What’s the Ideal Life Span for your MFP?
The following article was written by Lexmark’s Scott Hill, operations consultant for Lexmark Global Services and member of the Lexmark News Blog Editorial Board:
Historically, businesses have purchased printers and used them until they expire, which can take 10 years or more in some cases (we know some of you still have Optra S devices from 1997 out there!). Yet, these same businesses are leasing other output devices, such as copiers and fax machines, and replacing them every three years. Why is there such a big difference in life-cycle strategy for such similar technologies?
Is it because copiers are thought to be inherently less reliable and require replacement much more frequently? Traditional copiers may have been less reliable, but the migration to digital printing engines brings them into a class that is much closer to printers, simply with added scanning mechanics on top. For example, Lexmark’s multifunction printers (MFPs), which can be used as digital copiers, are built upon the same reliable engines as our award-winning printers. So, the reliability of the mechanics in the MFP is similar to the printers, which may be used for many years. With that in mind, the recommended life span should be similar between MFPs and printers.
Several years ago, Lexmark engaged in a study with a large corporation to determine how often it should replace its printers. As a high volume user, we looked at its increasing device failure rates due to heavy use and wearing mechanics, as compared to the expected increased reliability of new devices, enabled by both new parts and more reliable designs. We also looked at the soft costs of user interactions created by device failures, and the impact of lower consumables costs from new, higher yield cartridges.
What we found was that the financial tipping point, when it made sense to replace the company’s printers and MFPs, was around 48 months. If it had been running lower volumes, the life-cycle recommendation would have been closer to 60 months. In short, the study showed that it made sense to replace the printers more often than what’s typical in the market, but less often than what is typical in the market for MFPs.
Approximately two thirds of requests for proposals with MFPs are only for a 36-month term. If not for reasons of reliability, why would these more expensive devices need to be replaced this often? In an economic environment where businesses are squeezing more and more costs out of their operations, it would seem that extending contractual life cycles to 48 or 60 months would make financial sense, as it would spread the cost of the device over a longer period of time.
Extending leases over longer terms could have multiple benefits, including:
- Reducing monthly depreciation expenses
- Expanding the functional life of the devices
- Reducing transition management costs (soliciting, evaluating, purchasing, installing, training and old device disposal) and general business disruption with users
- Lessening environmental impact through extension of the functional life of equipment
- Lessening “churn” for associated technologies, such as workflow systems, which leverage the imaging capabilities of MFP devices
It’s understood that shorter-term leases might receive different financial treatment than longer-term leases- as an operation lease versus a capital lease. However, it’s still interesting that similar device types based upon the same technologies are acquired in different ways – purchased printers versus leased copiers. Why not lease printers as well… or purchase the copiers like printers, now that distributed MFPs are available and affordable? These are questions that should be asked as part of building a comprehensive output management strategy.