April 2007 Office Technology

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CONTENTS Volume 13 No. 10

FEATURE ARTICLES 10

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Development Platforms Providing a new level of productivity

A Taxing Problem Consider the implications of your generosity

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by Brent Hoskins Office Technology Magazine

by Robert C. Goldberg BTA General Counsel

How can the MFP provide a new level of productivity, making workers even more efficient? The answer, it appears, lies in open development platforms, allowing ISVs, dealers and MFP manufacturers to provide a custom interface at the MFP control panel to virtually any software application.

Gifts given by employers have tax consequences for the giver as well as the recipient.

PRINCIPAL ISSUES Employee Evaluations The key to success is to formalize a plan & stick to it

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by Jim Kahrs Prosperity Plus Management Consulting Inc.

Close-up: DocuWorld ’07 DocuWare Corp. hosts annual partner meeting

by Brent Hoskins Office Technology Magazine

Providing an opportunity to thank its dealers, introduce the latest version of its product and share insight into the solution selling business, DocuWare Corp. hosted its annual partner meeting March 5 in Orlando, Fla.

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COURTS & CAPITOLS

Make your yearly review process a successful and productive management tool.

SELLING SOLUTIONS Winning State Contracts There are several things to keep in mind

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by Art Schwartz Image Systems Group

The Solutions Game Becoming a total networked solutions provider

by Layton Getsinger CopyPro Inc.

Learn about state contract procedures and how to enhance your chances of winning a state contract.

Recruiting Tenured Reps How to attract success & experience to your sales force

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Unless the dealer channel adapts to and adopts a networked solutions strategy soon, many will inevitably go the way of the margins — down the tubes. This article explains one way to make the transition into the world of solution selling.

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Competing in a Digital World Moving from a TCO to a TVO strategy

By Randall Dazo InfoTrends

As competition in today’s digital world becomes more complex, dealers need to move from a Total Cost of Ownership strategy to a Total Value of Ownership strategy, because it offers a superior method for assessing the benefits of IT projects.

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by Jamie Schorr Cezanne Resources, LLC

The industry needs a scouting program to bring its top players back to the team.

DEPARTMENTS Business Technology Association

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May Education Calendar

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Executive Director’s Page

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BTA President’s Message

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Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

New & Improved ‘07 BEQI Available Soon

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or the past few months, the Business Technology Association and International Communication Research have been preparing the 2007 Business Equipment Quota Index (BEQI). It will serve as an outstanding resource for dealers and manufacturers to forecast sales, evaluate territories, measure sales potential, establish sales quotas and measure sales performance.

How does the BEQI work? Simply stated, it provides product indices at the state, county, ZIP code and MSA (metropolitan statistical area) level for 15 specific product categories. A formula included in the BEQI uses the indices and unit placement projections for each of the 15 product categories from one or more of the industry’s leading market research firms. The formula provides the user with the market potential (product demand) for the product categories for each geographic level — state, county, ZIP and MSA — in the U.S. market.

The indices themselves were determined, in part, through surveys conducted with Am erican c ompanies regarding th eir current office technology products use and their expectations for future acquisitions.

Surveys were conducted with companies in 12 major industry groups, such as: manufacturing; finance, insurance and real estate; health care and social assistance; and educational services.

The most recent BEQI, produced in 2004, had only eight product categories, including the general, separate categories of “copy machines” and “multifunction devices.” Certainly, since that time, the nature of the 6 | www.of ficetechnologymag.com | April 2007

industry has changed. For example, today there is a particular interest in selling colorenabled MFPs. That reality, coupled with the fact that the industry’s products are generally categorized by speed, led to several key changes for the 2007 BEQI, reflected in its 15 product categories. They are: Monochrome MFPs: All monochrome MFPs; 11-30 ppm (Segments 1 & 2); 31-69 ppm (Segments 3 & 4); and 70+ (Segments 5 & 6) Color MFPs: All color MFPs; 11-30 ppm (Segments 1 & 2); 31-69 ppm (Segments 3 & 4); and 70+ (Segments 5 & 6) All monochrome and color MFPs Single-function color laser printers: All single-function color laser printers; 11-30 ppm (Segments 1 & 2); 31-69 ppm (Segments 3 & 4); and 70+ (Segments 5 & 6) All single-function monochrome laser printers Facsimile machines Another change for the 2007 BEQI is the pricing. Rather than dealers purchasing geographic indices they do not necessarily need in order to receive the ones they desire, dealers can buy indices by state and MSA. The following dealer pricing will apply: $150 per state, includes state index and separate indices for each ZIP and county in that state. (Non-member: $300) $125 per MSA, includes MSA index and separate indices for each ZIP in that MSA. (Non-member: $250) The BEQI is scheduled to be completed in May. An order form will be posted on BTA’s Web site (www.bta.org). For BTA vendor and service associate member pricing, e-mail me at brent@bta.org. Special thanks to our sponsors: Hewlett-Packard, Kyocera Mita America and Toshiba America Business Solutions Inc. — Brent Hoskins

Executive Director/BTA Editor/Office Technology Brent Hoskins brent@bta.org (816) 303-4040 Associate Editor Elizabeth Marvel elizabeth@bta.org (816) 303-4060 Contributing Writers Randall Dazo, InfoTrends www.infotrends.com Layton Getsinger, CopyPro Inc. www.copypro.net Robert C. Goldberg, General Counsel Business Technology Association Jim Kahrs, Prosperity Plus Management Consulting Inc. www.prosperityplus.com Jamie Schorr, Cezanne Resources, LLC www.cezanneresources.com Art Schwartz, Image Systems Group www.imagesysgroup.com ®

Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Membership Marketing Manager valerie@bta.org Cathy Kenton Membership Sales Representative cathy@bta.org Gary Hedberg Accounting Manager gary@bta.org Mary Hopkins Accounting Clerk mary@bta.org ©2007 by the Business Technology Association. All Rights Reserved. No part of this publication may be reproduced by any means without the written permission of the publisher. Every effort is made to ensure the accuracy of published material.

However, the publisher assumes no liability for errors in articles nor are opinions expressed necessarily those of the publisher.

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BTA PRESIDENT’S MESSAGE ®

ITEX Show a Great Event for Association

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eld March 21-22 in Las Vegas, the 2007 ITEX Show proved to be an ideal venue for education, networking and learning about the products and services of the many vendors in the exhibit hall. It was a great event for the Business Technology Association and the office technology industry. If you were not there, you missed an ideal opportunity to gain new insight into ways to further advance your dealership.

Certainly, the industry needs this type of an event. The OEM dealer meetings serve their purpose. However, it appears that the BTA Channel continues to value a venue in which to convene that does not focus on a single manufacturer. During the show, I saw a number of our industry’s leaders from both the dealer side and the vendor side.

Certainly, for those two days, ITEX became the focal point of our industry.

We were particularly excited at the ITEX Show to present several awards to both manufacturers and dealerships. On March 21, BTA presented its 2007 Channel’s Choice Awards. Our top winner, receiving the Superior Performance Award, Primary Product Line, was Toshiba America Business Solutions Inc. (TAB S). Th e c ompany al s o received the Channel’s Choice in three additional performance categories — Corporate Support, Marketing Distribution and Digital Product Line. In addition, Muratec America Inc. was presented with a 2007 Channel’s Choice Award for Outstanding Performance, Secondary Product Line.

Channel’s Choice Award recipients are determined every year based on the results of 8 | www.of ficetechnologymag.com | April 2007

a survey distributed to independent office technology dealers, designed to recognize the best suppliers in several different performance categories. We congratulate this year’s winners and express our sincere thanks for their exceptional support of the BTA Channel.

In addition, on March 22, we presented the BTA 2007 Dealer of the Year awards in three revenue categories. This year’s winners are: Hagan Business Machines of Meadville Inc., Meadville, Pa. (less than $3 million in annual revenues); Copy & Camera Technologies, Lafayette, La. ($3-$10 million in annual revenues); and NovaCopy Inc., Nashville, Tenn. (more than $10 million in annual revenues).

The companies were among a number of nominees evaluated in four key performance categories — finance, operations, v i sion and c ommunity and industr y involvement. BTA congratulates these three dealerships, each of which have distinguished themselves among the association’s office technology dealership members.

And finally, during the ITEX Show, the members of the BTA Board of Directors had the opportunity to meet twice with the leadership of Japan’s Nippon Office Machine Dealers Association (NOMDA) — Chairman Akira Akutsu, Vice Chairman Ryotaro Matsumoto and Managing Director Takashi Uetake. These meetings presented us with a great opportunity to understand the nature of the dealer channel in Japan and to answer their questions about dealer distribution in the U.S. market. We made a commitment for BTA and NOMDA to work with one another in the months to come, exchanging information, etc.

Watch for more coverage of the 2007 ITEX Show in the May issue of Office Technology magazine.

— Dan Hayes

2006-2007 Board of Directors President Dan Hayes Purcell’s Business Products 222 E. 1st St. Campbellsville, KY 42718 dan@purcells.com President-Elect Shannon Oliver 25 Wheaton Circle Greensboro, NC 27406 soliver@triad.rr.com Vice President Ronelle Ingram Steven Enterprises Inc. 17952 Sky Park Circle Ste. E Irvine, CA 92614 ronellei@msn.com BTA East Thomas Chin Accolade Technologies LLC 604 Hampshire Road Mamaroneck, NY 10543 tchin@accotech.com BTA Mid-America Mike Blake Corporate Business Systems LLC 2018 S. Stoughton Road Madison, WI 53716 mblake@corpbussystems.com BTA Southeast Bill James WJS Enterprises Inc. 3315 Ridgelake Drive P.O. Box 6620 Metairie, LA 70009 bjames@wjsenterprises.com BTA West Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. P.O. Box 1170 San Bernardino, CA 92408 rjanecek@burtronics.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkle Newman & Rosenberg Ltd. 222 S. Riverside Plaza Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com

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Development Platforms Providing a new level of productivity by: Brent Hoskins, Office Technology Magazine

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irst there was the transition from analog to digital, followed by the rise of connectivity and the use of the MFP as a printer. Next, scanning emerged as a primary area of emphasis. Meanwhile, software-based solutions from independent software vendors (ISVs) and hardware manufacturers became prevalent. It’s no longer just the office copier.

What’s next? How can the MFP provide a new level of productivity, making workers even more efficient? The answer, it appears, lies in open development platforms, allowing ISVs, dealers and MFP manufacturers to provide a custom interface at the MFP control panel to virtually any software application.

Today, a growing number of MFP manufacturers are offering this capability. Ricoh Americas Corp., for example, introduced its Ricoh Developer Program (RiDP) in 2004. “For three years now we’ve been working with developers and providing various SDKs (software development kits) allowing them to create applications that run on our platform,” says Joe Gormley, senior manager of RiDP. “We have in excess of 40 developers right now, all working on solutions that allow them to integrate their products directly into our devices.

This, of course, benefits end-users in that they have a device that is capable of doing so much more than just scanning, printing and copying.”

Gormley describes a typical embedded application. “As an example, law firms are very interested in cost recovery because they want the ability to charge clients for everything that comes through the device,” he explains. “When an employee of the firm uses the Ricoh MFP, the application developer’s name and, 10 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7

perhaps, logo will appear on the MFP’s control panel. The first field the application may require is a client number; immediately, the system knows which account the copies are going to be charged to. Our embedded software architecture allows the developer to completely customize the control panel, which leads to a more userfriendly experience.”

For many, the first recollection of a development platform may be Canon U.S.A. Inc.’s Multifunctional Embedded Application Platform, commonly known as MEAP. Several years ago, says Dennis Amorosano, director and general manager of Canon’s Solutions Business Development Division, Canon leadership recognized a need.

“We started to see some things happen in the marketplace that led us to believe that down the road we would start to see customers utilizing the MFP as much more than a peripheral in the office environment,” he explains. “We envisioned a time when the MFP would become a very central part of a very specific application workflow in the office.”

That was the genesis for the MEAP concept, which Canon ultimately brought to market in 2003. Amorosano acknowledges that the acceptance of MEAP was slow in coming. “I will certainly be the first to admit that our entry into the marketplace was probably an entry that was well in advance of the readiness of the marketplace to migrate in this direction,” he says. “But, I think it has given us an opportunity to gain a lot of experience and market knowledge. We’re becoming very effective at not only driving development activity, but we are more knowledgeable about how customers want to utilize the platform itself and integrate applications.”

Currently, says Amorosano, Canon has approximately

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10 development partners that have either example, showed how a Sharp OSA“...

We can modify delivered MEAP-enabled applications to enabled MFP could be integrated with market or are in the development process. the Google Search Appliance to create the device to fit within In addition, Canon itself currently has enterprise search solutions from the their given environment, three specific MEAP applications and is MFP’s control panel. whether it is from developing or has delivered a number of While Google and the other two ina workflow perspective custom applications for specific cusdustry giants simply demonstrated the or in support of a tomers. “Customers are becoming more potential of the open systems architecspecific IT environment.” and more aware of the fact that we can ture, a number of Sharp OSA-enabled modify the device to fit within their given applications are already in use. In fact, environment, whether it is from a workflow perspective or in says Vince Jannelli, associate director of applications and support of a specific IT environment,” he says. partners for the Product Management Group at Sharp, Anyone attending the Sharp Document Solutions today the manufacturer has approximately 70 development Company of America National Dealer Meeting in February partners, with around 30 Sharp OSA-enabled applications saw a significant emphasis on Sharp’s development platform currently available on the market. Interest in the Sharp OSA — Sharp Open Systems Architecture, known as the Sharp platform has grown substantially in a short amount of time.

OSA platform. In fact, the meeting’s opening General The Sharp OSA platform was formally introduced at the Session featured Sharp OSA demonstrations from Google, AIIM/On Demand Show in May 2006. At the time, there were Microsoft and Yahoo! A representative of Google, for only 10 development partners.

Today, the Sharp OSA-enabled applications on the market are being heartily embraced by users, given the added value they bring to the MFP, says Jannelli. “Think of it not only as connecting an MFP to an application but as providing the capability to extend the functionality of the device,” he says.

“By extending the functionality of the device, I mean adding a feature that the MFP doesn’t offer.”

Jannelli cites the example of Wasabi, a Bates numbering application from Xpert Image, now available to end users with accessibility through the Sharp MFP control panel.

“That’s a feature that is not standard on our MFPs,” he says.

“So, now somebody who wants to be able to provide that functionality on the MFP can buy an applet from Xpert Image and directly apply the Bates stamp when a document is scanned on the MFP.” Is the Xpert Image software, then, embedded in the MFP? In the case of Sharp OSA-enabled MFPs, it is not, given that Sharp uses Web Services architecture. “In the case of Sharp’s implementation, we just point to an application that sits on a server or PC,” says Jannelli. “We act, essentially, as a portal that allows the user to interact with the application. A big benefit is that the resources are network resources, meaning the processing power is less expensive and there is more memory.”

Actually, within the realm of development platforms there are two leading environments — Web Services and Java.

“The reason we chose the Web Services architecture is because it is the de facto standard for application-to-application communication,” says Jannelli. “So, since applications 12 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7

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Piecing Ideas Together.

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Our members will attest that it’s well worth the investment by making each of them better leaders and bringing more value to their dealerships.

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If you’d like more information about our organization and how to join, please send us an email or give us a call.

Phone: 800.897.0250 Email: info@businessproductscouncil.org Website: www.businessproductscouncil.org Membership Director BPCA c/o BTA 12411 Wornall Road Kansas City, MO 64145

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engagement stage.” are already ‘speaking’ this way, we chose “We then assign a The nature of the relationship betto integrate that way. In addition, using ween Sharp and its developers and the the Web Services integration, you can Sharp representative to benefits and support they receive is akin program in any language, such as C#, every single developer to what Canon and Ricoh offer their C+, .Net or Java . Also, the time-to... That helps the developers. However, what does appear market is really advantageous.” developer to get started to separate the Sharp program is its sigIn contrast, Canon’s MEAP is Javaand to orientate them nificant emphasis on office technology based. “When you go back to the time at to the program ... ” dealerships as developers. Jannelli estiwhich we launched, there wasn’t a lot mates that 40 to 45 percent of its approxielse out there that would have given us the opportunity to provide as granular level of control as mately 70 developers are dealerships. In contrast, at Ricoh, what the Java development environment has provided us,” dealers “represent only a very, very small percentage” of the says Amorosano. “It met our needs from the standpoint of developers, says Gormley. Similarly, Canon’s Amorosano being a standard development environment as well as giving states: “We have been working with dealers on occasion us the flexibility to provide a developer with a detailed level where they have requested access to the SDK for specific of control of the device, which is consistent with being able development reasons. We have a couple of dealers who are, in to manage and support all of the functions that the device is fact, developing specific applications for their customers.”

Amorosano emphasizes the specific discipline that a capable of delivering within a MEAP-developed application.

One of the benefits Java offers is that we can run completely company needs to develop a MEAP-enabled application. inside the device, without the need for additional server “My only hesitation with dealers in my discussions with them about development is really around making sure that components that sit outside the MFP.” Like Canon’s MEAP, Ricoh’s RiDP also functions in the they are very much aware and cognizant of the commitment Java environment. “One of the reasons is that Java has really and resources it takes, not just to build an application, but become dominant in the enterprise world,” says Greg to maintain it and support it in the marketplace,” he says.

Anderson, senior engineering manager at Ricoh. “So, using “It’s one thing to build an application; there are a lot of Java in the machine allows us to leverage the skills of the people who can do that. It’s another thing to maintain it network enterprise engineers in the field. The other reason from a versioning perspective, bug-fix perspective and then that we chose Java is that this language is very strongly sup- support that on a long-term basis.”

Of course, the value of MEAP, RiDP and Sharp OSA extends ported by Sun Microsystems, which puts a lot of work into well beyond the benefits to any dealership that has become making sure that the language remains vibrant, is developed an application developer. Instead, dealerships can reap the and has good community support.”

Whether they choose Web Services or Java, MFP manu- rewards of the applications developed by others. So, while facturers are working diligently to establish relationships there are dealerships that may decide to develop their own with developers. “Most of the developers have contacted us,” applications, many dealers are very excited “because they says Jannelli. “But, we’ve reached out to others, based upon have realized that they can leverage the work of other people and meet a broader set of customer needs,” says Jannelli. the opportunities that have come along.”

He notes that the benefit to the dealership is three-fold.

Sharp’s developers must complete an application process and an agreement is signed by both parties. “We then assign “First, you are going to place more MFPs in a competitive a Sharp representative to every single developer, who acts as marketplace because you are able to differentiate yourself the developer’s champion within the Sharp organization,” from competitors,” he says. “Second, because you are able to says Jannelli. “That helps the developer to get started and to differentiate yourself to meet customer requirements you are orientate them to the program — ‘What can I do? What can going to place MFPs at a higher GP. And third, you are going to be more tightly integrated into the way the customer does I not do? How does Sharp work?’

“Once a developer is accepted into the program they get business. At the end of the day, because you are providing access to a dedicated developer extranet,” he says. “One ‘side’ higher value and have become more important to that of the extranet supports them during the development account, it is more difficult for a competitor to replace you.”

Amorosano also emphasizes the value of the tighter phase and the other ‘side’ supports them in the marketing 14 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7

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integration with the customer. “Dealers to use their personal computers as their “Customers are still are in a great position to take advantage primary interface for accessing informaof these development efforts, driving tion and delivering output. But, I think going to want to use additional revenue and profit and the best what we will find is that, in the context their personal part is, once you get these types of appliof a very specific type of business applicomputers as their cations into a customer environment, it cation, the user interface at the MFP primary interface for gets awfully difficult for them to push you c ontrol pan el b e c om es imp or tant accessing information out,” he says. “So, dealers will find that because it simplifies the process. and delivering output.” they have a much greater capability to “Within Canon, we have a vision that lock-in customers for the long term.” in the future we will find that the MFP Some may ask: Are end users, in fact, receptive to will become a much more personalized resource for users,” accessing an application from the MFP’s control panel? he continues. “My interface at the control panel may look Aren’t they more comfortable accessing applications from a completely different than yours, just based on the way that I desktop PC? Manufacturers acknowledge that the intent is happen to use the technology.” not to replace the use of a PC to access document-related Brent Hoskins, executive director applications. “Quite honestly, based upon our experience, of the Business Technology Association, we have learned and have certainly come to the conclusion is editor of Office Technology that this is not where this type of capability is going to magazine. He can be reached evolve,” says Amorosano. “Customers are still going to want at brent@bta.org.

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Close-up: DocuWorld ‘07 DocuWare Corp. hosts annual partner meeting by: Brent Hoskins, Office Technology Magazine

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roviding an opportunity to thank its dealers, introduce the latest version of its product and share insight into the solution selling business, DocuWare Corp., an integrated document management company, hosted its annual partner meeting March 5 in Orlando, Fla. The 14th annual “DocuWorld,” as it is called, drew 160 attendees, including 124 dealers.

“By meeting face-to-face with key players in the imaging industr y, our authorized DocuWare partners had the opportunity to gain knowledge about integration opportunities,” said DocuWare Corp. President Greg Schloemer, following the meeting. “I’m excited that we were able to provide our partners with the kind of networking opportunities that will really benefit their business.”

During the meeting, Thomas Schneck, president of sales and marketing for parent company DocuWare AG, based in Germering, Germany, reported on DocuWare’s performance. In 2006, he said, the company generated about $12 million in Clockwise from top left: Thomas Schneck, president of sales and marketing, DocuWare AG; Greg Schloemer, president of DocuWare Corp. (U.S.); the Technololicense revenues and had a total of 715 new gy Pavilion, which featured 13 exhibiting companies, such as eCopy and Kodak. system installations through its partners.

Schneck also commented on the results of a recent AIIM “more important,” while 28 percent indicated they are study, which was based on a survey on the topic of docu- “equally important.”

“What are the main applications/departments/document management, completed by 1,200 end users worldment types you would like to handle with a document manwide. Among the questions and results he cited: “How important is the handling of documents for the agement system?” Number one in the U.S. market: “acstrategic goal of your organization?” 58 percent indicated counting”; number two, “e-mail”; and number three, “customer service.” “extremely important” and 31 percent indicted “important.”

“What does this all mean for us?” Schneck asked atten “How has the importance of documents changed over the last two years?” 70 percent indicated documents are dees. “We are in a booming market. The growth rate for 16 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7

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document management is very, very end of 2008 will have been placed there “If we are not successful optimistic for the next years to come. It by a solutions sale.� is the obligation of all of us in the room To provide its partners with insight in unlocking the ... minds to get as much marketshare as possible.� into greater success in selling solutions, of the pragmatic buyer, Schneck also expressed his appreciathe DocuWorld meeting also featured a we are not going to be tion to DocuWare’s partners. “We know presentation by Darrell Amy, president of successful in bringing that you have been working extremely Dealer Marketing Systems. He referred to document management hard for DocuWare for a long time,� he the book “Crossing the Chasm,� by Geofto the mainstream.� said. “We know we are only successful frey Moore, focusing on Moore’s definibecause of your hard work. We also want tion of the various prospect types. Amy to thank you for your loyalty. Many of you have been with specifically focused on “pragmatists,� describing them as DocuWare for five to ten years or even longer. We know that practical managers, seeking incremental, measurable in today’s times, that is something that is not very common.� growth, who are particularly concerned about service and The DocuWorld meeting provided several educational references. Approximately 70 percent of the DocuWare opportunities as well, with Jon Reardon, group director for market opportunity involves the pragmatic buyer, he said.

Office Document Technology Solutions at InfoTrends, “If we are not successful in unlocking the hearts and serving as the keynote speaker. Reardon noted that the doc- minds of the pragmatic buyer, we are not going to be sucument solutions category served by DocuWare, “Workgroup cessful in bringing document management to the mainDocument Management,� was a $209 million market in the stream,� said Amy, noting that the key to success is helping United States last year. “We’re forecasting that to grow to the pragmatist solve business problems. “There is nobody $587 million by 2010,� he said. “That represents about a 35 more qualified or competent to have the discussion about percent compound annual growth.� business products than the sales rep. Do you realize that the Reardon also specifically stressed the importance of sales force of non-technical people that you thought could selling software-based solutions, not just hardware. “By the not even sell this stuff may be the key to you experiencing end of 2008, for office equipment dealers who are not explosive growth in the next 12 months?� playing in the solution space, the size of the playing field will Brent Hoskins, executive director have been reduced by 50 percent,� he explained. “So, 50 of the Business Technology Association and editor percent of the hardware being placed on the market by the of Office Technology, can be reached at brent@bta.org.

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The Solutions Game Becoming a total networked solutions provider by: Layton Getsinger, CopyPro Inc.

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e have been in the “year of solutions” for several years now. Many keep hoping and waiting for this to be a passing fancy and hope to get back to the business of selling boxes.

Unfortunately, box selling continues, but at significantly reduced margins.

Early on, dealers merely dropped the price on MFPs to write orders and maintain the margins on the back end. With time, both the hardware and aftermarket margins have slowly ebbed away. Unless the dealer channel adapts to and adopts a networked solutions strategy soon, many will inevitably go the way of the margins — down the tubes. No one will benefit from this scenario — especially the consumer. This article explains one way to make the transition into the world of solution selling.

The first and harshest reality is there is no checklist or guidelines for the dealer to follow. There is no “one size fits all” panacea either. One must sit down and analyze his (or her) dealership’s current state of being; determine where it is on the industry continuum; decide where he wants his dealership to go; and determine if it can get there based on current configuration. If not, then it is time to re-engineer the company and chart a course for success. There are no shortcuts. It is best to start with baby steps.

The skill sets that proved successful in the analog world seldom work in today’s solutions arena. It is no longer about feeds and speeds or price and monthly payment. It is now about shaping the customer’s buying criteria while solving customer problems and helping your customer solve its customer’s problems. It is the mother of all paradigm shifts.

The next step is to determine talent within the sales team. This would include, but is not limited to: product knowledge (hardware and software), sales/customer skills, attitudes, strengths and weaknesses and technical aptitude.

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When all the data has been gathered and analyzed, do you have the right horses to run the solutions race? If you are like many dealerships, you will have one or two top-producing reps who will attempt to sabotage any efforts to depart from the status quo. They are most willing to ransom the company’s future to stay in their comfort zone. Can you afford to lose them? If not, can you afford to lose your company? Personal experience has proven that with the loss of every top-producing salesperson or sales manager, revenues and profits go to new all-time highs. No one wants to risk losing a top producer, but nor should they risk losing their business. It’s really more about risk management than risk-taking.

When one compares the differences between analog and digital equipment, it is plainly obvious that our world has changed without our permission. It was not long ago that we were fighting connectivity and color. Today, if a dealership is not leading with color and connecting a minimum of 50 percent of its placements, there is undoubtedly a loss of market share and the concomitant aftermarket and professional services profitability.

The most significant change in the transition from analog to digital has been the life cycle of hardware. It has gone from three to five years to today’s digital life cycle of 18 to 24 months.

By the time a rep has reached a level of competency with the current product line, it has been superseded by a new release.

These realities are compounded for multi-line dealers. Due to the technical intricacies of digital hardware and related firmware, software reps could easily spend much of each day in the classroom instead of selling solutions.

Now that we have a pretty good understanding of the many obstacles that stand between us and success as solution sellers, how do we overcome them? It probably will not be via

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more of these individuals on the market the vendors, for they suffer from OEMIt is once again time than one realizes and typically they are created market share myopia, which more affordable and competent than further clouds their vision of the critical to take responsibility one might surmise. If you do not curnature of solution selling to their survival for our destiny and rently have an IT team, then contract and the survival of dealers. begin the process of with one until one can be developed.

Instead of investing in dealer channel re-establishing dealer Professional services should be a profit development, some vendors are comchannel dominance center, not an expense line item in your pounding the dealer’s dilemma by crein the marketplace. service department. The new ‘valueatin g ad ditional dire ct outl ets — add’ after remodeling will be the synergy re-branding equipment for off-brand marketing and usurping the dealer’s base while the dealer resulting from the combined intellectual capital of your softstruggles to find new and innovative ways to meet this ware specialists, sales reps and IT team.

If the principal is not the right person to lead this transmarket share mandate. The irony is that we are eating our formation, then identify someone on staff who has the young with increased brand competition. It is extremely naïve to believe that the direct channel is actually seeking respect, aptitude and tenacity to make it happen. This may net new business versus chasing the dealer channel’s base at be one place the dealer needs to go outside for help.

There are a multitude of software vendors in the market reduced cost and margins. It is empty rhetoric and smacks today.

Many of the hardware vendors have strategic relationof a complete disdain for the dealer channel. The only ships with one or more software companies or have their winner here is the end user.

It was the dealer channel that saturated the marketplace own proprietary software. A few vendors have software with analog copiers and it was the dealer channel that tran- teams, but none are currently positioned to train the dealer sitioned the marketplace to digital MFPs. It is only fair that channel on how to successfully integrate the solution’s the vendor seek to protect its benefactor versus destroying it model into their lineup.

The one inviolable tenet to which a beginning solutions via a comprehensive solutions distribution strategy.

The latter, coupled with the fact that there are few, if any, dealer must adhere to is to go slowly. Pick one or two software former dealership principals working at the vendor level, packages and maybe an electronic archival and retrieval softcreates an intellectual and operational chasm. When one ware that is server-based, totally compatible with your hardhas not “walked a mile in another’s moccasins,” it is physi- ware and scalable in nature. Have the software vendor come to your dealership to launch the software, teach the concepcally impossible to feel or fix the pain.

Meanwhile, back at the successful dealerships, those that tual selling process and identify the top five problems the have made the transition to solution sales are enjoying software addresses. The vendor rep should also make field record high margins on hardware, software, professional calls with the software specialists, sales reps and the IT team services and aftermarket. Most have done so by reinventing to demonstrate the proper selling techniques, document assessments, proposal formulation and how to close the deal. themselves and creating a new business model.

Now, you have a strategy for profitably competing for new So, if the problem is to be fixed, it rests on our shoulders as it always has. It is once again time to take responsibility for our business, upgrading your base profitability and going where the destiny and begin the process of re-establishing dealer channel industry giants fear to tread with a result of profits you never dominance in the marketplace. It will require an unrelenting and realized you could have.

Layton Getsinger is COO of Copypro Inc., based in Greenville, irrevocable commitment by the dealer to enter and succeed in N.C. He has worked in the copier industry for more than seven this new world of networked solutions. After all, it was the years, and now manages the day-to-day operations of the dealer’s principles and winning attitude that prevailed in the company. Copypro has been the top solutions analog days and must prevail again. dealer at the Gold level for Konica Minolta for The good news is there is no need to hire all new staff to the past two years, and is currently the top create a new business model. Actually, it would be cost prohibitive and most likely unsuccessful. However, hiring a mover of Documall for the Ricoh Family Group. couple of software specialists with engaging personalities is He can be reached at lgetsinger@suddenlink.net.

Visit www.copypro.net. a must to compliment your sales team’s skills. There are w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7 | 19

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Competing in a Digital World Moving from a TCO to a TVO strategy by: Randall Dazo, InfoTrends

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or BTA dealers, competition in today’s digital world is becoming more complex as we see not only pressures from large distributors and OEMs establishing direct channels, but we also see the lines being blurred — there are now more competitive pressures between IT dealers and BTA dealers competing in the same space. There are definite advantages that BTA dealers have capitalized on and strengthened over the years — strengths like customer intimacy and knowledge have been strong attributes that have kept customer relationships in place. But as we see customers looking at cost-cutting and Total Cost of Ownership (TCO) more seriously, price pressures may supplant the relationship advantage. That is why dealers need to move from a TCO strategy to a TVO (Total Value of Ownership) strategy.

While TCO has received much attention in recent years, TVO offers a superior method for assessing the benefits of IT projects. Using a total value approach, companies consider benefits not just from cost cutting, but from improved business processes based on new technology. TCO should not be disregarded either, as it gets the attention of C-level executives, but usually only satisfies their requirements for total value within the organization. Total value must be seen throughout the organization and be a harmonized strategy with all groups in order to see the greatest benefits and results.

The key to securing your position with your customers is by providing them with unprecedented total value that is difficult to replace and will make it difficult for competitors to break into. Using the word SECURE, InfoTrends has derived an acronym to help dealers remember how to create this unique value: Solutions — Provide solutions that benefit all aspects of the organization.

Engagements — A close relationship with the customer is an important aspect in moving to a TVO sale.

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customized solutions that are difficult to replace.

User — Be sure to consider all users within the organization.

Requirements — Understand all users’ pain points and what could make them happier and more productive at their jobs.

Efficiency — Efficiency = more productivity = more revenue The Evolution of Value If we look at the evolution of the copier industry, we can understand this concept of unprecedented value even better. Originally, the industry started with standalone

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productivity for an individual or departhardware that was differentiated by As applications matured ment. This can affect overall efficiencies adding unique features that solved that can actually negate the original simple customer problems. The more for specific industry goal of cost savings. TCO reduction unique features that added value to an verticals, customers should not be ignored, as it is actually a organization, the more customers were were able to see more strategy to get a toehold into a TVO willing to pay. When these copiers value because they strategy. But customer engagement b e cam e di g it al d e v i c e s , and th en solved specific pain must go beyond the C-level executive. network devices, higher value was points of that ... market. appreciated because they could now be The Value of Document Solutions shared in a digital print environment.

But as the hardware features became more ubiquitous, with If we break this down further, we can see how certain soluvery little tangible customer differentiation, prices fell and tions fit into various parts of the organization. InfoTrends hardware became more of a commodity. The next phase looks at software solutions in four categories: Input — Scanning or creation was to differentiate with applications. At first, software Output — Printing or storage bundling allowed for further differentiation because users Workflow — Movement of the electronic document could control multifunction devices with their PCs. But Device Management — Control or device relationship these original applications, like scanning to PC or scanning management of all devices to storage, were still too generic and it was difficult for users C-level executives look at the management of devices, the to understand the connection of their workflow to these applications. So, generic software bundling only added control and reporting of the costs and in some cases, that the workflow is attributing to efficiencies at the high level. small incremental value.

As applications matured for specific industry verticals, In general, they will touch device management solutions.

Mid-level managers look to improve efficiencies by customers were able to see more value because they solved specific pain points of that vertical market. This is when we improving processes and workflows and, at a higher level, really started seeing the first iteration of a solution. But making sure the activities of their employees are being optithese solutions were not realized until there was an engage- mized. In general, they touch workflow solutions.

End-users’ daily workflow activities typically center ment with the customer to understand their pain points and dealers were able to customize a solution to fit their exact around the actual MFP device. Improving the efficiency of needs. This customer-consulting engagement, under- their activities can be realized through input and output standing of their pain points and delivering a customized solutions that surround the device. solution has become the strongest differentiator among dealer competitors. InfoTrends has defined a “solution” as a The Value of the Assessment As mentioned, it is difficult to ignore TCO when putting set of software and services often accompanied by hardware that solves a business problem, improves a process or together your TVO strategy. A TCO study or print assesscreates a new business opportunity for a customer. That is ment identifies your customers’ printing requirements and offers them a hardware, software and service solution that something customers are willing to pay for.

The next phase of the value chain to achieve TVO or benefits the customers’ overall business requirements. A unprecedented value is to create customized customer solu- typical benefit of performing a print assessment is to find out tions that are realized throughout the entire organization. what their actual print spending is, to identify efficiencies, Value has to be seen throughout the entire company, from control spending and, in the end, lower their total cost of C-level executives to mid-level managers to the users that ownership. In fact, according to a past InfoTrends report, 90 the solution affects directly in their everyday workflows. percent of companies do not know what they are spending That is why only introducing a TCO reduction strategy can, on internal printing and, typically, 30 to 50 percent of a in some cases, backfire. Although it gets the attention of C- company’s internal assessments are incorrect. What is even level executives, changing an end-user’s everyday workflow more interesting is that typical businesses spend 6 percent of activities by implementing cost-reduction initiatives like their annual revenues on the document and cannot account sharing devices or redirecting output, may actually hinder for it. Print assessments can reduce a company’s spending by w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7 | 21

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Mid-Level Managers: 30 to 40 percent, and that is something ...

Your solution, which Does my group run more efficiently worth investigating. with these solutions?

At the same time, a workflow assessis a combination of Have workflows been improved and ment should be performed in order to software, professional can I measure the progress of the improveunderstand other areas of improvement services and hardware, ments that have already been made? that solutions can provide. While perwill improve your Are my employees happy with the forming this assessment, dealers should staying power within improvements made to streamline their study and survey the internal customers an organization ... job functions? in the organization and see their workEnd Users: flow habits as they relate to their docu Do my job functions seem to be less complex and easier ments. This is where customized workflow and on- and off-ramp solutions can be identified and presented to man- because of the solutions implemented?

Am I able to be more productive because of the solutions agement to further enhance the company’s efficiencies for implemented and can they be measured? growth. Areas that can also be investigated are mailing costs Am I happier with my job because technology or solulike overnight shipping and manual faxing, because those expenses can be significantly reduced by implementing tions cut down my stress level?

By rating these questions from one to 10 — one being technologies to streamline those processes. “strongly disagree” and 10 being “strongly agree” — you will have As with many skeptics of new technologies, change of workflows and work patterns can lead to inefficiencies and non- a measurement tool for TVO throughout the organization. An acceptance of these new processes. Part of the strategy should overall score between 80 and 100 can be seen as providing strong allow each of the users to be a part of the change and you value to an organization. A score of 50 to 80 may need minor should engage with them throughout the process so they feel tweaking to understand areas that need improvement and a score below 50 means there is an imbalance of overall value as if they have ownership and are contributing to the change. within the organization. Of course, striving toward 100 will give you the security of a sound TVO strategy and should conMeasuring Value Within the Organization Although it is difficult to put a price tag on efficiencies stantly be measured for continuous improvement initiatives.

At the end of the day, your solution, which is a combinathat can bring future growth or opportunities to an organization, understanding a customer’s total value of ownership tion of software, professional services and hardware, will can be measured. It is also difficult to pinpoint the value tied improve your staying power within an organization and to a specific solution because value is a customer-specific allow you to reap the benefits of continued recurring goal, often measured by future revenue opportunities and revenue as well as allow your customers to view you as a sometimes by emotional gratification. There are, however, partner that will help both of your organizations grow.

Unprecedented value, irreplaceable solutions and procorrelations to the “value of an implemented solution” and the “increase in efficiencies, uniqueness and competitive found engagements throughout the organization are the advantages” that they bring. Also, the higher the value quo- new propositions you should be striving for in creating a tient, from a customer’s perspective, the more difficult it is TVO partner strategy for your customers. It will make you to replace. Here are some questions to ask each group in much more competitive and secure your relationship with your customers for years to come. order to determine the value quotient: Randall Dazo is director for InfoTrends’ Network Document C-Level Executives: Solutions Service. With nearly two decades of experience, Does this solution provide new opportunities or Dazo leads InfoTrends’ continuous information service revenue for growth? practice in this area on a global basis.

Does this solution reduce costs and improve efficienPrior to joining InfoTrends, Dazo was cies within the company? senior manager of output solutions Does this solution give my company an advantage over for Ricoh Corp. He can be reached at the competition? randall_dazo@infotrends.com or Will I see gratification from all employees because of (781) 616-2100. Visit www.infotrends.com. the implementation of these solutions?

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EDUCATION CALENDAR BUSINESS TECHNOLOGY ASSOCIATION • April 2007

EDUCATION CALENDAR May 2-4

Sales Management Workshop Ft. Lauderdale, FL This three-day workshop, presented by MOTIVE8S Inc., is designed for the office technology sales organization — specifically for owners and sales managers, executives, vice presidents and supervisors. Workshop focus areas include leadership, situational management and team culture. For information, call MOTIVE8S at (515) 210-2136.

5-6

FIX: Cost Management for Service Workshop Austin, TX Learn proven service management and customer service strategies to use in your company. Costing out the service hour, effective and profitable maintenance agreements, efficient vehicle operations, reducing personnel turnover, competitive compensation plans and identifying profit-making opportunities through the service operation are issues that are critical for success.

8-9

Service Management Workshop Kansas City, MO This two-day workshop, presented by MOTIVE8S Inc., will provide office technology dealership service managers with improved management techniques and enhanced team productivity. The goal of the program is to help service managers improve consistency, accounting and productivity through the development of new mind-sets, strategies, processes and tactics. For information, call MOTIVE8S at (515) 210-2136.

15-16 BTA ProFinance

Chicago, IL Analyze current business practices and evaluate strengths and weaknesses. Participants will explore important issues surrounding profitability benchmarks, asset management, expense controls and employee productivity. They will leave with a clear set of benchmarks and proven strategies for successful implementation.

18-19 BTA Southeast Conference

Nashville, TN BTA Southeast will host its Nashville Conference at the Union Station Wyndham Resort Hotel.

The schedule includes a reception Friday evening, education sessions on Saturday morning and a dinner cruise aboard the General Jackson Riverboat. The BTA Southeast member price is $105. For more information, visit www.btasoutheast.com or call (800) 234-8996.

For additional information on BTA and other industry events or to register for courses visit www.bta.org or call (800) 843-5059. BTA offers dealer members a $250 discount coupon toward FIX and ProFinance.

Members may use their $150 discount coupons for the MOTIVE8S workshops. www.of ficetechnologymag.com | April 2007 | 23

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COURTS & CAPITOLS

A Taxing Problem Consider the implications of your generosity by: Robert C. Goldberg, General Counsel for the Business Technology Association

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s a frequent seminar presenter, I always enjoy the opportunity to observe others doing the same.

One of the most effective messages I have ever experienced was by an excellent presenter, Wayne Outlaw. The program was in Las Vegas and the venue alone can motivate an audience. Wayne encouraged audience participation, and each “volunteer” was rewarded with a one-dollar chip from the casino. After fifteen minutes or so, the rewards ceased and so did the level of participation. Wayne asked why. One attendee stated that Wayne had stopped giving out chips, and his response was: “How do you think your sales team reacts when you stop offering spiffs, rewards and bonuses?” His point was made.

Manufacturers also recognize the value of promotions and often provide the opportunity to “win” a trip if you purchase enough of their product. Contests, promotions and incentives are great motivators, but the shine can quickly fade if they result in an increase in your income and increased tax liability.

No doubt, most everyday employee income tax issues have been resolved with the receipt of their W-2. An issue that is often not properly handled is “gifts” that an employer or manufacturer gives to employees or dealers. With only a few exceptions, which I will address, these tokens of appreciation have tax consequences for the employer and manufacturer as well as the recipient.

The most common reward and probably the most appreciated is cash. This is always considered taxable and thereby subject to income and employment tax withholding provisions. Similarly, items that can be converted to cash like gift certificates, stocks, dinners-for-two or vacations are all addressed in the tax code and result in income to the recipient and withholding obligations to the employer. Manufacturers are not responsible for withholding if you are not an employee, but are required to issue a Form 1099 for miscellaneous income. Therefore, what may seem like a generous gift may, in fact, not be so valuable.

Is the IRS totally void of feeling and unmoved by the notion of gifting? Pretty much! There are exceptions, however, in the realm of tangible gifts. These items, like the “retirement watch,” pin or tray for years of service may be given without tax consequences.

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The IRS does insist that some type of “ceremonious observance” accompany the gift. This need not be a testimonial dinner, but this requirement ensures that the reward be for service, not as a disguised bonus. The simplest way to meet this requirement is to call together a small group, say a few words, and present the gift. These items cannot, in fact, be distributed in conjunction with a salary increase or additional benefit. When tangible objects are presented as a bonus or as some other form of compensation, the employer must determine a cash value of the gift and assess tax liability accordingly.

A final category to consider where the IRS doesn’t get involved are items deemed “de minimus.” In other words, gifts too small to be worth the paperwork. You may bring cookies, snacks and even holiday turkeys or hams to employees with impunity. You can send flowers, fruit, candy and the like to celebrate an employee’s special event or mourn their loss. You may even bring in lunch to celebrate the arrival of spring without inviting the IRS. The income tax exposure is not the only concern employers must consider when making “gifts.” Gifts to employees that qualify as compensation may have Fair Labor Standards Act (overtime) repercussions for the employer. Gifts given to employees as prizes for quality, quantity or efficiency in performance of their work have to be included in regular pay calculations for overtime purposes. Thus, if you were rewarding your delivery personnel for not having any accidents in a quarter, the amount of that reward would have to be added to their base pay when calculating overtime compensation.

Generosity is an excellent tool to motivate employees.

However, your generosity requires consideration of the tax implications for both the giver and the receiver. Unfortunately, that dollar chip Wayne threw me has to be included in my gross income. Next time I may not participate!

Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com.

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PRINCIPAL ISSUES

Employee Evaluations The key to success is to formalize a plan & stick to it by: Jim Kahrs, Prosperity Plus Management Consulting Inc.

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t’s that time again. Time for the dreaded annual review with one of your key staff members. For some companies, this is such an arduous process that they simply stop doing it.

I’ve had many dealers tell me that they believe it is a waste of time. “All the employees want to know is how much of a raise they are going to get. They aren’t interested in having their performance reviewed.” So, how do you turn the review process into the productive management tool that it should be? In this article, I will outline a process that has proven to be very successful.

The Basics of Annual Reviews The first thing to cover is the overall purpose and the elements of the annual performance review. The first purpose is to review the employee’s performance over the last year. In order to do this properly, it is important that you keep a file for each staff member who reports to you. The folder should include the good and bad things that have happened during the year. Start with a sheet of notes. When you notice something or have a situation to handle, make notes on the sheet.

For example, let’s say you had to talk to the employee about being consistently late. Write the date and details of the discussion on your note sheet. Be sure to add good things as well.

You should also keep copies of important memos, etc., in the folder. This folder will be very helpful when you sit down to write up the employee’s review.

The second and most important part of the annual review is future planning. As you go through the employee’s strengths and weaknesses, you want to outline what he (or she) should focus on for the coming year. These are turned into a game plan with specific goals. Of course, these goals need to be written up and put into the folder from the previous step.

The last part of the review process is to address the employee’s compensation for the coming year. For many employees, this is the part of the review they are most interested in. It is critical that you handle this properly. Too often employees are given an annual raise even if they have not

earned one. This is addressed in the Hubbard Management System in a policy letter dealing with penalties and rewards. In the policy letter, Hubbard states: “When you reward down statistics and penalize up statistics you get down statistics.” The statistics Hubbard is speaking of are the production measurements of the employee. When you give a raise to someone who has not earned it through increased production, you are actually rewarding down statistics and will get future down statistics and continued low production. All increases to compensation must be tied to increased production.

A Successful Plan for Annual Reviews I have helped quite a few dealers implement the plan that is outlined here. It has proven to be a successful method for handling the annual review process and for creating employee compensation plans.

Step 1: Create a Review Calendar — One of the cardinal rules of annual reviews is that they should be done on time.

When you forget about the review or miss the employee’s anniversary date, you send a message that he is not important to you. Of course, your employees are your most valuable and important resource. Create a calendar for annual reviews. The calendar should list all employees and their anniversary dates.

Use something like Outlook to create a simple reminder system that will alert you when an anniversary is coming up.

Step 2: Distribute Review Materials — You need to have a formal document to use for the review. Annual review documents are available from a number of sources. A good document allows you to rate the employee on a graduated scale in all areas of his job. The scale should have ratings like outstanding, very good, good, needs improvement, unacceptable, etc., and should rate areas like knowledge of work, quantity of work, quality of work, reliability, initiative, etc. Approximately one week before the employee’s anniversary date, the manager should be given two copies of the review form. The manager is to give one to the employee with a memo informing him of the w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7 | 25

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review date and asking that he fill out the through yours. Go through each item and form as a self-evaluation. discuss why you rated the items as you It is important to listen Step 3: Manager Review Write-Up — di d . If th ere i s a major di scre p ancy to what he has to say At this point, the manager fills out the between your rating and the employee’s, without rebuttal ... If you review form for the employee’s performy ou may want to sp end a littl e tim e want to outline plans for ance. The employee’s folder is referred to explaining why you see it differently. Be improvement, you need as a tool for remembering what happened sure to outline areas that need improveto understand the during the year. Once the write-up is comment. The review should be a balance of employee’s viewpoint. plete, the manager must go over it with his past performance and future goals. (or her) supervisor. The purpose of this is Step 5: The Compensation Element — to allow for help and direction and to provide a sounding I strongly recommend that you do not discuss compensation board. The manager and supervisor can also discuss compen- during the initial review meeting. Make it clear to the sation strategies at this time. employee up front that the purpose of this meeting is to go Step 4: The Review Meeting — When the review date through the review and that a follow-up meeting will be schedarrives, the manager and employee should meet in a quiet area uled to discuss compensation. The plan that works best for comwhere they will not be disturbed. It is better to do the review in pensation allows for employees to receive an annual raise up to the the office but if you do not have a quiet spot, you can have the Social Security Administration cost-of-living adjustment referred meeting off-site. As the manager, the first thing you do is go to as the COLA. Go to http://www.ssa.gov/cola/index.htm to see through the employee’s self-evaluation. Have the employee annual COLA rates. If an employee’s performance and productake you through the entire document. It is important to listen tion over the past year was excellent, he could be given a raise to what he has to say without rebuttal. Right now, you are based on the full amount of the annual COLA. If his performgetting his viewpoint. If you want to outline plans for improve- ance and production was good, but not great, he might get a ment, you need to understand the employee’s viewpoint. portion of the annual COLA. However, if his performance and Once the employee has taken you through his write-up, go production do not warrant it, you should not give any raise.

Additional income potential beyond the COLA should be offered in the form of production incentives that are tied directly to the employee’s position.

Having trouble finding Once you have decided how you are going to adjust the money for your compensation, schedule a follow-up meeting to go over this child’s education? with the employee. Be prepared to handle any questions or objections he might have.

The key to success is to formalize a plan and stick to it.

Once you do, the process of conducting annual reviews becomes much easier and more fruitful. The entire staff knows what to expect and can now focus on the process. You no Scholarships for use at colleges or accredited longer have the two opposite viewpoints mentioned at the vocational trade schools are available to the sons opening of this article. and daughters of BTA retail dealer and reseller If you need a review form or would like a copy of the policy members and the sons and daughters of their fulltime employees. Scholarship recipients are chosen by we use with our clients, just drop me an e-mail. I would be glad an impartial and independent evaluator. Completed to send along copies to help you get started on your way to applications must be received at BTA by May 1. To making the review process the management tool it can be. obtain a scholarship application form, contact Mary Jim Kahrs is the founder and president of Prosperity Plus Hopkins at mary@bta.org or (816) 303-4031 or Management Consulting Inc. PPMC write to: BTA Scholarship Foundation, 12411 works with office technology companies Wornall Road, Kansas City, MO 64145. in building revenue and profitability.

Kahrs can be reached at rkahrs@prosperityplus.com or (631) 382-7762.

Visit www.prosperityplus.com.

BTA Can Help.

®

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SELLING SOLUTIONS

Winning State Contracts There are several things to keep in mind by: Art Schwartz, Image Systems Group

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let others argue the issues. got my first state contract 19 years ago.

An occasional financial Second, pay attention because the conToday, state contracts represent more tract’s specs may change. Make sure that than one third of my business. One of loss on a client’s your bid meets the updated specs, not the the main benefits of getting a state contract maintenance agreement preliminary specs. For example, the conis that you also get to work with quasi-state will be greatly tract may require a minimum of four paper agencies, like school districts, that provide overshadowed by the drawers with 1,000 sheets of total paper the main benefit of getting a state contract. continued business our capacity. However, during the conference, Even when budgets are defeated, school disgood reputation brings. the state may change this to three paper tricts don’t go out of business. No matter trays with fewer sheets. If you miss this what, they continue to make copies and use change, you could submit your bid based on the old specs and tremendous amounts of toner and paper.

In my state (and probably your state, too), without a state price yourself higher than necessary. Although the state will contract, you are locked out of this monster market. If you are probably issue an addendum stating the new specification, it is considering getting a state contract, there are several things not unusual for the addendum to come out the day before the bid is due, which is not enough time for you to make the adjustthat you should keep in mind.

There will probably be a bid every two or three years. To get ments in your bid.

There are two things that you can do to greatly enhance your on the bid list, contact your state’s Department of Treasury’s Division of Purchase and Property. Then, to submit a bid, you chances of getting a state contract. First, have some sizable clienmust agree to offer the same pricing to state and quasi-state tele that you have supplied machines to. My company had been agencies. However, you must also meet requirements that are the primary fax machine supplier to one of the world’s leading beyond price. For example, you may have to commit to a four- pharmaceutical companies. This added to my company’s credihour service response to the entire state’s geography. Com- bility and demonstrated that we could meet the needs and plaints about lagging service response can cost you your place requirements of a large organization.

Second, be a reputable dealer. Unfortunately, in our business, it on the contract. You must also meet requirements regarding the financial stability of your company, and as a dealer, you will also is difficult to demonstrate credibility. Good news about your probably need a letter from your manufacturer stating that you company travels slowly, but one bad service incident is quickly have their approval to bid on the state contract. The state wants broadcasted by every one of your competitors. Therefore, I would to make sure that you will be able to meet its need for machines, highly recommend doing everything possible to avoid that situation. Sometimes a machine may have inherent problems. Still, it parts and supplies in a timely manner.

When there is an opportunity to bid on a contract, you could be is our responsibility to keep that machine working, regardless of notified of a preliminary pre-bidders conference. This mandatory our parts and labor expense. An occasional financial loss on a client’s maintenance agreement will be greatly overshadowed by conference is where the terms of the contract will be reviewed.

There are two key pieces of advice I can give about the con- the continued business our good reputation brings.

Getting on a government contract is not easy. It takes a comference. First, be quiet. The people from the state do not do copiers for a living, and some things in the contract might not mitment to provide a certain level of service and it requires a willmake sense to you. Despite this, don’t argue over an issue, ingness to deal with bureaucracy. However, the especially if the state is adamant about it. I have witnessed resulting stability in your business can make the representatives from large manufacturers argue vehemently effort worthwhile.

Art Schwartz is president of Image Systems with the state. Large manufacturers might get their way by Group, based in Middlesex, N.J. He can be arguing, and frankly, their argument might also help you reached at aschwartz@imagesysgroup.com. answer your questions. As a dealer, just submit your bid and 28 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7

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SELLING SOLUTIONS

Recruiting Tenured Reps How to attract success & experience to your sales force by: Jamie Schorr, Cezanne Resources, LLC

I

magine if it were possible to read the ro oki e card s of some of the nation’s top sales and business professionals. The stats w oul d includ e th e d et ai l s of th eir ver y first job. Despite the stale, 20-year-old wad of gum, you would have an amazing piece of sales nostalgia.

Would you be surprised if “copier sales” was listed as their first position in the lineup? You should not be surprised at all. The copier sales industry was literally the farm team for organizations that recognized exceptional sales and prospecting skills; skills that even the pharmaceutical industry considered worthy of their roster. They routinely called up copier salespeople and turned them into pharmaceutical representative “superstars,” complete with salary cap and all. Countless other industries seized copier salespeople for their clubs, too; perhaps in some way it was a compliment to our organizations’ training programs.

As the copier industry evolves into the “document imaging age,” imagine how competitive your company would be if you had those accomplished professionals back on your staff. The following is how the industry should develop and maintain a scouting program to bring our top players back to our team — the home team.

Years ago, selling a box was easy and applications were straightforward, making this industry perfect for entry-level people. As the industry evolved from selling boxes to selling solutions, the sale became much more complex. Strong analytical skills, an understanding of how a variety of businesses operate and the credibility to influence clients to consider process improvements became critical.

Your top salespeople are the ones selling solutions. Your entry-level, “go-getter” type of rookie lacks the experience and credibility to influence decision-makers. Rookies fall back on

the only instinct they have developed — selling on price. Their comfort zone is in dealing with lower level , non-decisionmakers. They have yet to develop the skills to qualify leads. The result, usually before the end of spring training, is a burnt-out rookie (read: turnover).

In the process, the dealer is out time and money while your prospect-almost-customer is frustrated by the whole game. Fortunately, there is a better way.

Your experienced account representatives have the credibility to comfortably interact with senior executives. These pros understand business applications and how documents are and should be used within their customers’ organizations.

They have strong relationships with their customers and prospects and are constantly adding value to clients with their seasoned decisions and solutions. Selling equipment is only the beginning of their solution sale. Like their major league colleagues, their earnings are superior as well. While the choice of hiring a rookie versus hiring an experienced professional seems obvious, most dealers choose the rookie, train the rookie and hope the rookie will stick around. In today’s world, these youngsters are not as loyal as our generation.

These rookies bounce around, costing the employer more time and money.

Frank Pacetta, southwest Ohio’s marketplace president for ComDoc, fully understands this “document imaging age.” “I am not open-minded to wasting our time and resources trying to reach those right out of college or anyone without sales experience,” he says. “The effort required, combined with the likelihood of success ... makes this a terrible investment.”

Pacetta will indeed hire a few rookies; however, the recruiting process will be as selective as AA or AAA ball. Unfortunately, w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7 | 29

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most dealers’ recruiting is not as structured cause successful tenured representatives ...

To attract successful as in the Cactus League. So, how are comto feel valued. Training and education panies recruiting? Sadly, what is left is must be frequent and creative. Having and experienced sales word-of-mouth and advertising to the your top players sit in front of a PC to pasprofessionals, a company general population. Do we really think that sively view a seminar is not enough . needs to have both experienced and successful salespeople are Training needs to be hands-on and cona targeted recruitment reading that advertisement? tinuous. If a dealer is not large enough to strategy and competitive In order to attract successful and experihave comprehensive training internally, compensation plans. enced sales professionals, a company needs they should consider outsourcing the to have both a targeted recruitment strategy training. The result will be a renewed and competitive compensation plans. The first step to a targeted focus and energy on their core business. recruitment plan is to make good use of professional recruiting While the industry today is different from 10 years ago, partners. Recruitment firms specialize in obtaining experienced there still exists an opportunity for an independent dealer to personnel; you continue working on what you do best — selling. reach unparalleled levels of growth and prosperity. Like the The right professional recruiter should take the time to reach out old saying goes, “We are only as good as the people we surto experienced and successful sales executives that meet the quali- round ourselves with.” Having a proactive strategy to attract, fications of the solution-selling role, delivering you the cream of develop and retain successful salespeople will continue to be the crop. crucial. Or, you can just forget about post-season play.

Likewise, your compensation plan for these pros needs to be Jamie Schorr is the owner and founder of Cezanne Resources, acutely different from that of a rookie. Paul Hanna, president of LLC. The company operates MRI Network of Beachwood, Ohio.

Blue Technologies, and his team made dramatic changes to MRI Network is part of Management Recruiters International, the their compensation plans this year in order to attract more largest recruiter of impact players in the nation. accomplished and qualified candidates. Blue Technologies is Prior to establishing his own business, Schorr also using a targeted recruitment plan executed by an in-house spent 22 years with ComDoc Inc. as vice presirecruiter. In addition, the company uses guidance from profes- dent of sales. Schorr can be reached at (216) 464sional outside recruiters.

8440 x102 or jschorr@cezanneresources.com.

Finally, dealers today will need retention strategies that Visit www.cezanneresources.com.

ADVERTISER INDEX 12 • Ames Supply Company

7 • DocuWare Corp.

9 • MKG Imaging Solutions Inc.

(800) 323-3856 / (630) 964-2440 / www.amessupply.com

(888) 565-5907 / www.docuware.com

(800) 881-7545 / (905) 564-9218 / www.mkg.org

2 • BEI Services

11 • Duplo U.S.A. Corp.

17 • Niche Equipment

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(800) 255-1933 / (949) 752-8222 / www.duplousa.com

(877) 446-4243 / www.nichee.net

13 • Business Products Council Association

3 • FMAudit LLC

31 • Panasonic Digital Document Company

(800) 897-0250 / www.businessproductscouncil.org

(573) 632-2461 / www.fmaudit.com

(800) 742-8086 / www.panasonic.com

26 • BTA Scholarships

27 • Imaging Industry.com

5 • Print Audit

(816) 303-4031 / www.bta.org

(800) 621-0623 / www.imagingindustry.com

(877) 412-8348 / (403) 685-4932 / www.printaudit.com

15 • docSTAR

32 • Kodak

(800) 367-5906 / www.docstar.com

(800) 944-6171 / www.kodak.com/go/ScanStationResellerOTM

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Panasonic Apr 07

3/16/07

8:43 AM

Page 1

IT’S NOT BLAH. You probably know by now that Panasonic copiers are turning some heads. Look what we’re up to now! Introducing the new C3 Color Series from Panasonic.

All of the innovative features of our C3 are now available in four simply brilliant colors to suit virtually any office personality.

It’s eye candy for the office!

And that’s not all. Panasonic was recently ranked “#1 Copier in Overall Customer Satisfaction Among Business Users.”

For more information visit panasonic.com/notblah or call us at 1-800-742-8086.

Panasonic received the highest numerical score in the proprietary J.D. Power and Associates 2006 Business Copier Customer Satisfaction StudySM. Study was based on a total of 1,524 responses, measuring 10 manufacturers and measures opinions of business customers at small, medium, large businesses who purchased or leased a new copier in the previous 21 months. Proprietary study results are based on experiences and perceptions of those surveyed from January 2005 - September 2006. Your experiences may vary. For J.D. Power and Associates award information, www.jdpower.com.

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Office Technology Magazine Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.officetechnologymag.com www.bta.org

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