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22 Print.IT Reseller
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opinion
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1. We get paid on % Savings through
Professional Services:
Your organisation
implements an iOS and/or Android remote
desktop solution and you take 30% of
savings realised through reduced printing.
These come from:
Paper reduction:
paper costs roughly
$0.009 per sheet. A customer printing 4M
pages/annum should see a 30% reduction
in volume, or 1.2 M pages/annum. In this
example, a 30% reduction in physical paper
saves the customer $10,800 per year. For
implementing the solution you take 30% of
the savings, or $3,240; and
CPP reduction:
Using the same
example, a 30% reduction in CPP covering
toner, service and parts ($0.0125/page)
would be $15,000/year. You take 30% of the
savings or $4,500.
Total savings for the customer are
$25,800 less your 30%, which gives you
$7,740 per year in revenue.
I know what you’re thinking: “I lost $15K
in click revenue thanks to BYOD. If I help the
customer do that and they give me 30% a
year of their savings I make $7,740, so I’m
still down $7,260 a year in revenue!”
I would agree with your summation.
Yet I have a smile on my face because I
know you’re actually better off. Why do
I say that? Because we don’t survive on
revenue alone: we live on gross margin and
profit. If you are currently making 30 points
margin on $15,000 of MPS revenue, that is
roughly $4,500 you get to keep. But if you
introduce BYOD paper reduction solutions
you stand to make 50 or 60 points GM
on paper reduction savings (there are very
low material costs here) through BYOD
assistance. We get $7,740/year in revenue
for this service. Based on 60 points GM, that
gives you $4,644 to keep!
Did you see what I did there? Even
though your CPP revenue is down by nearly
50%, your profit goes up! Of course, you
could wait for your customer to figure out
how to do this on their own and get nothing.
I think the choice is pretty clear.
2. Use an Alternate BYOD Savings
billing model:
You don’t have to use a %
savings kick-back model. You can achieve
similar gross margin gains by pricing a BYOD
solution into your CPP rates or through per
seat pricing. MSP/MPS hybrids are already
We recently commissioned Quocirca, a
leading technology research house, to
determine the ICT purchasing intentions
of UK mid-market companies with
annual revenues of between £5 million
and £100 million. Those interviewed
were typically C-level executives.
The results were thought-provoking and
I think they’re worth sharing.
For example, only one in seven
businesses are expecting to see ICT budgets
grow during 2013. One quarter expect
budgets to shrink by more than 5%. Only
half of the companies interviewed used
finance to invest in office equipment
technology. And whilst many businesses use
VARs for their ICT purchases, many simply
resort to ad hoc purchasing, typically via the
internet.
Now let us we consider the latest data
on bank lending which reveals:
1.
SMBs are struggling to secure finance to
fund business expansion. Data shows annual
net bank lending turned negative in May 2009
and has not been positive since; and
2.
Net bank lending in 2012 reduced by
over 4% in the year to November, acceler-
ating at a rate faster than in previous months.
This data paints a rather bleak picture
for our sector. With reduced budgets and
limited access to finance, technology
buyers may just decide to ‘sweat’ their
existing equipment for longer. The impact
is fewer sales, lower growth prospects and
a tough competitive climate where every
opportunity is fought for tooth and nail and
price is the ultimate victor.
The ICT supply chain – in which I
include manufacturers, resellers and finance
companies – has an important role to
play in helping the mid-market continue
to invest in essential business technology.
For a start, we must get more involved
at the decision-making level and prove
convincingly that it’s not a question of
opportunity cost. Day-to-day technology
items like MFDs, printers and associated
systems should not be competing for scarce
funds that should rightly be allocated to
core business development.
Collectively we must ensure that
embedded within our sales strategies is
an attempt to understand our customers'
budget approval processes. With such
intense focus on cost control, we mustn’t
allow sales opportunities to slip away on the
basis of ‘no budget’. This is more likely to
happen when our commercial teams aren’t
doing this across the pond in the US.
You might still be thinking that BYOD
will go away. And maybe everything will
get back to normal. But I doubt it. The
smartphone is fast becoming a TRUE
handheld computing device and customers
are demanding micro-computers that they
can use in similar ways to their laptops and
desktop computers. Inexpensive tablets and
smarter smartphones are making BYOD
more pervasive than anybody could have
imagined. Our MPS practices will prosper
or die depending on how we choose to
respond to the changes occurring in the
modern office, including BYOD.
West McDonald has been directly involved
in the Managed Print Services (MPS) space
for nearly a decade and is one of the
foremost experts in the field. He has trained
thousands of sales representatives in the art
and science of selling MPSand has helped
hundreds of organisations to focus and win
in MPS.
www.focusmps.com
Inexpensive
tablets and
smarter
smartphones
are making
BYOD more
pervasive than
anybody could
have imagined.
Financing The Real Economy
In his first column for
PrintIT Reseller
, Chris Cowell explains how the ICT supply
chain can help mid-market companies invest in essential business technology.
introducing a complete, all-inclusive solution
that encompasses the product, service and
finance package at point of sale.
Encouraging customers to adopt
new technologies to reduce costs and
improve employee productivity can be a
challenge, especially during a downturn.
Managed print services or advanced print
management solutions are examples. For
resellers, these often require a substantial
investment in retraining sales teams,
updating marketing messages and changing
systems. But the payback can be substantial,
given the higher margin opportunity.
Finance companies on their part must
ensure they are fully aware of the changes
currently sweeping the print market. At its
most basic level, this requires developing
appropriate policies and products that
can finance the total package i.e. not just
hardware, but also software and upfront
‘soft costs’ like professional services.
By offering such flexibility, I believe
finance companies can help manufacturers
broaden the appeal of their product
proposition to cater for businesses of all
sizes, not just at the enterprise level. For
resellers, it means they have a platform
to develop sustainable business models
that, in turn, can serve to help businesses
upgrade their infrastructure and drive
growth for the UK economy.
Chris Cowell is sales
director for the Office
Equipment division at
BNP Paribas Leasing
Solutions. He can be
contacted at
chris.cowell@
uk.bnpparibas.com.