70% of Your Dealership’s Profitability!

According to some of the business models employed within this industry your dealership should realize as much as 79% of its profits from service. My question then is, how are you managing your service department to maximize this opportunity?

Where is Your Focus?

It seems to me that most dealer principals spend more time managing their sales professionals and sales department than the service department which actually produces the profits. Many invest in software tools for CRM and managing the sales funnel but how many utilize advanced tools to measure and manage their technicians and maximize service department profitability?

Now I am in no way suggesting sales management is not important, we all know it is but I am suggesting we can do better at managing the function of the dealership where profitability is actually realized.

What Does Good Look Like?

When I question dealer principals directly I usually get a response that they run reports on service metrics to measure service performance. While an excellent practice, if you are doing this what is the baseline you are using to measure your results? Simply put, what does good look like, and are you really good?

Let me illustrate in a couple of specific areas.

Technician Performance

I recently reviewed an assessment of the service department for a relatively small dealership with less than 10 service technicians. Based on their internal “rankings” they expressed concern about the performance of several of their service technicians.

This review compared their service performance against a large national database and part of it graded service technicians from ”A” to “F” based on a number of measurements. What caught everyone’s attention was that not a single one of their technicians scored an average above a “D”. Further analysis of these results showed that by simply managing all of their service technicians to a “C” level would provide tens of thousands of dollars additional profitability to this dealership.

I believe this illustrates the question of what does good look like: instead of being concerned with a couple of individuals this dealership should be taking steps to improve performance across the board.

Performance of the MIF

Similar to the previous discussion do you know if your MIF is performing as good as it can and what could be gained from improvements.

If we were to analyze your in place population by model and compare it against thousands of other devices of same model across the country how would your parts usage and call frequency stand up?

I can tell you from experience that the average dealership can improve profitability by tens or hundreds of thousands of dollars per year by identifying those units with above average service expense and managing them down to the national average. The potential within your own dealership would probably amaze you!

Additional benefits are improved client satisfaction and therefore retention, and the ability to identify additional or supplemental training for specific technicians.

Marketing Ramifications

So now to what I believe is a bit of novel thought: how do you leverage this type of detailed analysis within a marketing strategy to drive higher profits for your dealership?

Since most of us agree that the function of sales is to place units so that we can realize profits on the aftermarket would it make sense to incent sales professionals to sell those models that drive the greatest profitability within their target volumes?

For those of you attempting to move into MPS how about the ability to compensate your sales professionals on a combination of hardware placement, capturing page volumes and profitability within an account? Do you think this may cause them to place the correct hardware and manage the account to greater efficiencies?

Summary

If you are already doing all of these things I congratulate you; you are definitely ahead of the curve. If you are not then this effort may provide one of the best returns on investment of anything you could do within your dealership.

There are resources and support available for you today that enable you to compare your performance against national averages with minimum effort on your part. Now as with anything else if you do nothing with the information then you will gain the same – nothing. However, if you manage to these numbers you are going to be surprised how much more efficient and profitable you can become while increasing client satisfaction.

To reiterate here, the value is the ability compare against what good is based on a very large set of service statistics, not just within your own organization.

If this discussion caught your attention and you would like to pursue it further please contact me (ghawkins@buscomgroup.com / 602.989.5667) at your convenience.

Least Cost Printing – Why Users Don’t Print to the MFD

Many of you have attempted to reduce your document output expenses by investing in multifunction devices and connecting them to your network. The question is how many of you have realized the results you hoped for?

Success Stories

As I talk to organizations across the country and spectrum of purpose I have found a relatively small percentage that has succeeded. Almost without exception, those that met their objectives did it by removing their cartridge-based printer fleet; thereby forcing users to use the component-based multifunction devices. It is rare to find a success story within the population that left the printer fleet intact.

Where Do the Pages Go?

The observation stated above comes from the data within the detailed assessments I perform as part of my client engagement. Even today, in mixed environments the number of pages produced on printers typically exceeds those produced on MFDs in a truly mixed environment. My experience shows the hoped-for shift in user behaviors and pages did not occur on a large scale, if at all.

Why User Behaviors Did Not Change

Let me share with you a few high-level findings that are common upon an assessment of document output environments similar to yours:

• Most users are totally unaware of the page cost differential
• Many users do not have MFD print drivers loaded on their workstation
• A large number of users are unaware of workflows that would be of benefit
• Inadequate training led to fear of change

While these seem like very simple “duh” statements they are significant to the failure of most attempts to print to lower cost per page MFDs.

Awareness

When performing a detailed environmental assessment I spend a great deal of time within the user community. Invariable during the device discovery process or user interviews I am questioned as to the cause and purpose of the project.

When I explain the high-level expenses associated with document output (possibly millions of dollars) users are quite surprised. When the discussion becomes more granular it often becomes disbelief; they simply had no clue that their desktop inkjet may be generating expenses as high as $0.25 per page or that the cost per page of the MFD (copier) is half that of their laser printer. Once that discussion is complete (proven) and expense reduction tied into something important to them (maintaining their benefits for example) their attitude typically changes to one of support.

Access to Devices

Very often during one of my user discussions they relate that they do not use the MFD because they do not have access to it. Further discovery usually uncovers that they have access to it but do not have a print driver, or the correct print driver loaded on their workstation.

There are actually two somewhat separate issues here, ability to print to the MFD at all and ability to access the features and functions offered by the MFD.

During a typical on-site discovery I load quite a few print drivers for the MFD that should be used. When shown the correct print driver and the functions they can access I usually encounter a little bit of excitement exhibited by the fact they print a document before I can leave.

Workflow

Another one of the significant influencers I find is that users typically do not understand the workflows associated with the MFD and how it can benefit them:

• Access to finishing options from the print driver
• Ability to identify and print to special media such as letterhead
• Secure printing workflows
• Print and hold workflows

These discussions often result in a “ah ha” moment when they realize they can actually take advantage of the speed and functions of the MFD from the print driver and maintain control of their jobs.

Training

This last issue, lack of training is the single most significant contributor to resistance to change behaviors and obviously influences the three other issues discussed above. It is interesting that in a group interview the issue rarely presents itself; few of us want to admit we do not understand something. However, if you listen and observe carefully, and ask the question in the correct manner someone will usually identify lack of training in a second or third party inference.

When approached individually and confidentially you will have the opportunity to walk the resistant user through the process and again experience the “ah ha” moment as they discover how it actually benefits them.

Now it is quite obvious that none of this is rocket science but these issues commonly derail attempts to redefine your document output strategy. Addressing them should be part of your implementation strategy and performed by your internal resources or contracted vendor.

Admittedly, fixing these issues may not still give you all the results you were hoping for, but will contribute. For those of you thinking, "some users just do not want to change," further modification of user behaviors can be accomplished with one of the software packages designed for that purpose. An additional benefit of these tools is they also provide you the measurements from which you can manage individual users and your entire document output environment.

Are You Getting the Color You Expected?

Have you invested in new digital color technology? Are you getting the color quality you were hoping for – the expectation that drove your investment? If you would like to see improvements read on!

Unattended Consequences

Typically change brings both positive and negative consequences. As color-enabled printers and multifunction devices have become commonplace we have enjoyed dramatic decreases in the associated costs. Color has become increasingly affordable and therefore more accessible to your organizations and user communities. Commensurate with this popularity has been the declining levels of color knowledge among the vendor and end-users which often results in your organization not realizing the quality of color you hoped to or should get.

Does it Really Matter Anyway?

This is an excellent question; does the color quality really matter? If green is green and red is red what is the difference? In many applications it does not really matter but there are plenty where it does or it should. If color is being used to highlight text or titles, or to separate segments of a pie chart then as long as red is red maybe that is good enough.

On the other hand many organizations have made significant investments in brand development so they should be concerned about the accuracy of color that represents corporate logos and color schemes. Is it important that embedded images of products, buildings and people be accurately represented?

Color Influencers

This topic has occupied complete books so I will keep it really simple here. There are many influences on color quality ranging from user tastes to changes in climate. Some of these we cannot change or control, but we can manage with some simple processes:

• Standardized desktop applications


• Workflow design to maximize the technology being utilized


• Workflow designed to compensate for user skills or lack thereof


• Document standards to maximize the technology being utilized


• Processes to maintain consistency on the output devices

Design and implementation of some basic processes and controls can maximize the quality from your particular technology, brand or model of device while taking into account the knowledge level of your users.

What Changed

It was not long ago that good to excellent quality color devices were very slow, costly to acquire and expensive to operate. The marketplace was limited to several significant manufacturers and often a subset of their distribution. The successful vendors utilized color specialists who helped the client justify these investments by implementing some of the processes mentioned above. This support structure and marketing strategy is now limited to high-end graphic arts devices if it exists at all. Today, virtually every sales person sells color enabled devices but very few of them have any substantial knowledge of color production issues.

As I work with clients who are seeking better color output I am quite amused by the sales strategies and product positioning they relay to me. What frustrates me is that often the sales person could have made a more expensive sale if they had listened to and understood their client’s needs better.

Doe's This Matter to You?

If maximizing color quality from your color output devices does matter to you then there are several things you can do today, or in the future when considering technology refreshment.

• You can inquire of your current vendor if they provide, or can direct you to someone who does provide this type of support and workflow design


• Next time you consider investing in color technology, ask these same questions of your potential vendors and demand proof that they really can provide the support you will require if they claim they do


• When purchasing color enabled output devices make sure you clearly define your expectations and purchase the correct technology to fulfill them. This may not mean the cheapest solution presented to you.

There are services providers out here who can help you build the processes and controls to maximize your color output or can assist you to determine whether the technologies, brands, devices or vendors you are considering can meet your needs.

In closing I would like to make it very clear that given today’s pricing for color enabled output devices it is not reasonable to expect a current or potential vendor to do this for no additional charge. There simply is not enough profit left to carry the cost of that type of support. It is not something that everyone needs, but it is something that a lot of organizations should be concerned about. If you are one of those I hope these thoughts help you to formulate a plan of action.

Least Cost Printing – A Strategy

My posting about Least Cost Printing several weeks ago created some interesting comments here and on other forums. After reading some of them it seemed to me that there may be some value in providing greater definition to the topic.

The Strategy

Least Cost Printing is a simple strategy that is designed to minimize document output costs within the mixed technology environments that most of you have in your organizations: it defines the least expensive method of output for specific job types. It is the antithesis of a program to take advantage of clients but rather allows clients to leverage their technology investments at the lowest expense.

Hard Costs & Soft Costs

When designing a least cost printing strategy you need to decide what hard costs and whether or not you wish to include soft costs such as user convenience, impact on productivity and environmental issues. The most simple example is the value of the time it takes for one of your employees to walk across a room or department to retrieve a printed job.

An Example

A simple scenario based on three assumptions about your environment follows:

• Average loaded cost of a classification of employee is $40,000/yr or $0.3205 per minute


• Average monochrome cost per page of your desktop inkjet printers is $0.0830 per page


• Average monochrome cost per page of your network laser printer is $0.0180 per page

In this scenario the cost differential is $ 0.0650 per page so what is the justification for printing to the desktop inkjet versus the network laser printer? If you estimated that an employee takes a minute (on average) to pick up a print job from the network printer your strategy would be that only jobs of five (5) monochrome pages or less can be output on a desktop inkjet printer ($0.3205 /$0.065 =4.93 pages).

Building Your Strategy

You can build your own strategy with as much complexity (or simplicity) as you like. Current expenses based on technology or model specific, employees by classification, department or individual, amortization of hardware or operating costs alone and any soft cost you feel are significant. The more granular you get the higher the savings but they will be offset by higher development and management costs. My recommendation is to start simple and refine as you go!

Expense Reduction

When working with my clients on document output environment assessments and strategy development I always include this component in my recommendations. Following the simple example above if I take all inkjet monochrome pages resulting from jobs of six (6) or more pages and assume their migration to a less cost device I can project savings based on the client’s actual environment. This is a cascading calculation, inkjet to cartridge-based laser, both of them to component-based multifunction devices and finally consideration for electronic document distribution. The same is done for color and duplex printing with a typical end result of about 35% expense reduction.

If the client is considering fleet management for their printer fleet then the calculations would obviously be made on the new contracted cost per page. The point here is that a least cost printing strategy and a fleet management program are not mutually exclusive but complementary components of managed print services.

Implementation

Historically, this type of strategy has been very difficult to implement successfully: how could you get users to conform and how did you know if they did or not. As mentioned in my first post on the topic there are software tools today that are very good at implementation of a least cost printing strategy and they can deliver a return on investment of six months or less.

For purposes of this posting I have tried to keep this discussion simple; least cost printing is a simple concept but it does take a bit of work to get there. If you would like to explore a least cost printing strategy for your organization or if you just have questions please feel free to contact me.

It is my intent to discuss this in future postings if there is interest from the readers.

MPS – Are You Thinking Laterally or Vertically?

After reading a number of postings in several Linkedin user groups I recognize similarities to our national political discussion. So, I have decided to borrow an idea from Mike Huckabee and apply it to the ongoing MPS discussion; lateral and vertical thinking.

The Similarities

If you are a cable news junkie like me, you must be amused by the non-stop chatter of political talking heads who constantly position every issue as either left or right. This filters down to our elected officials who argue every point strictly within their Democratic or Republican party position. Have you noticed no one seems to care about what is good for We the People, the taxpayers. This is lateral thinking, right or left versus vertical thinking, positive results for the people or negative impact on them– get the idea?

What I see happening in the MPS discussion are different folks taking positions to the left (MPS) or the right (hardware focused sales). MPS advocates definitely consider themselves as the progressives so they earn the left position on my lateral scale.

Lateral Thinking

In many of these discussions the participants like to talk about the positioning of their offerings and usually describe them in terms of how solution oriented (leftist) they are. They talk about what title to apply to their sales professionals and programs. Much attention is paid to the CPP approach and electronic monitoring of devices. There are lots of challenges issued to the dinosaurs of the copier world (my words) and a significant number of negative references to their business practices. Has anyone but me noticed that each side considers the other’s sales professionals and dealers as pencil whipping scammers and brokers of dishonesty?

Bottom line is most of the discussion is on positioning according to the marketing strategy and processes employed: this is how we do it!

Vertical Thinking

In contrast vertical thinking is about positive or negative results for the client.

Outside of a few individuals there does not seem to be much discussion about this. I read about and see in the field many programs that employ MPS processes but do little to nothing to improve the client’s environment. Some of the ones I have seen actually increase the clients cost structure without adding very much convenience to justify it (must have been some great pencil whipping done).

I think a recent posting by Jim Fitzpatrick summed it up quite well. To paraphrase; “if the client has not seen an account manager or been presented with suggestions for improvement based on reports since the implementation this is not MPS!”

Where is Your Thinking

So the question I ask is where is your thinking and MPS program? Is it simply a sales strategy as discussed by Tom Callinan a while back, or is it an actual program that manages the client’s environment beyond delivery of fix/repair services, supplies and usage reporting?

I would suggest if it is the former you are going to see some pretty strong competitive challenges as other vendors and industry participants educate your clients about what MPS could be. If this is the case, there are a number of resources for you to use to create greater value in your programs and service offerings. Start with taking a quick look at the Managed Print Services Roadmap contained in my Linkedin profile.

My Linkedin Profile

If your thinking is truly vertical, congratulations and good luck with your business; you should be able to realize some nice growth over the next few years!

“Least Cost Printing” – is it the holy grail of the Managed Print Services effort?

Over the years the convergence of technologies changed not only the way we deliver documents but the cost structure of doing so. As printer technologies evolved workflows shifted from print-once-copy-many to printing to the most convenient device. Commensurate to this was an increase in costs as page volumes moved to relatively expensive toner and ink cartridge-based engines.

So began the idea of least cost printing: as copiers transitioned to digital multifunction devices much of the effort focused on replacing printers and print-once-copy-many workflows with the MFD and concentrating print volumes to a workgroup device.

The Digital Promise

Many organizations invested in new component-based digital MFD technologies on the promise of reduced costs and even improved workflow. More often than not, this digital promise was not realized due to the inability to train their users to adopt these new workflows. The capabilities of the digital MFD remained underutilized in most enterprises as users continued to print to the desktop and workgroup toner and ink cartridge-based printers.

Fleet Management

As the marketplace realized the folly of the idea that the digital MFD would eliminate printers some began to focus on reducing the cost structure of the printer itself. The concept of fleet management began to grow and come to age enabled by improvements in the quality of remanufactured and compatible supplies.

So here we are today with half the marketplace proselytizing the benefits of fleet management while the other half continues to promote digital multifunction devices as the answer to cost containment. Meanwhile, most clients still have one foot in investments in digital MFDs and the other in fleets of printers, both toner and ink cartridge-based. For these, fleet management can without doubt reduce the expenses associated with operating printers but still not to the level of maintaining the multifunction devices.

Least Cost Printing

Simple in concept, least cost printing is one step in the evolution from fleet management to print management. It acknowledges the realities of the marketplace and can deliver dramatic results by shifting pages from higher cost-per-page devices to those with lower operating costs. Organizations can reduce office printing costs by as much as 35% with an effective least cost printing strategy.

A least cost printing strategy takes into account the actual cost-per –page of individual technologies within document output environments combined with the impact on user convenience and efficiency and drives pages to the most cost-efficient device or document delivery method for a particular job. A well designed least cost printing strategy should address issues such as color, duplex printing and electronic document distribution.

Enabling Technologies

While the concept of least cost printing has been promoted by the copier industry for a number of years to cost-justify digital multifunction devices there was not an enabling technology to train and manage users to overcome their resistance to change.

Today, there are low-impact and cost-effective enablers for least cost printing. I have used several and for the most part they are easy to install and maintain and provide an attractive return on investment.

These tools are applicable for small user groups to large enterprises who wish to leverage their technology investments and realize the digital promise. They will receive additional benefits from office printing solutions that include process controls provided by a least cost printing implementation;

• Reduced page output costs
• Improved employee productivity
• Increased utilization of technology investments
• Ability to manage office printing environments

It is my opinion that least cost printing should be part of every well-designed strategy for managing a document output environment.

Page Cost Calculator Update & User Tips

I wanted to thank all of the folks who have provided constructive feedback - it is satisfying to know this tool is saving time for you!

This post provides an update and a couple of user tips:

• The calculator should now work for all Hewlett Packard and Lexmark laser printers and color laser printers - next will be the laser-based multifunction devices
• The default page coverage (9%) is applied universally across all consumables - for a more accurate cost model you may want to reset the maintenance kits, fuser kits and transfer kits to the manufacturer standard five percent (5%). We will update the algorithm in the future to take this into account.
  
• Some of you have asked about access to other supply items - if you click on the file folder icon to the left of a supply item a window will open with alternatives such as high-yield toner cartridges. You can select an alternative from this list and the tool with automatically recaculate the cost model.
• You do have the ability to adjust the supply item cost, yield and assumed coverage model to customize the cost model to accomodate compatible supplies or specific client pricing and usage.

Please continue to provide constructive feedback and share this tool with your fellow sales professionals and other potential users. I will keep you informed of updates on this blog site.

Please provide your feedback directly to me at pagecost@buscomgroup.com.

Once again, here is the temporary link to the tool.

Page Cost Calculator

Cost per Page Calculator - Update

I am surprised by the number of individuals who have registered to use this tool. I know some of you are just looking but hope most of you have found some value in it.

I wanted to update those of you who are using it on some additions and fixes:

• The decimal place has been fixed to represent dollars; for example 0.0440
• Color cost per page is now totalled accurately, sorry about that one, the individual components were correct
  
• I think we have all of the Lexmark monochrome laser printers added now in addition to the Hewlett Packard laser printers and color laser printers
• Some of you have requested a more "intelligent" search function which we will be able to add by moving the tool to a more sophisticated platform when we see its usage increasing

If you find this tool useful please share it with your team members and continue to provide us with your valuable, constructive feedback.

Please provide your feedback directly to me at pagecost@buscomgroup.com.

Once again, here is the temporary link to the tool.

Page Cost Calculator

Cost per Page Calculator - Great Response

There has been a great deal of interest in this tool including quite a few questions directed to me.

Due to this high level of activity I am going to expand on its access and usage:

• To access this tool you need to follow the link below, go to the Sign Up page and fill in the required data completely but ignore the credit card information, it is not necessary
  
• I have intentionally kept the registration process manual at this point so you will not have immediate access, we will inform you by e-mail. Due to the overwhelming response we are running a bit behind here at the outset
  
• I am still editing the data base to enable the automated price calculations so not all devices are ready to go but all of the HP LaserJets and Color LaserJets should be
  
• All supply prices are for OEM supplies and obtained from the manufacturers web store or in a few cases from an alternate web store such as CDW
  
• Cartridge yields have been obtained from manufacturer web sites
  
• The default page coverage assumption is 9% per color channel
  
• You have the ability to customize all three of these fields to accomodate your personal needs, cartridge cost, cartridge page yield and coverage assumption
  
• You can also select an alternate toner/ink cartridge by clicking on the file folder icon to the left of the cartridge description. This is especially important when you are customizing the report for the cartridge types your client is actually using. In the case of Lexmark printers there may be as many as eight toner cartridges available for a monochrome laser printer
  

Now that we have this tool up and running we hope you use it and provide us with your valuable, constructive feedback. There are several folks who have been testing it and it does appear to work well for those devices currently supported.

Please provide your feedback directly to me at pagecost@buscomgroup.com.

Once again, here is the temporary link to the tool; I will eventually be moving it to a permanent URL.

Page Cost Calculator

Cost per Page Calculator

I cannot tell you how many times I heard loud groans emanating from an analyst or sales professional within the copier, printer or fleet management market space as they struggled to research and calculate cost models for cartridge based printers to use in assessments and competitive proposals.

I too had experienced the same frustration and early on began to develop a database of printer models with compatible supplies, manufacturer yields and pricing so I did not keep starting from scratch. Over the years it grew from a simple spreadsheet, to a rather unwieldy spreadsheet and then into a database.

Now before some of you jump in here and tell me how your process is better than calculating cost models let me tell you that discussion is for another day! Some of us less sophisticated folks out here still need to know what supplies go with which devices, what are their page yields and yes even estimated cost models.

A few weeks ago I posted a query in a couple of Linkedin groups about cost per page tools available on the web to simplify the life of analysts and sales professionals – I was surprised to find no one could identify one?

This led me to approach much smarter friends and solicit their expertise to turn my personal database into a web application so I could share it with hard working analysts and sales professionals.

To automate this tool has been slightly more involved than I expected; I have to manually edit each device to enable functionality but am well on the way of doing so. I decided to begin with Hewlett Packard laser technology since it represents some seventy percent plus of the existing installed base.

For those of you who would like to take this for a test drive it is now available for you to do so. I just completed a test where I created cost models for about four hundred different Hewlett Packard laser printers in less than an hour. I think it is safe to say that is significantly quicker than doing the research manually?

I encourage you to register for free access to this tool but in return I request that you provide me with feedback so I can continue to punish my friends with requests for any bug fixes and improved functionality. In the meantime I will continue to bring more device models online, let me know if you would like Lexmark laser printers next or Hewlett Packard inkjets.

If you do choose to use this tool there is a Help menu at the top right of the Search page that explains its functionality. Now if you are prone to complaining, just remember this is just getting off the desktop and will continue to improve based on constructive feedback.

Here is the temporary link to the tool; I will eventually be moving it to a permanent URL.

Page Cost Calculator

The Americans

In 1973, as the Vietnam War came to an end America was under attack from both within and without. The barage of negative sentiment and press inspired Gordon Sinclair, the dean of Canadian broadcasting to write the following for his June 5, 1973 morning broadcast. After just more than 36 years I clearly remember the emotion I felt while driving in my car that morning and listening to this broadcast: it seems appropriate to post it this holiday weekend.

"The United States dollar took another pounding on German, French and British exchanges this morning, hitting the lowest point ever known in West Germany. It has declined there by 41% since 1971 and this Canadian thinks it is time to speak up for the Americans as the most generous and possibly the least-appreciated people in all the earth.

As long as sixty years ago, when I first started to read newspapers, I read of floods on the Yellow River and the Yangtse. Who rushed in with men and money to help? The Americans did.

They have helped control floods on the Nile, the Amazon, the Ganges and the Niger. Today, the rich bottom land of the Misssissippi is under water and no foreign land has sent a dollar to help. Germany, Japan and, to a lesser extent, Britain and Italy, were lifted out of the debris of war by the Americans who poured in billions of dollars and forgave other billions in debts. None of those countries is today paying even the interest on its remaining debts to the United States.

When the franc was in danger of collapsing in 1956, it was the Americans who propped it up and their reward was to be insulted and swindled on the streets of Paris. I was there. I saw it.

When distant cities are hit by earthquakes, it is the United States that hurries into help... Managua Nicaragua is one of the most recent examples. So far this spring, 59 American communities have been flattened by tornadoes. Nobody has helped.

The Marshall Plan .. the Truman Policy .. all pumped billions upon billions of dollars into discouraged countries. Now, newspapers in those countries are writing about the decadent war-mongering Americans.

I'd like to see one of those countries that is gloating over the erosion of the United States dollar build its own airplanes.

Come on... let's hear it! Does any other country in the world have a plane to equal the Boeing Jumbo Jet, the Lockheed Tristar or the Douglas 107? If so, why don't they fly them? Why do all international lines except Russia fly American planes? Why does no other land on earth even consider putting a man or women on the moon?

You talk about Japanese technocracy and you get radios. You talk about German technocracy and you get automobiles. You talk about American technocracy and you find men on the moon, not once, but several times ... and safely home again. You talk about scandals and the Americans put theirs right in the store window for everyone to look at. Even the draft dodgers are not pursued and hounded. They are here on our streets, most of them ... unless they are breaking Canadian laws .. are getting American dollars from Ma and Pa at home to spend here.

When the Americans get out of this bind ... as they will... who could blame them if they said 'the hell with the rest of the world'. Let someone else buy the Israel bonds, Let someone else build or repair foreign dams or design foreign buildings that won't shake apart in earthquakes.

When the railways of France, Germany and India were breaking down through age, it was the Americans who rebuilt them. When the Pennsylvania Railroad and the New York Central went broke, nobody loaned them an old caboose. Both are still broke. I can name to you 5,000 times when the Americans raced to the help of other people in trouble.

Can you name me even one time when someone else raced to the Americans in trouble? I don't think there was outside help even during the San Francisco earthquake.

Our neighbours have faced it alone and I am one Canadian who is damned tired of hearing them kicked around. They will come out of this thing with their flag high. And when they do, they are entitled to thumb their nose at the lands that are gloating over their present troubles.

I hope Canada is not one of these. But there are many smug, self-righteous Canadians. And finally, the American Red Cross was told at its 48th Annual meeting in New Orleans this morning that it was broke.

This year's disasters .. with the year less than half-over… has taken it all and nobody...but nobody... has helped".

Original Script Courtesy Standard Broadcasting Corporation Ltd.
Copyright 1973 by Gordon Sinclair

MPSA – Constructive or Divisive?

As I follow the numerous discussions and postings on various blogs and Linkedin groups I cannot help but wonder if this new organization will promote the MPS market space, or divide the participants.

It is a fact that any organization of two or more human beings is subject to politics; the challenge is to rise above them to serve a useful and maybe even noble purpose to its constituents.

• Provide a forum for sharing of ideas
  
• Facilitate learning for the improvement of the industry
  
• Recognize and promote best practices
  
• Create standards for the protection of end-user clients
  
• Promote fair business practices between manufacturers, vendors and end-user clients
  
• Combine resources to promote growth of the entire marketplace
  

There are many personal and corporate agendas being interjected into these communications. Not only should this be expected but the competition benefits all of us in the end. However, with that said there are several underlying themes which I personally find disturbing and disruptive to the value and growth of this association and the market space in general.

Throughout is an arrogance that there is a higher calling to service-centric sales strategy than a hardware- or supplies-centric one. Many of the folks who appear to be central to this new association are setting themselves on a pedestal above "lesser" industry participants. While I personally believe in the service-centric approach and do not wish to go back in time to selling hardware, I recognize there are a lot of value-laden dealers who do business with great integrity, provide their clients with excellent service and create a large number of very good-paying jobs.

Related though somewhat separate is the theme that the traditional copier dealer and their sales professionals are intrinsically dishonest and stupid! Copier dealers have been providing a high-level of managed print services through facilities management programs for many years. In addition, most offer page acquisition models equal to the print management programs I experience in the field. They provide supplies, fix/repair services, technology refreshment and usage reporting for a fixed cost per page. Let me ask how that is significantly different than the vast majority of so-called print management programs? I must also ask the question "if copier dealers should get into MPS for higher margins then how are they currently gouging their clients?"

Both themes were epitomized by the recent discussion about a relationship between the new MPSA and the BTA. The BTA has transformed over the years to accommodate changes in the market it serves; like Tom Callinan I remember when it was NOMDA and largely populated by calculator and typewriter dealers. Over the years it evolved to play a significant role in building the copier industry and continued to change to adopt the transition to digital technologies and yes, even managed print services. I remember discussions with them to develop managed print services training in 2005 and they have actually been sponsoring training events for the past couple of years. The real point I want to make is not about the value of a relationship or association, but the underlying arrogance and divisiveness that arose in these discussions.

It is my honest opinion (IMHO) that if the MPSA is going to promote the MPS market space then it should embrace all industry participants as potential "converts" rather than the continual piling of some less than civil discourse upon them. I certainly hope this type of posting and discussion is no longer commended and recommended by the association leadership! These individuals and companies can be represented as the iceberg below the water line while the "San Antonio" gathering is that small and visible portion.

Rather than forming an inward-facing print-centric circle holding hands and singing Kum Bah Ya I hope the MPSA turns around and puts their collective hands outward to welcome all of the participants in this industry. This is what will enable this association to reach a "noble" purpose.

How Do You Rationalize Your Desktop Printers?

Do you, or does your organization have a strategy for desktop printers? If you are like most of the managers I speak to the answer is no. When they do it is typically that desktop printers are not allowed at all or the exact opposite; anything goes! I am not sure either of these are real strategies.

My experiences have revealed very few fleet management providers address the entire desktop fleet and usually ignore the impact of their expense in assessments. If you notice I specifically said fleet management because I believe a broader managed print services engagement includes all of the devices by default.

I think desktop printers are often ignored for the following reasons:

• Their impact on costs is underestimated
  
• They add to the complexity of the project
  
• No one wants to address the associated political issues
  

Impact on Your Document Output Environment

If you believe your desktop printers will not have a significant impact on your expenses you may want to think again. If I look back over some recent clients' environments it is not at all unusual for the inkjet devices alone to look something like this:

• Inkjet devices ranged from 3 to 33% of the overall device population
  
• Inkjet produced pages ranged from 2 to 11% of the total pages
  
• Inkjet driven expenses ranged from 6 to 43% of the total expense
  
• Savings from an effective inkjet strategy ranged from 8 to 65% of the total savings
  

The actual averages would be in the upper half of these ranges, there were a couple of environments included where a first pass at removing desktop printers had already been completed. The message within the data is that most clients are quite surprised by the actual impact of their desktop, and specifically inkjet devices.

Complexity

Adding locally connected desktop printers to a well designed MPS project does not increase the work and complexity beyond the potential benefits. It is understandable why a fleet management provider who is not likely to increase their revenues as a result of this effort would not want to include them. However, you as the client or end-user should be concerned with a component of your document output environment with as much potential impact as the desktop devices may actually have. The actual savings from a good desktop strategy for some of the clients included in the numbers above ran into thousands of dollars per month.

Political Issues

When you conduct a physical survey inside an enterprise you hear every reason why someone needs (deserves) a personal desktop printer. I have had the pleasure of $450 per hour professionals sit me down and present their 30 minute justification.

Security is an issue that no one believes can, or will be challenged but it can be:

• Network printers and multifunction devices have very good secure print functions
  
• How secure is printing a document on a slow desktop printer to leave it sit in the output tray or on the desktop?
  
• Security is in the workflow and not the device
  

Having a personal printer saves time and therefore expense (soft costs):

• What was the cost difference between printing the job on the desktop versus the workgroup device?
  
• How much time was saved and what was the value of the time?
  
• Was printing the job on the desktop device a good investment?
  
• Are you really that busy 8 hours per day?
  

Printing to a workgroup device disrupts my workflow:

• An interesting statistic inside of my data is that a high percentage of users print less than one job per day to a local device?
  

Printing photographs requires a desktop color printer:

• If the photographic printing is that important you should be using color management and printing on a photo grade paper
  
• The above is rarely evidenced by the pages I see sitting on the printer and desktop
  

Let me make it clear that I am not one who believes that every desktop printer should be "yanked" out of an organization but am convinced that there should be a strategy for their deployment within a well managed document output environment. This discussion can provide an outline for such a strategy but obviously will need greater detail based on your unique environment, cost structure and corporate (institution) philosophy.

Does your RFP Reflect your MPS Objectives?

Are you the person inside your organization who is preparing an RFP or bid for Managed Print Services?

If you are, join me for a few minutes while I share some thoughts and observations based on a sampling of RFPs I have recently reviewed from both private and public enterprises. Typically, these documents did not define a course of action or set of services that would fulfill the stated objective of the RFP and resulting project!

Stated Objectives

Below I have summarized the objectives stated by most of the RFPs:

• Improved user access to resources


• Enhanced support for users


• More productive workflows


• Rationalization (right sizing) of asset base


• Better return on investment in assets


• Lower overall expenses associated with document output


• Enhanced management processes and controls


• Reduced demand on internal resources

In some instances document management, sustainability and compliancy were mentioned or stated as future or secondary goals.

Does this represent what you expect from a re-engineered and better managed document output environment?

Course of Action

Of interest to me was that most of the RFPs stated a fairly robust set of objectives as summarized above but did not lay out a course of action or process that would likely deliver more than half of them.

Typically they requested assessment processes to uncover little more than device locations and meter readings; ostensibly to be used for strategy development. This type of limited data largely represents another replacement strategy and will probably not deliver solutions beyond simple fleet management. To maximize your document output environment a robust and comprehensive assessment is needed to provide the depth of understanding required for development of a strategy.

Most either implied or actually stated their focus was on network printers or copiers (multifunction devices); sometimes stating this was a first step in a larger endeavor. While I completely understand the desire to break a project down into manageable pieces and for immediate realization of savings, these pieces should not be completed without consideration of the document output environment as a whole. After all, this departmentalization and segmentation is what created the problem we are all trying to solve.

I suggest you should consider the document output environment holistically, create an overarching strategy and then break the implementation down into manageable pieces if you feel you cannot manage a broader project at once. If not, you will more than likely be developing strategies, solutions and vendor relationships based on components without the necessary interdependencies to achieve all of your objectives; again, back to the cause of the problem.

An alternative is an all-inclusive analysis of the document output environment, development of a comprehensive strategy and implementation plan for short-, mid- and long-term improvements. There will always be fairly immediate actions which can begin the expense reductions desired without compromising the larger objectives. Similar to software development, vendor contracts should be developed as components with windows that allow them to effectively interact with and support future or expanded strategy components.

Services

As would be expected, the services defined by virtually all of the RFPs were limited along the lines of the course of actions. The assessment and strategy processes were limited to network printers or multifunction devices with other important components of a document output environment as little more than secondary thoughts. Mapping locations of devices usually had greater import than understanding user behaviors and workflow.

Defined services were largely confined to supply replenishment and fix/repair services. There were often requirements for volume tracking and reporting but almost always without a stated purpose for this data and definition of the reporting. Usage statistics other than chargeback situations are very important data but only if used in a manner to and purpose of improving the document output environment. Data limited to page volumes and costs provide limited value for re-engineering and improving the document output environment. These are all remnants of technology refreshment based on replacement versus strategy.

Often device rationalization was mentioned as an organic result of the services outlined above rather than with the appropriate level of definition and focus. Comprehensive technology and device rationalization will deliver the greatest possible expense reductions and workflow improvements and should be defined in much greater detail. A limited amount of in-field observation has led me to conclude that this is one of the promises of management print services that rarely get attention after the supply replenishment and fix/repair service are in place and revenues are being realized by vendors. This is a predictable occurrence since most vendors use MPS as a marketing strategy to capture hardware, supply and service revenues with limited in-place processes for the management component.

My suggestion is that you define the management processes with as much detail and level of interest that you apply to the supply replenishment and fix/repair services. The RFPs I read usually ask an inordinate number of questions about attitudes, processes and capabilities to furnish supplies and fix/repair service and virtually none for the strategy development or management component. You should be asking for rationalization of technology and not simply devices.

Summary

After reviewing RFPs and following up with project managers I realize that this is virgin territory for most of you with few good resources to draw on. It is often obvious these documents have been influenced by vendors' sales and marketing efforts and/or the limited view of MPS within the majority of industry participants.

What does this all mean to you? If you answered yes to the question I asked earlier about your objectives it means the difference between achieving none of them, a few of them, most of them or all of them. I am confident that several of the organizations will miss savings of hundreds of thousands to millions of dollars if they accept proposals that are limited to the course of action and services defined in their RFP.

I advise you to step back and think carefully about your larger goals and objectives and independently research managing your document output environment with less influence by service providers, hardware and supply manufacturers and software developers. There are a number of resources available that bring an independent, end-user view to this market space.

If this post caught your interest and makes some sense to you I would suggest you read several of my earlier postings as well:

Managed Print Services, Blind Men & Elephants
Print Management Versus Device Management
Improving Your Document Output Environment

Are You Sure Those Costs Are Real?

If you are one of the many business managers considering entering into a fleet management agreement today how are you measuring the potential savings to your organization? Are they based on real verifiable expenses or projections provided by a print assessment that you or a vendor has performed?

If you are able to accurately accumulate the expenses you have incurred for hardware, service and supplies you are an exception and have the ability to develop precise cost models for your print output.

However, since most organizations have trouble putting their hands on all of this information they must rely on assumptions and projections; this is where the potential problem may arise.

If this is your case, the question you should ask is "how accurately do these assumptions reflect my unique print output environment?"

Hardware Expense

• Are they based on actual monthly lease payments or amortization?


• Are they based on projected amortization and if so do the assumed life cycles meet your actual experiences?


• Are the projected amortizations based on current asset investments or on today's replacement costs?


• Are the projected amortizations based on retail pricing or current market prices?

My experience has been that often the costs of printer hardware are ignored, usually presented as insignificant but probably driven by not wanting to do the homework to accurately develop these cost components. Depending on your actual page volumes per device these costs can be a fairly significant factor and I would suggest should be based on replacement costs for a like asset.

Supplies (Operating Costs)

• Are the costs per unit based on your actual purchasing history or an assumption?


• Are the assumed costs retail pricing or current market prices?


• Are the assumed costs based on the actual ink or print cartridges that you purchase (standard, high-yield, new OEM, compatibles, return program etc.)?


• Have you included all consumables (toner cartridges, fuser units, transfer kits, drum units, ink heads etc.)?


• Did you factor in supply inventory shrinkage, waste and obsolescence?


• What were the monochrome and color page coverage assumptions (five, nine, twelve, fifteen percent per channel)?

This is the area you should inspect since some sales professionals pad these expenses to make their proposal seem much more attractive. It is not unusual to read a proposal where the highest possible cost per toner cartridge is used (standard cartridge at retail) and unrealistic page coverage models employed. If your projected costs were based on anything higher than eight to ten percent (per color channel) you should ask for a good justification. To understand the impact, a fifteen percent (15%) coverage model used by some sales professionals increases your operating cost three-fold. Just because it is almost impossible to accurately measure your actual coverage you should not accept unreasonably high assumptions.

Service & Support (Operating Costs)

• Are the service costs based on actual in-place contracts, care kits or incurred expenses?
• If assumed costs what is the basis for them and are they realistic (e.g. the cost of care kits)?
• Have you included a cost for your internal IT or Technology support?
• Have you included a cost for infrastructure, network connection, wiring and switches?
  
  

This is another cost factor that gets ignored since it can be difficult to find your actual expenses. Unless you utilize internal support software it may be hard to determine what percentage of your time is spent on printer-related issues. There are published assumptions on these topics within the IT industry itself that you can use to base your assumptions.

I am going to go out on limb here and make the suggestion that the current cost projections contained in most proposals will be overstated as will the potential savings. I am not stating there will not be savings but even if they are small to none a comprehensive fleet management program is worthwhile since it provides so many other benefits for you and your constituent internal clients.

Print Assessment or Proposal?

If you are considering a study of your organization's printing environment are you looking for an assessment or a proposal?

The "print assessment" has become ubiquitous with dealers and fleet management providers employing them as a marketing strategy to develop hardware placement and printer aftermarket proposals. While there is no question these assessments provide value to the dealer, how well do you as the client benefit from them?

I suggest that a well designed and executed assessment should deliver something other than a selling proposal as its final outcome; rather providing detailed analysis and reports that enable you to bring your unmanaged print environment under control. Further, it is worth investing in a project that meets these criteria but not in a selling proposal; that is a marketing cost the dealer should bear!

The majority of the assessments that I see (and the tools used to perform them) focus on locating network print devices and their monthly page volumes (ideal for hardware replacement and laser cartridge sales). While vitally important data, it is not enough to develop an effective strategy for your document output environment.

• Many, if not most assessments ignore the local desktop printers which often represent from 40 to 50% of your office printing expense and the greatest potential to drive savings
  
• An assessment should provide you with a technology refreshment strategy that considers effective use of current assets and mid- to long-term technology refreshment; not just wholesale replacement of your asset base
  
• I question the value of identifying usage volumes and costs without understanding the detailed underlying user behaviors that drive them – the assessment should provide the data that allows you to develop print output strategies that maximize productivity at the minimum costs.
  
• Do you desire to conduct a device (fleet) assessment or an assessment of your document output environment? Would you like to understand the workflows associated with the document lifecycle and look for opportunities to improve productivity, quality and production cycles? Is your objective to reduce costs and resource utilization including network bandwidth and storage?
  
• What final deliverable do you expect; a selling proposal, software generated report or one developed from analysis of the data and environmental knowledge
  

Robust and quality data from a well-executed assessment of your document output environment enables you to architect and implement an effective solution that delivers the improvements you envisioned.

With in-depth knowledge of your environment justifiable hardware, software and aftermarket solutions that account for your current situation and address your vision of your future environment can be developed.

I recommend before entering into any assessment agreements you should see what the resulting deliverable will be; a proposal or objective report? Is this deliverable simply a data dump from the collection tools database: is it a canned proposal generated by proposal generation software that is based on hardware placement or device management engagement: or is it a detailed analysis of your unique document output environment with consideration for your personal objectives?

If you are a dealer or service provider reading this post now is where belief part must come in! By providing your clients with a solution developed independent of hardware and based on open standards, you still have the best opportunity for a long-term business relationship. What competitor has a better understanding of their environment and needs or has established and demonstrated a trusted partnership rather than a supplier/buyer relationship?

Improving Your Document Output Environment

Are you the one who has been tasked with improving your organizations document output environment – where will you begin?

Taking the common path will mean following the recommendations of most of the vendors you will encounter and focus on reducing the operating costs of your network printer fleet. You may even contract with one of them to "manage" it under an MPS or fleet management umbrella.

Obviously, the network printer fleet is a major component of your document output environment but only that, a component. If you do not consider other elements such as user behaviors and workflow, or try to address the network printer fleet in isolation from the rest of the environment you are missing the greatest opportunity to maximize your environment.

It is my belief that it is just as important to understand how and where the documents originate as it is to know where they are output. Analysis of the data I find in my document environment assessments invariably allows me to identify expense reductions as high as 35% without ever addressing operating costs. Without this knowledge how can one truly maximize both the fleet and user productivity?

Three simple examples to illustrate this point:

In a recent assessment I discovered that the client was printing approximately 36,000 color pages per month from e-mail. At a contracted cost of $0.075 per page they were wasting a minimum of $2,700 per month on this unnecessary activity.

In another project the client's equipment supplier recommended they upgrade a color-enabled MFD due to increased volume. Analysis of the data showed that just over 40% of the volume was coming from another workgroup who had an MFD that did not meet their needs. Replacing the device with too much volume would not have solved the core problem.

It is not unusual to discover that a percentage of users print 100% of their documents in color without any application-based requirements to do so. Additionally they often do this on desktop printers with a cost per page averaging 20 cents.

When performing assessments many vendors map the client's devices, some even map the volumes produced by those devices but mapping the volumes by user really provides a view of how the document output assets should be placed to best meet their needs.

More often than not I encounter prospects and RFPs that are only addressing the network printer fleet without consideration of the desktop printers, facsimile machines and MFDs. It is only with a balanced deployment of all these classes of devices that you can maximize your environment. Detailed data that shows job characteristics such as size by pages allows you to develop an effective least cost printing strategy.

The point of this post is if you are setting out to re-engineer your print output environment do not shortchange yourself by limiting the scope of the project. Assessing and analyzing all components will provide you with the knowledge of their interdependencies and ultimately allow you to maximize each one individually. Stay in touch for more detailed discussions of these topics.

Will the Xerox ColorQube Revolutionize the Industry?

I recently attended the launch of the Xerox ColorQube where I heard a number of industry analysts declare how much it was going to revolutionize the industry.

After listening to the presentation I have to say I would agree .... well sort of!

In my opinion, the technology within the ColorQube is a market-changing development but for entirely different reasons that Xerox would probably want me to believe. Xerox has leveraged the controller within the new ColorQube to finally make color more affordable and practical for the average organization. They are actually using the pixel counting that occurs during raster image processing to differentiate color pages and their associated costs. This is one of those things that is brilliant due to the simplicity of concept but potental impact.

What this is going to do is allow Xerox to profitably charge for color pages as low as one cent per page and an average that is probably somewhere about three to four cents. The potential cost savings to an end-user is in the thousands of dollars per year per MFD, something I think will be attractive.

There are additional benefits such as sustainability due to the low waste associated with this technology, variable color print speeds and application driven color quality but none are as impactful as the simple pixel counting.

The solid ink technology, similar to laser and inkjet, has its limitations and I am not sure how well the end-user community will accept it to drive the success of the ColorQube itself. In spite of this, if Xerox has done a good job with patents and can exclusively apply this billing approach to their other technologies such as color laser they may well revolutionize the industry.

It will be interesting to see how other manufacturers react to this simple application of technology - and how they will get around any Xerox patents that may exist.

Link to the ColorQube 9200 on the Xerox Web Site

Print Management versus Device Management - One Last Try

My first three posts developed the idea that MPS was more than device or fleet management - discussing the roots of the confusion and the reason(s) it should be important to providers and end-users alike.

It was my intent to move on to more granular discussions of MPS at this point but some of the responses from various sources causes me to make one last attempt to differentiate the parent from the child.

Managed print services (MPS) should do just that; manage print or the print environment. Some of the responses pointed out that MPS is more than CPP programs; it is management of the fleet and fleet strategy. This indicates they missed the point of my postings which leads me to pose the question; "how does device or fleet management fully equate to managing print?” Does it not manage print devices - a subset of managing print? In fact, the term MPS was coined to define a broader set of services than fleet management. I hope the folks who responded by offering various definitions of fleet management as MPS take a moment to read the earlier posting Managed Print Services, Blind Men & Elephants

Since users generate the documents to begin with and their workflow and behaviors determine the methods of output how can we as providers or end-users maximize our print environments without managing user behaviors, workflow and change. How does one maximize the fleet without knowing the sources and characteristics of the documents? Are we trying to just reduce the costs and resources required to print a page or possibly reduce the number of pages, implement a least cost printing strategy or improve productivity?

For those who thought this was all about semantics, it is not! It is important for all parties to realize the full potential of MPS so they do not limit the scope of their strategies to just devices and fleets. End-user clients can maximize their print environments and providers can build a complete set of complementary services. This obviously does not mean every end-user or service provider will implement all possible MPS components but the key idea here is that they should be armed with the awareness that lets them "choose." If MPS is constantly limited to managing the fleet or fleet strategy what choices will be available?

There was at least one suggestion that it did not matter how you defined MPS or what service mark you applied to your offering but rather how you consummate the client engagement. I completely agree with this observation and would suggest that a robust service offering which includes more than just fleet management can significantly increase the ability to meet the client’s needs.

Stay tuned to this blog for expanded discussions of MPS offerings which may shed some light for those with a view limited to device management or management of the fleet and the fleet strategy. I certainly appreciate any and all feedback; the discussion is necessary and excellent. I especially welcome comments from those who are in fact taking MPS beyond the devices and fleet.

MPS – A Contrarian Viewpoint?

First off, let me acknowledge that some of the following assertions and observations are generalizations but that is germane to this posting.

It appears to me that the majority of participants in this industry equate managed print services with cost-per-page or device (fleet) management programs which include supplies, fix/repair services and some degree of usage reporting. If this observation is correct then my view of MPS is contrary to the industry in general.

I have been arguing for some time that MPS is actually a collection of service offerings designed to help clients design, implement and manage a digital document output environment rather than just manage output devices. Further, I would outline the MPS roadmap as follows:

• Assessment services
• RFP & bid management
• Supply sourcing and management
• Fix/Repair services
• Technical support
• Hardware placement
• Workflow design & implementation
• Strategic management services

The question you should be asking is “why is this important to me or my clients.”

While CPP or device management programs may reduce end-user client expenses they do not necessarily solve the underlying problems – a lack of environmental management. A comprehensive MPS engagement on the other hand will address these causative factors and deliver additional benefits such as efficiency, productivity, sustainability and additional savings.

If, as a service provider, you ignore the MPS components other than device management you are not only short-changing your own business but your client(s) as well.

Maybe even more important is the following question:

“As device management services mature, what will be my differentiator other than the cost of my services; will I be able to compete with other service providers who offer more robust managed print services?”

We have seen margins decline in both traditional MFD and printer markets; what makes us think that competition will not bring the same results to device management services?

I realize that every dealer may not have the resources to enter this market with a full set of managed print services but at least you should be aware of the long-term prospects so you can plan accordingly. Enter the market now with what you can do but plan your offerings to fit into a larger professional services practice or develop partnerships to supplement your capabilities.

A case in point is the practice of providing free print assessments to capture the supply and service revenue from network printers. If you are investing the time why not execute them with enough value to charge a reasonable fee? If margins do decline will you be able to continue to bear the costs associated with assessments? The rush to free assessments reminds me of the rush to provide free copier trials as that industry matured or no-charge networking support for MFDs: where did that get us all?

MPS services provide value to the client if executed with their best interest in mind and most reasonable clients expect to pay for services which deliver measureable benefits to their organization.

It seems to me that providing MPS components free of charge indicates you are trying to sell services using a hardware (or supplies) sales model rather than the appropriate model for a professional services offering.

I invite you to view my version of the MPS Roadmap on my LinkedIn profile at http://www.linkedin.com/profile?viewProfile=&key=3614067&trk=tab_pro

Are You Still Thinking About Managed Print Services?

Managed print services should no longer be ignored or merely contemplated by either the provider community or end-user client. MPS can resolve the issues resulting from the convergence between component-based copiers and cartridge-based printers and continued use of early print workflows by the end-user community.

MPS will deliver expense reductions, improve technology ROI and increase employee productivity for end-user clients who have seen an explosion of cartridge-based assets and associated pages.

MFD dealers who experienced erosion of page volumes can recapture lost revenues or traditional printer dealers can protect or increase their share of the clients document output spend.

Change

In order to cross the chasm most of the interested parties will need to rethink their strategies.

End-user clients can benefit from transitioning to a truly digital document output environment versus simply employing digitally-based technology in a predominantly analog workflow. Virtually all available output technology enables advanced digital production workflows, management and modification of user behaviors, high level proactive support and effective business processes to measure and manage their environments.

Service providers from both sides of the technology spectrum will need to rethink their objectives from simply selling more hardware, supplies and fix/repair services to assisting their clients design, implement and manage a digital document output environment. Most will need to change their approaches from selling hardware, supplies and service to being a services provider much the same way as IT related organizations did a decade ago.

Opportunity

Implementation of managed print services provides the greatest savings for the end-user client; these high value services deliver the highest margin potential for the service provider: both parties win.

All of the managed print services components—assessment services, strategic planning, fleet management, technical support, hardware placement, workflow design and strategic management services provide revenue opportunities for the provider.

The good news is that you probably have many of the resources in place required to enter managed print services and only need to understand it better. If not, you can find partners that will participate with you in building your MPS strategy. Armed with this knowledge and a good assessment of your objectives, expectations and resources you can plan a successful MPS strategy.

Next Step

Ask yourself the following questions:

• What is MPS?
• What are my reasons for getting into it?
• What are my expectations and how will I measure success?
• What commitments am I willing to make to succeed?

Additionally, service providers should consider:

• Are my clients requesting this service?
• Am I meeting competitive pressures?
• Am I looking for new revenue opportunities or am I simply trying to sell more hardware, supplies and fix/repair services.

Once you have answered these questions, you can determine what commitments it will take and what returns they will render.

Managed Print Services, Blind Men & Elephants

After being involved in managed print services for nine years I notice one constant; confusion as to what this opportunity is! Titles such as fleet management, print management and managed print services are used interchangeably and tossed about as synonyms: but should they be?

Much like the story of the blind men and the elephant, MPS is confidently defined by vendors with products that touch a single part of it. Since “managed print services” arose primarily from the printer and compatible cartridge industries, most of its focus is on the service and support of the network print output fleet, or fleet management.

Let me get to the point of this posting: MPS provides revenue opportunities for vendors to help their clients manage document production and printed output, not just the network devices. If you consider that reputable industry analysts project printed output represents only 10 percent of the total cost of document production, it becomes obvious that there is considerable potential outside of simply managing output devices.

MPS is a collection of related service offerings, all of which provide revenue opportunities for the provider. If we continue to let vendors define and promote managed print services offerings based on their individual interests the providers will miss out on significant portions of the revenue opportunity.

With the advent of digital multifunction devices hardware vendors promoted hiring of technology support specialists to promote sales of hardware. In spite of the significant added value provided by their investments, dealers continued to earn their first dollar at the time of the hardware sale and rely on fix/repair services and supply sales for ongoing revenues.

As MPS grows, providers are now encouraged to provide assessment, design and support services free of charge to capture toner cartridge revenues or hardware sales. Software vendors promote sales professionals performing assessment and analysis rather than focusing these practices on specialists; it sells more seat licenses.

Much of the industry simplifies MPS to servicing and supplying fleets of printers and multifunction devices but there is much more to it than that. Fleet management is but one important managed print service.

Implementing MPS carries the highest margin potential for your dealership, and likely the greatest savings for your client.

Your clients realize real value from MPS and you differentiate your dealership when you solve their problems, not just tell them they exist with simplistic print output assessments designed to sell them additional hardware. A well-designed print management strategy will provide a compelling value proposition for your client and deliver multiple benefits to you.

You can positively change the sales dynamics between your sales organization and clients and create greater value. This will increase revenues within your current client base, create a differentiated value proposition in competitive engagements and provide an engagement strategy within your target accounts. You will benefit from net new professional services revenues with potentially higher margins, increased hardware placements and greater aftermarket revenues.