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CONTENTS Volume 17 No. 2 G
FEATURE ARTICLES 10
18
Device Management Providing remote MFP configuration & monitoring
PRINCIPAL ISSUES 26
by Brent Hoskins Office Technology Magazine
by Chip Miceli Des Plaines Office Equipment
Many would say that remote device management tools actually enhance the sales process. Such tools can save both the dealership and end user time and money. They can also be the basis of a consultative dialog.
It seems that the term “going green” has become part of the universal vernacular. But to some industries — in particular the document management industry — “green” represents more than the buzzword equivalent of “ecological.”
Building MPS Sales Reps Specialists should come from among your senior staff
The Imperfect Game Manufacturers should reconsider their strategies
28
by Larry Weiss Atlantic Tomorrow’s Office
by Jim Kahrs PPMC Inc.
Today, with the CPC model, we will soon be paying the customer to lease our copier/MFPs. Manufacturers constantly tell us how important the aftermarket is in this industry, so why do they continue to offer lower CPCs?
As the title of this article implies, the best managed print services (MPS) representatives are built, not found. As sales will be the catalyst to launch any dealership into MPS, having a strong sales plan is critical. So, how do you build MPS sales reps?
22
Toshiba’s LEAD 2010 OEM hosts multi-city MPS education conference
MPS STRATEGIES What’s in Your Wallet? Adapt to the changing business market to prosper
29
By Brent Hoskins Office Technology Magazine
by Ed Carroll Strategy Development
Designed primarily to provide dealers with tools to help them succeed in selling and implementing managed print services (MPS) programs, Toshiba America Business Solutions Inc. recently hosted LEAD 2010, a two-day education conference.
COURTS & CAPITOLS 25
Greening the Industry Promote the benefits of eco-friendly behavior
Avoiding Loopholes Monitor your lease portfolio & review documents by Robert C. Goldberg BTA General Counsel
In these difficult economic times, it is essential that you monitor your lease portfolio for compliance with all terms and conditions. You should further review your transactional documents. One small loophole and you may be on the short side of the transaction. 4 | 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 u g u s t 2 010
Throughout the years, the established BTA dealer has been successful in growing and developing his (or her) business through the sale of equipment. Today’s business climate is different. Finding ways to grow involves looking at new businesses.
DEPARTMENTS Business Technology Association
23
G
Education Calendar
G BTA Highlights
6
Executive Director’s Page
8
BTA President’s Message
30
Advertiser Index
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EXECUTIVE DIRECTOR’S PAGE
$21,500 Awarded in BTA Scholarships ince 1968, the Business Technology A ss o ci ation has awarded scholarships through its BTA Scholarship Foundation . Recently, BTA awarded 19 students a total of $21,500 for the 2010-11 school year. The foundation was established and is supported by contributions from BTA members. Through an application process and selected by an independent evaluator, BTA awards $1,000 and $1,500 scholarships to qualifying children of member dealership employees. Since the 1984-85 school year, BTA has awarded $1,424,500 in scholarships to 1,264 students. The 2010-11 winners and their sponsoring BTA member dealerships: Amanda Calcado, Advance Business Systems & Supply Co., Cockeysville, Md.; Kelsey Anderson, Anderson Business Technology, Pasadena, Calif.; Brooke Sherman and Nora Klein, Atlantic Tomorrow’s Office, New York, N.Y.; Allison Yates and Jennifer Yates, Automated Business Solutions Inc., Indianapolis, Ind.; Valerie Berry, Berry Business Machines, Shelby, N.C.; Michelle Rutz-Mendicino, Bishop Business Equipment Co., Omaha, Neb.; Brett Derleth and Stacey Duncan, E.O. Johnson Co. Inc., Wausau, Wis.; Seth Hewitt, Genesis Technologi es Inc., Charl e ston , S.C.; Hol ly Andrews, Gordon Flesch Co. Inc., Dublin, Ohio; Duncan Perry, Integrity Business Machines, Conway, S.C.; Emily West, Laser’s Resource, Grand Rapids, Mich.; Margaret Riedel, OfficeWare Inc., Cincinnati, Ohio; Patrick Ward, Oklahoma Office Systems, Oklahoma City, Okla.; Jessica Dresler, Pacific Office Automation, Beaverton, Ore.;
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Alexis Goldsmith, Regal Business Machines Inc., Chicago, Ill.; and Matthew Roberts, RJ Young Co., Nashville, Tenn. The contributions made by BTA’s members are greatly appreciated. During the association’s 2009-10 fiscal year, the following companies made contributions to the foundation: Advanced Systems Inc., Waterloo, Iowa; Aregood Technologies, Ridgeland, Miss.; Atlantic Tomorrow ’s Office, New York, N.Y.; Automated Business Solutions Inc., Indianapolis, Ind.; Bratton’s Of fice Equipment Inc., Greeley, Colo.; Budget Document Technology, Lewiston, Maine; California Business Machine Co., Fresno, Calif.; Capital Services & Supplies Inc., Washington D.C.; Berr y Business Machines, Shelby, N.C.; Coordinated Business Systems Ltd., Burnsville, Minn.; Copiers Hawaii Inc., Honolulu, Hawaii; CWS-Copier Word Processing Supply Inc., Parkersburg, W.V.; E.O. Johnson Co. Inc., Wausau, Wis.; Hoosier Business Machines, Jasper, Ind.; Image Communication Technolog y, Houston, Texas; Konica Minolta Business Solutions U.S.A. Inc., Ramsey, N.J.; Lockwood Moore Inc., Reno, Nev.; MBG Office Systems, Macon, Ga.; Midwest Office Solutions, Chicago, Ill.; Network Business Machines Inc., Redding, Calif.; Nevill Imaging Solutions, Carrollton, Texas; New England Copy Specialists Inc., Woburn, Mass.; Office Systems of Texas, Houston, Texas; Printers & Stationers Inc., Florence, Ala.; Printwise Office Solutions Inc., San Jose, Calif.; Purvis Business Machines Inc., Meridian, Miss.; Stan’s Office Technologies, Woodstock, Ill.; US Copy Inc., Kenner, La.; Vanco Systems Inc., Texarkana, Texas; and Waltz Business Solutions, Crestview Hills, Ky. I — 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 Ed Carroll, Strategy Development www.strategydevelopment.org Robert C. Goldberg, General Counsel Business Technology Association Jim Kahrs, Prosperity Plus Management Consulting Inc. www.prosperityplus.com Chip Miceli, Des Plaines Office Equipment www.dpoe.com Larry Weiss, Atlantic Tomorrow’s Office www.tomorrowsoffice.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 ©2010 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
®
2010-2011 Board of Directors
Have You Registered for BTA East’s Event? t has been my privilege in recent years to attend several of BTA’s district events. Each has proven to be an enjoyable opportunity to learn from some of our industry ’s leading presenters and to meet people from other dealerships. I also enjoy the chance to visit with the exhibiting sponsors. You cannot attend a BTA district event without gaining plenty of new information and practical advice to take back to your office. I am confident that you are well aware of the BTA Southeast and BTA East events that have taken place in recent years. But have you actually attended one of them? If not, I encourage you to do so. Your next opportunity will be Sept. 23-24 at the Ritz-Carlton Hotel in White Plains, N.Y., when BTA East hosts Grand Slam 2010. This will be the district’s third annual event at this venue. The General Registration schedule begins the afternoon of Thursday, Sept. 23, with a panel discussion moderated by Frank Cannata. This session will provide a perfect opportunity to hear from some of the Northeast’s leading dealers — Jerry Blaine, Larry Weiss and Andrew Ritschel. In addition, the panelists will include presidents of two of our industry’s manufacturing companies — Jim D’Emidio of Muratec America Inc. and Mike Pietrunti of Kyocera Mita America Inc. Come prepared to learn about their strategies for success and bring your questions for the Q&A session. Following the panel discussion, there will be a cocktail reception where you will have the opportunity to visit with the panelists, your fellow dealers and representatives of
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our 20 exhibiting sponsors. During the reception and at various times during the second day of the conference, there will be tabletop exhibits so you can learn more about the products and services of the sponsors. The learning continues on Friday, Sept. 24, with four education sessions: “Twenty Traits of the Successful Dealership,” with Bob Goldberg, BTA general counsel; “You Have the MPS Contract — Now What?” with Tom Callinan, founding principal of Strategy Development; “Recruiting & Hiring the Right MPS Sales Team,” with Sally Brause, director of human resources consulting at GreatAmerica Leasing Corp.; and “Scanning as a Service: A New Revenue Option,” with Byron Aulick, president of DataVault Inc. Each of these individuals is an excellent presenter with a tremendous amount of industry knowledge. As a way of thanking you for your attendance and to provide you with a great networking opportunity that you will never forget, the BTA East event will conclude with a night at Yankee Stadium to see the Boston Red Sox take on the New York Yankees. We will do so from the Club Suite — the largest private suite in the stadium. This memorable e vening i s b eing made possible through the co-sponsorships of our friends at GreatAmerica Leasing Corp. and EDA (Equipment Data Associates). See the ad on pages two and three in this issue or visit www.bta.org for more information on BTA East’s Grand Slam 2010. (Also, please note that you can attend this BTA East event at no charge by attending one of the two front runners — the BTA MPS Operations & Service Workshop or the BTA MPS Sales Workshop.) I — Rock Janecek
President Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. San Bernardino, CA 92408 rjanecek@burtronics.com President-Elect Tom Ouellette Budget Document Technology 251 Goddard Road Lewiston, ME 04240 touellette@bdtme.com Vice President Terence Chapman Business Electronics Corp. 219 Oxmoor Circle Birmingham, AL 35209 tchapman@businesselectronics.com BTA East Todd J. Fitzsimons Network Imaging LLC 122 Spring St. Southington, CT 06489 tjfitzsimons@networkimaging.biz BTA Mid-America Ron Hulett U.S. Business Systems Inc. 3221 Southview Drive Elkhart, IN 46514 ron.hulett@usbus.com BTA Southeast Mike Upchurch Business Machines Inc. 3121-C Glen Royal Road Raleigh, NC 27617 mike@bmi4u.com BTA West Greg Gray Burtronics Business Systems Inc. 216 S. Arrowhead Ave. San Bernardino, CA 92408 ggray@burtronics.com Ex-Officio/Immediate Past President Bill James WJS Enterprises Inc. 3315 Ridgelake Drive Metairie, LA 70002 bjames@wjsenterprises.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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Device Management Providing remote MFP configuration & monitoring by: Brent Hoskins, Office Technology Magazine
hey are not new to the industry or to the IT world, but for some dealers and their sales reps, MFP remote device management tools may be viewed as no more than words on a manufacturer’s product literature or website. Instead, meeting hardware quotas remains the order of the day. Why convolute the sales process by bringing up some softwaredriven capability? Many would say the question is not valid; that the topic does not convolute, but actually enhances the sales process. Such tools can save both the dealership and end user time and money. They can also be the basis of a consultative dialog, providing a product deployment experience that further differentiates the dealership from the competition. “If they [sales reps] don’t bring up the discussion of remote capabilities and how they improve the quality of the service your dealership can offer, then they are missing a great opportunity,” says Vince Jannelli, associate director of applications and partners at Sharp Imaging and Information Company of America. “The technology we are providing folds right into the sales story that most dealers use.” That “sales story” is the message used to address a key question asked by the customer: “Why your company?” And the technology Jannelli is referring to is Sharp’s iDVM Architecture, designed to simplify MFP administration and provide remote access for a dealership to perform maintenance diagnostics, automatically collect meter usage and monitor consumable levels. It also allows the dealership to remotely configure devices, clone configurations, update firmware and walk dealers through problems. For the dealership, the value of iDVM is apparent through call avoidance, reducing the number of service trips to the customer location, and in the ability for the technician to be
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better prepared with the right parts in hand on the first call, says Jannelli. “It increases customer satisfaction with the ability to provide quick resolution,” he says. “But, most importantly, in a world of margin compression, it reduces the dealership’s cost of supporting the MFP.” Of course, other manufacturers offer similar tools that provide dealerships the means to remotely monitor customer devices. Canon U.S.A. Inc., for example, offers imageWare Remote. “This solution is designed to help facilitate better service delivery on the part of the service provider — the dealership,” says Dennis Amorosano, senior director of solutions marketing and business support for Canon. “imageWare Remote can send information to the dealership such as meter reads and error conditions and allows the dealership to offer a much higher level of service.” Actually, while remote device management increasingly refers to tools for the dealership’s management of customer MFPs, it more often refers to tools for fleet management within the customer location. That is, such tools are intended for and well received by internal IT personnel seeking to remotely configure and monitor the MFPs and printers on the company’s network. “There is some overlap, but they are designed for different purposes,” says Amorosano of Canon’s imageWare Remote as compared to its Enterprise Management Console, its customer IT device management tool. “Generally speaking, Enterprise Management Console is intended to be an internal-use tool by the IT organization.” A closer look at Canon’s Enterprise Management Console offers a better understanding of the value it offers end users. Providing device discovery, configuration, monitoring and management, a sampling of its capabilities include: identifying
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all Canon and third-party Administration Utility, pro“If they [sales reps] don’t devices on the network; reviding in-house IT adminisbring up the discussion motely resetting device detrators w ith c entrali z ed fault settings; creating aumanagement, maintenance, of remote capabilities tomatic e-mail notifications auditing and support capaand how they improve when paper has jammed or bi liti es; and S har p MF P the quality of the toner is low; and replicating Home Page, a secured webservice your dealership and imp or tin g ad dre ss site embedded in the device can offer, then they are b o ok s from a referenc e used to manage device funcmissing a great opportunity.” machine to all installed detionality, color settings, seVince Jannelli, Sharp Imaging and vices that support Canon’s curity accounts, one-touch Information Company of America Device Information Delivery keys and more from a stanSettings mode. dard Web browser. Sharp offers similar capabilities to end users through its Given that the core device management tools from Remote Device Management Suite. Beyond the aforemen- Sharp, Canon and other manufacturers are shipped as stantioned iDVM Architecture, for example, among its various dard on MFPs — and, so, there is no cost — certain end components are: Sharp Remote Front Panel, enabling users users are quick to embrace their use. “From the customer and support staff to remotely view an MFP’s control panel perspective, Enterprise Management Console provides and control its features via a networked PC; Sharp Printer them a much more effective way of installing devices in a
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n etw orked environm ent their regular use is often a “From the customer and managing those devices reflection of the size of the perspective, Enterprise once they are in place,” says company and the number of Management Console Amorosano. “When you think devices, says Kevin Kern, vice about the fact that a fairly president of marketing for provides ... a much more significant amount of reKonica Minolta Business effective way of installing sources are spent by a comSolutions U.S.A. Inc. “If you devices in a networked pany ’s internal help desk have a customer with five environment and managing dealing with printing probunits in one location and no those devices once they are in place.” l ems, y ou st ar t to think IT people on staff, then it’s — Dennis Amorosano about the types of benefits probably not a good fit for Canon U.S.A. Inc. that this management techthem,” he says, referring to nology can have in IT organKonica Minolta’s PageScope izations. Rather than spending time focusing their efforts on Netcare Device Manager, which allows administrators to non-core functions, customers can focus on items that are manage their entire fleet from a single console. “But when you clearly more important to them, such as application devel- have an IT department, a large network and multiple devices opment and management.” that are not easy for IT personnel to walk to, that’s where this While remote management tools may be well received by IT really comes into play. It tends to be used by mid-sized and personnel, the overall level of enthusiasm for the tools and larger companies with a minimum of 10 to 20 devices.”
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When today’s free device call yesterday where the con“These are all conversation managem ent tool s are a versation with the IT person starters with IT ... I was on good fit for the customer, started with a discussion they sometimes lead to new about the machines, but a call yesterday where the revenues for the dealership. ended with us talking about conversation ... started “There is an opportunity for evaluations and remote with a discussion about the a dealership to generate managed IT services.” machines, but ended with additional revenue and profGoing forward, more dealus talking about evaluations it from selling certain feeers may want to consider and remote managed IT services.” based plug-ins to the base encouraging their reps to — Kevin Kern system,” says Amorosano. tout the merits of device Konica Minolta Business Solutions U.S.A. Inc. “For example, we offer our management tools for use ima geWare Ac c ountin g within customer locations. Manager plug-in for customers who want to account for and “This is a technical capability that really ought to be discussed bill back the use of Canon or non-Canon devices. So, not as part of the general sales motion,” says Amorosano. “Oftenonly can this allow the dealer to generate revenue from the times, it is easy to lose sight of the fact that driving TCO for the plug-in itself, but it also provides opportunities for profes- customer goes well beyond the basic costs sional services-type revenue engagements.” associated with the click charge.” Brent Hoskins, executive director of the Kern cites the resulting opportunity for billable profesBusiness Technology Association, is editor of sional services as well. “These are all conversation starters Office Technology magazine. He can be with IT,” he says of device management tools. “They can lead reached at brent@bta.org. to opportunities to generate additional revenue. I was on a
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Building MPS Sales Reps Specialists should come from among your senior staff by: Jim Kahrs, Prosperity Plus Management Consulting Inc.
s the title of this article implies, the best managed print services (MPS) representatives are built, not found. As MPS gains more exposure, acclaim and momentum, more dealerships are looking to jump on the bandwagon. As with all other programs in your dealership, your level of MPS success will be determined by how well you manage MPS from beginning to end. This must take into account your policies, procedures and processes in administration, service and, of course, sales. As sales will be the catalyst to launch any dealership into MPS, having a strong sales plan is critical. So, how do you build MPS sales reps? Hiring reps from other dealerships rarely works and this will be even more evident with MPS. A rep may know the buzzwords, but that does not ensure success. When hiring a rep from a competitor, you usually have to guarantee substantial income with or without sales success. When you reward someone with large guaranteed earnings regardless of sales production, you will get little or no production. And if he (or she) is that good, why is he leaving his current employer? Some dealers have gone the route of hiring rookie reps and training them as MPS reps. The problem these dealers face is twofold. The learning curve is the first issue. A rep has a great deal to learn and cutting one’s teeth on MPS sales is difficult. Secondly, keeping the new rep excited and “winning” as he (or she) learns the business and works through the early stages of print audits, needs analysis meetings and proposals can be almost impossible. New reps often have a difficult time learning what is needed and have trouble seeing the true potential that MPS can have. All too often these reps leave after a few months, taking your entire training investment with them. So, what is the answer? One very workable solution is to create a different atmosphere and career paths in your
A
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dealership. These career paths would include junior reps, associate reps, senior reps and specialists. A new rep starts out as a junior sales rep, sharing a territory with a senior rep. A new rep’s job for the first three to six months is to learn your dealership, prospecting skills, sales skills and product knowledge. The junior rep is charged with prospecting in the territory shared with a senior rep. His focus is calling on new accounts only. When the junior rep uncovers a sales opportunity for lowend machines (in the case of copier/MFP dealers, this could be anything 25 pages per minute or less), he works the deal with the sales manager and keeps the sale himself. When he uncovers opportunities for larger copier/MFP sales, he works with the senior rep and the two of them split the commission. When he uncovers MPS opportunities, he turns them over to the MPS specialist and he receives a finder’s fee. The key to success with this first stage is to measure and reward the junior rep’s production based on his sales prospecting and skills development activities more than his sales volume. This can be done by tracking his sales activities and providing skill and knowledge tests along the way. If you need to offer a guaranteed income when hiring a new rep, the best method is to give a standard salary and meet the needed income level with a draw against commission. For the first few months, the draw can be monitored against prospecting activities. To do this, you would set up weekly activity targets that must be met. A common way of doing this is to assign point values to each activity and require a certain number of points per week. The rep’s draw would be contingent on achieving the points quota. If a rep meets 50 percent of the points quota, he would get 50 percent of the draw. This will allow you to reward production and quickly determine if this new rep is going to have
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MANAGED DOCUMENT SERVICES Muratec America, Inc. â&#x20AC;¢ 3301 East Plano Parkway â&#x20AC;¢ Suite 100 â&#x20AC;¢ Plano, Texas 75074 www.muratec.com â&#x20AC;¢ 469.429.3481
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complex than that of a black-and-white the work ethic required to succeed. It is How do you build MPS unit, many dealerships employed the amazing how quickly a lazy rep will be efforts of color specialists. This model identified with this system. reps? You build these lends itself well to the MPS market. The junior rep would remain in this reps by focusing on the There are a few major issues that position until he has met certain criteria plan above and moving dealerships face in the transition to that you have determined in advance. For senior sales reps or MPS. First, no dealership can afford to example, once the rep can schedule at associate sales reps into abandon its current business model to least eight appointments per week for the MPS specialist role. chase MPS. That would be suicide. Your three straight weeks, has met the weekly current model is what pays the bills and points target for three straight weeks and has passed the product and skills tests you have designed, he keeps the place running. That said, you need to set up an MPS plan that will not detract from your current model. is ready for a promotion. The next issue is the dramatic difference in how MPS Once the junior rep has met the above promotion criteria, it is time to take the next step. You may now assign him a revenue comes into the dealership and the effect it has on territory or a portion of a territory and move the individual compensation models. You cannot pay MPS reps the same to the position of associate rep for another three to six way you pay regular copier/MFP reps. Finally, the knowledge needed in MPS is very different than months. During this time, you would apply a compensation plan that puts more focus on personal sales while keeping what is needed for copier/MFP sales. This leads to the conattention on prospecting activities. The associate rep is typi- clusion that specialists are the best way to achieve success. Now, back to the original question: How do you build cally still charged with calling on new accounts only. Current customers in the territory would belong to a senior MPS reps? You build these reps by focusing on the plan rep. However, every opportunity the associate rep uncovers above and moving senior sales reps or associate sales reps into the MPS specialist role. At this point in their careers, is his to work and he receives full commission. The sales manager should spend a lot of time with the these reps understand the dealership, the basics of the associate rep coaching him and building his skills. The terri- copier/MFP/printer world, know most of the lingo and can tory assigned can be one the rep will eventually take on per- handle themselves in front of a prospect. A compensation manently or it can be a temporary one. The benefit of having plan designed specifically for MPS sales is then put into the rep start in the territory that he will eventually keep is place and they begin their on-the-job training. Following this method will not only position your dealerthat he will be building momentum with his prospecting activities. The benefit of using another territory is that you ship for success in MPS, but it will ensure continued success can have the rep work an area that is convenient for the with your current business model. Running the two side-bymanager, or one that does not have as much long-term side will allow you to see where things are working and where they are not and you can adjust accordingly. potential. Either option can work. An associate rep would be assigned a sales quota on a Jim Kahrs has been a leader in the office systems ramped-up schedule. For example, he could be assigned a industry for more than 20 years. He has been recognized as quota of $10,000 the first month, increased in $10,000 increa top sales producer, sales manager, operations manager, ments for the next two months. Once the rep has met the dealership executive and business consultant. quota for three straight months, he would be promoted to As president of Prosperity Plus Management Consulting, account executive status. Kahrs works directly with office technology dealership At this point, the rep can go one of two directions: He can be principals and senior executives, helping them improve promoted to a senior rep or to a specialist position and placed their sales, cash flow and bottom-line profitability. He has on the corresponding compensation plan. As a senior rep, he also helped many dealers successfully would be assigned a territory and managed accordingly. navigate the sales of their dealerships or This brings us to the specialist role. Those of you who have the purchases of other dealerships. been in the industry for some time might recall the process Kahrs can be reached at (631) 382-7762 or that was rolled out when color copier/MFPs were first introjkahrs@prosperityplus.com. duced. Since the sale of a color copier/MFP was far more Visit www.prosperityplus.com. 20 | 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 u g u s t 2 0 1 0
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Toshiba’s LEAD 2010 OEM hosts multi-city MPS education conference by: Brent Hoskins, Office Technology Magazine
dollars on copier/MFPs, said Melo, esigned primarily to pronoting that the greatest pervide dealers with tools to centage of document output is help them succeed in sellfrom laser and inkjet printers. ing and implementing managed “Instead of walking past these print services (MPS) programs, printers, focus on all of your cusToshiba America Business Solutions tomers’ document output,” he said. Inc. (TABS) recently hosted LEAD “Your opportunity quadruples.” 2010, a two-day conference feaAcknowledging that it sounds turing a variety of workshops for a bit counterintuitive coming TABS-authorized dealers and from a manufacturer, Melo said Toshiba’s direct sales locations. TABS is advocating that dealers Five separate conferences took Beth Zody, a technical consultant with HewlettPackard, addresses attendees during one of the not delay securing MPS agreeplace in June and July — one each education sessions at LEAD 2010 in Chicago. ments with customers by waiting in Washington D.C., Dallas and Irvine, Calif., and two in Chicago, first for dealers and then for until copier/MFP leases are up for renewal. “It used to be Toshiba Business Solutions, the company’s direct sales opera- that you sold the hardware to get the service,” he said. tion. The five LEAD (Learn, Engage, Act and Deliver) 2010 “What we are going to be talking about over the next couple of days is, once you get the service, you’ll get the hardware.” conferences drew a total of approximately 700 attendees. The LEAD 2010 schedule included more than 20 education At Chicago’s first LEAD 2010, Bill Melo, vice president of national business solutions for TABS, opened the conference sessions in three tracks: sales, service and consulting. TABS by citing reasons for dealers to begin viewing their dealer- promoted the events as suited for “anyone who is impleships from a new perspective. “What we are seeing take place menting or merely beginning to develop a managed print is that the total number of A3 MFP placements has gone services (MPS) program.” Participation in the conference was down in the last couple of years,” he said. “It is forecasted to free and there was no limit to the number of people per dealership who could attend. The presenters included representacontinue going down over the next several years.” Melo also cited the negative impact that the poor econ- tives not only from TABS, but from Hewlett-Packard and omy — and the resulting increase in unemployment — has Lexmark as well, in addition to representatives from Strategy had on page volumes. He noted, as well, the growing desire Development and various independent software vendors. At the conclusion of the event, it was announced that later within companies to print fewer pages. “The point of all of this is not to bemoan our fate, because there are some great this year TABS will introduce the LEAD Academy, providing opportunities here,” he said, encouraging dealers to begin online self-paced training and testing. “This is not the end,” positioning their dealerships as MPS providers rather than said Melo in Chicago of the four LEAD conferences and simply copier/MFP providers. “When you take that perspec- TABS’ efforts to train dealers. “This is the beginning.” tive, the opportunities are very exciting.” Brent Hoskins, executive director of the Business Those opportunities lie in recognizing that end users are Technology Association, is editor of Office Technology spending less than 25 percent of their document-output magazine. He can be reached at brent@bta.org.
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EDUCATION CALENDAR September 14-15 BTA Managed Network Services Workshop
Atlanta, GA The managed network services (MNS) opportunity provides a tremendous market for MFP dealers. The small- to medium-sized business (SMB) customer is receptive to a new way of supporting its internal IT environment. The shift is occurring now, and forward-looking dealers have an opportunity to build a customer base in this growing market today. Once the shift occurs, winning new business will mean replacing the incumbent provider. In this workshop, Mitch Morgan of CEO Focus will teach attendees how to set up MNS programs in their dealerships.
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BTA MPS Operations & Service Workshop White Plains, NY As most dealers and resellers know, managed print services (MPS) is not something that is going to fade away. With entry into the MPS space, you add complexity to your back-office operations and to your service department. Taught by Mike Woodard of Strategy Development, this course is designed to jump-start your understanding of how to set up and manage all operational and service aspects of an MPS agreement.*
22-23 BTA MPS Sales Workshop
White Plains, NY As a provider of managed print services, the dealer can become the end-user’s “single source” for managing printed pages and the hardware used to produce them. Taught by Tom Callinan and Ed Carroll of Strategy Development, this two-day education workshop is designed to provide dealerships with the tools they need to establish a managed print services strategy that will allow them to significantly increase the quantity of captured prints, lock in customers, distinguish themselves from competitors and sell more hardware.*
23-24 BTA East’s Grand Slam 2010
White Plains, NY Grand Slam 2010 will feature an information-packed line-up of education sessions, including a dealer and manufacturer panel discussion facilitated by Frank Cannata of Marketing Research Consultants Inc. Other education sessions include: “Twenty Traits of the Successful Dealership,” with Bob Goldberg, BTA general counsel; “You Have the MPS Contract — Now What?” with Tom Callinan of Strategy Development; “Recruiting & Hiring the Right MPS Sales Team,” with Sally Brause of GreatAmerica Leasing Corp.; and “Scanning as a Service: A New Revenue Option,” with Byron Aulick of DataVault Inc. The event’s schedule will include time to visit with exhibiting sponsors and conclude with an evening at Yankee Stadium to see the Boston Red Sox take on the New York Yankees. For additional information or to register for courses, visit www.bta.org or call (800) 843-5059. *Registrants for the Sept. 22 and 22-23 workshops receive free General Registration to Grand Slam 2010.
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BTA HIGHLIGHTS BTA would like to welcome the following new members to the association:
Dealer Members Acme Business Machines, Olean, NY CBS Inc., Kensington, MD CopEx Inc., Providence, RI CopyLady, Ft. Myers, FL Copy Products Co., Pensacola, FL Express Business Systems, Redmond, WA Hoppstetter’s Office Products, Yuma, AZ Imaging Technologies, San Diego, CA Midwest Office Solutions, Chicago, IL Modular Document Solutions, Ft. Myers, FL Spartan Business Systems, Spartanburg, SC Vendor Associate Member Computhink, Lombard, IL Service Associate Member All Leasing Service, Irvine, CA For full contact information of these new members, visit www.bta.org.
BTA Marketplace The BTA Marketplace provides BTA member dealers with the opportunity to take advantage of discounts and value-added offerings from participating BTA Vendor Associate members such as DocuWare, Image Star, InkCycle, Sharp and Supplies Network, to name a few. Visit www.bta.org/BTAMarketplace to see the current participants in this new program, along with a description of each vendor’s BTA Member Special. The BTA Marketplace — one more way that BTA membership pays! For more information on BTA member benefits, visit www.bta.org.
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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 Diversified Computer Supplies (DCS) is a U.S. wholesale distributor of consumable imaging products. DCS’s product line includes supplies for copiers, inkjet printers, laser printers, fax machines and data storage products from all major manufacturers. The company also offers its customers remanufactured compatible solutions that it tests and validates, as well as OptiPrint, DCS’s managed print services program. www.dcsbiz.com BTA Service Associate member Barrister Global Services Network provides multi-vendor IT services, delivering superior resolution to client/server hardware challenges. The company serves customers in commercial and consumer markets through direct and indirect channels. Barrister provides break/fix, help desk, deployments and other project-based services on a variety of products including: printers, MFP devices, desktops, notebooks, POS, servers, kiosks, digital signage and related peripherals. Barrister covers every ZIP code in the United States, as well as Canada, Puerto Rico and Europe. www.barrister.com A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.
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COURTS & CAPITOLS
Avoiding Loopholes Monitor your lease portfolio & review documents by: Robert C. Goldberg, General Counsel for the Business Technology Association
n today ’s business environment, belonging to a peer group is essential. The ability to share ideas, solutions and successes is well worth the time, funds and effort invested in group activities. Recently, a member of one of the peer groups I work with sent an e-mail message warning to the group’s members regarding a situation encountered with an end user. The dealer is well respected, and deservedly so. However, the economy has changed, but his procedures have not. There is a valuable lesson here for everyone. Driving home the other day, I was listening to news radio and an attorney came on with a message to anyone having difficulty paying his (or her) mortgage. The attorney encouraged listeners to send him all of their loan documents and he was confident there would be errors in the paperwork to be found. Those errors could result in saving one’s home. There was a time when people were thankful for their mortgage, paid it off, burnt it and felt a sense of accomplishment. A homeowner who overextended himself financially did not look anywhere but the mirror for someone to blame. A difficult economy has changed things and innocent errors resulting from complex regulations and documents can become an escape for poor financial planning. The dealer situation involved a private-label leasing program. Private-label leases were assigned to the leasing company that paid the dealer and administered the leases. An end user contacted the dealer and asked for relief from his lease. Business was bad, the company had shrunk and the equipment was not being used. The dealer contacted the leasing company and retrieved the machine. The equipment was sold. However, as per the terms and conditions of the lease, the leasing company continued to bill the remaining lease payments. The end user is now suing the dealer, claiming the leasing arrangement was misrepresented. The end user contends that when the dealership picked up the equipment, he was relieved from any further obligation. The suit alleges that the end user was never notified that the lease had been assigned to the leasing company, no documentation was provided when the machine
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was picked up to advise that payments would continue, and the documentation that was provided used the word “repurchase.” The amount at issue is approximately $16,000. Defending the litigation could easily cost more than that, in addition to the time and the distraction from profitable business. A settlement is perhaps the most economical solution, but could this have been avoided? Yes, it could have. Although private-label leases have the proper language to assign a lease, the end user should be notified that an assignment has taken place and to whom. This is especially true where the leasing company is collecting payments in your name. If the end user believes the lease is with you and you pick up the equipment, it is possible to believe the end user is being relieved of his payment obligation. A notice of assignment will legally inform the end user that the lease is now with a third party. Proper documentation will always help in a contested situation. A pick-up receipt that merely indicates the goods have been taken is essential. The document should provide that the retrieval of the equipment does not relieve any obligations under the lease. Clearly the word “repurchase” should be avoided. It is always best to establish company codes for equipment rather than descriptions. Code 101 may mean “repurchase” in your company. However, that is not the message it conveys to the end user. In this situation, the end user will receive an undeserved discount due to a lack of documentation and improper terminology. The end-user’s attorney will ensure a savings of thousands of dollars. In these difficult economic times, it is essential that you monitor your lease portfolio for compliance with all terms and conditions. You should further review your transactional documents, making certain they are current and reflect your business practices. One small loophole and you may be on the short side of the transaction. Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com. 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 u g u s t 2 0 1 0 | 25
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PRINCIPAL ISSUES
Greening the Industry Promote the benefits of eco-friendly behavior by: Chip Miceli, Des Plaines Office Equipment
t seems that the term “going green” has become part of the universal vernacular, with nearly every company and organization weighing in on the importance of environmental friendliness. But to some industries — in particular the document management industry — “green” represents much more than the buzzword equivalent of “ecological.” It defines our future. While those in the office technology industry recognize this as truth, encouraging the customers and end users of our products to see and be “green” can present a challenge. But a little education about the benefits of technology, print management, conservation and archiving can go a long way, especially if the very real cost savings associated with these environmental efficiencies are underscored. In terms of forward “green” thinking, print management takes a place of honor. A fundamental and sweeping change in the document generation industry, print management — in short, the analysis of cost per page — is driving our industry down greener pastures. Studies indicate that between 1 percent and 3 percent of a company’s total bottom line is spent on document generation/management. Large corporations or public entities have historically purchased copier/MFPs from one vendor, facsimile products from another, and printers and supplies from a “big box” store in the neighborhood. After that, it is time to shop the market for a service provider. The use of four providers can result in significantly higher costs for companies that generate large volumes of documents annually. But substantial savings can be had and the carbon footprint can be reduced with the availability of programs that offer all the above components serviced by a single provider. Traditionally, document generation equipment and solutions have been driven by the price of equipment; however, the soft and hidden costs are many and the best way to provide a true picture of those costs is by creating a per-page price, including everything from the price tag of the equipment used to the service contract. Currently, print management software is available for organizations that use multiple printers and copier/MFPs. This state-of-the-art software monitors all machine-printed materials and tracks the number of copies each piece of equipment
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uses. It then produces a report that evaluates cost-per-page analysis. Print management tracking systems can also monitor paper consumption and accurate usage of scan, fax and copy output. Moreover, a print management system can provide information necessary to determine the optimal number of printers, copier/MFPs, faxes and other imaging equipment required for an organization to operate efficiently. This is an important factor, as there can be a wide discrepancy between the operating costs of desktop printers and copier/MFPs to generate an individual document. The smaller laser printers that are available at virtually every office supply company carry low price tags, but the cost of replacing cartridges can be significant. A system that tracks documents can red flag the excessive use of equipment with high per-page costs. And with most office environments now using color, it is critical that organizations employ technology that allows the generation of documents in the most efficient manner. As technology continues to evolve, additional opportunities will present themselves to document solutions dealers, while at the same time raising the bar for minimum acceptable industry standards. Dealers who are not making a concerted effort to stay ahead of technology — particularly as it pertains to the “green” movement — are only hurting themselves. Just like virtually every industry, those of us in the document
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auditing and access provisions make it management field are feeling the pinch easy and convenient for customers to of this tight economy. Still, it is money Indeed, electronic storage utilize this service. well spent to have service technicians offers a number of While it may seem counterintuitive for trained for the technological explosion; advantages for businesses those in the office technology industry to it all goes back to the difference between ... that want to get out encourage customers toward archiving — cost and value. from under the burden after all, ours is an industry built on selling Another, more old-fashioned approach of physical storage of paper, toner, ink and equipment that proto promote “green” behavior is to enpaper records. duces hard copy — it cannot be denied courage customers to employ conservathat conservation is the way of the future tion techniques within their offices. Here is one eye-opening statistic that just might do the trick: About and we need to be prepared to offer “green” services. Staying technologically proficient and educating customers 70 percent of a typical office’s waste is paper. Double-sided copying can help reduce waste significantly and will cut costs on the use of conservation measures will ultimately translate on supplies and expensive hauling. A further good outcome of into great value for your business, keeping things “green” on double-sided copying is a reduction in filing space and more than one level for your dealership. Chip Miceli is president of Des Plaines Office mailing costs. Equipment, a Chicago area leader in the field of Customers could also benefit from an inter-office “editprint management and document solutions. before-you-print” policy. They will likely be amazed at the He can be reached at (847) 879-6400. reams of paper that can be saved each year if a company pracVisit www.dpoe.com. tice is in place to proof before printing. Studies also indicate that industry is responsible for more than 67 percent of the non-hazardous waste generated in this country, yet few companies have invested in waste reduction technologies or implemented pollution prevention policies. Changing habits is not always easy, but a big difference can be made in streamlining office waste by following three basic principles: Reduce the amount of trash discarded, reuse containers and products, and recycle as much as possible. Going back to technology, perhaps the ultimate means to “going green” is through electronic archiving. Archiving software now exists, enabling businesses and organizations to store and easily retrieve documents in an electronic format. This most recent evolution takes document management to the next level and it is fast becoming a major factor in the ever-increasing movement toward the paperless office. Considering the economic landscape of the past couple of years, companies continue to look for measures to conserve; what was standard operating procedure 20, 10 or even three years ago is no longer the case. Indeed, electronic storage offers a number of advantages for businesses, hospitals, schools or institutions that want to get out from under the burden of physical storage of paper records. Today there are sophisticated storage programs available for traditional documents as well as electronic docum ents. Th ese programs are c ompli ant w ith privacy regulations including Gramm-Leach Bliley, the Freedom of Information Act and HIPAA. Secure storage, comprehensive 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 u g u s t 2 0 1 0 | 27
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PRINCIPAL ISSUES
The Imperfect Game Manufacturers should reconsider their strategies by: Larry Weiss, Atlantic Tomorrow’s Office
o better understand the present pricing model in the office technology industry, it is important to look at how the game began. For me it started in 1973 with Xerox, renting copiers with a 30-day cancellation at any time. Even back then, Xerox stressed the importance of selling supplies; the company charged a monthly rental fee that included maintenance, but supplies — toner and developer — were purchased separately. Sales reps had supply quotas and selling paper was important, too. My point: Selling supplies was a very important aspect of the business. From 1976 to 1990, the leasing of copiers was the predominant way they were acquired; the rental business was becoming a thing of the past. During this period, users made monthly lease payments for their copiers. In addition, we sold annual contracts with click charges. Billable supplies — i.e., toner, developer, fusers, etc. — were paid for by the customer separately from the monthly lease payment. It was the “perfect game.” In about 1990 (I cannot recall when the cost-per-copy [CPC] model was introduced), end users began paying a CPC, which included labor, parts, supplies — everything except paper and staples. When the CPC model was first introduced, I was not a big fan. The reason: The CPC model versus the old model of selling service and supplies separately reduced revenues by approximately 15 to 25 percent. Yes, CPC did help to justify selling more units, but at what expense? It was the start of the “imperfect game.” Being an optimist, I will admit I thought that if we would be able to increase the CPC rate on an annual basis, perhaps it would not be that bad. As it turns out, I was wrong. Today, with the CPC model, we will soon be paying the customer to lease our copier/MFPs. (I’ve heard this referred to as, “The Race to Zero.”) We all understand that the industry is facing declining unit sales, but what do the manufacturers think they will accomplish by giving away the aftermarket? If we are making less money on the copier/MFP and less money on the aftermarket, guess what? There will be nobody left to play the game! Manufacturers all have agreements with which they incentivize dealers to buy all of their parts and supplies from them.
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I have provided you with a look at the changing roadmap of the game of copier/ MFPs. Unfortunately, where the road eventually takes us will be difficult unless the manufacturers chan ge th eir appro ach to th e aftermarket. It is now 2010 and manufacturers must protect their unit production the best they can from such realities as dealers selling their businesses to competitive dealers or competitive manufacturers. Of course, in some cases, manufacturers are either offensively or defensively buying dealerships. This is all part of the evolution of what was the perfect game. Manufacturers must get more involved in how their direct operations are driving down pricing. They are offering CPCs that are so low that I have even asked my manufacturers how they can make money at these levels. Guess what? I have not received any supporting information that shows me that they are making money at these low CPC rates. When competing with other dealers, you compete more on competitive advantages. Yes, price comes into play, but if we are at $.012 black and white or $.07 color, a competing dealer will come back with $.01 and $.065. When competing with direct branches, however, today’s CPC is as low as $.004 (with staples). Also, 11-by-17 should not be billed as one click. If we are all trying to make money in the high-end color production space, we need to address this change accordingly so we can be profitable in this market. I realize manufacturers have to keep the factory running. However, if they were still playing the perfect game and not the imperfect game, they might not be laying off so many people, reducing salaries and cutting back on expenses. Manufacturers constantly tell us how important the aftermarket is in this industry, so why do they continue to offer lower CPCs? Manufacturers: I urge you to stop and reconsider your strategies and control the urge to give away the aftermarket. Try to return to the way the game was played. Larry Weiss is president of Atlantic Tomorrow’s Office, New York, N.Y. He can be reached at lweiss@tomorrowsoffice.com. Visit www.tomorrowsoffice.com.
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MPS STRATEGIES
What’s in Your Wallet? Adapt to the changing business market to prosper by: Ed Carroll, Strategy Development
apital One bank has been running a series of commercials featuring “old-world” Vikings intermingling in today’s society. The message being sent is that the old, established way of conducting business is not the way the company conducts business today. The primary product it is selling is its Visa credit card program. The program allows for the issuance of a credit card that meets the needs of the applicant and is not the same “one-size-fits-all” program the competition offers. The closing tag line is: “What’s in your wallet?” I share this with you because I believe this example speaks to the essence of what it takes to be successful in managed print services (MPS). Throughout the years, the established BTA dealer has been successful in growing and developing his (or her) business through the sale of equipment. Basically, the company sells equipment to get the aftermarket — the most profitable part of his business. Up until a few years ago, there was no reason to consider doing it any differently. Today’s business climate is very different. Equipment growth has slowed (copier/MFP placements are declining), and finding ways to grow involves looking at new businesses. MPS has been identified as one of the growth areas to consider and many BTA dealers are pursuing MPS opportunities. Generally, when you are good at something and you attempt to broaden your skills, you look to do so by applying your strengths to the new areas you are pursuing. Hence, many dealers approach MPS as an equipment opportunity. You position MPS with your customers as a way to simplify, standardize and upgrade their fleets of printers and outsource the responsibility to a single provider. In doing so, they will realize significant savings for the cost of printing on a go-forward basis. Sell the equipment to get the aftermarket agreement. The program is launched because you are able to identify opportunities in your current base, and as the current vendor, it is relatively simple to get the appointment to introduce them to the program. Most likely, they are satisfied with your services, and because there is no upfront investment, they agree to move
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forward with the assessment. The assessment identifies how many machines will be replaced and identifies the savings to be realized once implemented. This results in many assessments and a few MPS agreements, but for the most part, not a program that brings growing/profitable revenue to the dealer’s business. The dealer becomes frustrated with his lack of success with MPS. Why does this approach lack success? It starts with equipment. Most companies have more technology than they need and adding — or even replacing — is not a priority. Yes, they realize the technology might be old and illmanaged, and they might not know what it is currently costing them. But no one is breathing down the prospect’s neck to change this situation, so why make the change and risk it not going well? You could have created a sound business case, but given the dramatic change, especially with an equipment purchase at implementation, a prospect does not want to risk the chance of it backfiring. Many corporate careers have prospered through risk avoidance, and unless you are dealing with a dynamic, progressive organization, the risk associated with change leads to status quo more often than not. Whether you realize it or not, your desire to sell equipment has decreased your chances of getting the business. You created a new obstacle and hurt your chance for closing the opportunity. I would call this the “old-world” approach. A better approach, which will result in winning more opportunities, is the services-led model. This strategy focuses on breaking down the obstacles, building the business case and getting the contract. You focus on getting the contract to better position yourself for equipment opportunities. Like what might have transpired in the first approach, you need to build a sound business case for change. You also need to identify a change agent, or champion, who is not afraid of change. This person needs to be someone who is in a position to implement change, who has the will or desire to improve business operations and has exhibited a practice of leading change in his organization. Like the first, status quo remains a viable alternative. Overcoming this obstacle needs to be the focus 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 u g u s t 2 0 1 0 | 29
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opportunity. You do not want to create needs. They seek to offer a program that is By no means am I new ones. Keep it simple, do not overcomcustomized to the prospect’s environment plicate the situation and focus on getting and they focus the prospect on looking for suggesting this will the contract. Once you have the contract, what is in their wallet. be easy. It is not. you will get equipment opportunities in There is much to be gained in MPS. If you MPS is not a simple, the future. are not reaching your expected levels, transactional sale. By no means am I suggesting this will review your approach, understand your It involves work, be easy. It is not. MPS is not a simple, strengths and weaknesses with your current it is tedious ... transactional sale. It involves work, it is approach and, most importantly, keep your tedious, it is time consuming and it has a focus on the needs of the prospects, not just longer sales cycle (typically more than 90 days) than most your own. Your past success does not always transcend to equipment opportunities. success in new business or in today’s competitive market. We Those having success in MPS are doing so through building must adapt to the changing business climate in order to consound business cases, involving the decision makers in the tinue to prosper. process, using a consultative sales approach, and by keeping Ed Carroll is a principal at Strategy Development, an advanced focused on the needs of the prospect in order to overcome management consulting firm engaged in sales leadership, status quo. They do not seek shortcuts to the process. If managed print services, operational efficiency, service needed, they spend extra time to build the business case. They productivity and business planning. Clients include equipment look to eliminate obstacles, not create them. They are flexible manufacturers and resellers (large and small) in their approaches, not rigid. They realize the challenges of focused on equipment and service in the getting an MPS agreement are such that if they do not document and imaging industry throughout approach it this way, they will severely limit the level of success North America. Carroll can be reached at they are looking to achieve. Successful MPS providers promote (703) 722-2973 or carroll@strategydevelopment.org. a program important to the needs of the prospect, not their Visit www.strategydevelopment.org.
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31 • BTA Membership
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(877) 777-5001 / www.escorp.biz
(610) 527-3317 / www.strategydevelopment.org
11 • Digital Gateway
13 • FMAudit
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GreatAmerica ad July 10:32OT0408
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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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Executive Team Business Planning to help
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