Why Seat-Based Billing Should be Part of Your Strategy

Ken EdmondsThis is the first of what will be a four-part series on seat-based billing (SBB) and why it should be an important part of your strategy now and in the future.

SBB versus MPS

In theory, both structures serve to help a client manage their printing costs and provide control over what is printed and how. In most cases, MPS has just become a cost per page (CPP) program covering the company’s printers. While this may not be all bad for either party, it doesn’t fulfill the potential of the concept.

Control and accountability

One issue in all organizations is the need to identify who is printing, what they are printing and where they are printing documents. Recent events have highlighted the importance of being able to locate the source of a document and who generated the document.

For organizations that have and may need to print sensitive documents, (in other words, every company) it is vital to make sure that they have the ability to track who printed documents and to make sure that only that individual has access to the documents.

Managing devices 

Most companies have a variety of challenges when it comes to managing the printing devices in their company. The first challenge is the propensity to print documents in color and to color devices when there is no business reason to do so. For example, the information in an email is equally informative whether it is printed in color or black and white. Yet it if is printed to a color device and the email contains any hyperlinks or other information that is displayed in color, the device will print it in color and bill for the color print.

A second issue is with stealth devices showing up in an organization without the knowledge or authorization of the IT department. Many of these will be color inkjet devices that typically have a very high operating cost. If they are attached as a local printer via USB, for the most part there is no ability to identify, capture and control the output. This inability results in a potential security and liability risk to the company.

To assist with identifying devices, most dealers will install a Data Collection Agent (DCA) that enables them to see and capture information from the network connected devices. This information is vital to either process. In most cases, the DCA does not have the ability to monitor what happens with locally connected devices.

Cost reduction

One of the key selling points for either program is the potential for cost savings to the client. To achieve some level of cost savings, the vendor will typically replace some of the high cost/high volume devices with MFPs that have a lower page cost. This is where many dealers stop trying to reduce the client’s cost. Reducing the client’s output or diverting copies to monochrome devices would reduce the dealer’s revenue.

To maximize the value to the client, the process needs to go further. One key element is the introduction of rules-based printing. This is handled by software and ensures that mono prints go to mono devices. It would also route high page count output to low-cost devices.

The software being used for control should also be able to identify and control access to locally installed devices. This would be vital in both maintaining the security of a client’s documents and in controlling the cost associated with printing.

Proactive support and supply management

The final piece of either program is the ability to be proactive in providing supplies to the customer in a controlled manner. A well-managed program will ensure that the client has the proper amount of supplies on hand to prevent interruptions in the client’s workflow. At the same time, it is vital for the cash flow and profitability of the dealer to keep the minimum necessary supplies at the client site.

To fill this need, the dealer needs to have the proper software to monitor supply status and a process in place to automatically ship supplies at the appropriate time. One key factor in profitability is ensuring that the client does not replace supplies prematurely. Most equipment will display a warning that a supply item is low. This message is designed to alert clients to the need to have supplies available. What often happens is the user sees the message and then replaces the item prematurely. Failure to correct this pattern of behavior can result in a contract that is never profitable.

What program is best?

I believe that when either program is properly sold and carefully managed, they can be good for both parties. The client will be able to secure their documents, manage the workflow and save money. The dealer will capture clicks that they are not currently capturing and be able to generate a reasonable profit.

I also believe that the best choice for both the dealer and the client is a well-managed SBB program. In my next blog, I will explain why I think a SBB program is best for the dealer.

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Ken Edmonds

Ken Edmonds

Ken Edmonds is a consultant, management coach and service management trainer with 25 plus years experience in the industry. He has had the opportunity to participate in every function inside a dealership, having owned a Toshiba dealership and worked with two different manufacturers as a district service manager. During that time he had the opportunity to learn from and share information with some of the largest dealers in the U.S. He has had the privilege of attending the BTA Fix class two times, the Pros Elite Group Training two times, the Service Managers Achieve Results Through Training conducted by John Hey and John Hansen, and the BTA ProFinance training. He is a noted speaker and contributing editor to multiple publications.
Ken Edmonds

Latest posts by Ken Edmonds (see all)

Ken Edmonds

Ken Edmonds

Ken Edmonds is a consultant, management coach and service management trainer with 25 plus years experience in the industry. He has had the opportunity to participate in every function inside a dealership, having owned a Toshiba dealership and worked with two different manufacturers as a district service manager. During that time he had the opportunity to learn from and share information with some of the largest dealers in the U.S. He has had the privilege of attending the BTA Fix class two times, the Pros Elite Group Training two times, the Service Managers Achieve Results Through Training conducted by John Hey and John Hansen, and the BTA ProFinance training. He is a noted speaker and contributing editor to multiple publications.