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Financial directors (FD’s) of some of the UK’s largest property companies are unaware of what their business spends each year on document production according to research announced today by the printer manufacturer, Lexmark International.

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:

• 88% of FD’s questioned in the property industry did not know the cost of document production to their business.
• The majority of FD’s in the property sector also underestimated the cost, with 88% thinking that document production constitutes less than 1% of their turnover.
• 69% did not see visibility of document production costs as critical to financial budgeting.
• Bucking the trend were FD’s of financial institutions where 70% of them believed that they were fully aware of the cost of document production to their organisation. Businesses located within London were also the most aware with almost half (49%) claiming to have full visibility of document production costs.
• Hotels and catering (68%) and transport (63%) see getting document production under control as a priority.
• Retail (21%) and business services (37%) had no plans to get document production under control.

“IT and marketing budgets are both subject to immense scrutiny by all UK property 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 UK to help them understand the significant cost that document production represents to property companies’ 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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