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Financial directors (FD’s) of some of the South East’s largest companies are unaware of what their business spends each year on document production according to research announced today by the printer manufacturer, Lexmark International. However, with the national figure standing at 61%, businesses in the South East are more aware of these costs than many of their counterparts from across the UK.

The Gartner Group and other industry analysts estimate that the cost of document production is equivalent to between 1% and 3% of a company’s turnover.  This means that a business with an annual turnover of £20 million will be spending at least £200,000 a year on document production – possibly as much as £600,000.  It is therefore surprising that FD’s are ignoring a business expense that can have such a dramatic impact on their bottom line.

Survey findings include:

• 59% of FD’s questioned in the South East did not know the cost of document production to their business.  This compares to a national figure of 61%.
• The majority of the South East’s FD’s also underestimated the cost, with 62% thinking that document production constitutes less than 1% of their turnover.
• Over half (58%) responded that they have no plans to reduce costs by getting document production under control. Furthermore, 68% did not see visibility of document production costs as critical to financial budgeting.
• Businesses located in the South West were the most aware of the costs of document production with only 44% claiming not be aware of the costs. 100% of those questioned in East Anglia had no idea what their business spends in this area.
• Scottish businesses are most willing to tackle the problems of document production costs with 64% determined to get these costs under control.
• Property (100%), hotels and catering (68%) and transport (63%) see getting document production under control as a priority

“IT and marketing budgets are both subject to immense scrutiny by all UK businesses”, said Giovanni Giusti, Managing Director of Lexmark International in the UK. “And yet, here we have a cost of equal significance that many financial directors have absolutely no visibility of.”

Giusti continued, “Surprisingly, we take printing for granted. We think nothing of printing out emails to read once and then throw away or photocopying presentation handouts to give out after a meeting when the material can more easily be e-mailed. There is a significant cost associated with the incredible waste that happens today and this is directly impacting the bottom line.”

For businesses that need to reduce their expenses, document production costs present an easy and possibly incremental target to go after.  Securing an understanding of current costs is vital and, once done, there are some simple measures that can be adopted to reduce overall consumption:

• Encouraging employees to print on both sides of a piece of paper
• Implement electronic forms that are only printed when needed to avoid the significant cost of pre-printed forms
•  Implement software tools that monitor usage across the organisation
• Investigate paper intensive business processes and look for ways to use technology that can reduce paper consumption.

‘Lexmark will continue to work with its customers in the South East to help them understand the significant cost that document production represents to their business’ said Giusti.  “We will also work with them to show how they can apply technology that can have a dramatic impact on lowering their current costs.’

The survey of 200 financial directors from companies with a turnover of between £1 million and £20+million a year was commissioned by the printer manufacturer, Lexmark International and conducted by Continental Research in December 2003.

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