by Patricia Ames
Let’s do a little space exploration in this month’s SpeakEasy — as in the production print, industrial print and graphic communications space. Join me as we go on a thought-provoking journey to the great unknown with Gavin Jordan-Smith of Konica Minolta.
I had the pleasure of attending your dealer event in Aspen last year. Aside from some very impressive big iron and those beautiful MGI label presses, you weren’t talking much about print. You were talking about almost everything else, but you had a room full of dealers with a core business in office print. Do you see the uptake of the solutions part of the business progressing at a pace that you’re relatively happy with or is it still a little slow?
It is slow, but we’ve increased it 47 percent, so the trendline of the last couple of years has increased. I look at where software sales are going because we’re interested in helping dealers provide more value through services, which gives them an additional revenue stream and a stronger value creation with their customer. We are seeing an interesting uptake but we also are seeing dealers wanting to know more than just the technology, software or services areas. They want to know best practices in compensating their sales teams for solutions sales and how to get into certain types of vertical businesses.
Ultimately, our value to our dealers needs to complement the value they can deliver to their customers. If we do our job right, the complete value chain benefits. Our portfolio of services and products had to be centered around what their needs are as well as what the needs of their customers are. Whether we are focused on the graphic communications, industrial print or the office space, we concentrated on showing that we are doing this, and it is reflected in the growth that we’re seeing. In the last year, we placed a particular focus on applications and solutions that are tailored to the office SMB space. These products make it easier for dealers to transition their own businesses to different industries with solutions as a value driver in their relationship with their customers.
As far as dealers in the enterprise space are concerned, they already have relationships with particular solutions providers. What Konica Minolta does is enable those solutions to be exceptionally functional and deliver an exceptional user experience, from installation and support on our devices to how the solutions function on our technology. Our goal is to not be excluded from opportunities — we’re starting to see that metric rise. In the large enterprise, where the big dealers are, they’re actually seeing the value of placing our hardware when the solution is coming directly from the software vendor. The dealer may be getting Nuance directly from Nuance, for example.
So the bigger dealers are bundling solutions on their own?
Correct. That’s what we’re seeing, which is a good thing. The MPS space is very crowded and in this situation, focusing on enabling one solution does not deliver value to our dealer community. As an example, we launched PaperCut within the dealer community and within a year it was seven figures for one very good reason — the technology and how it functions within our device was leveraged by working directly with the Australian HQ so that ACDI, the distributor in North America, can support our channel appropriately. If we didn’t enable the entire value creation with PaperCut, ACDI and our technology, a dealer could say, “Well, why should I buy from you? I’m quite happy buying over there.” We need to put that value into it.
We’re also working with PaperCut to take on some of the managed content services (MCS), document management and simple workflow applications. That’s how we’re going to build the value that’s a little more meaningful down the channel, and then we’re hoping to give the dealers the tools to be able to offer service directly, without assistance from Konica Minolta corporate.
But back to your original question regarding the production side of the house — a lot of the dealers that attended the show asked why we had a full stage and multiple rooms loaded with all this great production equipment when a lot of our dealers are not in this space. What they didn’t know was that the dealers involved in this space wanted more! We are absolutely going to focus on the dealers in this space, which are typically the top 20 percent in size. For the smaller dealers, we are introducing the AccurioPro product line and other lighter-weight solutions to help them gain entry into light production workflow and hardware. We are also expanding out on our Production Services Bus to encompass specialty print applications that support our product lines like the MGI presses and our new entry toner-based press, the bizhub PRESS C71cf. Likewise, on our enterprise side, we are focused on value creation with our dealers to help them be successful.
Dealers have to invest quite a bit in order to address new lines of business, so it has to be well thought out. For instance, when they are looking at light production, in their head they are thinking, “Now I need to hire an expert on this.”
I know. In the graphic communications and industrial print space, credibility reigns supreme. If you don’t show up with that credibility, you’re not going to get the decision to sway in your favor.
If they land a call with one of these big printing companies, are you putting one of your subject matter experts with them to help close the deal?
To start … yes. When a big opportunity arises, specifically within my group, I have four regional teams focused on the dealer channel. We care about where that revenue happens for the dealer, which is why we are focused on a dealer program to help leverage our technology with education and business development. What we want to do is support our dealer the right way, and these groups of people will work with the larger dealers like POA and DEX and some of the other big dealers that we have.
We go into their offices and provide training on the technology and industries to their sales and technical teams. They then bring us into some of their larger opportunities. More often than not, when we come together like this, the deal is won because the customer also sees we’re not competing but working in true collaboration, which translates into credibility and trust. We’re going to enable the dealer to sell the device. We’re going to support the dealer through the entire process, until the dealer feels comfortable to go at it on their own.
What are you most excited about right now?
It’s pure upside; pure opportunity in this market. Everyone says that “the market’s dying” or “the market’s going away,” but it’s not. It’s shifting. And where there’s shift and disruption come different types of opportunities. The problem is, there are so many of them, what do you focus on? Take “workplace of the future” applications. The cloud is simply a delivery model. It’s nothing more, nothing less. It’s the applications that actually drive the decision-making authority. What does it do for a customer and in the value chain? When we make a decision to go down a particular path, we’re really looking at a lot of those things before we make an investment. There is no difference, irrespective to which line of business we are enabling, from graphic communications to the office.
So “workplace of the future” applications allow us to experiment a little bit, without getting too far away from our core. We’re already seeing success from that. Changing up the conversation also helps break down the barriers to build a relationship that ultimately ends in a win for the dealer and Konica Minolta combined.
Well – that’s innovation! You also have your Business Innovation Centers (BICs), correct? How do they play into this “experimentation”?
The “workplace of the future” apps came from the BICs. The BICs are experimenting. They’re coming to us saying, “We’re working on some of these developmental projects for the future, but we’ve just come across this ‘thing‘ that you can do now.” They’ll ask us what we think; we’ll see that it is easy enough to implement and we’ll take it to the field and see what we can do. The BICs are churning hundreds of ideas out to us every month.
In particular industries, we know equipment revenues are going to go down or stagnate, and the only thing that will be left to compete on will be market share — especially in a zero gain market like graphic communications. We don’t want to be that lowest-cost vendor competing only on price in that situation. So Konica Minolta has been very steadfast in making critical investments – it’s part of the shareholder value statement and it is very important to us.
These exciting times are full of opportunity — there’s a lot going on. If you can sit back and see the forest through the trees, then you’ll be able to pick and choose your opportunities. It’s not about boiling an ocean, it’s about tactically and strategically investing in adjacent technologies that augment our core technology. If you’ve got an idea and see a trend of where things are going and you’re starting to look at how you need to strategically maneuver, then it comes down to just one simple thing. How well can you execute?
What do you consider disruptive right now?
I think the price model is up for disruption — meaning the business model itself. I think the transactional to contractual aspect is going to drive some decisions and I think we’re in the race to the moon. Whoever is going to get there and who can transact successfully on that model will be key.
On the technology side, there’s convergence. You have print management, or MPS, merging into MCS, and soon convergence of that technology will be driven through IT services. We know that’s going on. We’re seeing it. That is to me a disruptive trend that’s at the beginning. The question is just how is it going to be delivered and serviced and monetized? I find that to be an opportunity to figure out.
Then the other side to look at is how the cloud delivery model is going to affect the services model as it relates to people services. You can deliver a service and walk through an automation without any touch by an actual human being. However, the customers still want someone there to help. So we need to figure out how to insert a human element into the automation or enable artificial intelligence to help drive that decision.
The other disruptive force I see involves data science. That’s also where a lot of the big thinkers are going, the design thinking perspective. HP talks about it as “the machine” – having content that exists on a PC or a framework, and the migration of that content is going to be inserted into and enabled by the cloud or into the environment where people can access what they want, when they want it. Then the intelligence that comes out of that is going to drive greater IoT adoption. I think even the meaning of IoT and what it actually signifies for business is disruptive. For example, the MFP is in effect an IoT device today, enabling a connected suite of features and functions that may or may not exist in the cloud.
For me, business intelligence needs to be visualized. We are investing in visualization so it can be more meaningful, and we’re going to serve out that information on a platform and that platform may be mobile. We can plug things into this service-oriented architecture to allow clients to control what they want to see and decide what is meaningful to them in their business. So you may have a platform that looks at a number of devices in a fleet – maybe there is a dashboard showing document storage and where things are going so you can make better choices. From the value chain standpoint, we’ve got to figure out what kind of platform we want to serve up to the dealer, to give them more control. All these disruptors play a significant role in all industries. They also help dealers become better partners with the clients and bring more revenue and opportunities.
What does a trend mean to a particular organization? I believe that it’s in part our technology embedded and integrated with a third party. The way we’ll go to market with it is, if you draw a diagram and you say “high-value” and “high-complexity” — we want to be in that high-value, high-contextual intelligence aspect space. It’s at the beginning. You can’t figure it out yet.
The tide is rising on IoT. That’s a real trend. The tide is rising on data. It’s raising all boats if you can take advantage of it.
The speed at which some of this is occurring is terrifying. Clearly, partners are needed to win this race. What happens when you are traveling faster than your partner is? There are maybe times where it looked like a great fit and that rocket was really fast and then, all of a sudden, it’s not anymore.
Yes. The architecture of that thought process is understanding when it becomes a distraction. When we partner with someone, we look for possible departures from our core focus. If we’re going in a certain direction and a partner has a great product and we want to partner with them, and they say, “Well, we just want you to resell” but we want to bring them with us in a specific direction, then we become separated, and our business objectives are opposed. It’s a distraction for both of us, even though there’s an upside to what they want us to resell.
We’ve talked about opportunities. What are some of the biggest challenges you’re encountering right now?
Well, I think one big one is the ability to sell the value proposition. If you go into a particular business or industry — for instance, if you’re in the document management services or ECM industry — you can’t just load a ton of information up to a copier salesperson and expect them to go out and sell the solution. It’s much more complicated than that. It’s the same with industrial print, where we are focused in the label and tags space. We need to identify the opportunity and sometimes it’s as simple as understanding the end client’s pain points or opportunity points in order for us to create a true value proposition. So the challenge is training on what and then how we can transition from selling a device to selling our value – it’s beyond price.
That’s some of the challenge. Another challenge is that sometimes you’re going into a customer where you have to be the best listener you can be. A lot of our sales reps are becoming great listeners. But that’s not the real challenge. The real challenge is to take what they’re giving you and turn it into a value proposition. This is where execution becomes critical.
Give us three words that describe Konica Minolta.
I think inspiration is important. If you can’t wow someone, how can you inspire them to do something different, invest in something different? How do you ask them to take a chance on their belief system with you and believe that Konica Minolta’s brand is something you can count on for your future as well? So for me, inspiration is very important. I would offer that word.
And I think that being a futurist is important because it’s very hard to predict the future. I think of the futurist in the sense of where we think people are going to be and how that affects peoples’ lives in the workspace and how it affects peoples’ lives at home. We’re going to start seeing more and more convergence there. I think that gives us the inspiration to do something more.
Another word I would offer is innovative leadership. It’s two words. We need to always be thinking about being innovative leaders and inspiring others to do the same. That’s how I think we’ll succeed — by being futurists and offering innovative leadership and providing the inspiration to get there.
You are quite a conceptual thinker! Is there a concept you are enamored with right now that you’d like to share?
I’ve been talking a lot lately about humanizing technology. If you think that what you’re delivering is in part the reason why a terrible disease is getting cured, that would most likely feel awesome. For me, that’s the humanist factor. It’s meaningful if you’re contributing to the value chain of that. And it’s not the collective of one, it’s the collective of all, so it’s the humanization of everything. What does it mean down to the human factor of the work life and the work space? That’s the futurist aspect — we’re far from that, but I think it’s important to emphasize it and work toward it.
This article originally appeared in the February 2017 issue of The Imaging Channel.