Document-related expenses are one of the largest unmanaged expenses for many organizations. In fact, studies show that only 1 out of 10 business owners are aware of their total printing spend.[1] Added up, these unmanaged expenses can cost businesses up to 3% of their annual revenue.[2]
A business’s printing costs includes the total costs incurred to manage and optimize the printer fleet and printer production, as well as the technical staff and processes that support the printer fleet. Typical printing costs include:
- All printing devices within the office, including desktop printers, multifunction devices, copiers, scanners, fax machines, and production printers
- Paper, ink, toner, and other supplies used during the printing process
- Internal and external help desk support, IT support, technical service, and maintenance
When calculating true cost of ownership (TCO) you will need to take into consideration all costs associated with your true cost of printing.
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Calculating Your True Cost of Ownership
Many businesses only consider upfront costs when purchasing a printer, but to make the best decision for your business you need to know the total cost of ownership (TCO) of your devices.
To begin understanding and calculating your TCO, you need information about your business’s print behavior, including:
- How many pages you print per month
- How many color pages your print per month
- How long you plan to own the printer
For example, let’s assume you print 2,000 pages per month on one device, 28% of those prints are in color, and you are keeping the printer for 3 years. Annual printing can be found using the math equation below:
- 2,000 pages per month x 36 months = 72,000 total pages
- 72,000 total pages x .28 color pages = 20,160 color pages
Now that you know how many pages you will print throughout total ownership you will need to calculate how many toner cartridges you will need over the life of the printer.
For example, let’s assume that toner for your device yields 7,000 black prints per cartridge and 5,000 per color cartridge. Annual cartridge usage can be found using the math equation below:
- 72,000 total pages / 7,000 black pages = 10.2 black cartridges
- 20,160 pages / 5,000 color pages = 4.03 color cartridges
Since you cannot buy partial cartridges, you will need to round your cartridge number up. You will also need to multiply your color cartridge requirements by the number used in your machine which is typically 3 but possibly 4 cartridges. Assuming your printer uses 3 color cartridges, you will need 15 color cartridges over the life of your printer. You will need 11 black cartridges.
To calculate total cartridge costs, assume one black cartridge costs $60, and one color cartridge costs $45. Your total cost for black cartridges is $60 x 11 = $660. Your total cost for color cartridges is $45 x 15 = $675.
Assuming you're only printing 20lb letter size paper, we can now add in the cost of paper to your TCO. Let’s assume that a case of eight reams of paper (500 sheets per ream) costs $50.
- 8 x 500 = 4,000 sheets of paper per case
- 72,000 / 4,000 = 18 total cases of paper
- 18 x $50 = $900 for total paper
Let’s add up all your printing expenses so far, and assume your printer cost $400, your up-front expenses were $40.
- $400 + $40 + $660 + $675 + $900 = $2,675 TCO
By dividing your TCO by 36, you will get your monthly print cost:
- $2,675 / 36 = $74.31 per month
By dividing your TCO by the number of total pages printed you will get your cost per page:
- $2,675 / 72,000 total pages = $.037 cents per page
Next, add in the cost of managing your print environment. Industry estimates that for every $1 spent on printing, businesses spend another $9 to manage the printing environment.[3] Using this estimate, you can now factor in print management to the TCO:
- $2,675 x 9 = $24,075 to manage print environment
You can also divide the TCO by 36 to get the monthly cost of managing print environment:
- $24,075 / 36 = $668.75 to manage print environment each month
Finally, add the cost of print environment management into your TCO:
- $2,675 + $24,075 = $26,750 annual TCO or $743.05 monthly TCO
To find your TCO across all devices, you will need to follow the same calculations for each device.
Taking some time to figure out your TCO across all devices in your business can help you understand your overall print environment, expose any hidden print costs, and work towards a plan to reduce printing spend.
[1] Joch, Alan, BizTech Magazine, http://www.biztechmagazine.com/article/2012/04/benefits-using-managed-print-services (accessed July 1, 2016). [2] Joch, Alan, BizTech Magazine, http://www.biztechmagazine.com/article/2012/04/benefits-using-managed-print-services (accessed July 1, 2016). [3] Joch, Alan, BizTech Magazine, http://www.biztechmagazine.com/article/2012/04/benefits-using-managed-print-services (accessed July 1, 2016).