April 2013 Office Technology by Business Technology Association

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CONTENTS Volume 19 • No. 10

FEATURE ARTICLES 10

Managed Services Looking for an added source of recurring revenue?

FEATURE ARTICLES Managing Mobility Dealerships already have the skills, resources

by Brent Hoskins Office Technology Magazine

The competitive advantages of your dealership are being noticed once again. In fact, they are being viewed as ideal for a service offering that you may have initially seen as distant from your company’s core offerings. Providing your customers managed services is no longer as ominous as it may have once seemed.

Target: Managed Services GAP, Continuum introducing new business model

by Greg Walters & Jennifer Shutwell Walters & Shutwell

Today, companies need more help than ever managing the increased responsibility of information and workflow surrounding mobile devices. This provides an opportunity for the BTA Channel — and it is easily within reach.

COURTS & CAPITOLS Building Your Team Place an emphasis on employee loyalty

by Mitch Morgan Growth Achievement Partners

by Robert C. Goldberg BTA General Counsel

The office technology industry is moving quickly toward the managed services business. BTA Channel dealers are primed to make a significant impact into this adjacent space, which offers them a unique opportunity for profitable growth. Based on our experience, we believe dealers need a business plan for managed services.

Assessment 911 Determining the success of your MPS engagement

Employees are the most valuable assets a business has — good products and excellent service are not sold by themselves. This year should be the year when you develop loyal employees who are committed to your organization.

SERVICE CONNECTIONS Obsolete Inventory It has a tremendous impact on your financial health

by Mike Lamothe Office Document Consulting Inc.

by Ken Staubitz BEI Services

Understanding what the customer is really spending and how he is using his current technology will be determined through a print assessment, which can be used to suggest possible improvements. Most of you are currently assessing your customer’s technology use, but by no means are you performing a proper assessment.

‘Change or Die!’ Really? Beware of doom & gloom, false optimism by Edward McLaughlin Valderus LLC

Over the past few months, I have heard enough conflicting information about how our industry is changing that, frankly, my brain feels like it could explode. While it is true that print volumes are declining, they are also evolving and shifting, and that, candidly, is more important. So, how do we take advantage of this evolution?

Inventory management is not a glamorous topic. Generally, most people’s eyes glaze over when even broached with the subject. However, the manner in which you manage your inventory has a dramatic impact on your organization’s cash flow.

D E PA R T M E N T S Business Technology Association

• BTA Education Calendar • BTA Highlights

Executive Director’s Page

BTA President’s Message

Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

Musings on Change and ‘My Two Cents’

am sometimes asked by advertisers and others: “What is the theme of the next issue of Office Technology magazine?” My answer usually is: “There is no specific theme, but rather a variety of articles on topics for office technology dealers.” I’m not sure my answer applies to this issue. I do see a theme. In this issue, you will see two articles that address the topic of managed services. There is definitely a theme there. However, there are also two other articles that relate: “Managing Mobility” and “‘Change or Die!’ Really?” How do they relate? To some degree, albeit in different ways, both address the questions and issues many dealers are grappling with in today’s marketplace. How can I best ensure the ongoing success of my dealership? What changes should I pursue? What is the hope of the future? I can imagine dealers answering each question, in part, with “managed services,” “managed print services” or “mobility.” I have stated before in this space that there are at least two interrelated, current market/societal changes that should be capturing every dealer’s attention. The first is the newest generation of employees now entering the workforce. To net it down: They don’t print much. The second is the rise of mobility. To net it down as well, from the perspective of an individual from that new generation entering the workforce: “I don’t print much due, in part, to the fact that I can access and share documents anytime, anywhere via my mobile devices.” No, I am not leading us down the print path of doom and gloom. The majority of people in the workplace are from the “yesI-print-pages” generations. So, there are still many pages to be printed for years to

come. However, the reality is we have a new generation of employees in the workforce and, knowing how the calendar works, over time their numbers will only increase. Some of them will move into management and make the technology acquisition and implementation decisions at their companies. Their leadership will likely contribute to the continued decline of the printed page. I am not telling you anything that you don’t already know. But this “themed” issue of Office Technology does have me revisiting the question: What would I do if I owned a dealership? Simply stated, I would be looking for ways to broaden my footprint in the customer location — “more share of wallet,” as some like to say. I would be focused on addressing my customer’s document, data and digital anything needs. I would be striving to differentiate my dealership from my competitors. And, of course, I would be seeking to capture as many printed pages as possible. This all leads to some simple advice related to “broadening your footprint” in today’s marketplace. I will admit, it emerges from the fact that I just completed writing the cover story on managed services, so am currently thinking about the topic. My advice: Give at least some thought to partnering with a third-party company that offers managed services support through remote network monitoring. Why the advice? Because I’ve seen it work firsthand. BTA itself is a new customer in a relationship involving a dealership (EBE Office Solutions, Olathe, Kan.) and a third-party managed services provider (Collabrance LLC, Cedar Rapids, Iowa). I can tell you that, so far, it has worked well and, it seems to me, it is a great strategy for EBE. Perhaps, as you consider our changing world, managed services would be a rewarding addition to your product portfolio as well.  — 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 Robert C. Goldberg, General Counsel Business Technology Association Mike Lamothe, Office Document Consulting Inc. www.officedocumentconsulting.com Edward McLaughlin, Valderus LLC www.valderus.com Mitch Morgan, Growth Achievement Partners www.growthachievementpartners.com Ken Staubitz, BEI Services www.beiservices.com Greg Walters & Jennifer Shutwell, Walters & Shutwell www.waltersshutwell.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 Mary Hopkins Database Administrator mary@bta.org Teresa Leerar Bookkeeper teresa@bta.org Brian Smith Membership Sales Representative brian@bta.org Photo Credits: iStockphoto, Ryan McVay. Cover Image: Inmagine. Cover Design Concept: Continuum. Cover created by Bruce Quade, Brand X Studio. ©2013 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 2012-2013 Board of Directors

Patent Issues Focus of Industry Summit

n the February issue of Office Technology magazine, I wrote about BTA’s plans to convene a meeting of industry leaders to address concerns about “patent trolls” sending letters to end users seeking licensing fees for the use of MFPs to scan and send documents to an email address. The Patent Issues Industry Summit took place March 14 in Newark, N.J., with representatives of eight MFP manufacturers among the attendees. In recent months, many of you have received inquiries on the patent issues and/ or copies of letters received by your customers. The letters are from law firms and others alleging the need for license fee payments. Sent by or on behalf of various licensing agents, the patent trolls seek fees based upon employee count. Fees demanded vary, but the average is $1,000. Patent trolls, as you might expect, are entities that seek to enforce a patent, but neither make a product nor perform a service. Their sole purpose is to enforce a patent that, very often, they did not originally fi le. During the industry summit, BTA General Counsel Bob Goldberg listed several proposed solutions to address the problem, including such things as an ethics complaint against attorneys who have never visited an end user to determine if the equipment is even in use, yet threaten litigation; a patent office challenge; congressional legislation; and/or an industry position paper. BTA will be preparing a position paper in the form of an end-user educational pamphlet that dealers and others can share with customers as invoice stuffers and otherwise. The pamphlet will be similar in nature to the one prepared for distribution several years ago, when the industry

was facing the issue of data security related to the use of an MFP’s hard drive. As national president of BTA, I had the privilege of being among the attendees at the industry summit. I was impressed with how much concern the manufacturer representatives have for end users and how they are on the same page in their reaction to the patent issues. It was great to witness this industry cooperation taking place, specific to the matter at hand. These are companies that compete on a daily basis in a professional manner, yet they will gather to address shared common problems and challenges. In the coming months, watch for additional information regarding the efforts resulting from the industry summit and any subsequent meetings. Naturally, I am pleased that BTA was able to facilitate the industry cooperation that led to this industry summit. As noted, this is not the first time we have done so in recent years. When a CBS Evening News report fueled interest among lawmakers to pursue legislation regulating the cleansing of data from MFP hard drives, BTA hosted the Data Security Summit in June 2010. A second summit on the issue was held in September of that year. Both were attended by MFP manufacturers and others in the industry. The summit attendees recognized that the real need was not legislation, but better end-user education. I am pleased to say the results of the efforts set in motion at the two summit meetings have been favorable for our industry. Whatever the issue — if it negatively impacts our members — BTA is poised to step forward as the industry’s advocate of the dealer channel. These recent meetings were not the first time the association has brought industry players together for the good of all. No doubt, they will not be the last.  — Terry Chapman

President Terry Chapman Business Electronics Corp. 219 Oxmoor Circle, P.O. Box 531066 Birmingham, AL 35253 tchapman@businesselectronics.com President-Elect Todd J. Fitzsimons Network Imaging LLC 122 Spring St., Ste. B3 Southington, CT 06489 tjfitzsimons@ni-ct.com Vice President Ron Hulett U.S. Business Systems Inc. 3221 Southview Drive Elkhart, IN 46514 ron.hulett@usbus.com BTA East Rob Richardson Allied Document Solutions & Services Inc. 200 Church St. Swedesboro, NJ 08085 robr@ads-s.com BTA Mid-America Dave Quint Advanced Systems Inc. 2945 Airport Blvd., P.O. Box 57 Waterloo, IA 50704 dquint@asiowa.com BTA Southeast Debra Dennis CopyPro Inc. 3103 Landmark St. Greenville, NC 27834 ddennis@copypro.net BTA West Mike Ehlers Yost Business Systems 685 E. Anderson Idaho Falls, ID 83401 mike@yostonline.com Ex-Officio/Immediate Past President Tom Ouellette Budget Document Technology 251 Goddard Road, P.O. Box 2322 Lewiston, ME 04240 touellette@bdtme.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC 222 S. Riverside Plaza, Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com

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Managed Services Looking for an added source of recurring revenue? by: Brent Hoskins, Office Technology Magazine

he competitive advantages of your dealership are being noticed once again. In fact, they are being viewed as ideal for a service offering that you may have initially seen as quite distant from the core offerings of your company. Your entrepreneurial drive, loyal customer base and inherent ability to sell all point to an opportunity you may want to consider pursuing, if you have not done so already. Providing your customers with managed services is no longer as ominous as it may have once seemed. Today, a growing number of third-party remote monitoring and IT management providers are looking to align themselves with BTA Channel dealers. They bring to the table the right infrastructure and personnel to handle much of the IT management work that may be outside of the scope of your employees’ expertise. They also bring to the table the promise of a new, recurring revenue stream for your dealership. Third-party management of an end-user’s network is nothing new. So, why the BTA Channel? Why now? Some would say it is simply because players in the IT monitoring and management space either have a newfound realization of or an increasing interest in the competitive advantages that dealers offer. The advantages become particularly apparent when compared to more traditional sources of IT support — managed services providers, often referred to as MSPs. “While managed services providers are very adept at dealing with the data side of the equation, they are not particularly good at selling,” says Michael George, CEO of Continuum, a SaaS-based managed services platform provider. He notes that the average MSP typically has a small customer base. “They have really just built their businesses upon word of mouth and are not typically professional sales organizations. “I have a particular affinity for managed services providers from the data side, because they have been the lion’s share of our partner community historically,” George continues. “But their fundamental deficiency is that they don’t really know how to market and sell themselves.”

While MSPs may be deficient in their marketing and selling skills as compared to BTA Channel dealers, it appears that many of them are at least making an attempt to broaden their footprints. Increasingly, MSPs are seeing that there is a new opportunity for them — managing not only the customer’s IT infrastructure, but capturing the customer’s printed pages as well. “Today, they want to go out there and sell hardware and offer managed print services,” says Roy Serhal, senior account executive with N-able Technologies Inc., a provider of remote monitoring and IT management software. “They have finally noticed and realized, ‘You know what, I ‘own’ the customer’s network. I am the one who approves connecting print output devices, so why shouldn’t I be the one to sell them to the customer?’” In fact, Serhal says, the new focus of MSPs is leading to a “collision” of IT services, VoIP (voice over IP) and print output devices. “For every small and medium business that is in this space, there is an urgency to start offering this threepronged approach to become the customer’s single point of contact,” he says, advising BTA Channel dealers to take note. “It is becoming very critical for the copier dealer to get into this space [managed services] if he [or she] wants to maintain his customer base.” George agrees. “You can get into the managed services business or you can plan on a diminishing marketplace for yourself,” he says, advising dealers. “So, there is a very critical, defensive measure that is necessary, because the convergence is taking place.” The management team at Continuum has had its eye on the BTA Channel since acquiring the managed services business from a public company, George says. “During our due diligence, one of the things that we uncovered was a very untapped channel for the distribution of our products and services,” he says. “We felt that our NOC and help desk would uniquely position us to enable the BTA Channel to enter into and dominate this market category.”

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What does a company like the copier side of the busiContinuum bring to dealers ness,” Serhal says. “On the “We provide dealers a that could lead them to domsales side, however, dealers means to get into the space inate the managed services tend to promote from withwithout a huge investment market? “We basically take in. You want to have at least and we allow them to scale companies on board and one dedicated person selling make them effective immemanaged services.” as they ... grow their diately, because we bring all Steve Ricketts, vice presibusinesses. At the end of of the technical resources; dent of marketing for Conthe day, dealerships are the it’s kind of like ‘just add watinuum, offers a slightly technology providers to their customers.” ter,’” George explains. “We different perspective on the — Jim Burns make them, instantaneousneed to hire a dedicated ly, a services provider in the person. “They need to only Collabrance LLC data services world, without hire one key person as a the heavy lifting.” senior technician who, essentially, builds the dealership’s Instead, the heavy lifting is left to Continuum and its credibility with the client and provides on-site support,” he NOC (network operations center; for around-the-clock re- says, noting that Continuum will help dealer partners in the mote monitoring of servers, desktops and mobile devices; interviewing process. “This person is the ‘IT team leader’ responding to alerts; providing data protection; etc.) and — initially just one person who is providing both sales suphelp-desk services (providing one-on-one support to end port, as well as providing the operational IT support. We are users seeking guidance to address specific IT-related prob- backing up that person, providing the rest of the IT service lems). The partnering dealership, in turn, provides any on- delivery through our NOC and help desk.” site IT support that is required, such as replacing a faulty Whether promoting a salesperson from within or hiring hard drive on a PC, etc. The customer is invoiced monthly a new employee, it is necessary for there to be “direct inby the dealership, given that Continuum’s involvement is fluence of the principal leaders or the owner,” Burns says, “completely white labeled in every dimension,” George says. referring to the required level of commitment to ensure suc“That includes all of the reports, etc., and our help desk. So, cess in managed services. “Everyone starts off excited and we answer the phone with the dealer’s company name. We invigorated. But where we have seen the most success is want the dealer to own the relationship; we don’t want to where a key leader in the organization is actively involved, interfere with it.” talking to sales and support on a daily basis. It shows evIt is up to the partnering dealer to determine the fees eryone around the dealership that this is important to the charged to the end users, George says. “We give them ad- organization.” vice, telling them what the current standard market rates Serhal concurs. “We have small dealerships that have five are, but we encourage our partners to mark up our prod- employees and we have dealerships that have 150 employucts,” he says. “They are marking it up two to three times, so ees,” he says. “Either way, the primary things that any sucthe margins are spectacular.” cessful managed services dealership has are drive and comJim Burns, general manager of Collabrance LLC, a subsid- mitment. Yes, we offer support from the technical side, but if iary of GreatAmerica Financial Services, notes another ben- you are not willing to invest the time needed into developing efit for dealers. “I like to think of us as being ‘experienced em- the business, then you are wasting both time and money.” ployees’ of the dealership,” he said of Collabrance, a provider Of course, companies like N-able want to see their dealer of managed services, complete with its Cedar Rapids, Iowa- partners succeed, so they enter their relationships with tools based help desk and NOC. “We provide dealers a means to get to help dealers optimize their managed services programs. Ninto the space without a huge investment and we allow them able, for example, provides dealers its Blueprint for Success, to scale as they get more comfortable and grow their business- which helps them better understand their costs, the pricing es. At the end of the day, dealerships are the technology pro- model, the best go-to-market strategy, etc. “A long time ago, viders to their customers. Their success is what matters to us.” we recognized that in order for us to achieve our goal, which Entering the market category does require an investment is making sure that our partners are successful managed serby the dealer, often in the form of hiring at least one new em- vices providers, we have to provide them business help so that ployee. “Typically, on the technical side, dealers tend to go they can hit the ground running, rather than going through a out and hire new personnel, simply because the resources year and half of trial and error,” Serhal says. they already have are utilized or even overutilized to support Ricketts cites one of his company’s support offerings, 12 | w w w. o f f i c e t e c h n o l ogymag.com | April 2013

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space — the BTA dealer’s priwhich demonstrates the mary target — is only about type of assistance dealers “We help them create a 5 to 10 percent, “but no more can expect from Continuum. professional video of the IT than 10 percent.” George de“We help them create a proservices they are offering, scribes it as a “land-grab opfessional video of the IT serand we even script it for portunity” for dealers. vices they are offering, and them. They can customize In addition, George says, we even script it for them,” dealers may be surprised he explains, noting that the that script if they wish, but how quickly success arrives. company has a studio that is ... we show them how to “It doesn’t take long,” he available to dealer partners. market themselves to an IT audience.” says. “Generally, the dealer“They can customize that — Steve Ricketts ship gets a deal quickly and script if they wish, but either Continuum the owner is saying, ‘Wow, way, we show them how to we looked at this for three market themselves to an IT audience. So, as our partner, you have access to video ser- years, have been offering it now for three weeks and we already have five or six of our vices as part of our overall sales and marketing program.” Is the timing right for you to take a look at partnering with customers signed up.’” n Brent Hoskins, executive director of the a third party to begin providing your customers managed Business Technology Association, is editor services? If so, it may be helpful to know that the opportunity of Office Technology magazine. is quite large. Ricketts estimates that the current penetraHe can be reached at brent@bta.org. tion by outside managed services providers within the SMB ibpi_IS_full_13_OT_half_13 3/6/13 6:34 PM Page 1

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Target: Managed Services GAP, Continuum introducing new business model by: Mitch Morgan, Growth Achievement Partners

he office technology industry is moving quickly toward the managed services business. BTA Channel dealers are primed to make a significant impact in this adjacent space, which offers them a unique opportunity for profitable growth. Since 2009, Growth Achievement Partners (GAP) has been presenting the BTA Managed Services Workshop to dealers. Our experience in the IT services market goes back to the early 1990s. We have worked closely with a variety of companies to help guide their success in this space and have consistently focused on the appropriate metrics that drive high performance. Based on our experience, we believe dealers need a business plan for managed services — supported by a time-tested business model — to be successful. The existence of a business model for managed services can help accelerate successful entry into the market. For dealerships that have been in the managed services business, the opportunity to utilize historical data and ongoing model enhancements will provide a continually refined road map for future success, much as the model for the traditional business has guided success in the past. The upcoming announcement and release of a business model at the ITEX National Conference and Expo in Las Vegas (April 17-18) will represent a “difference-maker” for dealer success in the managed services space. The business model for our industry has served as an important guide through the many changes that have occurred in the industry. Through BTA’s ProFinance course, dealers have had access to important measures to help guide business activity and drive financial performance. Adherence to a time-tested and consistently updated template has provided many companies the necessary road map to build healthy businesses, or to recognize and make adjustments, when appropriate, to get back on track. The same principles apply to the managed services business, with one notable difference. The IT services business model has been in a constant state of transition, and the key

metrics to measure success have changed with it. The industry’s business activity has shifted from project revenue to hourly billed service and support, then to a managed services model characterized by recurring revenue. As the business has changed, the success measures have changed with it. For example, effective hourly billing rates, revenue per engineer and billing utilization percentages were primary success drivers in the past. These have been replaced by key metrics, such as recurring revenue per seat, number of seats under contract and gross margin on managed services contracts. I am pleased to introduce the Managed Services Business Model to the BTA Channel. The model reflects a combined effort between GAP and Continuum, a leading managed services platform provider in the IT services market. Continuum has brought years of experience and currently manages more than 500,000 devices in this environment. The model starts with a consistent chart of accounts to record the revenue and expenses into consistent “buckets.” Additionally, the model includes a description of select key metrics and operational targets reflecting some of the more important “guideposts” that can bring value to dealers. For instance, the most important financial measure for high-performance companies in managed services is gross profit on core managed services. That number should be approaching, if not exceeding, 60 percent in order to achieve appropriate profitability levels. Some additional key metrics in the model include:  Revenue — The appropriate targets, mixes and types, and how those should change over time.  Contracts & Account Expansion — Seats under management, revenue per seat and growth expectations via additional products and services.  Activity & Pipeline — Sales cycle duration, pipeline metrics and activity targets to achieve business model revenue targets.  Head Count — Productivity measures for sales and

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vCIO personnel, target head-count levels based on seats managed and customers under contract, and personnel mix between sales and operations. Compensation— Who to pay, how to pay and when to pay, as well as target compensation levels as they relate to gross profit and revenue.  Profitability — Target contribution level and operational levels to enhance performance. The model also incorporates a focus on next-generation services to guide dealers to appropriate strategies to optimize the business. Two notable examples that are important to the model and reflect the strategic direction are hardware-as-a-service (HaaS) and cloud services. HaaS reflects providing hardware and software on a monthly payment basis and managing it. It lines up with a core competence of our industry — selling a payment. Based on our analysis, it is a key driver of success for high-performance companies. Additionally, the sale of the appropriate cloud services can bring greater revenue per contract and increased account control. The model will guide participants through issues, such as the percentage of seats under HaaS contract and target gross profit margins on cloud services. The Managed Services Business Model will be distributed in the ITEX breakout session, “Catapult Your Profits With Unified Managed IT and Cloud Services,” 8:30 to 9:20 a.m. on April 18. Dealers can learn about the use of the model in the newly updated BTA Managed Services Workshop. The workshop will next be held on June 19 in Chicago, following the Cruise to Success district event, hosted by BTA Mid-America, on June 17-18. In this one-day class, the model will be reviewed in detail. Attendees will receive a business planning template for dealers to use in developing appropriate action plans for this critical new business opportunity.  Mitch Morgan is a partner at Growth Achievement Partners. He founded the Connectivity Dealer Program from NIA in 1991. After his business was acquired by IKON Office Solutions in 1996, he led its Technology Services division. Morgan has been consulting with CEOs on strategy, operations, organizational development and sales since 2005. He can be reached at mitch@growthachievement partners.com or at (913) 269-7255. Visit www.growthachievementpartners.com.

The model also incorporates a focus on next-generation services to guide dealers to appropriate strategies to optimize the business.

18 | w w w. o f f i c e t e c h n o l o gymag.com | April 2013

Morgan Apr 13.indd 2

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Assessment 911 Determining the success of your MPS engagement by: Mike Lamothe, Office Document Consulting Inc.

lmost one year ago I received a panicked call from my mother: “It’s your father. I don’t know what’s wrong with him! He’s rolling on the floor in pain. I need your help!” I could hear him in the background and he was obviously in pain. She went on to say that he woke up in a sweat, breathing strangely, and then rolled out of bed. I told my mother the best way to help him would be to hang up and call 911. Reluctantly, she hung up and called. The emergency operator attempted to calm my mother down and then asked for her help to assess my father. (A little more on this later.) You have heard all the stats: An unmanaged print environment, for example, can cost as much as 30 percent more than necessary. Or, printing costs can be as much as 1 to 3 percent of an organization’s annual revenues. Understanding what the customer is really spending and how it is using its current technology will be determined through a print environment assessment, which can be used to suggest possible process or workflow improvements. Most of you are currently assessing your customers’ technology spending and use, but by no means are you performing a proper assessment. Early in my career, it was always part of my process to ask the customer permission to get a better understanding of his needs before I provided a quote. I would walk around to determine where the devices were, ask what features were important (basically, “speeds and feeds”), ask about volumes and, finally, ask for lease, purchase and service costs so that I could create some kind of current versus proposed scenario. Yes, you are performing assessments, but in a number of cases, problems lie in who approved the project, what you are assessing and where the information came from (Is it

actual customer information or just industry averages?). During my past experience as a general sales manager, I saw sales reps get frustrated with assessments. They took too much time and increased the length of the sales cycle, so reps would cut corners to speed up the process. Here are four things to keep in mind as you begin or refine your own process: (1) If industry averages are used, make sure you determine if the customer gets any discounts. Understand where the customer buys consumables and whether they are OEM or third-party products. (2) Ensure that the CFO/comptroller agrees with estimating consumable pricing to avoid objections late in the game. (3) Have someone help manage the various stages of an assessment and sign off on them before presenting them to the customer. This way, nothing is forgotten or assumed. (4) Always validate your findings with the financial authority and decision maker, because this is where objections

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Lamothe Apr 13.indd 1

3/28/13 4:49 PM

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and IT-related costs will be discussed and overcome.  A validation meeting The diagram on page 20 is an example From my past  A strategy session of the steps I took during an assessment experience, closing  A presentation at the decisionI did a few years ago. You might consider rates on strategic maker level putting together a similar diagram so business supported Another way to ensure the entire that all critical areas are disclosed and by a thorough assessment process is managed effecapproved before any work begins. All tively is to have your MPS champion of the steps listed below can vary from assessment were 80 oversee it. As a rep engages a customer, customer to customer and, depending percent or greater. each phase is reviewed and signed off on the size of the company, can be comon by the MPS champion, who ensures pleted in a few days. everything has been completed so the rep can progress to  Decision-maker approval the next step.  A floor plan to map current device locations Also, keep in mind that there are a number of software  An inventory of all print-related technology  At least one month of device volumes (if seasonal, more solutions on the market today that can help you with assessthan one month), preferably with the installation of remote ing customers’ print environments. They give you the ability to map a customer’s current device locations and configuramanagement software tions in one step, capture end-users’ device usage, potential  Interview a cross section of end users process and workflow improvements and, at the same time,  Full disclosure of all related financial information  All purchases, leases, net book value, capital cost avoid- establish a customer’s current financial state measured by ance, consumables, service contracts, time and materials, a proposed solution. In most cases, these solutions can provide a proposal document containing the complete assessment findings and the proposed solution. Keep this worthwhile statistic in mind: From my past experience, closing rates on strategic business supported by a thorough assessment were 80 percent or greater. Taking the time to manage the process systematically is well worth the effort. Getting back to my personal situation: I arrived at the hospital to find out my father was in critical care after suffering a massive heart attack. After a few days of tests and a complete cardiac assessment, they determined he had seven blockages. My father has since had bypass surgery that cleared all of the blockages and he is back to normal. To this day, my mother reminds me of the 911 operator asking her to assess my father as he suffered on the floor. The ultimate outcome was a success. Although it is by no means a matter of life or death, do not lose sight of the fact that taking the necessary time and approach to assessing your customer’s print environment can determine whether your engagement is successful. The health of your customer’s print environment will determine your longevity within the account.  Mike Lamothe is president of Office Document Consulting Inc. (ODC). ODC specializes in MPS strategies, developing software tools and implementing MPS programs at dealerships across North America. He can be reached at ml@officedocumentconsulting.com. Visit www.officedocumentconsulting.com. 22 | w w w. o f f i c e t e c h n o l o gymag.com | April 2013

Lamothe Apr 13.indd 2

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Innovolt ad Apr 13.indd 1

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‘Change or Die!’ Really? Beware of doom & gloom, false optimism by: Edward McLaughlin, Valderus LLC

ver the past few months, I have heard or read enough conflicting information about how our industry is changing that, frankly, my brain feels like it could explode. Managed print services (MPS), the savior only a few years ago, is now considered a commodity, or worse. Now it is network IT services. If we do not embrace these services, we are told, we will be out of business in a few years. Both positions are dead wrong. We all know that page volumes are decreasing, but there are some who say pages are going to come roaring back with a soaring economy (frankly, I expect neither). There was even an industry executive (who shall remain nameless) who stated: “All paper will be gone in two years.” That was two years ago. I wonder what he is thinking now? The combination of doom and gloom and false optimism is maddening. I do not want to mislead anyone. There is a great deal of change happening to the processes and forces that impact our business. We only need to look back a few decades to see how the use of what used to be an absolute staple in the office — the typewriter — has changed. Similarly, it is difficult to find anyone focusing on microfilm reader printers these days. Process and technology changes can essentially eliminate an entire industry. I am, however, weary of the “Chicken Little” approach to motivating change. I also disagree with the idea that everyone must leave their existing knowledge base and leap into services that they are not equipped or structured to deploy. While it is true that print volumes are declining, they are also evolving and shifting, and that, candidly, is more important. So, how do we take advantage of this evolution and position ourselves to prosper in the document business? First, we need to understand that one size does not fit everyone. It really depends on where your company is today and how well you can work with multiple partners. Are you account focused or transaction focused? Are you fully engaged in all segments of the business or only the lower segments? Are you fully engaged in the machine intelligence provided by your manufacturer or do you only sell an identified “best-inbreed” application? Do your compensation programs align

with your desired outcomes? Are the changes you make in your business motivated by the value you bring to your customers — or where someone told you the money is? Let’s look at the way that pages have changed over the past few decades and what forces are accelerating those changes today. In 1990, nearly 90 percent of all page output in the office landed in the copier output tray. Today, that number is closer to 20 percent. The shift is mostly attributed to the proliferation of the desktop laser printer. Less than 5 percent of color images were created on-site in 1990. The four-color process was commercially available, but the biggest customers were off-site service bureaus and print shops. Today, color is everywhere and off-site production work is moving in-house. Also, a relatively recent development is the impact of mobile devices, which reduce the dependency on convenience printing. The lower value prints in our industry are going away and no level of economic upturn will bring them back. They are gone forever. They are not, however, disappearing overnight. If your business is focused on fighting for these declining prints, you do have a problem. And, if that is the case, you are not even remotely prepared to shift into IT services. Actually, you are not really ready for MPS (which should not be confused with cost-per-copy printing) either. The real opportunity is with the off-site production of highvalue color prints that is moving in-house. This opportunity

24 | w w w. o f f i c e t e c h n o l o gymag.com | April 2013

McLaughlin Apr 13.indd 1

3/28/13 9:10 AM

Print Audit ad Apr 13.indd 1

3/25/13 12:58 PM

offers double-digit growth for both the fluid environment. In fact, the single top and bottom lines. This is one of the thing that has dealers upset is the cost Even the reactive most significantly growing volume segof managing all that movement and method of service ments in the document business. Nearly the number of devices that just cannot response that serves every manufacturer has a product offerseem to stay in one place. us so well with the ing. If you are not taking advantage of Even the reactive method of service copier/MFP base it, you should wait no longer. You do not response that serves us so well with have to be in a major market to take adthe copier/MFP base is miserably inadis miserably vantage and it is also within your existequate for MPS. I have had the privilege inadequate for MPS. ing core business model. to see, up close, the process used by some Let’s talk about the lost promise of who are successful in the MPS arena; it MPS. There has been so much said about this lately that I do is a self-created predictive service model. It comes from being not know where to begin. Personally, I have always felt that very account focused and the affect on efficiency is stunning. the opportunity was real, but the hype was overstated and I have also sat with CIOs who told me about very compeloversimplified. MPS is a consequence of the natural evolu- ling additional benefits they received from well-managed tion of products. In this case, the printer. All products go print fleets. To me, the most interesting thing has been that through a decline in value. From the first day a product is the level of account knowledge picked up from a well-manintroduced, it begins to lose value. If you graph the life cycle, aged account offers a very compelling competitive advanyou will see a point where services are interjected to create tage for MFP placements and competitive activity. new value. These services give new life to the value chain. It is true that the opportunity has been oversold as a I recall an industry meeting a number of years ago where growth industry. First, it is not an industry — it is a service there was a panel discussion about evolving technology. inside the office technology industry. Second, the growth is Somehow, the discussion shifted to the then newly intro- in picking up new “real estate.” Prints, as I stated earlier, are duced iPod. There were a number of critics of the technol- declining. Printing is a mature industry, and that maturity ogy. A lot was said about hard drives versus RAM and flash is what creates the opportunity for services or knowledge to memory. I remember creating a little stir when I suggested help an account control and maximize its output. that the entire conversation was irrelevant. I argued that So, here we are at network IT services — the “next big it was all about the content received through iTunes. The thing.” We are told to “embrace this or die” or that “this is product did not really matter. Was it easy to use? Yes. Was where the money is.” Is it all hype? Like all advice, there is it sexy? Yes. But, it was iTunes that made it relevant. Today, an element of truth. not many would argue about this point. It was the service Unfortunately, the entry level of this business is even that changed the value offering. Nobody cared about what more of a commodity than any other part of the copier/ was inside the device. MFP/printer business. The truth is at the very high level of The same is true with MPS. It is not so much that MPS did big data/business intelligence (BI) downloads and managenot live up to the promise as much as we never really un- ment. There is also a big opportunity in offloading missionderstood the opportunity. The average dealer is doing about critical business processes and managing them. Your com10 to 12 percent of his (or her) business in MPS; it should be petition will be IBM, AT&T, Verizon and Century Link, just twice that and maybe more. In fact, if you have 100 percent to name a few. of the MFPs, you only have 20 percent of the pages. Unstructured data management, disaster recovery and The move to MPS meant a transition from a transaction- business continuance are also big opportunities. What do you based sales process to an account development sales pro- know about them? The resources and partners required are cess. But that transition has still not happened. It is still a mind numbing. I actually know of only one dealership in the churn business and we are completely device-focused. Most country that is doing these things successfully. The reason? dealers, when asked about their recent MPS success, will The company has been in IT for years. Management knows discuss the placement of new printers in an account. This where the company can bring value and it is account focused. is simply not an MPS transaction. They may have picked up There may be a few others, but not many can produce the the printers and put the billing on a cost-per-print basis, but scale and focus to make it pay. In short, this advice to “jump that is not MPS. into IT” is as shallow as the advice to simply “jump into MPS” All services are about knowledge. In fact, MPS is a knowl- was. It will be equally disappointing to follow this advice. edge business. MPS is about the base and the prints — it has We are told that if we do not have the skill set, we can just nothing to do with devices. It is the management of a very partner with a company that does. Perhaps, but wait until 26 | w w w. o f f i c e t e c h n o l o gymag.com | April 2013

McLaughlin Apr 13.indd 2

3/28/13 9:11 AM

in some account management. Ensure you see all the partnerships you will there is freedom to develop your acneed. If you are having a difficult time I am not about to counts. Adjust your reward system to managing the many pieces of MPS alendorse one vendor over align with your mission. And forget ready, partnering is far more complicated. another, but network about sharing commission; every salesThen there is the danger of vendor conservices is a business person I know failed “sandbox.” Those solidation. Companies want one person to demanding resources, programs only create resentment and a turn to for all of their problems. What if lack of teamwork. you do not do it all? This business does not strong partnerships Most of all, stay true to yourself, know utilize your existing skill sets; you need to and knowledge. your strengths and weakness, and if addevelop new ones. It takes being “account visors are telling you to employ their sysfocused” to another level. Can your manufacturer help? Perhaps. Some are certain- tem or “you will go out of business,” fire them.  An industry veteran with 40 years of experience, ly further along than others and some have made significant Edward McLaughlin is chairman of Valderus, a newly formed investments in developing the skill sets. This, however, is a holding company focused on bringing together dealerships decision you have to evaluate. I am not about to endorse one with an innovative approach for shared profitability vendor over another, but network services is a business dewhile retaining local management and brand identity. manding resources, strong partnerships and knowledge. Previously, he was president of Sharp Imaging and In closing, take another look at the MPS business. If done Information Company of America. Prior to Sharp, properly, it will help you evolve to a more account-centric he held sales and management positions organization. That alone will help you transition and evolve. with several Fortune 500 companies, But MPS is actually a step into our past — we were much including 3M Co., SCM, Saxon Industries, more account focused 30 years ago than we are today. MovCanon U.S.A. Inc. and Savin Corp. ing to MPS will help us get closer to our customers and get a He can be reached at better sense of how we create value. edward.mclaughlin@valderus.com. Alignment is the key. Make sure that your processes and Visit www.valderus.com. priorities are aligned with your customers’ needs. Invest

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Managing Mobility Dealerships already have the skills, resources by: Greg Walters & Jennifer Shutwell, Walters & Shutwell Inc.

oday, companies need more help than ever managing the increased responsibility of information and workflow surrounding mobile devices. This provides an opportunity for the BTA Channel — and it is easily within reach. That is, office technology dealerships have the existing employee skills and resources needed to launch a successful mobility practice. The reasons to consider the opportunity are compelling. Dealers are being challenged by the increasing usage of screen technology over paper. According to IDC and Credit Suisse, in 2012 there were 107.4 million tablets and 687.9 million smartphones sold worldwide. These numbers are expected to increase to 142.8 million and 1.05 billion, respectively, in 2014. IDC reports that in 2010, users of mobile devices downloaded 10.9 billion apps and it is projecting users will be downloading 76.9 billion apps in 2014. With this growth in mobility over such a short period of time, management challenges are vast. The increasing costs of labor, hardware, software, maintenance, etc., are relatively easy to see because they are visible. The difficulty lies with the complexity and impact of what cannot be seen. This includes not only hard costs, but soft costs related to the rapidly increasing volume of storage needed, disaster recovery, security, end-user productivity, help-desk resolution, IT support and infrastructure, administrative costs and environmental controls. Been There, Done That The Business Technology Association (BTA) and the dealer channel have been in place for decades. Most would be surprised to learn that BTA was founded in 1926; the association and its members have weathered many changes over the years. The office of tomorrow, no matter how it changes, has its roots in the 19th century in U.S. business machines

that evolved from quills to computers in about 100 years. As we consider the gargantuan and swift changes being experienced today — including the rise of mobility — there is comfort in reflecting upon the previous tectonic shifts. BTA and the dealer channel have been here before. From world wars to recessions, typewriters to computers, steno pads to spell check, during each economic and technology shift, there was no doubt a great deal of doomand-gloom talk. Yet, the office — and those who supported the many activities of business — prevailed and thrived. Consider the copier industry’s humble beginnings. Down-the-street sales harken back to the days of cold calls, one-appointment closes and hiring decisions based on the size of the vehicle a candidate drove. It had to be big enough to carry two machines and “don’t come back to the office until they are both sold.” Through the 1980s and into the next century, business technology advanced and, with it, the way our industry operated continued to evolve. Today, our services span from basic copying to network support and cloud applications. As we face the challenges of today, looking back, it is easy to see that we already know what we need to know. Managed Services We have heard about and, at the very least, considered moving into managed network services, managed IT services or simply “managed services.” Interestingly, managed services — including the management of mobile devices — has always appeared to be a natural progression from managed print services (MPS). It has been said that if you can manage printing, you can manage anything. As natural as the MPS to managed services step appears to be, there are challenges to entry. We see three common barriers: (1) fear of not having the knowledge set; (2) regarding

28 | w w w. o f f i c e t e c h n o l o gymag.com | April 2013

Walters Shutwell Apr 13.indd 1

3/28/13 9:38 AM

impact is on the office technology dealIT professionals as more than what they er’s domain. As consulting firm Deloitte are; and (3) expanding beyond one’s comThis service is about LLP states: “Tablet computers replace fort level. actively managing paper, not PCs.” Relativity can sometimes help clardevices and processes ify the facts. If we think our industry’s that are enabling Establishing a Mobility Practice transformation is intense, consider what communication and The insights we have from managing is happening in the IT realm. printing can be applied to today’s mobilThe personal computer (PC) is a ubiqfreedom for people and ity movement. This service is about acuitous device throughout the business information to move. tively managing devices and processes environment. In 2009, 64.6 percent of all that are enabling communication and computing was performed on a PC. In Q4 of 2012, only 24.8 percent of computing was performed freedom for people and information to move. Information on a PC. In three short years, the tide erased nearly two de- may be stored in the cloud and accessed through services cades of PC growth in usage, in terms of processing. For us, like Salesforce, Amazon, Microstrategy, Apple and Google. Accessing massive amounts of data from anywhere is init would be like experiencing a 40-percent drop in volume creasing with Wi-Fi connections available for free. Consider during a 36-month lease. The driving factors are many and manifest themselves this: There are 7,000 Starbucks, 15,000 government libraries even more in the increased usage of tablets and smartphones and 12,000 McDonald’s offering free Internet access across with the advent of the cloud and the grass-roots bring-your- the country. Internet access is becoming ubiquitous, which own-device (BYOD) movement. Despite all this turmoil, pun- further supports mobile users being free to move around the dits do not describe this time as a “post-PC era.” Actually, the country; managing these changes is of utmost importance.

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To kick off a mobility practice, you IT acumen is weak, then strengthen it should start with evaluating ways to through training or hiring additional Establishing a mobility combine and expand services from the resources. This will mean re-evaluating practice enables dealers addressable needs of your clients’ mobilyour current talent pool and determinto accelerate revenue ity growth patterns. According to Comping who is onboard with your new adstreams to create more TIA’s guide for solution providers that venture and who is not. secure and sustainable want to craft a mobility strategy, there Evaluating your client base and unare eight key steps to consider: (1) Evaluderstanding the relationship spectrum operations as client ate and assess; (2) Understand business is critical. Some clients are commodity demands grow. goals and priorities; (3) Consider end usbuyers, while others want a unique soers; (4) Address the issue of devices; (5) lution that will add specific and meaOpt for mobile life-cycle management; (6) Secure the device, surable value to their businesses. When designing your monetwork and data; (7) Develop an app strategy; and (8) Cod- bility services, remember to build a spectrum that relates to ify the mobile policy. the client with value and dollars. Each step addresses an aspect of what it is going to take Establishing a mobility practice enables dealers to acto build a holistic approach to provide managed mobility celerate revenue streams to create more secure and susservices. Do some of these steps sound familiar? For the tainable operations as client demands grow. Like many dealer community, many have already taken this type of times before for BTA dealerships, it is time to transform the approach with MPS. Consequently, many dealerships have what — not the why — of your business. The new, recurring already acquired or developed the skills and resources nec- monthly revenue provided by mobility is available in your essary to put together the operational infrastructure for a existing client base today; your current ways of servicing mobility practice without even knowing it. It is a matter of clients are particularly valuable as you pursue a mobility directing operational team members to look at what else strategy. Good selling. n they can monitor and manage by utilizing remote monitorGreg Walters, senior correspondent for the Business ing and management (RMM) tools. VARs have been using Transformation Center, is president of the Managed Print RMM tools for years; now that dealers are beginning to use Services Association (MPSA) and Walters & Shutwell, a them, a whole new world is opening. mobility, communications and transformation consultancy. During an IT sales and services career that has spanned a The Dealer’s Edge quarter century, he helped turn a large West Coast VAR’s There are striking similarities and differences between struggling managed print services practice into a highly the dealer and IT VAR business models. As far as similariprofitable business. A prolific writer and frequent speaker ties, both models are turning toward using similar client at industry events, Walters considers himself a “contrarian engagement models to pursue services with value propo- technologist” — someone with a unique and provocative view sitions, assessments, proposals, contractual agreements, of technology and how to sell it in the 21st century. implementation methodologies, service and support levels, He can be reached at greg@waltersshutwell.com and continuous improvement plans. However, when you or (909) 239-7894. look a little deeper, you begin to see apples and oranges. Jennifer Shutwell, CEO of Walters & Shutwell, has nearly 20 For example, dealers are excellent at facilitating on-site years inside the document services industry. Her experience sales meetings and service functions. In contrast, the VAR includes successful selling with dealerships and OEM direct would rather perform sales and service from a remote locaoperations, including IKON Office Solutions, Hewletttion. When it comes to billing, dealers are accustomed to Packard, Konica Minolta Business Solutions U.S.A. Inc. and monthly leasing and service fees, while VARs are more familCanon Business Solutions Inc. Most recently she served as a iar with large capital purchase orders and one-time annual senior consultant with Photizo Group prior to co-founding maintenance agreements. These are just a couple of the many Walters & Shutwell. Shutwell is known for her insights differences between dealer and VAR business models as you and recommendations consider your go-to-market strategy for a mobility practice. on complex business environments. First Steps She can be reached at There are some actionable steps you can take today. Begin jen@waltersshutwell.com with assessing the current state of your market, business and or (980) 333-3658. operation, and then choose to build, buy or partner. If your Visit www.waltersshutwell.com. 30 | w w w. o f f i c e t e c h n o l o gymag.com | April 2013

Walters Shutwell Apr 13.indd 3

3/28/13 9:39 AM

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COURTS & CAPITOLS

Building Your Team Place an emphasis on employee loyalty by: Robert C. Goldberg, General Counsel for the Business Technology Association

ith each passing day, I receive more and more inquiries regarding non-compete, non-solicitation and non-disclosure agreements. Dealership owners are taking all necessary precautions to protect their customer bases and avoid unfair competition from ex-employees who leave with confidential information. In reality, these precautions are essential and have varying enforceability from state to state. However, is the correct emphasis being placed on the employment relationship? Do we worry about an individual leaving rather than implement strategies to keep employees and develop a loyal team? Employees are the most valuable assets a business has — good products and excellent service are not sold by themselves. Recruiting, training and developing employees is an expensive undertaking. Satisfied employees can be convinced to leave and try another dealership, whereas loyal employees sing your praises and are not about to leave. This year should be the year when you develop loyal employees who are committed to your organization and to customer satisfaction. If you are not building your team with team members who support each other, you really do not have an organization. A dealer I work with on a regular basis offered starting positions to all graduating seniors on a local college hockey team. The results were outstanding. Their team spirit and cooperation was brought to their employment. They had each other’s backs and gladly covered for and assisted each other. It was all “us” and not “me.” Customer satisfaction soared while repeat and expanded business came to the dealership. The following 12 questions are a result of a major study conducted by the Gallup organization and published in the book, “First Break All the Rules: What the World’s Greatest Managers Do Differently,” by Marcus Buckingham. In his book, Buckingham suggests that the first six questions contain the basic foundation for the success of each member of the team. Having your team answer these questions on a one-to-five scale is a great exercise. Following the assessment, organize a team meeting to discuss the results. The questions are:

(1) Do I know what is expected of me at work? (2) Do I have the materials, resources and equipment I need to perform my job correctly? (3) At work, do I have the opportunity to do what I do best every day? (4) In the past seven days, have I received recognition or praise for doing good work? (5) Does my supervisor seem to care about me as a person? (6) Is there someone at work who encourages my development? (7) Do my opinions seem to count at work? (8) Does the mission/purpose of my company make me feel that my job is important? (9) Are my co-workers committed to doing quality work? (10) Do I have a best friend at work? (11) In the last six months, has someone spoken with me about my progress? (12) This last year, have I had opportunities to work, to learn and to grow? These questions will assist you in building a quality team that is devoted to your business and to customer satisfaction. The goal each month is not sales revenue, but developing loyal employees and customers who will generate sales and growth. Every employee needs to feel appreciated and that his (or her) contributions are recognized while he continues to grow in his role. Employees also recognize those individuals who are not making a proper contribution and they understand when these individuals are replaced on the team. By having your employees respond to these questions and by discussing them in team meetings, loyalty will grow and thoughts of leaving will diminish. Although it is essential to protect yourself from departing employees who may take confidential information, the real emphasis should be placed on building employee loyalty. This investment will pay rewards for years. n Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com.

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EDUCATION CALENDAR April 24

Building My Business Webinar “Eight Simple Rules for Getting the Most Out of Your Sales Force” This webinar, geared to business owners and managers, covers the eight key components of building a sales force. Included are sales planning, hiring, compensation, activity management, relationships and more. Led by Troy Harrison of SalesForce Solutions, this webinar will include direct takeaways that you can use to help grow your business now and throughout 2013. Visit www.bta.org/BuildingMyBusiness to register.

25-26 FIX: Cost Management for Service Workshop New Orleans, La. FIX teaches you how to compute the cost of your service labor hour (service burden rate) and improve your overall service department profitability. Instructors Ronelle Ingram and Rock Janecek will cover proven management and customer service programs to improve morale within your service department. The April 25-26 workshop’s fee includes admission to the AIMED Product Showcase on April 25, and the keynote speech by USPS Senior Vice President Jim Cochrane on April 26. Visit www.bta.org/FIX to register.

June 5-6

ProFinance 2.0 Denver, Colo. With more than 30 key benchmarks, including benchmarks for MPS, ProFinance 2.0 will help you and your team achieve double-digit operating income. John Hanson and John Hey of Strategic Business Associates will share their knowledge from their experience in building one of the largest dealerships in North America and from advising many successful companies in the industry. Visit www.bta.org/ProFinance to register.

17-18 Cruise to Success - A BTA district event hosted by BTA Mid-America Chicago, Ill. BTA Mid-America will host its annual district event, open to BTA members and non-members from across the country, June 17-18, 2013, at the DoubleTree by Hilton - Magnificent Mile. The event will feature a keynote presentation by Doug Albregts, president of Sharp Imaging and Information Company of America, four additional educational sessions presented by industry leaders, and a dealer panel focused on turning business disruption into opportunity. In addition, there will be time to network with fellow dealers and visit with 30-plus exhibiting sponsors. To wrap up the event, attendees will enjoy a three-hour scenic skyline dinner cruise on the Spirit of Chicago. Visit www. bta.org/BTAMidAmericaEvent to register. For more information, visit www.bta.org/Education or call (800) 843-5059.

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BTA HIGHLIGHTS BTA would like to welcome the following new members to the association:

Dealer Members High Sierra Business Systems, Carson City, NV Visual Edge Technology, North Canton, OH Service Associate Members Caley Enterprises, Canton, OH National Printer Repair Network, Whitinsville, MA For full contact information of these new members, visit www.bta.org.

CompTIA Exam Voucher Discounts BTA member dealers may purchase discounted exam vouchers for CompTIA’s CDIA+ certification direct from BTA for only $241, a $43 savings. CompTIA CDIA+ certification covers the knowledge needed for a career in the digital imaging and enterprise content management industry. BTA member dealers may also purchase discounted exam vouchers for CompTIA’s PDI+ certification direct from BTA for only $222, a $39 savings. CompTIA PDI+ certifies that an individual has the required knowledge and skills of the core operations of printing and document imaging devices. CompTIA PDI+ serves as a foundation for a career involving the service and support of printers, copier/MFPs, scanners and fax machines. For more information, visit www.bta. org/CompTIAVouchers. For information on BTA member benefits, visit www.bta.org/MemberBenefits.

For the benefit of its dealer members, each month BTA features two of its Vendor or Service Associate members in this space. BTA Vendor Associate Member Paessler AG, based in Nuremberg, Germany, with representatives in the United States, offers network monitoring solutions that provide peace of mind, confidence and convenience at an affordable price. Paessler has been at the forefront of providing the industry’s most powerful, affordable and easy-to-use network solutions since the dawn of the modern Internet. Its lightweight products make it easy and convenient to manage network availability, performance and usage without draining valuable system, personnel and financial resources. www.paessler.com BTA Service Associate Member National Printer Repair Network (NPRN) consists of printer and copier/MFP dealers across North America who have agreed to assist each other in repairing imaging equipment for a fixed dollar amount and parts markup. This agreement ensures these companies can maintain their profitability for their national account customers. NPRN was founded by Frank Topinka, an industry and managed print services veteran who is dedicated to growing membership and extending the coverage footprint throughout North America. www.nprn.net A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.

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Highlights Apr 13.indd 1

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Digitek/Reception ads Apr 13.indd 1

3/28/13 8:00 AM

service connections

Obsolete Inventory It has a tremendous impact on your financial health by: Ken Staubitz, BEI Services

et’s face it, inventory management is not a glamorous topic. Generally speaking, most people’s eyes glaze over when even broached with the subject. However, the manner in which you manage your inventory has a dramatic impact on your organization’s cash flow. Consider that the items in your inventory — whether they are sitting on a shelf in your warehouse, in one of your technician’s cars, on your demo floor, etc. — are dollars residing in these locations. Also, consider the opportunity cost of the excess dollars tied up in your inventory. The more dollars an organization has tied up in unused inventory, the less money the organization has to spend on other things (e.g., raises, technology, new initiatives). As a business owner, what else could you do with this money if it was not tied up in excess — or obsolete — inventory? Unavoidably, your organization has to purchase and maintain a stock of goods that you sell, but there is a delicate balance in ensuring your organization maintains the appropriate amount of items used while reducing its risk of inventory write-off. Having inadequate inventory on hand to meet demand can result in upset clients waiting on much-needed items. Conversely, too much inventory on hand can increase the organization’s risk of future write-offs. All major enterprise resource planning (ERP) software has some type of inventory module with varying degrees of automation, allowing one to create minimum and maximum stocking levels, reorder products, restock warehouse locations, transfer items, etc. The degree to which you take advantage of this automation really depends on the skill and expertise of your logistics staff in optimizing the use of the software. Automation is fantastic at minimizing redundancy and reducing errors. There is no question that your organization should leverage the technologies purchased for the benefit of the company. However, the degree of automation does not matter if one is purchasing and maintaining inventory that is not being used, increasing your risk of write-off. On the other hand, not stocking enough of the items being used will lead to increased service manpower, which can put customer service levels at risk. To illustrate my point, consider the following example: ABC Company is doing a fantastic job exceeding various BTA Channel service benchmarks. Service margins, first-call effectiveness and net calls per day are all at, or above, benchmark. This organization is optimizing the use of its ERP software to

reorder, restock and account for inventory. The technicians are happy because they typically have the parts needed to fix a customer’s problem on the first visit. Generally speaking, the logistics department at ABC Company is happy because when it comes time to take a physical inventory, everything is accounted for within reason. After joining the Overstock Parts Network (OPN, www.over stockpartsnetwork.com), ABC Company was provided with a detailed snapshot of various overstocked and obsolete parts in its inventory. The analysis was staggering. The owner of the organization was surprised (an understatement) to find that the company was warehousing more than $109,000 in parts that had not been used in more than 18 months. Of the $109,000 in obsolete inventory, more than $20,000 was residing in technician car stocks. Further analysis showed that the company purchased more than $5,000 in parts that were already residing in some of the technicians’ car stock inventories. Now, the organization must decide what to do with

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Ken Staubitz has experience in all levels of the obsolete inventory, address the various service and operations. Before joining the process issues that are creating an abunInventory management BEI Services team, he was an operations dance of obsolete items in the technicians’ is not glamorous and service consultant for Strategy car stocks and avoid purchasing items aland flashy, but it Development, where he trained and coached ready in stock. has a tremendous hundreds of vice presidents and service The good news for ABC Company is that impact on the managers in best practices to maximize the owner is now aware of this opportunity. productivity and effectiveness. While In order to reduce inventory and increase financial health working in the dealer channel, Staubitz was cash flow, the company sold many of these of the organization. the director of client services for obsolete items to the OPN. In addition, the Modern Office Methods (MOM), Cincinnati, OPN analysis provided ABC Company with Ohio, managing more than 60 service personnel a list of understocked items, allowing managers to order the in various locations. He consistently exceeded various financial needed inventory before risking any customer relationships. and operational benchmarks, which allowed Inventory management is not glamorous and flashy, but it him to successfully train and consult for both has a tremendous impact on the financial health of the orgathe dealer channel and various manufacturers nization. Not enough of the right inventory will create upset to improve their service operations. He can be customers, resulting in a decline in market share. Too much reached at ken.staubitz@beiservices.com or inventory can hamstring the organization’s ability to invest in (513) 200-2169. areas to gain market share. Isn’t it time you took a closer look Visit www.beiservices.com. at the location and use of your money (inventory)? 

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Staubitz Apr 13.indd 2

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Advertiser Index 22 • Ask the Analyst

5 • DocuWare

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27 • BTA Marketplace

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35 • BTA Member Appreciation Reception

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2-3 • BTA Mid-America District Event

40 • GreatAmerica Financial Services

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Ad Index Apr 13.indd 1

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GreatAmerica ad Apr 13.indd 1

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