In early March, I
had the opportunity to attend the ITEX show in Las Vegas. It
appeared to me that there were fewer exhibitors than last year –
at least so far as the hardware vendors were concerned. Companies
who, in previous shows, had been a major presence were notable in
their absence. That simply left more room for supplies, parts and
software providers – all of whom appeared to be selling some form
of managed print services (MPS).
The approach of these providers depended upon what that company
brought to the table. If, for example, the vendor supplied
metering software, then MPS became an automatic data collection
system. If the vendor offered compatible supplies, MPS was a
supplies strategy. If they offered parts, it was a parts strategy.
In short, MPS was whatever the vendor wanted it to be, and every
vendor wanted it to be something else! It’s no wonder, then, that
dealers were wandering the show floor in abject confusion.
There is no doubt that MPS is a major play in our industry,
although many dealers have indicated that it is no different than
fleet plans or CPP plans they have been offering for years. In a
sense, they may be right. But, if this strategy is to succeed,
there are more complexities to consider – even in the most basic
approaches.
For example, fleet plans included service and supplies for
products the dealer had already sold. MPS plans include service
and supplies for products sold by someone else. In these cases,
how will the dealer provide service? It may be easy to target the
larger HP or Lexmark printer MIF. But, how do you provide service
for competitive MFP systems? They won’t all convert to your brand,
you know.
What about supplies? Yes, you’ll be selling compatibles for most
printer fleets. The next step, then, would be to sell compatibles
for your own fleets. How will your primary vendor respond to that?
How will it impact your rebates and other price support programs?
Will they even run reliably? How will you know?
What happens when it’s time to refresh the fleet? Will you install
your primary brand MFPs, or simply replace printers with
refurbished products where the margins are considerably higher?
Who will be selling MPS services in your organization? Most
dealers tell us they rely on a specialized sales force, since a
strong MPS strategy relies on the existing MIF and is less
dependent on hardware placements. In other words, it conflicts
with the goals of the “box” rep.
Lots to consider, isn’t there? Still, in the words of virtually
every infomercial you’ve ever seen, “But wait – there’s more!” We
have always considered an MPS engagement to have three levels. The
first is the easiest. “Produce the same number of pages on the
same devices. Let me service them and provide supplies. I can save
you money.”
Anyone can do this. It’s easy. The next level— that of
rationalizing the fleet is more difficult. Where are the devices
located? Should you attempt to balance the print load using rules
based printing parameters? Should you try to change the ratio of
output devices to users from the current average of 3:1 to a more
manageable 8:1? Can you document the savings that might accrue? I
saw some support at the show for these efforts. But I really had
to tease the issue out of the vendors before I saw an ounce of
their recognition of the problem.
The third level is the most difficult but, at the same time, the
most important. It’s the one that separates you from all the other
MPS providers. We call it “work flow analysis.” It changes the
emphasis from the number of pages to the content of those pages.
What’s the value of that content to the enterprise? What happens
if the document flow is interrupted? Is there an easier way to
accomplish the task?
You know, I walked the floor looking for the one company who
understood this opportunity and could provide support to dealers
wanting to provide it to their customers. Like Diogenes looking
for the honest man, I was looking for the complete vendor. I’m not
sure about Diogenes, but I never succeeded.
Why? Because every vendor told me they have not yet determined a
way to make money selling workflow. According to them, it can’t be
done, because there’s no “generic” way to accomplish the tasks
involved. I think they’re wrong.
Perhaps the most difficult workflow to automate is found in the
healthcare field. The federal government has mandated that all
patient records be converted to electronic form. But, and here’s
the catch, those new electronic records must meet all HIPAA
requirements as well as multiple levels of certification.
Too complex? Someone doesn’t seem to think so. Who? How about
Sam’s Club? Visit their website (smasclub.com) and search for EMR
(electronic medical records). You’ll find that they’ve partnered
with multiple providers to offer certified systems ranging in
price from $11,925 to $36,150. They’ve made the solution generic
enough to sell it on the Internet – like a pair of shoes!
Now, I’m not trying to denigrate Sam’s Club. But, if they can
reduce a complex workflow to a generic solution, why can’t the
myriad of vendors purporting to be in the MPS market do the same?
Better, still, why can’t you do it? You must, if you are ever
going to set yourself apart from other MPS providers. Or, you can
compete for lower margins at the basic level of this market. It’s
your choice.
Lou Slawetsky, CEO
of Industry Analysts, Inc. - a marketing and management consulting
firm for the office automation industry. visit their web site –
www.industryanalysts.com
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