstances: • If you do not possess adequate expertise or information to make an informed ranking on a particular RFP question, input “0” for all responses on that question. • This will force a “wash” on that question and not affect the overall ranking in your individual scorecard. Purchasing will account for this in the overall tabulations.

33. Commercial & Financial Risk Evaluation • Commercial analysis focuses on: • ability to meet Penn’s diverse customer and delivery requirements • collection of incumbent supplier performance feedback • financial solvency to continuously grow the company and adequately fund operations • known and potential litigation risks • ability of Penn to influence the product offering and marketplace • (typically) understanding Penn’s negotiation position; ability to achieve a high value cost structure • (typically) contract legal terms and conditions • When reviewing a company’s financials, we analyze: • overall financial solvency of the firm • ability to support continued operations for anticipated contract term • ability to support current indebtedness and simultaneously continue internal investment for growth • financial assets to support upswing/downswing in business during term

34. Other Considerations • Scalability • OEM agnosticism • Holistic document management capabilities • Ability to maintain leading edge on industry trends, technology • Ability to implement a unified program across a single campus with highly diverse customers • Local economic inclusion • Ability to benefit the most people at Penn • Ongoing process improvement and continuous cost savings

35. Team Evaluation Process Major activities for RFP evaluation: Written RFP responses Supplier presentations Pilot assessment evaluation Award Decision Ended May 31 June 17, 2013 Written RFP Responses (5) On-Campus Presentations (2-3) Pilot Print Assessments (2) Award (1) • Approach: Relative ranking by weighted scorecard • Goal: Scoring results used to short-list • Approach: Short scorecard used by evaluation team • Goal: Validate written RFP response content • Goal: Validate short-list by written RFP scoring • Approach: Identify business areas for parallel assessments • Goal: Determine which supplier best “fits” in Penn environment • Goal: Gain comfort with level of expertise • Goal: Determine if MPS recommendations fit typical Penn requirements. • Approach: Reconvene evaluation & extended team • Review findings, assessment experiences, and review supplier recommendations • Goal: Determine if enough data and pilot experience exists to make an informed, data-driven, defensible award decision.

36. MPS RationaleSchool of Dental MedicineMaria Mejia, IT DirectorSchool of Veterinary MedicineSmith Ragsdale, IT Director

37. Business Case for MPS: • Client Profile: • 632 Students & Residents/Post-Docs, 285 Faculty (including full-time and adjunct), 283 Staff • 213 print output devices • Complexities: • Remote faculty practice locations: On-campus, Bryn Mawr, 34th & Market Street (University City) • Patient confidentiality concerns; HIPAA • Student privacy; FERPA TOP FIVE REASONS FOR MPS: We have no idea how many printers the school uses and how much it costs us Save money, especially following print assessment and right-sizing activities Make better use of existing assets Increase customer service levels for all printer-related issues Allows Dental IT to “get out of the printer business” BONUS: Practice what we preach – we are an electronic practice!

38. 2nd Floor Schattner Most Severe Case: A Printer Per Person Unmanaged environment

39. Nearly a Printer Per Room: 4th Floor Levy Unmanaged environment

40. Success in Similar Environment: 5th Floor Levy Fully managed environment

41. Side by Side: 3rd Floor Evans Unmanaged environment Fully managed environment

42. Business Case for MPS: • Client Profile: • 425 Students, 235 Faculty, 600 Staff • Number of print output devices: NO IDEA • Complexities: • Remote campuses: New Bolton Center and Working Dog Center • Vet hospitals: Preponderance of stand alone printers • Student printing TOP FIVE REASONS FOR MPS: We have no idea how many printers the school uses and how much it costs us. Allows Vet IT to “get out of the printer business” Save money, especially following print assessment and right-sizing activities Increase customer service levels for all printer-related issues Seems like a really good idea

43. Ryan Veterinary Hospital 3rd Floor (Asset DB tool used to map printers & cost)

44. Ryan Veterinary Hospital First Floor

45. MPS Project Evaluation Team: Eric Bowden Annenberg School for Communications Lena Buford Annenberg School for Communications Kim Byrd Graduate School of Nursing Brent Friedman Purchasing Services Maria Mejia School of Dental Medicine John Mulhern, III ISC Technology Support Services Smith Ragsdale School of Veterinary Medicine James Tarver, PhD SAS/Chemistry Omar Telan ISC Technology Support Services Susan Tracey University Lab Animal Resources Special thanks to our extended team and others that contributed to the project: Ray Aull Purchasing Services Par Bowler Business Services Clare Din SAS Computing Dan Garofalo Facilities and Real Estate Services Tom Gudmundsen Business Services Chris Hanson Facilities and Real Estate Services Vira Homick Purchasing Services Susan Kennedy Business Services Justin Klein Keane SAS Computing Andrea Kreiner Facilities and Real Estate Services Mark Mills Purchasing Services Melissa Muth ISC Information Security Kristin Nelson ISC Technology Support Services Warren Petrofsky SAS Computing Colleen Reardon Purchasing Services

46. About Penn Purchasing

47. Penn Purchasing Services:Our Role • Strategic sourcing is an institutional procurement process that continuously improves and re-evaluates the purchasing activities of an organization. Sourcing is considered one component of supply chain management. • Key Responsibilities: • Draft, negotiate, execute supplier contracts • Assess and mitigate risk • Maximize value for Penn’s supplier investments • Transaction review & approval • Develop entrepreneurial sourcing strategies • (RFI, RFQ, RFP, Reverse Auctions, Negotiation Planning) • Mission Statement: • To leverage our institutional knowledge, procurement expertise, and technology in order to provide solutions to our customers and optimal financial return-on-investment to the University.

48. Penn Purchasing Services:Strategic Sourcing Traditional Role “Purchasing” Modern Role “Strategic Sourcing” Marketplace Analysis

49. Penn Purchasing Services:Uncovered Value Where Strategic Sourcing Delivers Added Value

50. Penn Purchasing Services:Sustainability Initiatives Toner Cartridge Recycling Writing Instrument Recycling Office Depot Tote Delivery Program Point-of-use In-line Water Filter/Coolers Shift to 10-30% PCR Paper