June 2011 Office Technology by Business Technology Association

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CONTENTS Volume 17 • No. 12

FEATURE ARTICLES 10

The A4 MFP Opportunity Is it time for you to take a closer look?

COURTS & CAPITOLS Target: Automatic Renewals New Wisconsin law effective May 1, 2011

by Brent Hoskins Office Technology Magazine

by Robert C. Goldberg BTA General Counsel

Are you just walking by the A4 MFP market, not opening the door to the opportunity? Are you concerned about the lower amount of revenue generated by an A4 MFP as compared to an A3 MFP? If so, you are not alone.

Accelerating Growth Kyocera Mita hosts Pan-American Dealer Meeting by Brent Hoskins Office Technology Magazine

In what may be just the tip of the iceberg, Wisconsin has passed legislation governing the automatic renewal provisions of equipment leases. What is noteworthy is that portions of the legislation are applicable to all existing leases — not just those entered into after the effective date.

P R I N C I PA L I S S U E S Saving or Making Money What is the goal for your business?

by Ed Carroll Strategy Development

With company executives expressing continued commitment to the dealer channel, sharing the latest product road map and announcing ambitious company growth plans going forward, Kyocera Mita America hosted its 2011 PanAmerican Dealer Meeting April 18-20 in Las Vegas.

Gateway to Success BTA Mid-America hosts district event in St. Louis

Do you want to save money or make money? Normally, these options are not usually mutually exclusive. If you are able to save money (i.e., reduce costs), you are able to make more money or profits. But in today’s imaging industry, it seems that the priorities of your business are not always that clear.

Remote Monitoring & More Examine all your options before making a decision

by Brent Hoskins Office Technology Magazine

by Mike Lamothe Office Document Consulting

With the goal of providing dealers the opportunity to learn from experts, gather new ideas and strategies, and network with fellow dealers, on May 3-4, BTA Mid-America hosted Gateway to Success at the Four Seasons Hotel in St. Louis, Mo.

Hire Learning Avoid legal pitfalls & discrimination when hiring by Dennis Sprenkle Crawford Thomas

The goal of a job interview is to learn as much as you can about a candidate in order to accurately assess interest, qualifications and experience. In order to get the information we need, we have to ask questions. Yet, some questions are inappropriate and even illegal.

In previous articles, I have described some of the challenges sales reps and dealership principals have experienced attempting to make the transition into managed print services. In this article, I would like to share a more recent personal experience sourcing remote monitoring software (RMS).

D E PA R T M E N T S 24

Business Technology Association • BTA Highlights

Executive Director’s Page

BTA President’s Message

Advertiser Index

4 | w w w. o f f i c e t e c h n o l o g y m ag.com | June 2011

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EXECUTIVE DIRECTOR’S PAGE

A Look at MPS, A4 & Mobile Computing

’m suspending with my traditional format this month. That is, instead of focusing on one topic in this column, I have three topics I would like to briefly address. My hope is that each will give you a little food for thought. (1) MPS Delivered — As is always the case with any cover story I write for Office Technology, many of the comments shared in the telephone interviews I conduct do not end up in print. It is simply a matter of limited space. As I wrote the cover story for our May issue, there is one area related to the topic of MPS that I had hoped to include, but could not due to the space constraints. For that article, I had asked the interviewees from Konica Minolta, Kyocera Mita America and Toshiba this question: “What do you believe are the key characteristics of the dealership that is doing well with MPS?” Here is a synopsis of the traits they shared: owner involvement and commitment to an MPS program; a willingness to invest in staff training; inclusion of the MPS program in the dealership’s business plan; the right compensation strategies; dedicated personnel who can easily discuss the concept of managed print with customers; and strong administrative and operational processes. Does this describe your dealership? (2) The A4 MFP Opportunity — If you stopped to look at the artwork on the cover of this issue, then you know the topic of this month’s cover story is A4 MFPs. I have written two previous cover stories on the topic, however, this time, as I began writing, I was thinking about how the buzz for A4 has died down a bit since writing the previous articles. The recession may have had something

to do with that, slowing some dealers from adding to their product lineups. There is also the issue of the concern about A4s displacing A3s, which I address in the article. Yet, I cannot help but think about what I would do if I owned a dealership. I would be embracing A4 with an eye on providing a full spectrum of products to my customer base. I would be driven, in part, by the knowledge that I never print on 11-by-17-inch paper. In many environments, A4 simply makes more sense. I would want to capture the clicks on as many A3 MFPs, A4 MFPs and singlefunction printers as possible, not just the clicks from two of these product categories. Are you embracing A4? (3) Mobile Computing — I have not yet written a cover story on this topic, but I will in the future. Like you, I have been amazed by the rapid acceleration in mobile computing in recent years. Yes, there is the iPad (and similar products), but think about all of the smartphones out there. Today, we check e-mail via cell phone when away from the office. Just this morning, I reviewed a PDF proof of the cover of this issue of Office Technology on my phone before arriving at work. What’s next? A few years ago, I could not have imagined all of the mobile computing we have now. Likewise, I cannot imagine what is coming next. What I can imagine is a day when I’ll want to print from my cell phone. I can also imagine an entire generation of workers who rely only on mobile devices, as opposed to desktop PCs, like I am typing on now. Are you keeping a close eye on mobile computing in anticipation of how it will change the office technology industry? One of the things I like about our industry is that it is constantly changing, resulting in new opportunities. I hope you are looking forward to whatever lies ahead.  — 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.com Robert C. Goldberg, General Counsel Business Technology Association Mike Lamothe, Office Document Consulting Dennis Sprenkle, Crawford Thomas www.crawfordthomas.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 ©2011 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.

6 | w w w. o f f i c e t e c h n o l o g ymag.com | June 2011

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BTA PRESIDENT’S MESSAGE 2010-2011 Board of Directors

It Has Been a Great Year — Thank You!

find it difficult to believe that my year as BTA’s national president is already nearing a close. It has been a great year and serving as president has been very rewarding and enjoyable for me. Thank you for the opportunity to serve our association. Much has happened during the 2010-11 year and much remains to be done. There have been some very exciting and important activities that have taken place. Following are a couple of the highlights. Perhaps the most important issue this past year has been the concern about data security and the resulting new state legislation proposed to regulate actions taken when buying, selling or returning office equipment. Lawmakers in some states have introduced legislation that would regulate how dealer and vendor members assure end users that they will not be negatively affected by any data left behind on a digital MFP. BTA’s general counsel, Bob Goldberg, has been busy traveling to the states where legislation has been proposed (there are seven states as of this writing). Bob and representatives from dealerships, manufacturers, etc., have met with state lawmakers to help them understand the issue of data security and how it relates to our businesses. BTA’s position is that legislation is unnecessary. Instead, our end users need to be both aware and informed about protecting their confidential information. BTA has crafted an informational pamphlet about data security that can be found at www. bta.org/DataSecurityPamphlet. I would encourage all dealers to take advantage of this resource. It can help make your customers aware of these concerns while also offering solutions to keep their data secure. BTA is

working hard to ensure that data security legislation does not have a negative impact on the office technology dealer. Meanwhile, another BTA activity that I am very pleased with and excited about is the number of district meetings that are taking place. For the first time in many years, BTA is conducting district events nationwide. The inaugural BTA Mid-America event in May, held at the Four Seasons in St. Louis, Mo., was well attended and we have received positive feedback from attendees and sponsors. The events in the East and the Southeast are well established, but gaining in participation. BTA will be hosting a BTA West district event this November in Las Vegas. These events are fun and educational, allowing dealers to network with each other, learn from our education sessions, and meet with their vendors face to face. If you have not been to a BTA district event, I invite you to attend to see what the excitement is about. Dealers are invited to attend any event in any district, and attendees are eligible for our BTA District Event Sweepstakes prize drawing when they fill out an entry form available at each event; the more you attend, the better your chances of winning. In addition to our Sweepstakes prizes, our sponsoring vendors award prizes during each district event as well. BTA has added other benefits and features for its members this year. To learn more, visit www.bta.org/MemberBenefits. Although my term ends June 30, our new president, Tom Ouellette, and our executive director, Brent Hoskins, along with the full BTA Board of Directors and the BTA staff, will continue to improve your dealership’s opportunities and profits by offering more benefits and programs for you to access as a BTA member.  — 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

8 | w w w. o f f i c e t e c h n o l o g ymag.com | June 2011

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The A4 MFP Opportunity Is it time for you to take a closer look? by: Brent Hoskins, Office Technology Magazine

re you just walking by the A4 MFP market, not opening the door to the opportunity? Are you concerned about the lower amount of revenue generated by an A4 MFP as compared to an A3 MFP and asking yourself, “Why would I want to sell a product that will make me less money per unit than what I’m used to selling?” If so, you are not alone. However, it may be time to open the A4 door a little wider. “I think there is a fear among some dealers that if they start replacing their A3 MFPs with A4 MFPs, they won’t generate as much revenue as they have before,” says Jim D’Emidio, president of Muratec America Inc., which offers an A4 MFP lineup that includes one color and nine monochrome models. “It is a huge fear.” Shane Coffey, director of document products for Sharp Imaging and Information Company of America, which markets the Frontier Series of monochrome and color A4 MFPs, offers a similar assessment. “Some dealers are fearful of change,” he says. “From the dealer’s perspective, at first glance, he asks, ‘Why would I have a sales rep knocking on doors to sell an A4 product when he could be selling a more expensive A3 product?’ That’s a very basic and rational first response.” The hesitancy among some dealers to embrace A4 based on visions of an A3 MIF (machines in field) being replaced by an A4 MIF is not well founded, say D’Emidio and Coffey. Says D’Emidio: “Muratec does not view A4 as a means to replace A3 machines.” Says Coffey: “That is not what the product is designed to do.” More on the intent of A4 MFPs later. Bob Palmer, director of the Digital Peripherals Solutions Consulting Service for InfoTrends, a market research firm, acknowledges that the hesitancy among many dealers to sell the copier/MFP vendors’ A4 MFPs is apparent. However, he says, the prevalent issue is not the lower-than-anticipated sales volume due, in part, to dealer concerns about A4 MFPs replacing

A3 MFPs. “Yes, the copier vendors have been disappointed in their performance with A4,” he says. “But the fact is, they are losing business to the printer companies. So, it is not a question of A3 losing business to A4, it is the copier vendors losing business to the printer vendors.” Among dealers who do embrace the A4 opportunity, increasingly they are turning to the printer vendors for their A4 MFPs (and single-function A4 printers), driven significantly by the shift to managed print services (MPS), says Palmer. “MPS has helped dealers understand how they can sell A4 product, but when they do it, they often do not go to the copier vendors for A4 products, they go to printer vendors such as HP (Hewlett-Packard), because the printer-based A4 MFP is cheaper,” he says. “The dealers who are the most successful with A4 MFPs — and I’m being as frank as I can — are the ones who have access to printer-based devices such as those available through HP and Lexmark.” Of course, there are other viewpoints, such as the one that prevails at Ricoh Americas Corp. In January, the manufacturer entered the A4 MFP market with the launch of two color models; three additional A4 models will be launched in September. The Ricoh models are presented as “hybrid” MFPs, offering — as at least one Ricoh promotion states — “the best of both the printer and MFP worlds.” Specifically, says Steve Burger, Ricoh’s vice president of product marketing, while the company is “not looking to offer the lowest-priced A4 MFPs out there,” its products offer an advantage over printer-vendor A4 MFPs. Those advantages, he says, include such traits as robust controller technology, full device management capabilities, low running costs, more metal parts (increased durability), a protected aftermarket (as opposed to aftermarket supplies available on the Internet) and higher margins. Comparisons of printer-vendor A4 MFPs and copier-vendor

10 | w w w. o f f i c e t e c h n o l o gymag.com | June 2011

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A4 MFPs aside, there is no something unique and acdebating that the combined tually gain market share. “ ... A4 products give market for printer-based, Instead, the dealer will be dealers another weapon ... copier-based and scan-centaking on A4 just to mainBy rightsizing some of the tric A4 MFPs is growing. The tain market share.” products in the end-user’s U.S. market for all (color and The ability to gain marmix, you can ... be more monochrome) EP (electroket share with A4 is a realphotographic) A4 MFPs grew ity, says Coffey, given that competitive with your bid at a rate of about 17 percent these small-footprint MFPs without reducing your margin. in 2010 with approximately often allow dealers to win It is ... another arrow in your quiver.” 1.27 million unit placements, new customers in bid situa— Shane Coffey, Sharp Imaging and reports Palmer. In contrast, tions. “We have noticed that Information Company of America the A3 MFP U.S. market for those Sharp dealers who grew at a rate of about 4.6 have embraced the A4 prodpercent with approximately 823,000 unit placements. For ucts, the growth of their overall sales is higher than those monochrome-only MFPs, he says, “it is basically flat for A3 dealers who have not embraced A4 products,” he says. “The while A4 is growing at about 15 percent.” data holds out that this is, in fact, true.” While the numbers reveal that new A3 MFP unit placeThough A4 has existed for years in the form of singlements are far behind A4, there is another declining number function desktop printers, only recently has the industry that A3-only dealers should recognize. “If you are just re- seen the rise of the A4 MFP featuring — although somewhat placing A3 machines with A3 machines, you are going to see limited compared to their A3 cousins — finishing capabilia reduction in your click count,” says D’Emidio. “People are ties. What is driving today’s growth of the A4 MFP market? printing more and not producing as many copies as they did One of the drivers, of course, is the growing recognition five years ago.” that few documents require the 11-by-17-inch paper providWith that in mind, “we tell our dealers, ‘Maintain your A3 ed by A3. It is only about 15 percent of documents, says Palmbase, but increase your base with A4 placements,’” he says. er. However, he says, there are two more significant drivers: “A4 is not a way to replace A3. It is a way to replace single- “Number one is the difference in cost between A3 and A4. function printers in an MPS engagement or to replace a Number two is the overcapacity and underutilization of A3.” product where the end user also needs scanning in a deskThe rise of A4 can be attributed as well to technological top unit. So, we believe that A3 still has a place, but maybe advancements, says Coffey. Early copiers fed 8.5-by-11-inch not in as many places as in the past.” paper in the portrait direction to meet speed requirements, Coffey explains that when two or more A3 MFP-only he says, which led to the capability of handling 11-by-17vendors compete, the provider offering the lowest price is inch paper. “Today, technology has advanced to the point often the company that wins the account. “So, the A4 prod- that we can now make an A4 machine, which is not as deep, ucts give dealers another weapon,” he says. “They can say to but is capable of running at 30-plus pages per minute,” he a customer, ‘Look at the number of units on your campus. says. “And, of course, controller and processing technology There is still some need for the high functionality of an A3 has allowed the machine to economically perform the same device, but there are also areas where there is no need for functions that advanced A3 machines can perform.” A3 [11-by-17-inch] paper.’ Instead, for those areas there may Burger emphasizes that today’s A4 MFPs are far superior be a need for a scan-centric workflow where an A4 MFP can to early models. “In the past, the A4 MFP was just a printer be incorporated. By rightsizing some of the products in the with a scanner bolted on top; it could scan a little bit, but it end-user’s mix, you can now be more competitive with your was really a printer,” he says. “As technology has matured, bid without reducing your margin. It is basically another ar- now you are seeing everyone offering products with more row in your quiver.” advanced capabilities. That’s opening up the opportunity.” Dealers do not want to be in a reactive mode, says CofGiven that technology has made today’s advanced A4 fey. “Those who are reluctant to sell A4 may not do so until MFPs possible and “our channel is a push channel,” it is imthey have to,” he says. “That’s unfortunate, because if the portant for dealers to remember that “the customer sees dealer doesn’t get in there early and take advantage of the what the dealer shows,” says Coffey, noting that this reality uniqueness of the A4 offering before a competitor comes should serve to help dealers overcome any hesitancy about up with it, then it’s just a ‘me too’ offering. The dealer will A4 MFPs. “Each dealer controls his own sales force and his have squandered the advantage of being able to go in with own MIF,” he says. “The salesperson can only pitch what 12 | w w w. o f f i c e t e c h n o l o gymag.com | June 2011

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competing with another his sales manager allows “A4 is more ... critical now dealer down the street,” says him to pitch.” Stricklin. “They are competWhile the dealer will want that dealers are not just ing with VARs and computto control his (or her) MIF, it competing with another er integrators that are tryis clear that today’s end usdealer down the street ... ing to get into the customer ers are increasingly interToday, the dealer needs to location from the print ested in A4 MFPs, says Lou become a more complete side with the goal of phasStricklin, director of marservices company ... The ing out or taking over the keting for Muratec. “With an customer’s copiers. Today, A4 MFP, particularly deskcompetitive landscape is changing rapidly.” the dealer needs to become top models, you are talking — Lou Stricklin a more complete services about workflow and simpliMuratec America Inc. company, offering a comfying business processes,” plete package he says. “In addition, due to the recent recession, where an office may have two to three to customers. The competitive landscape is people less than a few years ago, the dealer can now deploy changing rapidly.”  Brent Hoskins, executive director of the devices that will help the customer be more efficient.” Business Technology Association, is editor The A4 MFP is also the ideal means for dealers to compete of Office Technology magazine. with other companies that lead with printer-based products. He can be reached at brent@bta.org. “A4 is more and more critical now that dealers are not just

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Accelerating Growth Kyocera Mita hosts Pan-American Dealer Meeting by: Brent Hoskins, Office Technology Magazine

ith company executives expressing continued commitment to the dealer channel, sharing the latest product road map and announcing ambitious company growth plans going forward, Kyocera Mita America (KMA) hosted its 2011 Pan-American Dealer Meeting April 18-20 at the Mandalay Bay Resort and Casino in Las Vegas. The meeting drew more than 1,100 attendees — including both Kyocera and Copystar dealers — from the United States, Canada, Latin America, Mexico and Japan. Ed Bialecki, senior vice president of sales for KMA, welcomed attendees as the opening General Session got under way by explaining the meaning behind the meeting’s “Inspire, Innovate, Accelerate” theme. “Our goal is to inspire, giving you the spark necessary to jump-start your business, communicate how we at KMA are innovating — how we are doing things differently through products, applications and unparalleled support, and to deliver it at a pace that will accelerate your business,” he explained. “We at KMA are focused on being dealer-centric in order for us, together, to be customer-centric.” Bialecki thanked dealers for helping KMA achieve continued growth. “During the past year, every one of our sales divisions grew their revenues,” he explained. “In the aggregate, new sales were up 10 percent year over year. The result reinforces what I’ve been promoting for many years — that the independent dealer is the preeminent marketing force in our industry. On behalf of everyone at KMA, I thank you for making fiscal year 2011 a resounding success.” The pace of company growth is expected to continue and accelerate. In his presentation in the opening General Session, Katsumi Komaguchi, president of Kyocera Mita Corp., the parent company of KMA, said the company’s objective is to triple in size over the next five years, by FY2016. “Clearly this is an ambitious goal and to do it will require further investments in R&D, channel expansion and strengthening, an expansion of production facilities and a broadening of our brand awareness,” he said. “Ever since the founding of Kyocera Group, a hallmark of our business philosophy is that our employees have had the motivation to set high

Clockwise from top: Attendees view Kyocera Mita America’s (KMA) products in the Product Fair; Katsumi Komaguchi, president, Kyocera Mita Corp.; Ed Bialecki, senior vice president of sales, KMA; Mike Pietrunti, president and CEO, KMA targets for our company. We pride ourselves in the fact that the targets we set are the highest and most aggressive in the industry.” Acknowledging it as an ambitious yet achievable goal, Bialecki said the short-term goal for KMA is to double its growth rate in 2011. “We are going to deliver on that expectation,” he said. “It starts with new and innovative products. At this meeting, we are introducing 11 new state-of-the-art products, including a fourth generation of color and a refresh of what is already the strongest monochrome product line in the industry, as well as two high-speed color devices.

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an equal level of confidence during his Combine that with 13 new A4 devices, comments in the opening General Seswhich you will see later in the year, and “ ... we believe we have sion. “The Kyocera Mita Corporation is I have no doubt we will be able to win earned the right to 100 percent committed to growth and even more of your business.” compete on a value is building a global strategy to ensure Bialecki shared additional details on basis with our key that objective is achieved,” he said. “We some of KMA’s plans to accelerate its at the Kyocera Mita America Group are growth, including an improved rebate competitors. To leverage completely aligned with our parent corprogram, simplified planning allowing that opportunity, we are poration’s goal. Our vision and plans KMA reps to spend more time in the rapidly expanding ... “ are to drive significant growth in 2011 field with dealers, simplified pricing and beyond.” models for dealers with quarterly price Two years ago, said Pietrunti, KMA lock-ins on particular models, and plans to have all of KMA’s sales personnel participate in a series of introduced new product engines with the goal of being the new training programs. “In our competitive market, what price leader in the marketplace. “Two years later, we believe worked for us in the past does not guarantee success in the we have earned the right to compete on a value basis with future,” he said. “But success will come to those who are our key competitors,” he said. “To leverage that opportunity, best prepared, who are most willing to adapt to continu- we are rapidly expanding our organization in order to exous change, and who have a clear line of sight of what our pand our market share.” In examining its sales capability, it became clear that customers need and want. I am very confident that we will KMA is “currently a box-selling company,” said Pietrunti. achieve our ambitious goals.” Mike Pietrunti, president and CEO of KMA, expressed “We rely heavily on price, and in this marketplace, relying

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Dealer Panelists Address MPS Programs

Top Row, from left: Frank Cannata, Ken Godzik, Bill Witt. Bottom row, from left: Nina Knight, Kevin Jergenson, Doug Dupree.

o give attendees insight and guidance into establishing a managed print services (MPS) program, the Kyocera Mita America Pan-American Dealer Meeting included a dealer panel discussion moderated by Frank Cannata, president of Marketing Research Consultants Inc. The panelists and the dealerships represented were: Doug Dupree, EGP, Orlando, Fla.; Ken Godzik, SymQuest, South Burlington, Vt.; Kevin Jergenson, Century Business Products, Sioux Falls, S.D.; Nina Knight, Imagetek, Dallas, Texas; and Bill Witt, Witt Company, Bellevue, Wash. Following are excerpts from some of the panel questions and answers. Cannata: On the completion of the assessment, how often do you recommend a reduction in the number of devices that the client is utilizing? Jergenson: The number of printers that most of our clients are using is growing dramatically. As the prices of units have come down, everybody has taken advantage of that and wants the convenience of having a printer on his or her own desk. So, when we come back with analysis, I would have to say that 90 percent of the time we suggest a reduction of total units in the office. A lot of those times we are able to bring in the A4 product. Cannata: What kind of software do you find most advantageous in managing an MPS client? And as a follow-up, do you employ any call avoidance or any call reduction software? Knight: We have used lots of different software to manage our MPS clients, but we’re pretty well settled on the FMAudit tool. We use it primarily for gathering meter reads of both networked and nonnetworked devices. It goes directly into our back-end billing system, which helps a lot with accuracy and timeliness in billing. We also use the supply component to manage the supplies on the customer site, to see what the status is and to do the automatic toner replenishments. That has gone really well. As far as call avoidance, we use the KM-NET Viewer [providing centralized network device management] and other tools, like Print4 [from NER Data Corp.]. Primarily, we are not using it for the call avoidance; we are using it for the information it provides, for when we go out on those calls. On our larger accounts, where we have a full-time service tech where we are doing operational assessments, then we are using [these tools] to be more proactive and avoid the calls. Also, on our national accounts — we have several national MPS clients — we use a Print4 tool that helps us with both evaluating the client and managing those accounts.

Cannata: What percentage of your total revenue is generated directly or indirectly from managed print services? Godzik: We are both a document solutions provider and a networking company, so we are about a $35 million company, $23 million of which is on the document side. The MPS equation is growing tremendously. Within the last year, just in printer sales, we were up 311 percent from the prior year. It [MPS] is almost 7 percent of our total document solutions at this time ... We have been doing this for about five or six years. We cut our teeth and learned a lot. I would encourage anybody who tries this to not give up. We’ve made mistakes along the way, but we feel it is “falling forward” once you discover what is not working. Cannata: Give me some of your suggestions on the steps toward building a viable MPS capability. Witt: The first thing you have to recognize is that MPS is not going to happen on its own. It is very related and associated with a lot of common elements that we do every day in this industry that we’ve done for many, many years. But you have to have a plan. You have to start with a plan and you have to engage key people in your organization in all of your different departments as you prepare to support that plan. That really starts with the CEO. If you don’t make that plan and you don’t make that commitment to implement, it won’t happen ... You will want to identify the resources that you have in your organization today that could help you implement MPS. That includes, of course, IT personnel, pre-sale support, post-sale support and your vendor relations in terms of parts and supplies. And make sure your people understand that this new strategy is going to expand out to opportunities to do more business with your current customers and with new customers. I think you have to invest in the software and training ... There are a number of different [software] tools that you can use; you have to make the commitment to implement those tools and teach people throughout your organization how to use them ... Every time you’re selling to a new customer or upgrading an existing customer, also bring up the issue of an MPS strategy for their printers. You can put that on the same agreement that you put your lease for your MFPs. Cannata: Once it is established, how quickly do you begin to see the results? Dupree: When you first start, you will have some successes with it. I think that a lot of times, there’s a sense to give up, since you are not taking down a large account that has 200 or 300 devices, instead of looking at the small advances in taking down 20 to 30 devices — even five devices. So, as you start with it, you will see some very quick response to it on a few accounts. Then you could have the lulls. It can take up to a year sometimes, or even longer, to be able to bring somebody in. We have had accounts that we worked on well over a year that we have finally been able to bring to the table ... Don’t look at it as something that if “I start today, I’m going to see fast results within a month or two.” You have to have a commitment that you can be there from now on and then the results start coming more frequently. As far as how long does it take for somebody to make a decision? It is how it is presented to a customer. If the customer has the need and the pain at this point, then it can be a very quick turnaround. If it’s something where you are building a confidence level with the account, it is going to take longer to build the confidence to be able to take it down. But once you have it, if you do your job properly and have done everything to support that account, then you will have it for a very, very long time. n — Brent Hoskins

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on price only as a long-term differentiaRegarding the 13 new A4 MFPs, tion strategy is a recipe for disaster.” Wolowitz noted that the models have Going forward, KMA Going forward, KMA must innovate various new features and benefits. “From must innovate “if we “if we want to thrive and not merely surenvironmentally conscious features to a want to thrive and not vive,” said Pietrunti. “That requires us to fully integrated design for the optional merely survive ... To be think and act differently. To be successcard authentication kit, these MFPs ful in the future, we have got to change have it all, including four that have a successful in the future, the dynamic and transition to being a user-friendly touch-screen control panel we have got to change solution-selling company.” complete with compatibility for Kyothe dynamic ... ” Pietrunti said KMA has two initiacera’s most popular business applicatives under way to move the company tions,” she said. “Add in standard gigabit forward. The first is the creation of a Ethernet on eight models and increased Global Services Division, connected to the end-user com- print speeds on five of the models and you have a tremenmunity, that will identify the key solution components KMA dous opportunity with a very robust A4 product line-up.”  needs. He explained that he has challenged the division to Brent Hoskins, executive director of the Business Technology focus on six key areas: workflow process management, docAssociation, is editor of Office Technology magazine. ument management, cost control and security, managed He can be reached at brent@bta.org. document services, cloud and mobile printing technologies, and network and device management. “In order to support our transition to a solution-selling company,” said Pietrunti, “we will develop a series of defined solutions that we will be able to bring to market later this year.” The second initiative “to jump-start the transition to a solution-selling company is to implement a ‘best-in-class’ training program for our internal sales force,” said Pietrunti. “Starting in June, we will educate every member of our sales team on how to make this transformation ... Once we have successfully piloted this training internally, we plan to roll it out to our dealer network by making it available to dealer principals and their sales organizations during the second half of this fiscal year.” Like Bialecki, Pietrunti also emphasized the strides KMA is making with its A3 and A4 product launches. “Now you are going to have the strongest product line from A4 devices on the low end all the way up through high-speed color MFPs at the 70-pages per minute [ppm] level — and the engineering is all Kyocera Mita,” he said. “For me, the key is that our continued new product introductions are a clear demonstration of our commitment to the dealer channel. Every year, year after year, we continue to introduce new products that are reliable and competitive with the lowest TCO in the industry.” Danielle Wolowitz, director of product marketing for KMA, gave attendees details on the new product launches during the opening General Session. “We are refreshing practically our entire A3 product line-up at this show, with color MFPs from 30 to 70 ppm and black-and-white models from 35 to 80 ppm,” she said. “A few key highlights include 12-by-18 support on all 11 models through the paper trays, gigabit Ethernet, banner printers on our color MFPs, robust paper handling, vibrant image quality and, of course, industry-leading preventative maintenance schedules.” www.officetechnologym a g. c o m | J u n e 2 0 1 1 | 19

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Gateway to Success BTA Mid-America hosts district event in St. Louis by: Brent Hoskins, Office Technology Magazine

ith the goal of providing dealers the opportunity to learn from experts, gather new ideas and strategies, and network with fellow dealers, on May 3-4, BTA Mid-America hosted Gateway to Success at the Four Seasons Hotel in St. Louis, Mo. The event drew nearly 70 registrants. Comments shared by attendees were favorable. A sampling from event evaluations: “All of the presentations had ‘meat,’ not fluff, and all had takeaways that I can use tomorrow,” and “This was a good meeting. I learned where to go to get what I need.” “It has been many years since BTA Mid-America has hosted such an event,” said BTA Mid-America President Ron Hulett. “So, we were particularly excited to bring office technology dealers together in our nation’s Heartland. Just as the BTA East and BTA Southeast districts have done with their events, we plan to make this an annual event.” Gateway to Success featured five education sessions: “On the Horizon: Possible Changes in the Office Technology Industry,” with Ed McLaughlin, president of Sharp Imaging and Information Company of America; “Twenty Traits of the Successful Dealership,” with Bob Goldberg, BTA general counsel; “Prospecting Stats: What ‘Good’ Looks Like,” with Kate Kingston, Kingston Training Group; “Building & Maximizing the Impact of Your Solutions Team,” with Mitch Morgan, Growth Achievement Partners; and “Service Productivity, Efficiency & Effectiveness,” with Mike Woodard, Strategy Development. The event concluded with an evening in a private suite at Busch Stadium to see the Florida Marlins take on the St. Louis Cardinals. The event also featured 24 exhibiting sponsors: Color Imaging, Crawford Thomas, Densi, Digitek, DocuWare, ECi, EDA, Epson, ESP, FMAudit, Hytec Dealer Services, GreatAmerica Leasing, Image Star, InkCycle, Kyocera, LEAF, MSE, SalesChain, Solgenia, Square 9, Strategy Development, Supplies Network, Toshiba and West Point Products.  Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine. He can be reached at brent@bta.org.

Clockwise from top: The Gateway to Success event drew nearly 70 registrants; the view from the private suite at Busch Stadium; Growth Achievement Partners’ Mitch Morgan; attendees visit with a representative of one of the 24 exhibiting sponsors; Ed McLaughlin, president of Sharp Imaging and Information Company of America.

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Forces of Change “I

Above: Georgann Gelsi-Piccirillo, a regional manager for exhibiting sponsor ESP (Electronic Systems Protection Inc.), explains the value of her company’s products to attendees during one of the dedicated exhibit breaks held at Gateway to Success; Strategy Development’s Mike Woodard presents “Service Productivity, Efficiency & Effectiveness.”

Clockwise from top: BTA Mid-America President Ron Hulett draws a winning entry from those gathered by Cheryl Paxson of West Point Products, one of various vendor-sponsored prize drawings; BTA General Counsel Bob Goldberg; attendees enjoy the private suite at the St. Louis Cardinals’ Busch Stadium at the conclusion of the Gateway to Success event; Kate Kingston, Kingston Training Group.

think there are some forces of change that are going on in our industry,” said Ed McLaughlin, president of Sharp Imaging and Information Company of America in his opening comments as the Gateway to Success keynote speaker. “I think it is important to understand the things that are going to develop in the world around us that will affect our business and affect it very significantly.” What are these forces of change? “The most important current changes are mobility, the green movement and something that not everybody in this room has heard about — IFRS,” explained McLaughlin, referencing the International Financial Reporting Standards (IFRS). “Candidly speaking, from a non-technological standpoint, this may be the single most significant thing that is going to happen in the next four to five years.” The IFRS are a set of accounting standards developed by the International Accounting Standards Board (IASB), which is becoming the global standard for the preparation of public company financial statements. Of interest to dealers, said McLaughlin, are proposed and pending changes that relate to equipment leasing. While “there are a lot of unanswered questions,” he said there are some proposed leasing-related standards to be imposed by the IASB that “I believe are not going to be changed that are going to affect you.” Today, explained McLaughlin, there are “pretty straightforward” operating leases and capital leases. In the future, as proposed, all leases (with a few exceptions, such as short-term leases) will be accounted for on the balance sheet, he said. “That’s going to be in effect in 2015,” he told dealers. “You can take that one to the bank.” The pending accounting changes — making leases more transparent — are the consequence of the fall of Enron Corp., said McLaughlin. “That’s when these things started,” he explained. “You will remember the [news reports] about all of the off-balance-sheet financing that was hiding the debt. So, as typical, the government likes to overreact. This is a big overreaction, but it’s here to stay.” As noted, McLaughlin pointed to mobility and the green movement as two other important key forces of change. “The mobility that is in tablets, smartphones and all of the other devices is affecting pages and access to information,” he said. “It is dramatically changing the process by which people conduct business and transfer information in their offices. It is also altering user expectations.” Today, he said, personalization at the MFP control panel is now expected. “I want that screen to show my application and the things that I do,” he explained. “That is no longer going to be an option. That’s required, and it’s going to be required more and more. The more manufacturers can satisfy that requirement, the more it is going to be demanded.” Like personalization, increasingly end users are going to seek dealerships that adhere to green strategies and capabilities, said McLaughlin. “It is going to start becoming a part of the marketing and satisfaction requirements more frequently,” he said. “If your manufacturer doesn’t have a recycling program, develop one yourself. If your manufacturer does have one, label it for yourself, and advertise and promote it. It will enhance your relationships with your accounts.” n —Brent Hoskins

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Hire Learning Avoid legal pitfalls & discrimination when hiring by: Dennis Sprenkle, Crawford Thomas

s an employer, the purpose of a job interview is to learn as much information as you can about your candidate in order to accurately assess interest, qualifications and experience for your opportunity. In order to discover the information we need, we have to ask questions. Yet, some questions are not only inappropriate or offensive — they may also be illegal. Let’s face it, modern-day America is a litigious society, and coupled with a recession, people are becoming more desperate than ever. If an inappropriate interview question is asked to the wrong candidate — even if it is accidental — you run the risk of being sued for discrimination. The Equal Employment Opportunity Commission (EEOC) is an independent agency tasked by the United States government to enforce federal employment discrimination laws and investigate discrimination complaints. Here are some of the major pieces of legislation that prohibit employment discrimination: n Equal Pay Act of 1963 — This law makes it illegal to pay different wages to men and women if they perform equal work in the same workplace. n Civil Rights Act of 1964 — This law makes it illegal to discriminate against someone on the basis of race, color, religion, national origin or sex. It also requires that employers reasonably accommodate applicants’ and employees’ religious practices, unless they can prove that doing so would impose an undue hardship on the operation of the business. n Age Discrimination in Employment Act of 1967 — This law protects people who are 40 years old or older from discrimination based on age. n Pregnancy Discrimination Act of 1978 — This law makes it illegal to discriminate against a woman because of her pregnancy, childbirth or a medical condition related to pregnancy or childbirth. n Americans with Disabilities Act of 1990 — This law makes it illegal to discriminate against a qualified person with a disability. It also requires that employers reasonably accommodate known physical or mental limitations of an otherwise qualified individual with a disability who

is an applicant or employee, unless they can prove that doing so would impose an undue hardship on the operation of the business. Interviewing Do’s and Don’t’s With the EEOC in mind, it is critical to protect yourself and your organization from litigation and the accompanying embarrassment and PR nightmare. Ask your candidates correctly formed interview questions and avoid those that could infer you decided against hiring the individual based on his (or her) age, race, color, national origin, religion, sex or disability. n Age — Questions that establish an applicant’s age or approximate age are unacceptable. Do not ask: “When did you graduate from high school?” or “How old are you?” Do ask: “Are you over 18 years old?” n Race/Color — Questions regarding an applicant’s race, color of skin, hair or eyes are unacceptable. Do not ask: “What clubs or organizations do you belong

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to?” (If the interviewee belongs to an oryou can utilize to obtain insight into ganization that may indicate a particucandidates while shielding yourself Ask questions that relate lar race, it can potentially expose you to from discrimination issues. Questions specifically to your liability if you do not hire the applicant.) regarding an applicant’s knowledge and position’s qualification Do ask: “Do you belong to any professkills, previous employment, goals, rearequirements, sional or trade groups that are relevant sons for applying for the job, strengths responsibilities and the to our industry?” and weaknesses are all acceptable. Ren National origin — Questions remember that you are the director and experience necessary in garding an applicant’s national origin the candidate is the “star” — that is the order to be successful. are unacceptable. The exception is if the hope, anyway. A general rule of thumb position specifically requires one to be a is to allow the candidate to carry 75 perU.S. citizen, which must be stated in the job posting. cent of the total conversation. Do not ask: “Your name is interesting. Where were you Use different types of “W” questions that ask: Who? born?” or “Are you a U.S. citizen?” What? When? Where? and Why? Direct, open-ended and Do ask: “Are you authorized to work in the United States?” behavioral/situational questions are all important to ask. n Religion — Questions regarding an applicant’s relin Direct — Ask a direct question and you are likely to gious beliefs (or lack thereof) and the religious holidays he get a direct answer. These are short, simple and sweet. An observes are unacceptable. example: “Why do you want to work here?” Do not ask: “Do you celebrate Christmas?” n Open-ended — These questions often get candidates Do ask: “Can you work within our required schedule?” to overshare, producing juicy tidbits of a candidate’s true n Gender — Questions indicative of an applicant’s gen- feelings and opinions. An example: “Tell me why you left der are unacceptable. your previous job.” n Marital status and childcare — Questions about n Behavioral/Situational — These questions provide a candidate’s marital status, pregnancy, future childcare a snapshot into a candidate’s experience; they can demonplans and childcare arrangements are unacceptable. strate an ability to prepare answers in advance. An examDo not ask: “Do you have any children?” or “What are ple: “Discuss an experience where you once had to ... ” your childcare arrangements?” Just remember, keep your questions work-related. Ask Do ask: “Are you available to work overtime on occasion?” questions that relate specifically to your position’s qualior “Can you travel?” fication requirements, responsibilities and the experience n Military service — Questions regarding dates of mili- necessary in order to be successful. Ask direct questions tary service and the nature of military discharge are unac- about past employment performance and use your job deceptable, unless a business necessity can be shown (classi- scription as a resource if you need assistance in creating adfied status required, federal contract, etc.). ditional questions. n Disability — Questions regarding the existence, naDue to privacy issues, ensure that the information you ture or severity of a disability are permissible and should be obtained during the interview process remains confidenexamined on a case-by-case basis. tial. Be sure to ask each candidate the same questions. Once Do not ask: “Do you have any ailments or disabilities that you have reviewed all the information at your fingertips, you I should know about?” (Be sure to never specify a particular should be ready to legally and appropriately make your demedical condition.) cision on your next hire. n Do ask: “Are you able to perform the essential functions Dennis Sprenkle is a graduate of the University of Central of the job to which you are applying?” (Be sure you tell the Florida where he served as the student body president and applicant what the essential functions are.) later attended law school at the Florida Coastal School of n Education — Questions about an applicant’s educaLaw. After working in civil litigation for two years, he tional experiences are acceptable. entered the HR/recruiting industry, specializing in Do not ask: “When did you graduate?” (This gives an apexecutive level and legal professional proximation of age, which can potentially expose you to liplacements, as well as HR/labor law ability if you do not hire the candidate.) consulting and compliance. He was Do ask: “What schools have you attended?” subsequently hired by Crawford Thomas to manage the development of its HR Decision Time consulting and compliance group. It is important to note that there are additional methods Visit www.crawfordthomas.com. www.officetechnologyma g. c o m | J u n e 2 0 1 1 | 23

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

Dealer Members ALL Document Solutions, Pasadena, CA Ashley Investments Inc., Alpharetta, GA Copier Products Group, Santa Ana, CA Copier Source dba Image Source, San Bernardino, CA Datrue, Mandan, ND EBS – Execuline Business Systems, Kansas City, KS LDI Color Toolbox, Jericho, NY Rival Office Solutions, Barrie, Ontario, Canada Standard Office Systems, West Collingswood, NJ Terrell’s Office Machines, Bozeman, MT Vision Office Systems, Charlotte, NC Vendor Associate Members M-Files, Dallas, TX Objectif Lune, Bloomfield, NJ For full contact information of these new members, visit www.bta.org.

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 SalesChain, serving companies in 35 states and Canada, is a provider of sales management software for office equipment dealers. Its software suite includes telemarketing, customer intelligence, competitor equipment, lease portfolio management, products configuration, deal pricing, proposal and order documentation, commission management and SalesChain’s industry-exclusive delivery desk automation solution. SalesChain’s software is fully integrated with e-automate, OMD and La Crosse software. www.saleschain.com

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 Color Imaging, Electronic Systems Protection (ESP), FMAudit, Innovolt and Square 9 Softworks, to name a few. Visit www.bta.org/ BTAMarketplace to see the current participants in the program, along with a description of each vendor’s BTA Member Special.

BTA Service Associate member Growth Achievement Partners (GAP) provides sales and operational consulting within both traditional and emerging markets exclusive to independent copier dealers throughout the country. GAP helps progressive dealerships take advantage of the changing market landscape by speeding the transition into an effective hybrid model, capable of sustained growth and reoccurring revenue within four key areas: core strategy, advanced solutions, network services and growth achievement. GAP consultants lead BTA’s ProSolutions and Managed Network Services Workshops. www.growthachievementpartners.com

For information on BTA member benefits, visit www.bta.org/MemberBenefits.

A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.

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COURTS & CAPITOLS

Target: Automatic Renewals New Wisconsin law effective May 1, 2011 by: Robert C. Goldberg, General Counsel for the Business Technology Association

n what may be just the tip of the iceberg, Wisconsin has passed legislation governing the automatic renewal provisions of equipment leases. What is noteworthy is that portions of the legislation are applicable to all existing leases — not just those entered into after the effective date. End users have constantly complained about automatic renewal of leases due to the failure to notify the leasing company during a specific time frame. Complaints also developed when notice was provided, but not in a manner acceptable to the leasing company. Legislators heard these stories and several jurisdictions responded. Automatic renewal legislation also exists in New York, Rhode Island and Louisiana. Wisconsin is the first state to pass automatic renewal legislation specifically targeting commercial contracts. Wisconsin Statute 134.49 creates specific disclosure and Notice of Renewal requirements on contracts “for the lease of business equipment” or “for providing business services” with an automatic renewal period of more than one month. The law took effect on May 1, 2011; the Notice of Renewal requirement is retroactive to existing leases for all contract renewals in which the deadline to decline renewal or extension occurs on or after July 1, 2011. The initial disclosure requirements in the Wisconsin legislation apply to a “business contract” with a renewal or extension term of more than one month. The automatic renewal provision must be disclosed as either a separate form containing the required disclosures, signed by the customer, or by including the required disclosures in the contract “in a conspicuous manner,” with the page containing the disclosures initialed by the customer. The law specifies four requirements that either method must meet: (1) a statement that the contract will be renewed or extended unless the customer declines renewal or extension; (2) a statement indicating the duration of the additional contract period; (3) a statement indicating whether an increase in charges to the customer will apply upon an automatic renewal or extension; and (4) a description of action the customer must take to decline renewal or extension. Failure to comply with these requirements renders the automatic renewal clause unenforceable and results in the contract being terminated “at the end of the current contract term.” The law mandates a Notice of Renewal if a “business contract” has an initial term of more than one year, an automatic

renewal term of more than one month and the deadline for the customer to decline renewal is “more than 60 days after the effective date.” If these factors exist, a seller/lessor must provide the customer written Notice of Renewal 15 to 60 days prior to the “deadline for the customer to decline renewal or extension.” The notice must contain: (1) a statement that the contract will be renewed or extended unless the customer declines renewal or extension; (2) the deadline for the customer to decline renewal or extension; (3) a description of any increase in charges to the customer that will apply after renewal or extension; and (4) a description of the action an end user must take to decline extension or renewal. The Notice of Renewal may be made in person, by mail, fax, e-mail or overnight delivery. Like the disclosure requirements, failure to comply renders the automatic renewal clause unenforceable and results in the contract being terminated “at the end of the current contract term.” In this instance, it would be best to make a written record of any Notice of Renewal provided. If a seller/lessor fails to give the end user Notice of Renewal as required, the customer may decline the renewal of the business contract. If the seller/lessor “agrees to terminate the contract as of the date the customer notified the seller,” the customer is responsible for charges incurred to that date and may not bring action against the seller unless failure to comply was willful and malicious. The seller/lessor is also not liable if the end user requested, in writing, the renewal in question. If the seller/lessor refuses to terminate the contract, the customer can bring an action or counterclaim for damages equal to either “twice the amount of the damages incurred by the customer,” or the lesser of “twice the amount of the periodic payment specified in the contract or $1,000.” If you have your own leasing company with leases in Wisconsin, it is imperative that you comply with the law immediately. If you use a third-party leasing company, make sure it is providing the proper disclosures and notices. If you are not doing business in Wisconsin, you may wish to implement these disclosures and notices yourself. Additional states will likely consider such legislation now that Wisconsin has set standards. n Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com. www.officetechnologyma g. c o m | J u n e 2 0 1 1 | 25

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PRINCIPAL ISSUES

Saving or Making Money What is the goal for your business? by: Ed Carroll, Strategy Development

o you want to save money or make money? Normally, these options are not mutually exclusive. If you are able to save money (i.e., reduce costs), you are able to make more money or profits. It is as simple as that. But in today’s imaging industry, it seems that the priorities of your business are not always that clear. For years, the imaging channel has been very successful in selling equipment and, in return, realizing a profit. Even with average selling prices declining and aftermarket rates shrinking, the end result was still healthy profits for most. We could reason with our customers that the latest feature-rich technology we were offering was something they needed to run their businesses efficiently and, if it was not a new placement, we could provide it to them at a price equal to or less than the price they were paying for their current equipment. The manufacturers supported the efforts of the channel by providing new technology that was better engineered and more reliable than previous generations of products. So, the prices they offered were often less than the previous generation or more feature rich at the same price points. Life was good and so were our profits. Then along came market saturation. As printer and copier technology evolved into output technology, product segmentation blurred and companies began to realize they had more technology for printing documents than they needed. E-mail changed the way the office handled printed documents and the economy slowed to a standstill with the recession, further eliminating or delaying new equipment purchases. Today, combined printer and copier/MFP placements are flat and, in many segments, declining. The ability to sell equipment profitably with good margins and aftermarket rates is behind us. Those who realized this day was coming transitioned their businesses to more services-focused models, generating profits by focusing more on customer needs and less on equipment. The transition for those who embarked down this road early has not always been an easy one. There are many who are realizing strong revenue gains and profits by planning, focusing and moving their companies to a new business model — one focused on services. Those early entrants are finding that the profit margins in services are far better (or should be) than the margins realized in an equipment-focused model.

This brings me back to my original question: Is your business goal focused on saving or making money? I have the opportunity to meet and discuss current business with imaging company employees throughout the United States at our workshops and industry or manufacturer events. All too often, the discussion about their service offerings, like managed print services (MPS), inevitably moves in the direction of how your value proposition can save your customers money. This is further compounded by advertisements for software tools or supply sources in trade publications, and articles written highlighting the benefit of saving your customers money with your service offerings, like MPS. Our services-focused business model — one that could help this industry continue to grow and flourish — wants to approach this evolving area by saving customers money. I fully understand that businesses today must find ways to reduce their costs and operate more efficiently in order to be competitive and successful in their industries. Business leaders are keenly focused on growing profits for themselves and their companies, so when faced with the opportunity to contribute to this goal, they are interested in exploring the possibilities. A services offering can provide such an opportunity. But why do we need to make it the most important benefit of our services offering? We do not and we should not. The value of our knowledge and expertise should not be measured in cost savings, but in the improvements we make to the business processes and efficiencies of our customers. Inefficient business processes are very costly to organizations, both directly and indirectly. Our ability to fix a broken process should not mean that the result is a large cost savings for the prospect. It might warrant some savings, but not significant savings, and surely not in the range of 20 to 30 percent, which is often quoted. In reality, it should be a very rare case when more than 10 percent of savings is necessary to secure a newly identified opportunity that is not a bid, RFP or competitive situation. If your services-focused model requires you to pass along significant savings in order to secure new business opportunities, I would recommend reviewing your approach, talk track, knowledge and understanding of the offering. The value of a services offering stretches well beyond cost savings. As I mentioned, it is a well-defined business process

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and the approaches your team is taking. that improves business efficiencies. It enReview the reasons for implementing ables companies to better utilize their You should challenge your services offering, and review the auown resources on more strategic projects your organization to dit or assessment process currently being or priorities. It helps address any sustainunderstand and realize used to build the business case. ability initiative the company might have. the value of your As a business leader, you know your priIt eliminates pilferage in supplies, or overservices offerings ority is to make money, not to save your spending on equipment and supplies that customers money at your expense. You might not be needed. It helps extend the beyond saving the should challenge your organization to unuseful life of the technology and assures customer money. derstand and realize the value of your serthe proper placement of technology to vices offerings beyond saving the customer meet end-user needs. Finally, it will help your customers better control this expense and reduce it over money. In the end, you will build a successful, profitable servictime. These are all sound reasons for considering your offering. es-focused business for years to come. ď Ž Ed Carroll is a principal of Strategy Development, So, why should we care about the approach? It is simple a management consulting firm engaged in sales leadership, math. When pursuing new opportunities, the costs associated MPS, operational efficiency, service productivity and with the offerings are known and fi xed. It is not difficult to debusiness planning. Clients include termine the cost of each opportunity and, once determined, equipment manufacturers and resellers the cost is directly related to the opportunity you are pursuing. focused on equipment and service in the When the opportunity is cost-savings driven, the resulting document and imaging industry. savings comes at the expense of your margin and, therefore, He can be reached at (703) 722-2973 or your profits. The larger the discount, the lower the margin and the less profits your business will receive. Do not get caught carroll@strategydevelopment.com. Visit www.strategydevelopment.com. up in the hype about cost savings. Review your program

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principal issues

Remote Monitoring & More Examine all your options before making a decision by: Mike Lamothe, Office Document Consulting

n previous articles, I have described some of the challenges sales reps and dealership principals have experienced attempting to make the transition into strategic programs like managed print services (MPS). In this article, I would like to share a more recent personal experience sourcing remote monitoring software (RMS). If you have not purchased RMS yourself, hopefully you walk away from this article more informed than you were before. Additionally, I will finish this article with my thoughts on the recent Kyocera Mita Pan-American Dealer Meeting held April 18-20 in Las Vegas. In building our organization, my company was determined to offer more than traditional consulting services. Having sold various MPS strategies over the last eight years, we felt having our own RMS to offer as one of our cloud services would benefit a number of dealers who were looking for help transitioning their businesses. You will hear a number of definitions for RMS, but from my perspective, it is very simple. A data collection agent is installed on your customer’s server, which relays the information outbound to you, the service provider. In its early development, RMS software was installed to help track and capture printer meters, hence the “M” in “RMS” (monitoring). As demands changed and developers realized that devices could report more than just meter data, they expanded their offerings. You now have the ability to receive service alerts, preventative service notifications, TCO reporting and supply notifications, along with an array of customized reports. From my perspective, this is changing the “M” in “RMS” from “monitoring” to “management.” Today, RMS is the foundation of any successful MPS program. Some of the solutions are now providing synchronization into a dealer’s ERP system, which not only provides the necessary information to effectively manage a customer’s fleet of networked and locally connected devices, but also streamlines the billing process for the customer’s dealership. One of the newer enhancements we were looking for in our RMS was green reporting. Imagine being able to position MPS as a green initiative. As many organizations look to provide

some kind of go-green strategy, I can see adding a level of fleet optimization by factoring in the environmental impact. So before we went to talk to a number of RMS providers, we were determined to do our homework and make a straightforward decision. We learned it was not that simple. Not only would we have to decide what our form of acquisition would be (Do we buy, lease or rent? And from what company?), we also had to decide who would host the software and our customers’ data. Hosting the software refers to where the software and customer data will reside. Some vendors are willing to host the software for you, eliminating the need to invest in a server and its maintenance. In some cases, a third-party organization is hosting and supporting the software. If that is the case, you can host the software yourself. To acquire the software, you first have to make an outright purchase that includes installation fees and individual device fees. For example, an individual device fee could be five cents per device per month. Second, vendors are offering a monthly rental fee with installation costs with the same individual device fee. The third way to acquire is through a third-party relationship with the software provider. Many of these relationships will allow you to begin offering RMS to your customers at a low monthly rental cost with individual monthly device fees. But most have one caveat: You will have to buy supplies or parts from them. I will not tell you what we did, but just a word of advice if you have not acquired RMS: Look at all of the options, talk to a number of software vendors, examine each of the offerings and determine the best solution for your organization. Kyocera Pan-American Dealer Meeting We have all heard the old adage, “What happens in Vegas stays in Vegas.” Well, that adage will not be true if Kyocera Mita attains its goal to triple sales in the next five years. I had the pleasure of being invited to the recent Kyocera Mita Pan-American Dealer Meeting, which began with a heartfelt “thank you” from Kyocera Mita Corp. President Katsumi Komaguchi, for the U.S. efforts and aid with the recent www.officetechnologym a g. c o m | J u n e 2 0 1 1 | 29

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gies (with embedded Pcounter solutions earthquakes and tsunami in Japan. to offer additional print management, deAside from the significant financial tarIt was a good showing vice management and rules-based printgets, I left the conference impressed with ... and it will be ing), docStar’s Eclipse (document manKyocera’s core vision, which Mike Pietrunti, interesting to see how agement software using Kyocera’s DMS president and CEO of Kyocera Mita Amerthe company evolves Link, where users can scan and intelliica, described as: “We are, and will always from a box-centric gently file documents directly from Kyobe, dealer-centric.” He went on to set the cera HyPAS-enabled MFPs) and Drive tone by explaining the theme for 2011: “Incompany to a solutionsImage (a turbocharged scanning solution spire, innovate, accelerate.” based organization. that has intelligent workflow-customized Pietrunti spoke to the highly competitive modules to simplify workflows). marketplace we find ourselves in, where If I was a Kyocera Mita dealer, I believe change is the only constant. From my perspective, Kyocera Mita is looking at dramatic change. Includ- I would have found the Pan-American Dealer Meeting to be a ing the 24 new devices this year, Kyocera will have introduced success. It was a good showing by Kyocera Mita and it will be 56 devices in two years. It has established a Global Services interesting to see how the company evolves from a box-centric Division and is changing the core of the company from a box- company to a solutions-based organization. n Mike Lamothe is president of Office Document Consulting sales organization to a solutions-based organization. (ODC). With 25-plus years in professional sales and Pietrunti went on to speak about the natural evolution management, he brings extensive industry experience, having from MPS to managed document services (MDS), and said worked at both the dealership and manufacturer levels. Today, that Kyocera Mita is committed to providing the necessary reLamothe assists clients with the implementation and ongoing sources to help its dealer partners make this evolution. The product fair provided a good example of where Kyocera support of MPS programs and offers guidance in such areas as strategic selling, Mita is headed. It focused on both its newly launched devices development of selling and marketing tools, and strategic software solutions, including Kyocera-developed organizational right-sizing, and assessment applications specific to the education and health-care verticonsulting and design. Lamothe can be reached cals, along with a number of solution provider products, such at odcconsulting@live.com or (647) 389-5048. as EFI (with its new cloud printing applications), Equitrac Visit www.officedocumentconsulting.com. (with print management and cost recovery), A.N.D. Technolo-

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