enx magazine

The copier industry seems obsessed with benchmarks. Before I receive a letter from my alma mater requesting that I send back my degree let me state that I strongly believe in using financial analysis in planning and to measure execution against a plan. I also believe that benchmarks provide an educational function; they eliminate the “possibility” discussion: “Is that even possible.” As long as you are factual it is difficult to dispute a response like “Well, it is an industry benchmark that many companies are achieving and exceeding.” So I do use benchmarks and I am not suggesting that you ignore them. What I am stating is that benchmarks are only a measurement; they make you feel good when you are exceeding them and they give you a goal when you are sub par.

I rarely encounter financial executives or entrepreneurs from copier dealerships discussing how they are executing against their plans to improve operations or close any gaps to benchmarks. They simply want to know the benchmark or how their results compare to benchmark. Take the time to reconcile your financials with an industry model so that you know what is possible. Make certain you have your revenue, costs, and expense categories aligned with the model so that any delta to benchmark is due to operational performance and not to financial modeling differences. This will cut down on any debate regarding comparability. You have now completed step one on the long and disciplined journey to operational improvement.

Your willingness to model your results is a good sign. You are showing commitment to improvement. In the copier industry today—a mature industry undergoing significant changes and converging with other technologies—disciplined planning will separate the very successful from the marginal players. So now that you know where you stand relative to benchmark what is the next step?

Are you managing too few copies per technician—do you lay off the required number of technicians to get to benchmark? If the revenue per sales rep is too low—do you fire some reps? If your reschedule for parts ratio is too high—do you buy more parts? Without planning and process changes these three actions will more than likely result in longer response times and reduced quality of service; lower equipment revenue; and, reduced asset efficiency with minimal decrease in rescheduled calls, increasing to the current level in short order.

If your processes require your current quantity of techs to maintain your machines in field (MIF) with an acceptable response time you need to address your processes, both business and management, to impact your results. Parts reschedule ratio may be one of your issues but if you do not have a sound technician stocking processes, buying more parts may only have a short-term impact on your reschedule rate, with long term asset management issues. If you do not have your sales coverage set correctly and are not driving increased business with account planning sessions and sound sales management processes, you may be optimized at your current revenue per sales rep with your poor processes: Any reduction in staffing will result in less revenue.

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