Total Cost of Ownership (TCO) is a concept that captures all of the costs associated with the document lifecycle. Each step of the lifecycle provides opportunities for cost reduction. The money spent procuring print is only part of the total cost. Extensive market research and in-depth case studies based on 2009 data have found that on average, for each $1 spent on print, another $6 is spent on related services such as warehousing and archiving, creative services, management and review, fulfillment and distribution, obsolescence and related administrative costs. With the implementation of on-demand solutions, this ratio has greatly narrowed with many organizations achieving a 1:1 ratio between print and non-print related costs (Infotrends).

Continued technological innovation enables organizations to effectively quantify expenditures and implement programs that achieve efficiencies. Organizations can both improve document effectiveness and overall financial performance.

Inefficiency of In-plant Solutions

Few organizations actually measure all costs associated with print. According to the chart detailed below, the total burdened cost per page for a typical document produced in-house can range from 52¢ to 70¢. For organizations that print more color and graphic-oriented documents (which increase usage of ink and toner), the per page costs will be higher. These "unaccounted for" but very real burdened costs are in addition to the non-print related costs more fully described by the document lifecycle.

Total Burdened Costs for Documents	Avg Costs
Visible Hard Costs - hardware, toner and inks, paper (plain and special), click-charges, services and maintenance, power, etc.	5¢ to 7¢
IS Support and Infrastructure - help desks, 2nd level support staff, training, print servers, network connections, mainframe conversions, print formatting software, pre-processing equipment, etc.	5¢ to 7¢
Administration and Purchasing - product and services selection, internal requisitions, orders, billing, RFP's, storage, restocking, supplies service centers, inventory management, vendor relationship management, etc.	2.5¢ to 3.5¢
Document Production - end user production time/energy, waiting time, intervention activity, hand finishing, walking to copiers, fax machine interaction, etc.	15¢ to 20¢
Document Management - the 'before and after' costs and processes, including filing, storage, indexing, microfiche, COLD, scanning (and not scanning), binding, folders, retrieval, postage, enveloping and distribution, mailroom, pre-printed forms, electronic forms, document creation, waste disposal, etc.	25¢ to 33¢
Total Burdened Cost	52¢ to 70¢

Source: Infotrends: 2009 TCO Study

Efficiency of Mimeo

Another effective manner to compare the internal costs of producing documents against outsourcing is to build an activity model that includes time and actual print costs. The assumptions and example below demonstrate a very simple cost model for printing a single manual internally and externally via several well established providers.

This example is not intended to be all-inclusive, but it does demonstrate there are several factors to consider when printing even simple documents such as manuals – the labor costs associated with manual tasks, the need to repeat tasks when manufacturing is prone to errors, and the actual cost of printing. In this example, mimeo clearly shows the benefits of automation through Internet-enabled software functionality. The savings when switching to the efficiency of a shared online process is significant.

Activity	In-House		Well Known Quick Print Chain		Mimeo
	Min	Cost	Min	Cost	Min	Cost
Driving/Walking Time	10	$5.20	10	$5.20	0	$0
Creating New Order	12	$6.24	10	$5.20	5	$2.60
Proofing	5	$2.60	5	$2.60	2	$1.04
Reordering	12	$6.24	7	$3.64	2	$1.04
Pick-up Time	12	$6.24	7	$6.64	0	$0
Repeat Due to Errors	15%	$3.98	9%	$2.06	0.3%	$0.01
Sub-Total	$30.50		$24.94		$4.69
Direct Print	$13.31		$12.00		$7.87
Total Costs	$43.81		$36.94		$12.56

Source: Infotrends, January 2009