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Controlling Today’s And Tomorrow’s Information Costs

NYC - Crawford Del Prete, Executive Vice President WW

Research Products & Chief Research Officer

Tokyo - Takashi Miyazono, Manager, IDC Japan

London - Angèle Boyd, GVP/GM, Document Solutions & SMB

Markets

1/18/2011© IDC 2

Context

– Managed Print or Managed Document Services?

– Market outlook

Forces shaping business and customer impacts

– Information explosion

– Workforce changes (reduction, mobile/remote)

Addressing these customer impacts. IDC and Ricoh research

(800 organizations in the US and EU) findings

– Customer needs

– Savings and benefits

– Leading-edge provider response

Agenda

1/18/2011© IDC 3

IDC’s print and document outsourcing taxonomy defines Managed Print

Services (MPS) as

– Third-party contracts that assess, proactively manage and continuously optimize

a customer’s printing/imaging/document environment.

IDC’s view of MPS is a continuum of offerings

– Contracts that focus on the hardcopy device environment

– Contracts that additionally focus on business process improvement by

transforming document workflows

– Ricoh’s Managed Document Services (MDS) focus is here

MPS or MDS? The Opportunity

8.5B

11.7B

0

2

4

6

8

10

12

14

2010 2014

$ B

illi

on

s

WW MPS Opportunity

1/18/2011© IDC 4

Information Explosion And Its Impacts

By 2020 IDC projects the digital universe will be 44x 2009’s size

– In 2009, despite the global recession, the Digital Universe (WW) set a record.

– It grew 62% to nearly 800,000 petabytes (a petabyte is a million gigabytes). Picture a stack of

DVDs reaching from the earth to the moon and back.

– In 2010, the Digital Universe was projected to grow 50% to 1.2 million petabytes.

– By 2020, our stack of DVDs would reach halfway to Mars!

The result

– Information overload, failure to leverage information,

regulatory compliance and security risks

– Organizations are paying a heavy price, and need

technology and services to manage information for growth

and competitive advantage

But, organizations lack resources to manage and reap benefits

– Job reductions in the economic crisis eliminated job growth of prior years

– The number of IT professionals WW will grow by only 1.4x

1/18/2011© IDC 5

Workers Rely on Many Forms Of Information To Conduct Their Jobs

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Instant Messages

Digital Pictures

Digital Forms

Digital Data Base Records

Web Site Info

Digital Documents

Voice Calls/Mail

Paper Forms

Paper Documents

Email

Ty

pe

s o

f in

form

ati

on

% of workers

Paper documents are a significant source of information for workers.

1/18/2011© IDC 6

Workers Want to Reduce Paper Document Usage –25% to 50%+ Cite This For Most Document Types

0

10

20

30

40

50

60

General bus. c

orrespond.(m

emos/emails/m

tg. minutes)

Financial (budgets, p

urch./billi

ng, expense rpts.)

Mktg./sales (p

res., broch./fl

yers, nwslttr

s., ads/signs, s

ales rpts., m

ktg. ...

HR docs. (work descrip

tions, re

cruit., health

care related)

Education/tra

ining materia

ls

Legal (contra

cts, litig

ation, re

g./compliance)

PDFs

Manufacturing (s

hipping, inventory, fa

cils./o

ps.)

Websites (w

eb-based materia

ls)

Other

Total n=196

<100 emp n=70

100-999 emp n=42

1000-4999 empn=26

5000+ emp n=56

Source: IDC Quick Poll, April 2010

1/18/2011© IDC 7

The High Costs of Inefficient Information Management

Average Hours

per Worker per Week

Cost

per Worker per Year ($)

Searching but not finding information 3.7 5,974

Reformatting data from multiple sources 3.7 5,974

Recreating content that can't be found 2.5 4,037

Publishing via multiple applications 2.1 3,391

Unraveling version control issues 1.2 1,938

Translating from one language to another 0.5 807

n = 345

Notes: Costs were found to be worse among VPs and Directors, and mid-size firms.

Cost per worker per year is based on an annual salary of $75,000, including benefits but not overhead.

Source: Hidden Costs of Information Work: A Progress Report, IDC#217936, 2009

An organization with 1000 knowledge workers loses $6 million annually

1/18/2011© IDC 8

Total Costs of Printing, Imaging and Document Management Are Hidden And High

IDC and Ricoh research finds:

– C-execs do not have visibility into their costs according to

the latest IDC research conducted for Ricoh

– Fragmented ownership of the many components (IT, Facilities,

Procurement, Office Services, LOBs, Telecomm., Regulatory

Compliance/Security)

– Many think their costs are insignificant

11%15%

Manufacturing Healthcare

Total Costs (percentage of revenue)

– As a percent of revenue, total costs

range from 11% in Manufacturing

to 15% in Healthcare

1/18/2011© IDC 9

2. Increasingly Mobile/Remote Workforce And Impacts

Mobile/remote workforce expansion

– 29% of WW workforce in 2008, 35% by 2013

– Largest group is mobile office worker (60% of

total; 5% CAGR)

– Fastest growing is home-based worker (6%

CAGR; 5% share)

Corporate information access anywhere, anytime

– Security breaches occur when documents

(paper and digital) get into the wrong hands

Calls for IT infrastructure and support to reduce risk in

the printing and document infrastructure

– Secure document access and management

– Authorization/authentication to network and

cloud resources via proximity swipe cards and

biometrics

1/18/2011© IDC 10

Customer Needs

IDC research conducted for Ricoh finds that customers need

– Education about their total costs

– Benchmarked savings and benefits

for their industry

– Integration of MPS into other IT and

corporate initiatives

– One throat to choke (“universal” help

desk; integration with other service

contracts e.g. ITO and BPO)

– Experienced and trusted partner to

work with

– Help/tools to change employee behavior to achieve and maintain

goals

– Security of corporate information, document workflows and devices

– Global delivery (large companies)

1/18/2011© IDC 11

MPS Drives Savings And Benefits Beyond Hardcopy Infrastructure (Print/Copy/Fax)

IDC research finds:

MPS savings average 25% (as high as 30% and 40% for some industries)

A $250M company can recover $6M in savings

Customers are realizing transformative benefits as a result of streamlined

business process document workflows, an increasing trend. Biggest

savings:

– Tier 1 (48% to 55%+ cite as biggest savings) – ink and toner, HC device

break/fix, and HC device hardware.

– Tier 2 (18% to 27% cite as biggest savings) - Paper, IT headcount,

streamlined business process document workflows, and external print

procurement.

• Streamlined business process document workflows rates increased

over the 3 periods studied.

– Tier 3 (7-14%) – Help desk calls, paper document storage and impact on

the environment.

1/18/2011© IDC 12

Leading Edge Provider Response

Help customers manage information for

better business outcomes via:

– Business-process document workflow

transformation

– Cloud-based printing and document

services

– Security to safeguard corporate data

– Mobile/remote worker support

– Sustainability measures around

documents to reduce environmental

impact