Despite the recession, firms are failing to implement simple cost-cutting measures which could save them thousands of pounds on their printing costs, according to document software specialist Sefas Innovation.

The extent of the problem has been highlighted in a new White Paper, ‘Are you Printing Away Profits?’, published by Giles Hill, managing director of UK-based Sefas Innovation, who is warning business owners to take action.

“Technology has had a significant impact on printing over recent years,” Hill (pictured below) says. “Document production technologies are changing faster than ever and variable costs of production are becoming more competitive, yet few organisations have the capability and the willingness to embrace opportunities to drive costs down. Today’s economic pressures, as well as advances in print technology make now a better time than ever for firms to take cost saving initiatives on board.

“Many saving measures are quite basic – for example, companies can save up to 30 per cent in costs by merging documents on to one sheet and selecting duplex printing, as opposed to simplex, or single-sided printing. This will also result in using 50 per cent less paper to deliver the same communication, as well as reduced postal and material costs.”

Other cost cutting measures identified in the report include reducing the density of  ink/toner, eliminating banner page printing, recycling, bulk buying stationary and automating reprints.

Despite intense environmental and financial pressures to implement these initiatives, Hill says market conditions have encouraged complacency among organisations.

“There remains a huge amount of over-capacity in the marketplace, whereby print and mail can be ‘sold’ at very low prices,” he said. “While this should be welcomed, it is not fixing the longer-term problem of ensuring that these low costs will be maintained when capacity is taken up and prices driven back upwards.

“Gartner has predicted that 25 per cent of the top 20 BPO providers will not exist as separate entities by 2012. This consolidation will reduce competition and the need for low pricing, so there is a pressing need for firms to plan for the longer term.”

Hill claims that even for larger UK firms, potential savings are significant but there is a failure to maximise on cost-savings: “With prices rising by 25 per cent over the past six years, postage remains one of the biggest single costs in communicating with customers.

“Intelligently grouping documents into a single mailing and maximising Mailsort discounts can drastically reduce costs; BT was able to save more than £1.2 million a year in postage costs by doing this alone.

“Transpromotional marketing, whereby marketing messages are added on to transactional documents, is another area of untapped potential, which has been proven not only to reduce print costs, but increase customer retention and response rates at the same time,” Hill says. “Gartner has predicted that some companies will even start to make money from their customer communications through third party advertising for related product by 2012.”

Surprisingly, online communication is one of the key problem areas for companies, according to Hill: “While the benefits from more timely and cheaper variable production costs through new channels are attractive, increasingly initial infrastructure and ongoing costs relating to security and version compatibility, together with a reluctance to move away from paper by many people, mean that the shift to a new paperless world is still beyond the most organisations’ grasp.

“It is a bizarre situation considering the fact that more than a quarter of the world’s population are now online and the intense environmental and financial pressures for paperless communication. Despite the slowness of firms to react, Gartner predicts that many businesses will start making cost cutting measures over the next few years. The elimination of capital, labour and materials will have a huge impact on the printing industry, so companies need to prepare for this market shift and evolve their business model, or face dire consequences.”

For more information about Sefas, or for a copy of the Are you Printing Away Profits? White Paper, email contactuk@sefas.com

Giles Hill