Lexmark Shreds Paperless-Office Myth

Printer maker aims to cut businesses' printing costs

InformationWeek Staff, Contributor

August 8, 2002

4 Min Read

Lexmark International Inc. likes to take pictures. The $4 billion print-technology vendor that was spun off from IBM in 1992 is on a mission to disprove the "paperless office" theory -- not that it needs much disproving these days. Lexmark offers a service it calls Discovery, in which representatives will spend time in a company documenting (i.e., photographing) print-oriented resources and business processes of which the company may, or in many cases may not, be aware. Some of Lexmark's more interesting pictures:

  • The big copy-technology company that had an industrial-sized printer churning out hard copy directly into a blue plastic paper-recycling bin.

  • The state agency that spent about $60,000 to reinforce the floor of a warehouse in order to hold its archive of paper forms.

    The government agency where office employees rigged up a homemade flag system to spot at a distance which printers in the print room were working and which weren't, to avoid the frustration of sending output to a machine that wasn't working.

These scenarios are Kafkaesque in their convoluted bureaucratic logic. But they're not unusual when it comes to the mundane issue of hard-copy output in the enterprise, an issue that usually flies below the radar of most business-technology managers. That's because the budget for print-related technology "doesn't lie in any one person's particular product area," says Randy Nelson, VP of U.S. marketing for Lexmark's corporate side, its printing solutions and services division. And that's despite the fact that up to 3% of a company's revenue can be spent on print-related technology and services, Nelson says, citing statistics from IT advisory firm Gartner.

Lexmark, like its primary and perhaps better-known rival, Hewlett-Packard, sells print technology about equally to consumer and business markets. But Lexmark, in Lexington, Ky., has 12,000 employees worldwide and has been spending considerable time and resources on the business side. For example, it's developing raster-software technology to improve interface and touch-screen capabilities, says Ken Woodruff, Lexmark's manager of application development. Lexmark spent $246 million on research and development in 2001, or about 6% of its $4.1 billion revenue.

And Lexmark has been spending more time with IT personnel. "It doesn't make any sense to offer a technology solution without involving the IT people," Nelson says.

Ask Donald Moore, deputy director for information services at the Louisiana Department of Social Services. Moore has been involved in solving his agency's printer problems, which mostly are related to the overwhelming number of forms (more than 200) the agency deals with: welfare, food stamps, child-support enforcement, foster care, disability determinations, and rehabilitation, to name a few. "We're pretty much a paper-intensive process," Moore says.

That process was complicated by the significant number of agency employees using cheap printers as their personal output devices, a development that had one big drawback: "At least a third of our help-desk calls were printer-related," Moore says. "We wanted a more cost-effective approach to printing."

As part of a statewide effort -- kicked off during Louisiana's Y2K upgrades -- to integrate agencies on local and wide area networks, the social services agency piloted Lexmark's multifunction printers in several of its field offices. Along with printing, multifunction printers can copy, fax, scan, and incorporate E-mail and Internet data.

The agency eventually outfitted its five offices with network-attached multifunction printers, which let it consolidate personal printers and office copiers, and speed up paperwork by incorporating faxes, scanned forms, and E-mail into electronic documents that are more easily and quickly worked through the bureaucratic process.

That's a typical corporate scenario these days, says Don Dixon, senior analyst at Gartner's digital documents and imaging group. Dixon, a copier-industry veteran, says companies want to leverage the potential cost savings of multifunction printers to replace rooms full of copiers and fax machines and deal with the plethora of personal printers. "The personal-printer installed base is the target," Dixon says.

Lexmark also developed another system for Louisiana, what Moore refers to as a "forms-appliance kiosk," a PC with an attached printer that lets agency executives store forms electronically, then print them out, rather than archive them in a warehouse. The application cost $800,000, but Moore says the department will save more than $300,000 over three years on postage alone.

Moore says the agency will save $200,000 by closing its forms warehouse, and maybe the cost of reinforcing the floor as well.

Illustration by John Ueland

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