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Managed Print Services
Print.IT Reseller
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28
“You can't
keep doing
business the
way you've
always been
doing it”
A changing market
If the message from end users was to stick
to what you do best and do it properly,
Photizo’s thrust, as it has always been,
was that the market is changing – even if
quite slowly and not overnight – and that
resellers should change with it.
In his keynote address, Photizo Group
founder and CEO Ed Crowley said:
“Almost every paradigm of our business is
changing”. From big data, to the impact
of Generation Y in the workplace – “These
guys think, operate and act differently from
older generations, for example they don't
use paper” – to social media, mobility
and demand for more efficient workflows,
everything is changing and “you can’t keep
doing business the way you’ve always been
doing it.”
In a separate presentation, Larry
Jamieson, Photizo group director of
Hardware and Supplies Advisory Services,
explained how these factors were
causing people to print fewer pages.
Photizo predicts that the number of plain
(uncoated) sheets printed on inkjet and
laser devices in EMEA will fall from 800
billion in 2012 to well under 700 billion
in 2017.
There is also likely to be continued
downward pressure on device and
consumables prices as competition
increases and new technologies like page-
wide array inkjet printers take market share
from lasers. Sales of OEM colour toner
cartridges, which have been growing, are
likely to come under more pressure from
third party toners (see box opposite).
Crowley said: “When markets go
through transformation customers tend
to polarise. The market tends to coalesce
around two ends of the market: high value
and transaction. Transaction will be there
but it will be very high volume, low margin.
At the other end it will be about adding
value to customers. The danger point
for resellers is if you are in between the
two. You won't be competitive enough to
compete in the transactional area and you
won't be valuable enough to compete at
the high end. The middle will be squeezed
out,” he warned.
MPS and services revenue is one way
that resellers can compensate for falling
print volumes. Crowley said that there
was growing demand for MPS – “the
noise level is huge” – but he warned that
resellers were not doing it that well and
were failing to meet customer demand for
more efficient processes.
In particular, he said that too few
resellers were delivering Advanced
Document Services – stages 3 and 4
of Photizo’s revised four-stage MPS
model (1. Control; 2. Optimise/Ongoing
Management; 3.Enhance/Business
Process Improvement; and 4. Integrate/
Business Process Optimisation – Crowley
also mooted a fifth stage, Content
Management/Big Data). The difference
between stages 3 and 4 is that the former
involves digitising an existing process to
make it faster, for example scanning rather
than posting forms in a bank loan approval
workflow, whereas the latter involves
completely re-engineering a process.
He said that today most providers
were doing stage 0, basically just a click
charge, and calling it MPS, which caused
disappointment amongst customers when
nothing changed. Some were moving into
Stage 2, but what customers really wanted
was to move to stages 3 and 4. To be in
a position to meet that demand, Crowley
suggested, would take hard work.
“It’ll take a couple of years to get from
stage 2 to stage 3/4 and you’ll need skills
you don't have today and that'll take time
and commitment,” he said.
He added that developing the capability
to deliver Advanced Document Services like
document storage and shredding, workflow
consulting, document management
solutions, process management software
and IT services would help resellers, who
have the advantage of being close to their
customers, to compete against OEMs who
still dominate the European MPS market.
According to Photizo, in 2012, 69% of
MPS business in EMEA was direct and just
31% indirect. In the US, the split is 50:50.
Crowley said that evolving from a
stage 1/2 provider to a stage 3/4 provider
requires Aspiration, Commitment and
Transition and that nine out of 10 resellers
fail at the Commitment stage which
involves a change of leadership, business
model and IT infrastructure. “The hardest
Opportunities in colour
Delegates heard how colour toner supplies
represent a major opportunity for resellers to
increase margins and profit.
In his talk
How Will Technology Impact the Core
Hardware and Supplies Market
Larry Jamieson,
industry director of the Photizo Imaging Industry
Service said that the market dominance of OEMs in
the colour laser supplies market was under threat
from outside forces – and from within.
He said: “People are still reluctant to buy third
party colour toner because of concerns about the
colour-matching of logos and worries that their use
might cause problems with devices. But technology
might be changing that. When Xerox came out with
its Responsible remanufactured toner cartridges
for SMEs, it said ‘you don’t need colour matching
and it’s a quarter to half the price of an original’.
When a good brand name like Xerox says that, you
are going to see a change and people will be more
comfortable using third party supplies.”
In a separate presentation, Julie McGrattan,
Business Development Manager at cartridge
remanufacturer MSE, explained how resellers could
maximise profits from MPS engagements by using
its colour toner cartridges, instead of more expensive
OEM supplies.
She said that third parties had made relatively
few inroads into the colour supplies market to date
and that OEM products still made up 90% of colour
cartridge sales compared to 65% of mono sales.
She admitted that many third party suppliers have
trouble producing high quality colour cartridges
due to the small size of colour toner particles and
their tendency to behave differently in different
humidities.
But not MSE. McGrattan said that its toner
powder – made to MSE’s own recipe – and cartridge
remanufacturing process, which includes the
addition of a secondary cleaning
system, produces print quality as
good as the OEMs’ and excellent
reliability. As evidence she cited
a return rate of 0.8% and a
customer retention rate of 96%.
www.mse.com
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