Document Output Vendor Selection and Management Strategies
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1 Research Brief Document Output Vendor Selection and Management Strategies Abstract: Decision-makers often use inefficient methods to select vendors for copiers, printers and multifunctional products. By Andrew Johnson and Jun Li Strategic Planning Assumption Two out of three companies that use the traditional request for proposal (RFP) vendor selection process will fail to select the best vendor or service provider (0.8 probability). Publication Date: 7 October 2003
2 2 Document Output Vendor Selection and Management Strategies Introduction Selecting copiers, printers and multifunction products (MFPs) is complicated by inefficiencies that decision-makers experience when conducting product and vendor evaluations. Gartner research has found that IT product acquisition initiatives become impeded because of three factors: defining requirements, employing a methodology and securing objective vendor performance data. Studies conducted by Gartner continue to point out severe deficiencies in standard IT product selection techniques. According to the most-recent survey, 64 percent of the selection teams that used a traditional RFP selection process reported a low level of confidence with that effort and the resulting decision, and they were unsure that the selected vendors would deliver on promised functionality. Today's tough economic conditions require that the methodology for assessing document output devices be effective in determining potential shortcomings or trade-offs between specific vendors and products. What Are the Challenges in Making a Decision On a Document Output Device Vendor? Organizations often conduct evaluations that focus only on tactical considerations, such as product functionality and cost. Typically, a combination of these two perspectives would dominate 90 percent of the evaluation process. However, many decision-makers are discovering that selecting a functional product market leader does not guarantee overall satisfaction. Because of the broad scope of many initiatives, project teams and stakeholders have been compelled to investigate strategic issues such as a vendor's services capabilities, viability and vision before making significant investments in these products. What Are the Key Criteria to Determine If a Vendor Meets Your Organizational Requirements? Before even considering products, businesses must have a document strategy aligned with the company's business plans. Once this businessplanning exercise has been completed and clear goals have been established, decision-makers should focus their investigations of potential vendors and products among five categories: product, costs, services, viability and vision. Members of the project team should prioritize these five criteria in terms of their relevance to the business plan. An effective approach to prioritizing complex issues is assigning relative weights to a set of criteria that produce a total of 100 percent. Gartner's general weighting recommendation resembles the following: product should be weighted at 35 percent, costs at 17 percent, services at 27 percent, viability at 11 percent and vision at 10 percent. The relevance of these five general criteria may vary based on departmental requirements and regional issues Gartner, Inc. and/or its Affiliates. All Rights Reserved. 7 October 2003
3 What Product Type and Configuration Should You Choose for Each User? The era of stand-alone output devices can no longer be justified. MFPs are a key part of a cost-containment strategy that seeks to reduce the total number of copiers, printers, fax machines and scanners installed in an organization. According to Gartner research, 45 percent of the documents that go through the MFPs are print jobs. Another 42 percent are copy jobs, while fax accounts for 14 percent and scanning jobs account for 5 percent. There is no ideal proportion of these tasks and usage is changing as more scanning applications become available. The complexity of operation justifies why "task switching" or how seamlessly the MFP can switch jobs among functions is critical to the configuration decision. Paper handling is another critical capability; not only paper input capacities, but also output features such as duplex printing and sorting/mailbox printing. Lastly, MFP architecture, including network connections and hardware and software settings, is a critical criterion. The newest MFPs are providing programmable architecture that can be customized to better fit with document management software. How Much Should Cost Factor Into the Vendor Selection? Many organizations overweigh the importance of initial acquisition costs in the selection process. Gartner research has shown that the investments in such projects typically are exceeded by ongoing costs over three years, with a majority of the outlays hidden within maintenance and integration projects. Depending on the scope of the deployment, significant costs are often incurred in cultivating the necessary expertise to support and exploit a product. Gartner recommends initial and ongoing costs for a product weigh under 20 percent in any decision. How Important Is It to Consider a Vendor's Services Offerings? Organizations must ensure that they can efficiently and effectively incorporateanduseproductsasthebasisfortheirbusinessrequirements. Such efforts require consulting expertise, problem-resolution capabilities and knowledge-transfer skills that are critical to the successful exploitation of the IT products. The extent that a vendor can facilitate these service relationships with its installed base directly impacts the level of client satisfaction upfront, the success of the vendor-client business relationships over the long term and the overall success of the vendor in the marketplace Gartner, Inc. and/or its Affiliates. All Rights Reserved. 7 October 2003
4 4 Document Output Vendor Selection and Management Strategies In Gartner research, the criterion of services examines the available capabilities of a vendor and its associated parties in providing both professional services as well as a general support infrastructure to assist its installed base in using and maintaining its MFP products. This evaluation includes, but is not limited to the quality, breadth, depth and timelines for delivery of professional services such as the provision of consulting, implementation services, training, and project and quality management. It also addresses important general support issues such as help desk support, documentation and maintenance. Why Is It Important to Consider a Vendor's Viability and Vision? The analysis of a vendor's viability is important as users struggle to acquire strategic IT solutions from reliable providers in light of changing economic conditions. The viability evaluation should incorporate both qualitative analysis and traditional Wall Street metrics. Organizational viability considers the quality of a vendor's senior management team, plus the capabilities, composition, and turnover rate of the vendor's sales force and development team compared with competitors. As markets consolidate, it is not only the weak that depart even the strong may leave to cut their losses and focus on more appealing opportunities elsewhere. A vendor's vision addresses its plan to maintain or improve on its strengths, and minimize its exposure in the marketplace during the next threetofiveyears. Product vision addresses the strategy a vendor has adopted for competitively advancing their product functionality. Considerations are focused on topics such as whether a vendor is a technology innovator or a "standards follower." What is a vendor's migration plan for nextgeneration technologies and what other strategies for differentiation has a vendor developed? This should include an appreciation of the vendor's plans for enhancing its service capabilities or alliance strategies. Ensuring That Purchases Are Strategic Gartner has worked to equip clients with the means to make better, faster and more-informed IT decisions. To this end, we have developed a structured and objective model for evaluating MFP vendors, which is based on the Refined Hierarchical Analysis (RHA) evaluation methodology. This model is most effective in differentiating between similar products placed on a shortlist of products. Gartner offers this model to assist corporate users within the Gartner Measurement organization ( by providing a library of tools, called "Decision Tools for Vendor Selection," whicharebasedontherhamethodology. Key Issue What client issues should Gartner research address? 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 7 October 2003
5 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 7 October
6 6 Document Output Vendor Selection and Management Strategies This document has been published to the following Marketplace codes: HARD-WW-DP-0568 ITSV-WW-DP-0545 For More Information... In North America and Latin America: In Europe, the Middle East and Africa: In Asia/Pacific: In Japan: Worldwide via gartner.com: Entire contents 2003 Gartner, Inc. and/or its Affiliates. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice
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