Whatever Happened to Being Self-Sufficient? | Article

Reasons to Outsource Mailroom and Copy Services That You May Not Realize

backoffice outsourcingApollo Group, Inc. (Apollo) is a publicly owned company with a forte in secondary education. Its subsidiaries include the well-known University of Phoenix, as well as the Institute for Professional Development, Western International University and the College for Financial Planning.

Michele Flatt, Apollo’s director of Facilities Management, recalls that, prior to outsourcing, they were “spending a ton of money on copying. We had copiers in every department, and everybody felt they had to have the largest and latest/greatest pieces of equipment in their department. They were all self-sufficient, and employees were spending a lot of time standing at the copiers to make copies.”

IKON Office Solutions, through which Apollo was leasing its copy equipment, suggested in 1991 that its facilities management department could reduce Apollo’s costs through outsourcing. IKON would eliminate much of the existing equipment, put in a copy center staffed with IKON employees, and place convenience copiers strategically around the office.

Although outsourcing was a direction that Apollo had never before considered taking, Flatt says they had a “bake-off” with IKON and another leading outsourcer. “We took a long, hard look at both companies and had a big panel involved in the evaluation of their solutions.” The chips fell in IKON’s lap.

It Started With a Focus on Costs

“At that point, we were basically just trying to save money,” Flatt states. And the strategy worked, for IKON’s outsourcing services resulted in a bottom line that was a little less than what Apollo had been spending just to lease the equipment. More importantly, productivity increased because Apollo’s employees were spending time working at their desks instead of standing at copy machines.

Flatt states the supplier’s services are billed on a tiered structure, with a lower cost for higher volume. The copy volume IKON services at Apollo’s Phoenix corporate office and at its University of Phoenix campuses in Phoenix and at Tucson totals more than 200,000 impressions per month. At University of Phoenix online, the volume tops more than 1.5 million impressions per month. “So on our busiest months,” says Flatt, “our per-copy costs are less than on slower months.”

IKON also runs the mail services at the online location in Phoenix and at the Tucson campus. In addition, the outsourcer handles purchasing of supplies for the copy equipment, stocks the copiers with paper, clears paper jams and ensures the equipment is cleaned and serviced in a timely manner. Since the Apollo contract includes three main buildings at the corporate headquarters in Phoenix, with seven satellite ground campus locations throughout the valley, the IKON staff makes numerous runs to clear jams and handle copier maintenance. The buyer renewed the contract in October 2000 for another five years.

“Outsourcing is the way of the future,” says Flatt. “It’s a definite cultural change, but without change there is no progress. An outsourcer can offer alternatives that the customer may not have considered.” She speaks from experience, for Apollo has received unexpected benefits from IKON.

Then Came the Added Value

Flatt says IKON “looks for better ways to do things to produce a cost savings for us. They suggest innovative ways to meet our needs.” One strategy was a move to digital equipment, which alleviated some of the volume from Apollo’s laser printers. They now submit jobs electronically to the copy center, sending instructions to the IKON staff in an online form. Alternatively, an Apollo employee can take a disc to the copy center to have originals printed from it. With either method, the buyer saves both time and money by not having to print a hard copy first.

As added value, IKON agreed to keep the copy center at the University of Phoenix main campus at Apollo’s headquarters open into the evening hours to expand services to instructors and students. “Taking on faculty and student copy jobs, as well as the retail mail services for our Apollo employees, shows how flexible and accommodating they are,” says Patrick Bliss, assistant director of Purchasing for Apollo.

You Can’t Put a Dollar Value on Some Services

Because changes in technology and business requirements are inevitable, flexibility is a key characteristic to seek in an outsourcer. Flatt and Bliss agree that IKON’s flexibility is outstanding. The service for University of Phoenix Online, for instance, opened with just one building. Online quickly expanded to four buildings, with staff growing from 200-300 employees to 900. IKON’s staff had to shuffle the mail and handle the copying services among those four buildings. All the Apollo employees in those buildings are administrative staff who also were shuffled around from building to building, causing IKON to keep up with all the moves and new locations for mail services. To make matters even more challenging during this growth period, the IKON copy center was also relocated.

“Outstanding” is not a unique enough word to describe the value of this relationship, says Flatt. IKON has given Apollo free advice regarding its satellite locations across the country, even at the risk not increasing IKON’s own business if Apollo eventually chooses not to use IKON for a satellite solution. IKON helps Apollo identify volumes and business processes appropriate for a facilities management outsourcing solution versus an in-house solution. “They do that with a lot of good faith, helping us manage our growth while maintaining cost efficiencies in other areas,” comments Flatt.

Summarizing their relationship, Flatt – who is responsible for dealing with employee complaints and issues – says “it’s wonderful. Complaints are extremely few and far between.” She says their relationship has improved every year, and IKON has stayed right in step with Apollo’s growth. “They treat us like we are their only customer,” she adds.

Lessons from the Outsourcing Journal:

  • Because of leveraging the supplier’s economies of scale, outsourcing a copy services process can reduce the costs lower than an in-house owned-or-leased equipment solution.
  • Outsourcing copy services and mail services will increase productivity because the buyer’s employees will spend more time at their desks, working.
  • Flexibility is a key element to seek in supplier services in facilities management, especially if the buyer is a growing company with potential changes in buildings and number of employees.

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