Report: SMBs Implementing Cost-Cutting Measures

An AMI report says midmarket companies are finding cost-cutting measures directed at printing and office supply costs to be the most advantageous.

The economic tsunami has forced small to medium-size businesses to cut costs wherever they can, according to a report from Access Markets International (AMI) Partners. The report found reducing office supplies and printing costs is the most widely employed cost cutting plan among SMBs, ahead of reducing travel or telecommunication costs.

Reducing office supplies and printing costs is simpler to implement than other cost reductions, and the benefits can be immediate since all employees can play a part in reducing this line-item expense, the report found. The findings were released in an AMI study titled -Printing During the Downturn: How the Recession Has Created A Significant Printing Opportunity.'

"Due to their greater touch points and exposure, MBs (companies with 100 to 999 employees) are likely to be more negatively affected by the downturn and have initiated more cost cutting plans compared to SBs (companies with 1 to 99 employees)," said New York-based AMI analyst Melissa Chong "In a recent internal study, 77 percent of U.S. MBs and 47 percent of U.S. SBs, respectfully acknowledged that their company has taken measures to reduce office supplies and printing costs."

Chong said printing and copier vendors need to react quickly to reverse this cost cutting trend and advance SMBs' use of existing IT infrastructure, since SMBs are very likely to prolong the lifecycles of basic computing hardware such as PC and printers during lean times. "Furthermore, AMI has observed a growing proportion of SMBs that are concerned with to what degree the economic downturn will impact their business," she added. "It is not far-fetched to imagine SMBs will increase these cutbacks as concern grows and prolongs."

The study includes strategies and recommendations for printing and copier vendors to reverse the reduction in office supplies/printing cost trend by SMBs in the U.S. A key strategy is to target high-value printing customers (HVPCs). AMI said IT vendors should be reassured that the downturn has forced companies to more seriously consider investing and using IT to address their business needs for efficiency and cost control and help them manage through the downturn. The study found around half to two-thirds of SMBs would like to leverage IT to reduce costs and improve productivity.

HVPCs are the most attractive group as they spend more on printing hardware and supplies relative to the total number of small and medium businesses. Vendors that successfully the address needs of the HVPC will reap the larger benefit due to the HVPC's higher propensity towards printing spending. "It is not practical, especially as vendors find themselves increasingly resource strapped, to try to address the whole market," Chong said. "Vendors should start by zeroing in on the needs of SMBs that print the most or the HVPCs."