Defining the Indefinable: The Rules of MPS

by Greg Walters, Walters & Shutwell

After five years of managed print services, one would imagine a standard set of MPS rules would rise out of the fog. (I know, you’ve been doing MPS for 25,000 years. Get over it.) And yet there is still debate over what exactly MPS stands for — not the acronym, but the vision and real value of managed print services.

I remember the great device-to-technician-ratio discussion of 2008. Copier dealers had a well-established “rule” that had been developed and honed for decades, but it didn’t apply in MPS. There are a number of “rules” associated with toner yields as well, but have they made you money, or did they cost the last MPS manager his job? With this in mind, it is easier to see guidelines take shape rather than hard and fast rules. Benchmarks are almost the same situation. MPS benchmarks are difficult to establish, and best practices simply hold us back.

At the 2012 Lyra Imaging Symposium, vendor scorecards showed that profits are down. A majority of the industry OEMs have been utilizing the same rules since 1979. Today, they find themselves 41 percent behind Q4 2007 numbers. Stunning, isn’t it? What’s it called when one plays by the same rules expecting different results?

Roll in the evolution of less print: From 1991 to 2001, printing paper shipments increased 27 percent, but from 2000 to 2009, they decreased 27 percent; it is not that difficult to see.

MPS contributes to shrinking print and copy volumes, which in turn reduce the prospects’ need to buy OEM toner, parts and machines, resulting in fewer printed pages, fewer printers, fewer copiers and fewer virgin cores.

This has been and remains the biggest Catch-22 with MPS — the one issue OEMs can’t seem to get their minds around quickly enough: MPS contributes to the reduction of machines in the field, yet every single OEM has an MPS program in hopes of reducing the other OEMs’ machines in the field. Suicidal? No. Madness? Indeed. Transformative? Absolutely.

MPS moves fast

Time is accelerating as well. Yesterday’s enterprise was about print, copy, 60-month leases, CPC contracts, locking customers in, flexing, selling more capabilities for the same price, auto-renewals and built-in obsolescence — and that was less than 36 months ago.

Less than a year ago, World Expo presented the concept of managed print services to a hungry audience. We were re-exposed to the MPS basics of toner, service, remote monitoring and cost-per-image billing. Back then, discussing VARs and managed network services (MNS) was fresh and new.

Today, if you don’t know that MNS is nothing more than managed services, you’re two years behind. If you don’t understand the connection between managed print services and managed services, stop reading right now and pick up your edition of MAD magazine; enjoy the bliss.

Technology evolves faster than we comprehend. It took a decade for everyone in America to have a car, a phone and indoor plumbing. In only 12 months, back in 2010, Apple sold 14.8 million tablets and then matched that entire year in one quarter on the way to 40 million units in 2011 — which already seems a decade ago.

All this is converging and accelerating into the future at a dizzying pace. There is barely enough time to breathe, let alone establish a set of rules. The good news is there are guidelines, natural laws that — when recognized — can help us keep our bearings as we boldly move through this unexplored space. Consider the following a few suggested guideposts along your MPS journey and business transformation.

1. Be aware

The first rule is simple: Know who you are, your world and your place in it. Self-awareness is the foundation of all change. For example, if you are strong when it comes to delivering toner, use this as a foundation to grow on.

When you look at your client base and see a vertical, use that information as an additive to your business personality and value proposition. Take the deep dive and perform an assessment of your entire business operation.

Are you flexible, open and adaptable enough to look at how you have been running your business and then change it?

Caution is recommended here; there are just a few full-scale business assessments in our industry. “Full-scale” refers to every facet of your business: finance, sales, inventory, infrastructure, partnerships — everything. This is different than the standard “How are you selling?” and “How does your service desk work?” evaluations.

This transformation from copiers to MPS to managed services is a magnifying glass. If your current systems are flawed, adding a new process will turn cracks into crevasses.

Also, get to know your customer’s environment outside of printing. Look at the workflows, recognizing choke points and other areas for improvement from a business perspective — not a toner, services or print perspective. Are they looking to move to IP phones or tablets? Check to see if they are outsourcing their IT support today and how much they pay. Do they feel the money is well-spent? Do your customers use Twitter? Do they write or read blogs? Be aware of your world and the world around you. Open your eyes.

2. Be adaptable

The days of churn and burn are nearly at an end; this option is a dead end, but that doesn’t mean doom and gloom. The opportunities and directions are endless, but flexibility in all phases is necessary to survive and thrive. Compensation, for instance, has been reasonably stable over the decades. Can you look at paying for performance differently? Are you flexible, open and adaptable enough to look at how you have been running your business and then change it? For instance, if you are under the traditional toner supply model with notifications coming directly to you, consider and be open to a different model. If you see more documents heading toward screens instead of paper, would you consider reselling or partnering with a tablets OEM? Adapt or die.

3. Be a partner

The tough times are making everybody re-evaluate their position in the ecosystem, and the best way to survive is to gather together with like-minded people. Partnerships open up your services portfolio; good partnerships bring with them even more connections and synergy. Isolation leads to desperation. Partner with your clients, toner provider(s), OEMs and fellow employees. If HP can work with third-party toner suppliers, why can’t you partner with a managed services provider? Or better yet, how hard can it be to become a tablet reseller? Today, it is all about partnerships and teams. Build a team that includes players from all over — from network infrastructure experts, software application specialists, property managers, bankers and shop owners. Full press your personal network and choose those you deem worthy.

4. Be lean

Tough decisions are coming, if they haven’t already. The economy is making a rebound unlike any other time in history, and the recovery will not include a spike in manufacturing jobs or employment. Look to reduce your overhead.

Do you really require a demo floor? Really? No, really? It may look nice, but … really? Is it a stipulation of your dealer agreement? If so, throw that Lyra chart in front of them and push back. Nobody holds inventory anymore, so why are you? How tight are you on trunk stock and warranty exchanges? How many service calls have you made over the past 12 months on your fleet of laser/cartridge-based devices compared to your traditional copiers? Do you need so many technicians? Do you need three dispatchers? How many people in accounting?

I am not recommending you fire everyone in sight. I am recommending you look at the costs that could be reduced or shifted over to some of your partners and possibly move traditional infrastructure talent into your sales team. For example, in my practice, I did not want to stock toner, take orders or coordinate the shipment of and maintain an inventory of toner cartridges. I did not want to — nor did I believe I should have to — bear the overhead cost. I evaluated every single fulfillment program out at the time from front to back. I looked at their process and the infrastructure the value-add provided and talked with the people on the ground.

I made the shift and demanded much from my new, integral partner — from delivery and customer relations to report generation. When I found somebody I could work with, that company became a full-fledged member of my team. It worked and reduced my overhead immensely. Lean, agile, clear.

5. Be a leader

If you’re employed at a dealership that promotes MPS but the guy at the top doesn’t know the difference between remote monitoring and remote machine management, quit. It’s time for executive management and ownership to climb down off the ivory tower and get dirty. The good ones will; the leaders already have.

If you are ownership, get out and explain to your team how you’re going to move the company forward, and then do it — every day. Reach out into the trenches, deliver equipment, make sales presentations and take service calls.

If you’re in sales, put together your plan for success and present it to your fellow team members on Monday morning. Don’t ask your manager if you can; tell him that you are. If you get push-back, quit.

Now is the time — if you decide to stay in this industry — to ride out the storm. Let it all hang out. It won’t be easy; there will be doubters and naysayers. Stay the course. If the system is gamed against you, get out.

Leadership comes from all levels, and vision leads to profit. It’s not the other way around.

6. Be open

Educate yourself about everything other than print. You probably know more than you need to about copying. What about telephony and tablets? What about asset management and PC support? Rack versus blades? Would you be surprised to find out that some customers who utilize managed services are happy to simply receive a phone call telling them that one of their servers is broken? A phone call.

Do you know how naive you sound when you say you’re in MNS versus managed services? What’s your level of comfort with RMM or the difference between copier service SLAs and managed services SLAs? Why are you compensating copier service differently than MPS engagements? Plug into some new LinkedIn groups or subscribe to print magazines from outside the industry. Tweet, for goodness’ sake. Be open to new ideas. Get to know whatever it is you need to know.

7. Be defiant

Test everything every day. Your processes can always be better, your costs reduced. Take a page out of Six Sigma or any one of the hundreds of business books, scale it down and apply the lessons to your everyday business process. Make quarterly reviews mean something internally. And if you ever hear the phrase, “This is how we always do it,” refer back to that Lyra chart.

Transformation is continuous, and your improvement should be too. The number of imaging providers will decrease by half or more. Copiers are not what they used to be. Be ready for anything by challenging everything. MPS is bigger than toner and service, so you need to be ready to shift and move at the drop of a hat. What was done in the past simply does not apply today, so challenge the existing.

8. Be basic

Think about the days when you knew nothing about copiers or toner. Remember how it was to make it up as you went — how you demonstrated over jammed originals, around faulty color and through spilled toner? Call up the days when there were no rules in toner — or copier — sales. What did you have? A phone, the Yellow Pages, Rolodex and some ideas? A pager? What the heck is a pager? How did you survive?

I hate to say it, but get some of the grind work done; that means calls and marketing — in the trenches. Because like never before in history, we — providers and prospects — are on the same page. The field is level. It comes down to two people making something happen — a basic relationship built on solid intent.

9. Be the ruler

This is simple: Comparing yourself to others is a standard approach, but I suggest you look inside before looking to others. They’re simply guidelines; the only comparison that really matters is internal. Gartner, IDC, Canon, Ricoh, HP, Xerox, Toshiba, Konica Minolta, Sharp, OKI Data, Kyocera, Lexmark, IBM, Cisco, Apple — they all have their rules. With few exceptions, their rules are not serving us very well. Don’t ignore their musings; just be open and dubious. Make your rules, Your Rules. And then live by them.

Stand or fall

This is the big one. The above recommendations are simply that: suggestions. I’ve seen dealerships, OEMs and general business models over the past 24 years grow, stumble, recover and fade. I’ve watched IBM transform and Compaq assimilated. I was the first generation of VARs born in the 1980s and destroyed in the 1990s. I’ve helped dealerships grow and evolve and watched others crash, burn and be born again under a new moniker.

Change is eternal, transformation unavoidable. And like the Matrix, this has all happened before. Right now, the wolf is at our door. We are simply collateral in the big shift from slow, paper-based transfer of knowledge to instantaneous, screen-based modes of communication. While digital content is set to grow 18 times over, print is dying.

Now is the time to make a stand, to burn the ships at the shore or dust off that exit strategy you designed. If you look at the rules and don’t see a happy ending, get out. Save yourself. Give your employees the opportunity to grow beyond your little dealership. But if you do decide to stay and circle the wagons, get your rules set, and then ride with them. Ride like the wind.

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