The New Normal
Ian Davis of
McKinsey and Company recently said, “It is increasingly clear
that the current downturn is fundamentally different from
recessions of recent decades. We are experiencing not merely
another turn of the business cycle, but a restructuring of the
economic order.” This restructured economy is what I like to
refer to as “the new normal.”
As a society, we’ve witnessed a major shift with the adoption
of the notion of “frugality chic.” Thriftiness has been
embraced wholeheartedly by individual consumers and businesses
alike. In addition, we’ve witnessed the emergence of the green
consumer who is leery of green marketing and more interested
in green solutions and savings. Finally, in the digital age
with rapidly evolving technologies, people desire and require
more control. There is a greater awareness and need for
information security, and individuals and businesses must have
confidence that the products they purchase will help protect
the sensitive information that is important to them.
The document imaging industry is not immune to this new
normal. The traditional multifunction product (MFP) business
is in the late maturity stage and there has been a steady
decline in the number of units shipped since 2007. Similarly,
as the economy declined over recent years and jobs were lost,
we witnessed a sharp decrease in page volumes per device.
These trends require that document imaging industry
professionals – from dealers to manufacturers – adapt, evolve
and ultimately shift the way they view and do business. What
once worked is no longer a viable strategy in this
Consider this: for every $1 spent on A3 technology, end-users
spend $3 on A4 devices. Similarly, for every page printed to
an A3 device, three are printed to an A4. Those that define
themselves as managed document services (MDS) providers see
those statistics and realize an immediate quadrupling of
market opportunity. Why only bring in revenue from pages
printed to devices sold when you can generate revenue whenever
a customer prints to any and all devices?
According to Gartner, “By 2012, 70 percent of businesses with
more than 250 employees in North America and Western Europe
will acquire printers, copiers, MFPs and associated supplies
as part of a managed print service contract.” Therefore, it is
critical that dealers take a brand agnostic approach and
secure MDS contracts now, with or without hardware attached.
This shift in approach leads to an almost immediate expansion
of a dealer’s customer base, increases their share of wallet,
and improves customer “stickiness.” When the hardware lease
does come up for renewal, it is highly likely they will not
only be invited to bid, but also secure the contract based on
the value provided by the MDS relationship.
At Toshiba, we take a holistic approach to the document
environment through a very customer-centric approach. We
listen to the needs and concerns of each individual business
and tailor solutions to directly address their unique
requirements. This also means looking beyond fleet
optimization to improving information security, reducing
environmental impact, and managing printing at the user level
rather than the device level. Ultimately, this provides more
significant rewards, protections and cost-savings to
customers. Two of the proprietary solutions Toshiba dealers
can deploy are the Encompass Security Vulnerability Assessment
and the Encompass Green Report.
The Encompass Security Vulnerability Assessment identifies a
customer’s current vulnerabilities such as data on the device,
device access and user authentication, document security and
end-of-life security. Dealers can then remedy current
vulnerabilities and implement policies for moving forward.
This means implementing end-user education, affecting change
in employee practices and employing digital rights management
tools to fully secure a company’s intellectual property.
The Encompass Green Report identifies a customer’s
eco-footprint. Unlike other competitive tools, the Green
Report uses actual customer data to identify how many trees
and other natural resources are consumed, as well as how much
carbon dioxide and solid waste are produced. From there,
dealers can recommend specific strategies for reducing use and
waste, and improving recycling. In addition, Toshiba has
several recycling programs available.
Once dealers decide to define themselves as MDS providers, the
next and likely most difficult challenge is developing and
implementing the infrastructure to support sales growth.
Recognizing this as one of the most difficult hurdles to
overcome, Toshiba is devoted to helping dealers through this
transformation with advanced training programs and dedicated
corporate and field support.
For example, many dealers may not have the resources or the
training on a variety of devices to feel they can service
customers properly with a brand-agnostic MDS program. Another
obstacle is that potential MDS customers are physically too
far away to provide the proper level of service support.
Toshiba addresses these challenges by providing on-site
service for all of these scenarios, and the dealer is billed a
monthly flat fee plus consumables. This is a great way to
augment a dealer’s internal service offering, optimize dealer
training and parts inventory management, and allow for
national accounts opportunities.
Similarly, cost-per-copy (CPC) billing is a new challenge that
requires infrastructure and automated meter capture tools.
Toshiba’s PageSmart Express and PageSmart ABC help by
providing meter capture tools and fixed wholesale CPC costs, a
dealer branded e-commerce site for supplies ordering and
management, and it eliminates guessing about real internal
cost of sales.
Toshiba also has created a MDS-focused training program known
as LEAD Academy. LEAD Academy is an ongoing, self-paced,
online education and certification program for dealers’ sales,
service and consulting specialists.
Today, Toshiba is a services-led organization, and I believe
the dealers and industry professionals who position themselves
in a similar fashion will ultimately be the most successful in
the years to come. We have a new normal that requires the
broadening of product and service offerings to increase wallet
share. It’s time to evolve beyond the page.
Bill Melo is
Vice President , Marketing, Services and Solutions of Toshiba
America Business Solutions Inc.