Penetration of managed print and document services (MPDS) is slowing down in the enterprise sector, where the focus is moving away from print management and more into areas such as workflow, process optimization, and high-value document services. In the enterprise, vendors typically focus on leveraging access to the print and document infrastructure to migrate customers up the MPDS value stack.
Meanwhile, print and document-based services are swiftly gaining traction among small- to medium-size businesses (SMBs), fueled by rapid adoption of cloud-based solutions and services designed to drive operational efficiencies, improve customer service, and gain improved control over information access and content security.
The SMB space represents significant growth opportunities for outsourced print and document services. Research from IDC’s Worldwide and U.S. Managed Print and Document Services and Basic Print Services Forecast projects MPDS/BPS revenue to grow at a CAGR of 11.3% over the next five years among lower midsize companies (100–499 employees) in the U.S. market. Growth in the SMB sector will be driven in part by increased push of BPS and MPDS from the indirect channel, which will be facilitated by programs delivered by hardcopy vendors to support their channel partners.
To reach SMB customers effectively, the emphasis for outsourced print and document services needs to move beyond lowering print costs to include a broader conversation around helping businesses drive operational improvements and boost productivity. Many smaller businesses have limited visibility into the total cost of printing and document processes. Print and document management policies, if any exist, are often ad hoc, without collaboration or coordination between disparate functions and business units.
Paper and manual processes frequently bridge the gap between incompatible business systems. IDC research has shown that information work is inherently document intensive and that information workers waste a significant amount of time contending with challenges related to working with documents. 42% of documents used by an average worker are paper based, and 62% of employees say paper document volume has either stayed the same or increased. Significant opportunities exist for those service providers with the technology and solutions expertise to help SMBs migrate to more advanced stages of print and document maturity.
There are several key trends beginning to emerge that promise to shape the future of MPDS for the SMB market.
Packaged MPDS Solutions
IDC expects to see a rapid evolution of MPDS tools and service delivery models designed specifically for the SMB sector as vendors continue to push direct capabilities to the indirect channel. Expanded channel programs and services will include advanced training, business development, and marketing support in addition to enhancements to the document solutions and services portfolio. Vendors remain focused on extending cloud services offerings to drive channel partner engagement and simplify program deployment. Virtualized MPDS models based on a standardized technology stack will open up new customers and reduce barriers to entry within the SMB segment.
New Billing Models
Continued expansion beyond print into other areas of the document infrastructure is leading to alternative billing and service delivery models. Dealers and service providers are actively looking to diversify into other managed services. Migrating from traditional cost per page (CPP) billing to a seat-based billing model would allow for layering of additional services per user and create a more stabilized recurring revenue stream. Many SMBs are accustomed to acquiring IT services under a seat-based model, which means that customers could unify their outsourced services under a single payment structure.
Data analytics will become a key differentiator for service providers looking to extend MPDS into areas that address greater strategic business value. Leveraging data analytics will offer near-term benefits in areas such as predictive and preemptive service capabilities, creating more efficient and cost-effective service delivery. Long term, however, data analytics will become crucial as the Internet of Things (IoT) becomes more pervasive and MPDS solutions could be utilized to improve business intelligence and drive better business outcomes.
3rd Platform and Digital Transformation
The shift to 3rd Platform technologies is causing significant disruption and innovation in the business sector. Mobile, cloud, data-analytics, and social business are key enablers driving digital transformation that impacts how businesses work with information. Cloud-enabled offerings are contributing to rapid changes in output device architecture and capabilities as well as to print management, content management, and mobile print and scan offerings. These technologies facilitate changes that go beyond streamlining existing processes to transforming business models. While enterprises are investing significant internal resources to address these issues, smaller businesses will increasingly seek out service providers equipped with the necessary tools and expertise to help guide them along the digital transformation journey.
The increasing mobility of the knowledge worker and the growing use of smartphones and tablets are rapidly changing how and where individuals create, access, and produce documents. IT departments are struggling to keep pace with these changing dynamics and the management and security risks posed, placing increased emphasis and urgency on the need to migrate to higher levels of print and document maturity.
Security is a top-level concern among businesses of all sizes. Within the document infrastructure, this involves everything from securing output devices to protecting access to content, document security and encryption, device authentication, and digital rights management. Among many SMBs there is also a low confidence in the security of mobile devices not only for print but for general use. IDC’s research indicates that many smaller businesses are not aware of the particular benefits that secure mobile printing can bring to their organization. This represents a clear opportunity for MPDS providers to equip the SMB and mid-market with secure mobile print solutions.
Demand for managed print and document services is growing in the SMB sector, but it is important to understand the variables behind this trend. SMB customers are concerned less with the costs of print and more with the need to optimize the entire document infrastructure. Service providers should consider the key growth factors identified as prime areas for investment in order to meet identified customer pain points and provide services that are clearly differentiated from competitors.
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