by Raegen Pietrucha
A company named after the family that founded it, Edwards Business Systems (EBS) opened its first office in 1954 in West Reading, Penn., and has since grown to 11 locations (including Virginia Business Systems, or VBS) that serve businesses large and small across eastern Pennsylvania and central Virginia. Originally a copier dealer of Konica Minolta and Ricoh products, EBS expanded its line to include HP devices in 2005, at which time it also decided to build an MPS offering. Here’s EBS’ success story.
With 15,000 devices under MPS contract and an operating income of more than 70 percent as a result, Edwards Business Systems is seeing the investment it made in MPS seven years ago pay off in spades.
Transitioning to MPS
EBS’ inspiration behind evolving into an MPS dealership is twofold. From a company standpoint, many felt the move was essential to continued survival and success. With OEMs selling directly to end users, a 4-to-1 printer-to-copier ratio in the average office and margin compression to boot, “EBS realized that it needed to look at some other avenues to capture more of the clicks and guard itself against manufacturers coming in and taking over the dealer base,” said Rick Lingon, vice president, sales and marketing, at VBS.
But MPS was just as much on the minds of end users as it was on the company’s staff, said Dexter Loeble, senior marketing director at EBS. As expenses for staff-purchased printers and help-desk calls spiraled out of control, businesses started looking for ways to reduce these costs. And if fleet standardization was a goal, such employee behavior needed to be curtailed as well. “Clients are telling us, ‘We just need help managing this printer fleet,’ or asking, ‘How can we optimize that so that we can have the most efficient print strategy?’” Loeble said. “We’re partnering with them to help them control this expense and get a handle on their business so they can focus on their core.”
MPS program components and infrastructure
When it comes to EBS’ MPS program, Loeble believes “the most important component is the engagement process that EBS uses, because it’s really about understanding clients’ environments and what their needs are.” An in-depth procedure from start to finish, EBS’ engagement process begins with analysis and moves into planning, execution and finally ongoing consultations. The analysis and discovery portion allows EBS to gain insight on the state of a client’s current infrastructure, from which the dealership can structure an optimization process that will reduce client expenditures. Once print fleets are optimized, EBS checks in on a regular basis to ensure its clients’ devices are consistently up and running; the dealership also collects data to help customers identify issues that are eating away at their profits, whether unnecessary printing, labor or both (such as document-intensive processes that can be reduced or eliminated).
To achieve such optimization naturally requires several tools, some of which are provided by the various partners EBS works with. GreatAmerica, U.S. Bancorp and De Lage Landen (DLL) assist EBS on the financial side with tasks such as bundling for its services. EBS also has partners in compatible supplies that it leverages to reduce consumables costs for its clients. But the core of EBS’ print management solution in particular is Print Audit’s software, which monitors devices, providing metrics as well as notifications of when service, supplies and preventive maintenance are needed. Accurate reporting, timely billing, auto-replenishment and ease of remote deployment/installation of the software are the qualities the dealership values most about Print Audit products with regard to its particular MPS needs. But EBS sees how valuable Print Audit’s products are to end users as well. “Not only does it benefit us, but it benefits clients, because they get their view into the software, so they can help evaluate and look and see what’s going on in their organization,” Lingon said. “When we’re doing reviews, customers have a better handle of what we’re talking about and how we can help either streamline or work on reallocation or redeployment of their assets, and they can see that and know that that’s a reality — not just something that we’re talking about.”
Part of the streamlining EBS helps its clients achieve is accomplished through additional services such as managed network services, document management, and process and workflow optimization that the dealership offers. EBS has also partnered with Ricoh’s Commercial Imaging Services group to provide that offering as well. “These additional services have augmented or complemented the managed print, which has really allowed, instead of just managing a printer fleet, managing the entire workflow,” Lingon said. “That translates into better operations for organizations from the back office to out of the network. It’s helped us quite a bit. It’s helped the sales reps too, because it gives them a better offering.”
Corporate structure and strategy
The EBS staff is divided into three core groups — service/implementation, administration and sales/marketing — all of which work together as a team to move the business forward. Specifically with respect to its MPS offering, senior solutions engineers and systems engineers perform implementations, and a device management administrator monitors and manages the Print Audit software the company utilizes.
EBS’ sales staff in particular is led by one “integrated solutions manager” (or ISM) per region who supports clients from discovery through implementation and beyond with end-to-end knowledge of all of EBS’ solutions. “Because solutions was a more complex side of our business, what we’ve done is we’ve created horizontal support,” Loeble said. “Rather than have a silo, we’ve generalized our message, so everybody sells the full portfolio rather than us having a specialist. I think that’s been and is going to be a big part of our continued success.”
Admittedly, Lingon said, this “team approach is not for every sales rep out there.” However, he continued, “it’s not the same sales it used to be, either.” Loeble agreed, saying “That’s been a change — selling a value proposition versus selling a product first. We obviously have our story to tell, but then we focus on selling process improvement, security and compliance, cost of ownership and sustainability. Why would you buy from us? Because of the attributes our company has, but also because we’re focused on these four things. Once we determine what processes need to be improved, then we’ll find a solution.”
Finding salespeople who excel at this team-oriented solutions selling, though, has not been without its challenges. Luckily, EBS was able to promote one staff member to an ISM position, and it conducted an extended search to find another. EBS remains committed to its approach, though, because it sees how having sales staff with the ability to work together and sell a full solution set has broad-sweeping benefits. “By having that full product line that all are able to offer, we’re able to get the brand and the message out to the entire marketplace,” Lingon said.
Just as the type of sale has changed for EBS, so has the type of marketing associated with it. “It was about 18 months ago when we started realizing that what we were doing still wasn’t producing the results we wanted to achieve,” Lingon said, “so we’ve reassessed what we’re doing as an organization and have taken a much cleaner, tighter focus to rebranding what we do.” EBS has developed new marketing materials, retrained its sales force and has invested in the organization from both the financial side as well as with regard to personal commitment and buy-in from the top down to achieve its goals.
Financials
With more than 15,000 print devices under contract, EBS has done quite well for itself in the last seven years. Still, the company isn’t content to simply rest on its laurels, and it’s therefore pursuing new financial streams to stay on top of the game. “We have experienced places where, because of the market, we’ve lost some margin in output, but we have recouped that margin in providing more value-added services,” Loeble said. “Everybody’s making a big play right now to offer a full portfolio because they realize that we’re turning dimes into nickels pretty quickly, and we need to be able to improve that or sustain by offering more value-added services.”
EBS is already well on its way to achieving this goal by going deeper with its current clients. “We have multiple clients where we could demonstrate that we’ve expanded our relationship horizontally threefold as a result of bringing more value-added services, and that’s important,” Loeble said. “With that same client, if we’d just left them alone and only sold them print services, we might have had a significant drop in revenue, because they’re not outputting as much or we may not be selling at the same margins that we had in the past.”
While EBS continues to offer and profit from MPS and other managed services, it still sells traditional lease/maintenance contracts as well. However, the writing’s on the wall as far as the most profitable direction for this company down the road. “This year, our operating income for print management is over 70 percent,” Lingon said. “It’s been tremendous, and that’s because of the service. It’s always the service. Everyone knows that. The margins are being compressed on the traditional MFP side of the business, and with MPS, we’re able to still capture some pretty good operating income.”
EBS secures a profitable future for itself via bundled, 12-to-36-month-long CPC contracts that include costs for various services and solutions the company offers. Pricing for its offerings is on a per-case basis, ultimately dependent upon a client’s equipment, volume and usage. “We want to make sure that we’re providing the best price going forward,” Lingon said. “You can sell value a lot, but it comes down to price too.” EBS always leverages its partners to help with costs associated with bundling, leasing and billing to deliver the most bang for the buck to its customers. “We have great partners,” Lingon said. “It helps out tremendously.”
Challenges
The challenges EBS has faced as it’s transformed into an MPS dealership have been both internal and external. Within the organization, there was the typical struggle as the existing staff transitioned from transactional sales to consultative and adjusted to the latter’s longer sales cycle. “For some, it wasn’t the best,” Lingon said. “For others, they’ve adopted and adapted well; it’s been a big opportunity to help improve their revenues and income as well as providing the accounts that were assigned to them a better workflow and better control over the organization.”
With regard to the additional talent EBS sought outside company walls, both Loeble and Lingon noted how difficult it could be to find a good fit — someone who has not only the drive and personality for the role, but could bring industry and technical experience to the table as well. Therefore, the company was and is scrupulous in its interviewing, testing and profiling of candidates for the EBS team. The work doesn’t stop once the right fit is found, though. EBS spends time educating and training all of its employees on the sales of its various solutions, making sure it gets the right tools into its employees’ hands so they can do the job successfully. “It’s always ‘proper tool, proper job,’” Lingon said. “Without the proper tools, you really can’t be effective.”
From the client perspective, Lingon has noticed that there are some end users still struggling with understanding true MPS, sometimes to the point where they hesitate or refuse to engage MPS. “The term ‘managed print services’ has become a little commoditized, in that there are so many types of managed print offered that when you’re out speaking to prospects about that, they may have gotten a bad taste in their mouth from someone else that makes the sale harder because they’ve been jaded by it,” he said. To overcome this obstacle, EBS takes these end users through a thorough outline of what MPS really is, detailing how the services it offers can help them improve efficiencies, not simply reduce costs. “Some people have made MPS into just a low-cost takeover, but it’s not about the toner,” Lingon said. “It’s about workflow, and it’s about total document management and fleet deployment.” Loeble agreed, adding, “EBS comes in with a total solution, and that’s the reason why you go in to a client: to offer them a total solution.”
Another reflection of insufficient end-user education on true MPS, Loeble said, comes in the form of end users who attempt a do-it-yourself kind of MPS. “One of the things that’s so interesting is, we get clients who say, ‘I can do this on my own. Here’s how much toner costs me,’” he said. “Then I say, ‘Let’s look at your service records, the time and materials costs, how much you pay for printers.’ Those are all very visible hard costs.” Once prospects are given this kind of data, he said, it isn’t hard to convince them they should refocus their efforts on their core competencies and outsource MPS functions to experts like those at EBS instead.
Successes
While EBS has been successful at educating and winning over many clients with its MPS solutions, one particular customer that stands out in Lingon’s memory is a school system the company’s engaged. All schools are hurting for funding right now, and, confident in its solutions, EBS was certain it could help save this particular end user some money. The company performed an assessment, finding a plethora of unmanaged, unmonitored print devices. On top of this, because the school was able to spend departmentally, associated printing costs were completely uncontrolled. EBS therefore discussed eliminating redundancies and the costs associated with them.
The whole picture for this school system looks very different now, three years after EBS’ MPS solution was first implemented. “We had an account review with them about a month ago,” Lingon said. “They said we had saved them almost 40 percent in cost savings since we installed our MPS solution. It’s been a tremendous success for them.” There was even an added bonus for Lingon personally because of EBS’ MPS success. “My kids are in that school system, so it’s helped me as a taxpayer as well,” he said.
MPS Tips from Rick Lingon, VP, sales & marketing, VBS
- COMPLETE BUY-IN FROM THE ENTIRE COMPANY. If you’re going to start in MPS, the whole organization has to be behind it. It can’t be just a sales piece. Everyone from admin to sales to service to logistics has to be behind managed print.
- DISCIPLINE. I think that you have to have a discipline in your process. You have to have internal benchmarking.
- THE RIGHT TOOLS. You’ve got to have the correct tools to do it right, because without the proper tools — whether it’s automating shipping of toner, reporting mechanisms, or the ability for sales to generate proposals and do total costs of ownership and analysis when they’re making their proposal — without the right tools, it’s almost impossible to do.
On the Web
Edwards & Virginia Business Systems
www.edwardsbusiness.com
