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MANAGED PRINT SERVICES
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their own programmes; and 40% have both.
In the UK, the average partner ranking
for the six OEMs we analysed are all within
about one point of each other: Ricoh and
Konica Minolta got 7.5 and 7.4 respectively,
with Canon pulling up the rear with about
6.4. There was a much bigger spread in the
German and French market, which indicates
that the UK is a fairly developed market
with a higher level of competition.
PITR
: When do resellers decide
whether to use a vendor
programme or create something
themselves?
KS:
It’s all to do with profitability. Whenever
it is more profitable for them to do a
programme with an OEM, they will lean on
that. But if that decision leads to non-
profitability, they will quickly switch to their
own programme or even defect to another
OEM’s programme. And in out-of-territory
deals, they will often require other partners
to help them rather than OEMs.
PITR
: What are some of the main
obstacles preventing partners
from adopting MPS?
KS:
The major issues are longer sales cycles
and competitor pricing concerns, followed
by capital investment – the perception that
it is too expensive to invest in managed
print services infrastructure – and staffing
concerns, not believing employees are really
going to adopt MPS. There is also a concern
that OEMs will compete directly with them
in the same marketplaces.
PITR
: How can they overcome
these obstacles?
KS:
With longer sales cycles, the one
negative it is very hard to get past is cash
flow. Getting into a perpetual selling cycle is
one of the key challenges facing a services-
based business. Instead of focusing on quick-
hit lease renewal and getting into what we
in the US call a dogpile, competing against
other providers on price, service-oriented
resellers have to be in the account on a
monthly or quarterly basis looking to add
value. This requires more consultative selling
skills, so you have to sharpen your pencil
there. It also requires you to have a broader
portfolio and to look for opportunities to be
customer-led. This means understanding your
customer's business, not just understanding
what you have in the warehouse to sell. One
of the questions I ask partners I consult with
is: ‘When you think about your top 10 or top
100 customers, do you know if their revenue
went up or down last year? And do you
know why it went up or down?’ Most folks
have no idea, and that has to change.
PITR
: Is the price pressure you
mentioned leading to greater use
of compatible supplies?
KS:
We aren’t seeing as much of that in
the UK or US as we expected. In the UK,
52% of channel partners say they only use
OEM supplies; 30% say they use both; and
13% say they only use compatibles. We
thought there would be more of a 50:50
split between originals and compatibles. The
reasons the ratio's not higher seem to be
that there are a lot of quotas that partners
have to hit and that, due to a perception
of value, customers will pay a little more
for OEM toner to ensure devices operate at
optimal performance.
PITR
: Have you tracked end user
attitudes to MPS? What don't they
like about MPS today?
KS:
Overall, they feel vendors are doing a
pretty good job at device management, and
they feel they are doing a pretty good job
at service delivery. But there is a big gap
when it comes to stuff that moves them
from being a vendor to becoming more
of a partner with a customer. Generally,
end users are telling us ‘MPS is great; we
understand that value proposition. But we
need our partners to understand our front
line business, to address revenue questions
not just the bottom line cost question’.
PITR
: So the push for services isn’t
just coming from resellers?
KS:
The ‘per page’ billing model the
industry adheres to doesn’t lend itself to
helping customers optimise their business
processes, especially when it comes to
digitisation. I’m talking to a number of
OEMs about that now: why aren’t partners
picking up on document management
as much as you want them to?; what’s
happening with business process
outsourcing? I think the billing model is out
of sync with how a partner is going to help
a customer reduce volumes and move to a
more efficient workflow that doesn’t involve
as much paper.
...continued
Continued...
“When you
think about
your top 10
customers,
do you
know if their
revenue
went up or
down last
year?”
The major
issues are
longer sales
cycles and
competitor
pricing
concerns...
PITR
: What billing models are
pioneers introducing?
KS:
In the US, one of our MPS leaders
has a ‘per bed’ billing model. They work
specifically in healthcare and instead of
charging per page or per device, they align
themselves to the customer billing model,
which for hospital systems here is revenue
per bed, revenue per patient. That’s how
they have aligned the whole cost savings
model and adjacencies like information
security that they are moving into. Another
billing model we are starting to see some
consultants work with is a per seat model
directly aligned with IT reseller practices.
It allows the partner and end user to have
a better conversation about what the real
costs are and allows the partner to make
money by adding other services that don’t
necessarily revolve around paper or toner.
PITR
: Why is there still so much
paper in businesses?
KS:
A piece of paper is just a convenient
conveyance for information, so there are
two things going on: one, it’s convenient
and cheap; and two, with all the technology
we now have access to – think about your
email for instance – how likely is it that you
are going to copy something and put it in
your desk for later, rather than printing it,
showing it to somebody and then throwing
it away, knowing that you can reprint it.
We have a culture of disposability. From an
end user standpoint, you never really see
the cost of your prints, so printing has no
financial impact on you as an employee,
which is why print management software
has become more and more popular.
PITR
: What are some of the trends
we are going to see over the next
12 to 24 months?
KS:
The big question in more mature
markets is that MPS has to have actively
managed components, people have to
be engaged in the process. High value
providers will adopt the paradigm of having
highly trained, highly skilled consultative
individuals who can offer high value to their
customers. At the same time, we are seeing
a convergence of platforms that allow
resellers especially, but OEMs as well, to be
predominantly high volume suppliers. They
get the benefits of centralised purchasing,
buying from this massive platform – like an
Amazon for MPS.
OEMs are starting to say that, for them,
channel partners are going to be product-
centric, and their direct customers will be
the high value plays that they make. They
will let channel partners decide how they
