It sounds too good to be true, and most things that can save upwards of £152k a year are; however, we have conducted the research and collated the findings to prove that it is possible.
Let us go back to the beginning.
Identifying the ‘hidden’ costs of print and postage
With cost-cutting exercises and pressure to continuously reduce budgets, its common practice for Local Authorities to scrutinise spend and identify where savings can be made. An example would be annual print and mailing costs.
With thousands of pieces of direct mail and timed critical communications to be sent each year, carefully considered decisions can be made about these big volume mail-outs. Many Local Authorities have outsourced these tasks and partnered with experts, recognising the benefits that it brings.
However, that is not the end of the story.
The burdened costs, those that must be absorbed to print and mail documents in-house, still exist, they are just less obvious.
With multiple departments and sites to manage, it can be difficult for Local Authorities to monitor the production of everyday, ad-hoc correspondence. Volumes are varied and unpredictable and with no central control, the associated costs are simply absorbed into departmental budgets.
The true cost of a letter
Several studies and reports have been commissioned over the years to evaluate the true cost of choosing to print and post documents in-house.
Working with more than 60 Local Authorities across the UK, the insight we have from our own experiences and those of our clients has allowed us to calculate the burdened costs more accurately and to revise them year-on-year.
The assumption is that the cost of posting a letter is the postage. The reality is that the overall cost needs to include the paper, print and resource required to complete the task from start to finish. Then we need to consider the equipment, such as printers and franking machines, along with the office space to store them and the energy required to power them.
In truth, the hidden costs of producing and posting documents in-house are staggering. What may come as a surprise, is that while 20% of the cost is allocated to consumables and printing, with a further 30% on postage, a whopping 50% is associated to labour.
Taking cost out of the equation, it is also important to consider where the labour resource could be redirected. The reality is that skilled workers are spending time printing documents, as opposed to concentrating on their core role.
Addressing the challenge
With an estimated cost of £1.98 per document, and on average Local Authorities sending 100k pieces of mail per year, there are significant savings that could be made. In fact, for some, it could be a quick way to alleviate costs allowing them to be invested elsewhere.
The way to achieve these savings is to rely on a partner that can manage the process from start to finish without you having to lift a finger. Better still, with a tried and tested solution, this approach will consolidate all costs across divisions and sites without any additional input.
Using a purpose-built production system and postal optimisation solution, FDM can reduce costs to around 46p. On average1, that delivers an estimated saving of around £1.52 per letter.
It’s important to note that, from anecdotal evidence provided by clients, they have calculated the costs of producing mail to be much higher. Some as much as £4.50 per letter when all factors are considered.
Here’s how it works
Hi-mail is a hybrid mail solution delivered by FDM. With 30 years of experience, the team has developed the product and process to ensure it meets the needs of Local Authorities.
With Hi-mail, staff can send print jobs via a desktop portal to one of our production sites, rather than producing it on costly office printers. This means that we can capture all of the ad-hoc correspondence generated across the business.
Collating all of the documents at our site means that we can process them together, unlocking the postal discounts that we have access to.
Accessing the savings
Hybrid Mail is so simple, yet so often overlooked. Through access to our established Hi-mail systems and processes, each Local Authority that relies on our expertise saves money.
As just one example, one Local Authority – that due to necessary contractual obligations shall remain nameless – was tasked with reducing costs and delivering service excellence. Having reviewed its print and postal operation, the Council identified there was an opportunity to improve efficiencies.
FDM was selected to handle the Local Authorities daily letter volume, totaling approximately 36k letters per month. These comprised of administration of council tax, housing benefit and various debt recovery and business rate documents, along with planning, legal and other communications from central corporate departments.
Using Hi-mail, FDM re-engineered the way that print-files were received, reconciled and printed, removing the need for manual intervention from the Local Authority.
Introducing an automated workflow built around a white-paper solution, print jobs would come directly to FDM’s purpose-built document facility in Canning Town. Instead of matching data to pre-printed templates, the entire document was printed onto plain white paper, reducing manual labour, improving efficiency and eliminating the need to store pre-printed paper products.
In addition to the cost savings, the Local Authority also benefitted from continuous investment in equipment and software upgrades at no cost to the Council.
Making the change
There is no doubt that moving to hybrid mail saves Local Authorities money. The barrier to that change is often a lack of understanding about the process. The assumption is that implementing a system such as Hi-mail will be complicated and time-consuming, but in reality that is not the case.
As you would expect, we make the process as seamless as possible. We manage the installation and roll out of new processes and systems. This means that each Council we work with can start to make savings and improve efficiencies within the first few months of our engagement.
If you like what you read and are interested in exploring how the Hi-mail solution could work within your Local Authority, get in touch. We will explain how it works and what savings it could bring to you.
FDM is one of the UK’s leading print and mail companies, providing comprehensive document solutions for its customers. With more than 30 years’ experience, through innovative thinking and new technologies, it manages the way large-scale, time-critical multi-channel communications are delivered, reducing printing, mailing and postage costs, whilst ensuring data security and integrity.
For more information about FDM Ltd, please visit: www.fdmplc.com or contact a member of the team on tel. 020 7055 1600.
1 Example cost to show potential savings. Cost may vary between £0.435p and £0.50p depending on
solution & number of pages being used when issuing via 2nd class Royal Mail.