For more than a decade, Lexington-based Lexmark International has devoted time and money to building an infrastructure for businesses that helps them eliminate printing.
Called managed print services, this field is becoming more and more prominent for Lexmark and its rivals. Lexmark doesn't break out the division's revenue, but acknowledges it's an important piece of its future, citing important account wins lately like the BB&T bank chain.
Also, the company announced Friday it is purchasing Perceptive Software, which is expected to help it offer broader MPS services.
As part of supervising the printer fleets of companies, Lexmark helps them understand the number of printers and pages being used and their costs, as well as develops ways to convert paper-based processes to paperless to save money and help the environment. The latter, the company says, differentiates itself from competitors, who focus more on printer fleets and less on refining workflows and helping companies print less.
John Crandall, vice president and general manager for Lexmark Global Services, recently took time to talk about the future of this key area.
On the beginning of managed print services at Lexmark: "More than 10 years ago, we made an investment of over $100 million in infrastructure to support this business on a global basis, and we have continued to make sizable investments each year since then.
"(Our) dedication to operations and services is evident by Lexmark's consistent customer renewal rate, which has consistently been greater than 90 percent for many years as compared to an average of 60 percent in the outsourcing industry."
On the most successful customer types for Lexmark in the past: "Lexmark has been very successful in the financial, government and retail industries since the start of MPS (managed print services). Lexmark is still strong in these industries today, but the customer base and industries served is very broad now. Today, we cover all major industries including finance, retail, manufacturing, health care, services, government and other industries.
"Lexmark started MPS with a focus on large enterprises. Today, we are strong in both large enterprises and small and medium businesses, and we have installations in all geographies ... around the world."
On the easiest and toughest parts of convincing a new client to come on board: "The easiest part ... is convincing them that the benefits they can achieve are real. ... The area where we see the most difficulty is when a customer has decentralized decision making with budgets distributed throughout the organization and there is not full alignment on the direction of (printing) output in the organization."
On how big a role managed print services plays in Lexmark's overall business: "Lexmark has experienced significant growth in its MPS business year after year and this growth has continued to outpace the market. Even during the economic downturn, Lexmark experienced major growth in its MPS business. This continues.
"As an example of this, in the last six months, Lexmark had more than 10 Fortune 500 and Global 500 Company significant wins, which is all new business to Lexmark and in each of these cases, Xerox and HP competed and Lexmark won.
"Examples of these wins include the likes of Cummins and BB&T, which we announced earlier in the year."
On how the acquisition of Perceptive Software will help MPS: "Lexmark differentiates itself in MPS by adding value to, and streamlining our customers' business processes as it relates to workflow and output. Perceptive Software delivers additional capabilities that will enable Lexmark to go deeper, and end-to-end with workflow solutions for our customers."
On the areas of growth for MPS in the coming years: "There will be significant expansion of MPS in all areas — large enterprises moving to MPS for the first time, emerging market expansion, increased small and medium business penetration and expansion within existing accounts."
On the strongest competitors in the business and how Lexmark differentiates itself from their offerings: "Xerox is typically our last competitor in these situations. At Lexmark, we are focused on balancing the optimization of both the customer's employee time and effort and optimization of the infrastructure and technology as compared to Xerox and others that focus a majority of their optimization on the consolidation and centralization of devices."
Crandall went on to note that among the ways Lexmark differentiates itself is its "print less approach. The cheapest print is the one you do not make. At Lexmark, this is real — we significantly reduce the pages printed by each of our customers including reducing the annual pages printed by more than 100 million pages in a number of our customers. Others may talk about it, but it is not core to what they do."