Outsourcing print management can save companies up to 30% a year
Let’s get this out of the way up front: print procurement is not dead or even declining. In fact, print continues to make up a very large share of enterprise budgets. According to CIO.com, a typical Fortune 1000 company spends $100 million or more a year on print.
That’s right: $100 million a year.
Industries such as health care and financial services with stringent regulatory requirements still rely heavily on printed materials. However, the need for print goes beyond technical documentation and regulatory filings. In an increasingly digital world, it can be hard for brands to break through the ad blockers and spam filters to get their message heard. A campaign that includes print in the mix is often a way to break through that noise.
Maybe that’s why print also still accounts for over half of marketing campaigns and drives more than 50% of revenue for marketing services firms.
However, trying to manage all that print internally can be an expensive proposition for most enterprises, with costs ranging from 1-3% of revenues. For comparison, that is on par with what corporations spend on their total IT budgets. That’s why many large corporations outsource their print to firms that specialize in print procurement.
According to CMO.com:
“Midsize to large companies with a minimum print spend of $10 million annually gain the most from print management outsourcing. On average, these companies save up to 30 percent of their overall print spend.”
So, to recap:
- Large corporations are spending $100 million a year on print.
- The cost of managing print internally can be as much as 3% of revenues.
- These companies can save up to 30% of their print spend, or $30 million a year, by outsourcing print management.
This is all good news for print outsourcers. However, as enterprises continue to look for places to cut costs, many are looking for areas where they can cut back on print, forcing outsources to negotiate the same or better pricing on lower volumes. At the same time, they are beginning to scrutinize outsourcing contracts and put pressure on their partners to deliver higher value at lower margins.
In our next post, we’ll look at the key challenges that create bottlenecks and drive up costs in the print procurement process, and how technology is evolving to address those challenges.