Lexmark helps Feds cut waste
According to Lexmark International, the Lexington-based printer and imaging company, on average, a federal employee prints 7,200 pages per year. That same employee tosses 35 percent of those pages the same day they’re printed. Lexmark wants to help reduce that waste and create savings for Uncle Sam through managed print services (MPS). In its marketing, Lexmark likes to say: “Quite simply, it’s a bundle [of business services] that can save you a bundle.”
Lexmark isn’t so much about ink on paper anymore. In its sales pitches, it suggests its products and services allow customers to “print less and save more.” The company offers solutions that don’t necessarily involve printing. MPS is a mix of software tools, services, custom solutions and strategies. Lexmark sees enormous potential in working with the myriad of federal agencies to reduce their bloat.
“There is an executive order the agencies are now under to declare the most efficient spending,” said Mark Guthrie, vice president of Lexmark government solutions, in a recent interview. “Printing and imaging are also under that order. The General Services Administration [GSA] created a major program for managed services that agencies must leverage and exercise.”
Since federal agencies came under orders to get efficient in order to save money and energy, MPS is one solution for managing hardcopy devices such as copiers, printers, multifunction devices and fax machines in a unified fashion.
The General Services Administration helps manage and support basic functions of federal agencies. It allows agencies to use blanket purchase agreements for print environment assessment and tailored print-services packages. Agencies can save millions of dollars by pooling printer and copier purchases, according to the business publication Information Week.
“The government has become more aware of it,” said Guthrie. “It spends $2.6 billion a year in what we call our core imaging space. They have declared that they need to attack [reduce] that more.”
That is exactly what government critics have claimed for decades: Federal government efficiencies are few and far between.
It is a starting point for the government to save tremendous amounts of dollars. The infrastructure that comes with MPS multifunction devices is the enabler for the government to eliminate paper pages, said Guthrie.
“I think of it as Lexmark becoming the information highway first-responder,” he added. Lexmark is fiercely competing in this arena with rivals Xerox and Hewlett-Packard. Lexmark recently landed a plum of a federal customer. It was awarded a five-year blanket purchase agreement by the U.S. Department of Agriculture (USDA) for managed print services agency-wide. The deal is worth $50 million, according to Lexmark.
“By leveraging Lexmark’s world-class MPS offerings, business process expertise and industry knowledge, the USDA will now have more time to spend on mission-critical work within its agencies,” said Marty Canning, Lexmark executive vice president and president of imaging solutions, in a statement.
“We have the capability to eliminate print. The federal government is trying to become the most efficient organization agency by agency,” said Guthrie. “When the government is spending $2.6 billion a year and trying to reduce that spending by turning things around electronically, moving from paper to digital, it’s a huge growth-market opportunity for us.”
Lexmark is also working with the U.S. Department of Veterans Affairs. Guthrie, whose team frequents the halls of the federal government in Washington, D.C., looking for new business, also hopes to land more military-related agencies.
“When you serve the needs of the [U.S.] citizens, veterans, their families, the war-fighter, the intelligence analysts, Lexmark has tremendous capability to serve the federal community,” Guthrie said.
The feds are changing their way of thinking through MPS, according to Lexmark, and federal agencies are now asking this question: “How does the asset serve the mission?” They have defined a set of offers and capabilities through industry best practices that are there for all agencies to use. For example, a tier 1 service level would include things such as the asset, coupled with maintenance and consumables to handle the “care and feeding of the device,” with some level of reporting.
Lexmark’s first-quarter earnings, including revenue and profit, were down in a recent report. However, its MPS business is growing as it transitions more into servicing business customers. Guthrie could not comment on when the company will complete this shift, which began in 2007, or when or how it will reach certain profitability levels.
The federal government’s poor record of cutting waste actually works in Lexmark’s favor.
“I can tell you firsthand that the government has a long way to go in terms of moving things digitally. There is an opportunity for growth,” Guthrie said. But he added that he has “witnessed unprecedented feedback and discussions among federal government personnel. There’s tremendous pressure to change and to turn what is a huge bureaucracy into an efficient one and to accelerate that.”
Of course, any success for the company as it works with the federal government worldwide impacts Lexington in terms of employment security.
“Lexington is our hub for all vital things — research and development, offers, programs and pricing,” Guthrie said.