March 2006 Office Technology

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CONTENTS l

Volume 12 No. 9

FEATURE ARTICLES 10

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Scan-to-Anyplace Are you positioning MFPs as digital on-ramps?

COURTS & CAPITOLS Protecting Company Names Make sure to file or verify the proper registrations

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by Brent Hoskins Office Technology Magazine

by Robert C. Goldberg BTA General Counsel

Imagine if someone asked one of your customers, “How do you view the MFP that sits in your office?” Is it simply viewed as a copier? If so, with the right tools and proper training, the MFP can be transformed in the eye of your customer, seen as a vital component of daily workflow.

Your company name has great value to you in the marketplace. To ensure that value is solely for your benefit, take steps to protect your name from others.

‘Think Smart, Work Simple’ Sharp hosts 2006 national dealer meeting

SERVICE CONNECTIONS Service Pricing One dealer’s views on the factors to consider

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by Darrell Amy Dealer Marketing Systems

How do you become your clients’ most trusted advisor in the area of document solutions? By helping to give words to their business challenges and providing plausible ideas to solve these problems. One of the simplest and most powerful ways to do this is through case studies.

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PRINCIPAL ISSUES Software-Based Solutions They are becoming an increasingly critical factor

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by Joel Mazza InfoTrends

There is significant evidence that software-based solutions are becoming a critical factor in U.S. sales of office equipment hardware.

by Gregory Schloemer DocuWare Corp.

Share Your Triumphs Case studies play a pivotal role in educating clients

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W sho hat u cha ld we rge lab for or?

There is no doubt about it, pricing office technology service is not the easiest task for dealers. Here is one dealer’s views on the topic.

Terminology Challenged? Here are some document management definitions The document management industry is packed with terms, buzzwords and acronyms that are very confusing, particularly to those who are new to the industry. Here is a guide to help eliminate the confusion and gain a better understanding of what the terms actually mean.

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by Ron Hulett U.S. Business Systems

by Brent Hoskins Office Technology Magazine

Sharp Document Solutions Company of America hosted its 2006 national dealer meeting, themed “Think Smart, Work Simple,” Jan. 29-Feb. 1 at Caesars Palace in Las Vegas. The event drew approximately 1,300 attendees, including representatives from more than 300 Sharp dealerships.

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Close-up: Konica Minolta OEM has multi-tiered solution-selling program

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by Stephen T. Jones Konica Minolta Business Solutions U.S.A. Inc.

Konica Minolta has established a well-structured, multi-tiered program to make the transition to solution sales as simple and successful as possible.

DEPARTMENTS Business Technology Association

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March-June Education Calendar

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Editor’s Page

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BTA President’s Message

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Advertiser Index

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EDITOR’S PAGE

Dealers Frustrated by OEM Direct Sales f you read my column in the February issue, you will recall the topic: OEM direct sales efforts. I shared some of the results of a dealer email survey I had conducted. I also listed the number of direct sales operations as reported to me by eight OEMs that sell through the dealer channel. In my survey I asked dealers to share any general comments they have on the topic. Many of the comments that did not appear in the February issue now appear on the BTA Web site (www.bta.org). Just click on the Office Technology name on the home page and then scroll to “archives” at the bottom of the page. There you will find the February issue. As I was reading through the various comments, posting many of them on the Web site, I was struck by the number of dealers expressing significant concern regarding the advantage direct sales operations have in terms of product pricing. I felt it would be of interest to share some of these dealer comments. Here is a sampling: n “OEM direct sales can take all of the profit out of a dealer’s aftermarket. Often, if an OEM is in your account, you get to keep it, but you have to cut your price to an unrealistic rate. Long term, it will hurt both the OEM (by losing distribution they need) and dealers (by losing the profit that sustains them).” n “Our OEM vendor has become the independent dealer’s biggest competitor. Beware to all independent dealers!” n “I feel it is unfair trade. They sell for less direct (one unit) than I can buy for at

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what is a wholesale price doing a million dollars a year with them. I should be buying from the branch. I would probably get better pricing and terms.” n “In my experience, the OEM competitor’s sales/pricing policies have led to ‘a demolition derby marketplace’ for the independent dealers; i.e., the quotes are at or even below dealer cost. Thus, it begs the question of whether the OEM is genu i n e ly c ommitt ed to an indep endent dealer channel.” n “ We had a large customer call the manufacturer direct for a price; they were quoted below our cost for the machine.” n “OEMs have a better pricing advantage and , if they want, they can use this to reduce my margin even lower.” n “They sell for less than my cost.” n “They can always sell at a much lower price than us if they want to. They usually go back and forth between supporting dealers and direct operations. They don’t seem to be totally committed.” n “I see direct competition from manufacturers as the real threat to the independent dealer. I don’t think I need to explain the threat other than to say when a competitor has the pricing to sell with 30 percent margins and his sale price is the same as my cost, I think we have a problem competing.” n “The aftermarket is one of the best sources we have for profit and they are stripping it away from us. Our consultants warned us of the potential of this and now we are seeing it happen.” As I consider these comments I think of a question I’ve heard asked through the years: “Shouldn’t the playing field be level?” — Brent Hoskins

Editor Brent Hoskins brent@bta.org (816) 303-4040 Contributing Writers Darrell Amy, Dealer Marketing Systems www.dealermarketingsystems.com Robert C. Goldberg, general counsel Business Technology Association Ron Hulett, U.S. Business Systems www.usbus.com Stephen T. Jones Konica Minolta Business Solutions U.S.A. Inc. www.kmbs.konicaminolta.us Joel Mazza, InfoTrends www.infotrends.com Gregory Schloemer, DocuWare Corp. www.docuware.com

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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 Bert Darling Executive Director bert@bta.org Valerie McLaughlin Membership Marketing Manager valerie@bta.org Gary Hedberg Accounting Manager gary@bta.org Mary Hopkins Accounting Clerk mary@bta.org ©2006 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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Why did 350 independent office equipment dealers name Muratec “MFP Facsimile Manufacturer of the Year?”

In the Marketing Research Consultants (MRC) 20th Annual Dealer Survey, Muratec was named “MFP Facsimile Manufacturer of the Year” by over 350 independent office equipment dealers. Muratec was lauded for its commitment to product innovation, dealer support, sales training and distribution practices.

It’s simple. No manufacturer is easier to do business with. And with the release of our award-winning Network Gateway Platform, which enables seamless network connectivity and powerful digital document delivery solutions, there’s no better time to become a Muratec dealer.

For more information about becoming a Muratec dealer, call 469.429.3481.

MFX-1330 MFX-2830

MFX-2030

F-560

Visit us at ITEX 2006 – Booth 401.

Muratec America, Inc. 3301 East Plano Parkway • Suite 100 • Plano, Texas 75074 • www.muratec.com • 469.429.3481 ©2005 Muratec America, Inc. All rights reserved.

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BTA PRESIDENT’S MESSAGE ®

BTA Hits 80 Years! Help Us Celebrate hope you are registered to attend the ITEX Show in Las Vegas this month. If so, I encourage you to join us for th e Busin ess Technology Association’s 80th Anniversary Party. The event will be held from 5 to 7 p.m., Wednesday, March 15, in the ITEX Exhibit Hall at the Las Vegas Convention Center. Hosted by BTA, our sponsors are Toshiba America Business Solutions Inc., Muratec America Inc. and Oki Printing Solutions. BTA was establi sh ed in 1926 as th e National Association of Typewriter Dealers. Of course, through the years, our association has changed considerably, but the vision of the founding members remains intact — dealers helping dealers to collectively strengthen and advance what is now known as the BTA channel. The 80th Anniversary Party will provide a great opportunity to take a look back at the association’s rich history. In fact, guests will enjoy displays of photographs depicting the history of the association and the industry. And, just for fun, there will be live music featuring hits from the past eight decades. The party will also feature some great prize giveaways. In addition, the event will provide BTA with the perfect venue to announce the winners of the 2006 Channel’s Choice awards. As you know, each year the association mails ballots to dealers asking that they rate the performance of OEMs in several categories. This year, awards will be presented to the industry’s best in the categories of Product Line, Marketing Distribution and Corporate Support. There will also

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be awards presented to both primary (Superior Performance) and secondary (Outstanding Performance) OEMs for best overall performance. Who will win these coveted awards? Attend BTA’s 80th Anniversary Party and be among the first in the industry to know the results. It is an honor for me to serve as national president in the year that we celebrate such a significant milestone in BTA’s history. I can’t help but think of the thousands of dealers through the years who have benefitted because of their membership in the association. Certainly, my BTA membership has directly contributed to the success of my company. I know many of you would say the same thing. If you are not a current member of BTA, I encourage you to consider joining. There are many reasons to so. Here are just a few that come to mind: channel benchmarking reports, such as the Financial Benchmarking Report, Ser vice Productivity R e p o r t a n d C o m p e n s a ti o n P ra c ti c e s Report; favorable tuition fees for some of the industry’s leading education programs, such as ProFinance; legal services, including sample agreements, contract reviews and industry advice and guidance via the Legal Hotline; and networking opportunities with fellow (non-competing) d e a l e r s a t BTA- sp o n s o re d e v e n t s o r through such initiatives as our peer collaboration groups. There are many other benefits of BTA membership. Visit www.bta.org to learn more. Or call BTA at (800) 505-2821. Our staff will be glad to help you, and you will be glad you called. Be a part of BTA as we begin our next 80 years. — Mark Naylor

2005-2006 Board of Directors President Mark Naylor ABM Automation 740 NW 63rd St. Oklahoma City, OK 73116 markn@abmautomation.com President-Elect Dan Hayes Purcell’s Business Products 222 E. 1st St. Campbellsville, KY 42718 dan@purcells.com Vice President Shannon Oliver Copier Source Inc. 215-G Industrial Ave. P.O. Box 36395 Greensboro, NC 27406-4542 soliver@copiersourceinc.com BTA East Thomas Chin Accolade Technologies LLC 604 Hampshire Road Mamaroneck, NY 10016 tchin@accotech.com BTA Mid-America Dave Johnson G-I Office Technologies Inc. 701 Atlas Ave. Madison, WI 53714 davej@gioffice.com BTA Southeast Bill James WJS Enterprises Inc. 3315 Ridgelake Drive P.O. Box 6620 Metairie, LA 70009 bjames@wjsenterprises.com BTA West Greg Valen Hawaii Business Equipment Inc. Toshiba Business Solutions 590-A Paiea St. Honolulu, HI 96819 gregory.valen@tabs.toshiba.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Fisher Newman & Rosenberg Ltd. 222 S. Riverside Plaza Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com

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Scan-to-Anyplace Are you positioning MFPs as digital on-ramps? by: Brent Hoskins, Office Technology Magazine

magine if someone asked one of your customers, “How do you view the MFP that sits in your office?” Which of the following is the most likely response? (A) “It’s a copier.” (B) “It’s a copier that prints.” (C) “It’s a copier and printer that does other stuff we hope to learn more about someday.” Or, would your customer offer a vari ation of th e fol lowing response? (D) “It’s a copier and printer. However, it is also a scanning device that allows us to move countless paper documents into the digital world — to files, e-mail, our back-office applications, etc. — in order to improve our document workf low and save time and money. It ensures we are more efficient in all that we do.” Obviously, answer (D) points to the opportunity that lies in the MFP’s scanning functionality. With the right tools and proper training, the MFP can be transformed in the eye of your customer to be seen as a vital component in daily workflow. Increasingly, that transformation is becoming reality. “In the past, the scanning function was primarily just a way to take a document and send it to an account,” says Jim D’Emidio, vice president of sales and marketing for Muratec America Inc. “Today, we’re seeing document management and document workflow changing things. More and more, customers are looking at the MFP as being the device that serves as the ‘on-ramp’ for documents, so that they can be moved across the organization electronically.” Of course, that “on-ramp” leads to many “highways.” The list of the MFP’s “scan-to” destinations is growing. Among the most commonly cited: scan-to-email, scan-to-file, scan-tofax and scan-to-FTP. Others include: scan-to-print, scan-todatabase, scan-to-application and scan-to-efiling.

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What is the payoff for the “scanto” user? The most frequently cited benefits are time savings, cost savings and assistance with regulatory compliance. Among champions of the MFP’s scanning functionality, examples of the benefits are readily shared. Bill Brikiatis, marketing manager at eCopy Inc., for example, describes how one company implemented scanning to replace a manual , paper-based process of managing purchase requi sitions. “ It was taking an average of 42 days to get a requisition through,” he says. Using eCopy ’s ShareScan OP product, “they ’ve reduced the time to an average of two days.” Similarly, Mark DeSarno, director of network solutions for Kyocera Mita America Inc., cites the example of one of the OEM’s major accounts. In the account, field sales reps previously exchanged multiple FedE x packages with the company’s headquarters, containing documents related to each sale, which had to be “passed around” among various individuals. Today, utilizing the scanning functionality of the OEM’s MFPs and its KYOcapture product, documents can be scanned by sales reps and immediately viewed by management, says DeSarno. “They saved 10 days in the sales process and more than $3,000 a week in FedEx bills.” ShareScan OP? KYOcapture? While the “scan-to” list is growing, so, too, is the list of products and technologies specifically geared to the MFP’s scanning functionality. Descriptions offered by the two vendors in their promotions serve to illustrate the value of scanning. From eCopy: “ShareScan OP is a document imaging and distribution software that transforms digital copiers and scanners into information hubs by integrating paper documents directly into

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7% 2% 3/ 0,%!3%$ 7 ) 4 ( / 5 2 , !4 % 3 4 “Today, I think sales reps are talking about scanning more than printing, because printing is just printing. Scanning is a whole other world in which they need to educate their customers.� — Kay Fernandez Toshiba America Business Solutions Inc. the workflow of critical processes.� From Kyocera: “KYOcapture transforms the document workflow process by allowing select Kyocera MFPs to capture, process and route paper or electronic-based documents to existing or new document management systems.� Are dealerships and their sales reps working to “transform� — as both of the above descriptions state — their customers’ MFPs and business processes through such products as ShareScan OP and KYOcapture or even through the MFP’s “out-of-the-box� scanning functionality? Increasingly, the answer is “yes.� In fact, Kay Fernandez, director of product and solutions marketing for Toshiba America Business Solutions Inc., says she believes that scanning is moving to the forefront. “Today, I think sales reps are talking about scanning more than printing, because printing is just printing,� she says. “Scanning is a whole other world in which they need to educate their customers.� Similarly, Brikiatis notes that there are dealerships that are quick to promote scanning functionality. He cites the example of one eCopy dealership in Iowa. “On every sale they pitch scanning, whether the customer is looking for it or not,� he says. “They are asking questions like, ‘What kinds of contact management system or document management system do you have?’ and ‘Wouldn’t it be great if you could get paper-based information into that system?’� Of course, other dealers are not proactively selling MFP scanning functionality. “We do have dealers who bring scanning up in every sale they make,� says Vickie Malis, vice president of marketing for eCopy. “We also have dealers who are less eager to do that. They bring it up if the customer is asking about it; they’re more reactive.� Malis says the distinction between the proactive and reactive dealers is a reflection of the larger issue of solution sales. “Our experience is that dealers are all over the map in

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MFP’s display. Meanwhile, terms of whether they are “We’ve seen a jump in our Kyocera’s KYOcapture offers just pushing boxes or really connector sales ... That a wide range of advanced going in for a solution sale,” definitely reflects the trend scanning functionality, such she says. “There are dealeras: dire ct do cum ent inships where the rep goes in that people are scanning dexing at the MFP; network and fully assesses not just directly into some software authentication to facilitate th e sp oken n e ed s of th e application, either a document security ; and a prospect, but the inferred document management device manager to allow IT needs, and then comes back application or a back-office ... process.” administrators to oversee with a ‘prescription’ for the — Vickie Malis and manage workflow from solution. However, very few eCopy Inc. a central location. dealerships are on that end Is your dealership proof the spectrum.” moting scanning functionality of the MFPs you sell, coupled Despite her observations about the low number of dealerships that are “really going deep into solutions,” Malis points with scanning-centric solutions? The benefits of doing so out that it is apparent that many dealerships are increas- are worth considering. “It can increase the revenue stream ingly moving into the solution sales arena, based on eCopy’s and shore up margins; this is higher-margin business,” says sales trends. “We’ve seen a jump in our connector sales — Malis. “It can also help differentiate dealerships from their probably 100 percent growth year over year,” she says, noting competitors. And, it increases the ‘stickiness’ of the equipthat each connector provides a link between ShareScan OP ment at the customer site.” That “stickiness,” says Malis, makes it difficult for the and a specific networked software application. “That deficustomer to part with the dealership. “When the lease nitely reflects the trend that people are scanning directly into some software application, either a document manage- comes up for renewal, they’re not just thinking about replacing the box, they are thinking about how the device is ment application or a back-office business process.” While eCopy products were once only available to Canon connected to all of their business processes,” she says. dealers, in recent months a growing number of dealers are “They are much more reluctant to move that equipment.” As Malis notes, scanning-centric solutions can lead to an selling the company’s products. Today, eCopy also has distribution agreements with Ricoh, Sharp and Toshiba, sells increased revenue stream. She lists billable implementation direct to Hewlett-Packard VARs and is pursuing distribution services, customization services and training as examples. agreements with Konica Minolta, Océ and Xerox. In some There is also the possibility of ongoing revenue from the cases, ShareScan is embedded within the MFP and accessed scans themselves. DeSarno says he knows of dealers charging through its control panel. In other cases, eCopy’s ScanSta- .003 cents per scan. Similarly, D’Emidio says some Muratec tion OP — consisting of a touch screen, keyboard and PC — dealers are charging .002 or .003 cents per scan. However, it appears, the number of dealers charging for scan clicks is attached to the MFP. As noted, eCopy sales reflect a growing emphasis among remains low. “I would estimate that only about 5 percent or dealers on scanning. Toshiba’s Fernandez confirms the trend. less of our dealers are charging for scans,” says Fernandez. Why the low number? “I’m not sure that the industry as a “Our document solution sales have doubled since we brought on the eCopy product,” she says. “It’s been great for us. We’re whole has taken hold of this and said, ‘Yes, we’re going to finding that it’s easy for dealers to sell, because it’s essentially a move forward and this is the way we’re going to structure piece of hardware [ScanStation]. They are used to selling hard- this additional revenue stream,’” says Fernandez. “I think ware. This is just another accessory that goes along with that.” right now it is probably being introduced too late in the Again, despite eCopy’s rise to prominence, it is not alone sales cycle. It’s an afterthought. At that point, the customer in offering technology focused on the MFP’s scanning func- is thinking, ‘This is what you quoted me, I don’t know if I tionality. Most of Muratec’s MFPs, for example, feature the would be willing to pay additional for scanning.’” In the meantime, while the industry continues to solidify company’s Network Gateway Platform, allowing users to easily send scanned documents across the network, practices related to charging for scan clicks, what are the selecting a destination by viewing a Windows tree on the best strategies for selling scanning-centric solutions? “What 12 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 6

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I’ve seen as the best strategy point out the value-add you “You can’t beat HP on is to begin with the departcan add to their workflow,” printing. So, the only ment or purchasing group he says. “ You should also way we’ve found to truly that is interested in the scan determine whether you can solution ,” says DeSarno. help them better address replace HP is added “However, it is also imporany compliance issues that functionality. That’s what tant to explain and sell the relate to Sarbanes-Oxley, the MFP and its ability to solution to the customer’s the Patriot Act or HIPAA. serve as an on-ramp to MIS department, emphaAnd finally, emphasize the the network brings to the customer.” si zin g th e cap abi lity of security you can offer. Com— Jim D’Emidio expansion. That way, the pliance and security are Muratec America Inc. MIS personnel are empowvery important in most verered to come up with their tical markets, especially own creative ideas to utilize the new solution. Beyond a when it comes to capturing images.” single department, they are able to bring value to the entire DeSarno also suggests that sales reps emphasize the benenterprise. That’s appealing to them.” efits of MFPs over standalone scanners, which exist in DeSarno advises sales reps to make sure they listen to many scanning-intensive environments. Likewise, D’Emidio prospects as they explain document-related processes that advises reps to promote the benefits of MFPs over singlecould be improved with a scanning-centric solution. “Then, function printers. “You can’t beat HP on printing,” he says. “So, the only way we’ve found to truly replace HP is added functionality. That’s what the MFP and its ability to serve as an on-ramp to the network brings to the customer.” That strategy works particularly well with Muratec dealers, given the OEM’s concentration on Segment 1 and 2 devices. “We tell our dealers, ‘When you go into that 50person office and there are two Segment 4 machines, great, replace those,” says D’Emidio. “But what if there are also 38 desktop printers? How do you replace them? Some dealers may say, ‘We can beat them on cost per copy.’ We would rather ask the customer, ‘Do you need to scan-to-file, scanto-email, etc?’ We’re finding that the answer is often ‘yes.’ “Think about the executives, legal counsel or HR people,” Scholarships for use at colleges or he continues. “They have a need for scanning and printing, accredited vocational trade schools are and they want to be able to do so from their credenzas. So available to the sons and daughters of BTA you say to the customer, ‘Maybe we can replace some of Retail Dealer and Value Added Reseller your printers and give you some added functionality.’ As a members and the sons and daughters of their result, not only do you sell two Segment 4 machines, but full-time employees. Scholarship recipients are you may also sell 15 Segment 1 machines.” chosen by an impartial and independent Dealers need to ramp up their efforts to emphasize the evaluator. Completed applications must be on-ramp to the network, says D’Emidio. “I see a day when received at BTA by May 1. To obtain a printing and scanning will be the two most important funcscholarship application form, call Mary tions of the MFP,” he says. “Today, people Hopkins at (816) 303-4031 or write: BTA are moving documents around electroniScholarship Foundation, 12411 Wornall Road, cally. If they want a hard copy of a docuKansas City, MO 64145. ment, they print it.” Brent Hoskins, editor of Office Technology, can be reached at brent@bta.org.

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‘Think Smart, Work Simple’ Sharp hosts 2006 national dealer meeting by: Brent Hoskins, Office Technology Magazine

he message was clear. Sharp dealers should strive to become technology partners to their customers, playing an integral role in helping them to improve their business processes. The key to doing so is through implementation of the right software with hardware placements, and the development of closer relationships with customers. It is not through the industry’s traditional selling strategies. The behest to dealers came from Ed McLaughlin, president of Sharp Document Solutions Company of America, during the OEM’s 2006 national dealer meeting. Themed “ Think Smart, Work Simple,” the event, held Jan. 29-Feb. 1 at Caesars Palace in Las Vegas, drew approximately 1,300 attendees, including representatives from more than 300 Sharp dealerships. While the event featured the customary fare of education sessions, social events and product displays, McLaughlin’s opening comments set the tone for the meeting and were Clockwise from top photo: Attendees gather in the Product Showcase; the opening supported by the significant number General Business Session; Ed McLaughlin, president, Sharp Document Solutions of third-party software vendors fea- Company of America; and Yoshiaki Ibuchi, corporate executive director, Sharp Corp. tured in the event’s Product Showcase. As he welcomed dealers in the opening General side of the road is very familiar to you; it’s safe and it’s well Business Session, he emphasized that for many of them it is paved. You know it’s not bumpy; you know what to expect.” time to change the course of their dealerships. However, he suggested, just beyond the horizon “there is a “We’re at a crossroads,” he said, as the image of a forked thousand-foot abyss.” The other road, he said, “looks a little road was displayed on the room’s large screens. “Now, one bumpy, is not quite as well paved and is certainly not

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familiar turf. But I’m going to suggest to tion of my idea, and it is finally ready for “... OSA makes it easy you that if you go down this road ... you’ll you to use to expand your business. to integrate MFP funcfind the value that you need in order to “Sharp OSA makes it easy to intetions ... into third-party survive. You can make the decision to be grate MFP functions, such as scanning, safe and go down that other road. But if into third-party application software,” application software. you do, don’t say I didn’t warn you.” explained Ibuchi. “This saves workers This saves workers time Today, said McLaughlin, dealers and time by automating tasks that once by automating tasks that sales reps need to start “getting close” to took several steps. For example, from once took several steps.” their customers in order to play an inteyour customized operating panel, you gral role in their operations and business can gain direct access to document processes. Those who do will have “an enormously bright management software.” future,” he said. “But if you sit back and take the comfortable During the General Business Session, representatives of road, you’re going to be in trouble.” four third-party software companies — Liberty Information The answer, he said, is for Sharp dealers to set them- Management Solutions, Kofax, Equitrac and eCopy — selves apart from the competition. “The product that is demonstrated how their software programs can be accessed going to differentiate us from ever ybody else in the directly via the displays of Sharp OSA-enabled Sharp industry is the OSA,” said McLaughlin, referencing Sharp Imagers. Three dealers also demonstrated how they have Open Systems Architecture, the OEM’s new development developed customized solutions using Sharp OSA. platform. (Sharp OSA, which will be available in April, utiGetting close to customers by helping them improve busilizes Web Services as its architecture, rather than being ness processes through Sharp OSA is the right road to embedded and Java-based.) choose, said McLaughlin. “It isn’t the future, it’s now,” he said. “This has been my baby ... since five years ago,” said “There is no other opportunity like this in the industry.” Yoshiaki Ibuchi, corporate executive director, Sharp Corp. Brent Hoskins, editor of Office Technology, “I kept putting pressure on my engineers for quick realizacan be reached at brent@bta.org.

Sharp Unveils New MX Series Color MFP Line advanced user Sharp Document account management, Solutions Company of America showinbound fax routing to cased the first four of e-mail, secure print and scan to SMB. eight models in the Other features of OEM’s new MX Series the MX Series include: of color MFPs. Sharp multitasking controller has based all models in the series on a technology with dual job queuing to scalable engine process copy, print design, which will The first MX Series models were prominently displayed in the Product Showcase. and scan jobs more allow for the launch of all eight models in the next six months. The MX Series will effectively; the ability to print color or black and white files directly from a USB memory device; the ability to scan a docurange in speed from 23 pages per minute (ppm) to 70 ppm. ment on the MFP and save it to a USB memory device in such The first four models range in speed from 23 to 45 ppm. formats as TIFF, JPEG and PDF; accounting and management The MX-3501N and MX-4501N are designed for general tools to ensure that only authorized users can access the office use. The MX-3501N prints and copies both color and black and white jobs at 35 ppm, while the MX-4501N prints machines; and Sharp-developed micro-fine toner technology. All MX Series models will support the new Sharp Open and copies black and white jobs at 45 ppm and color at 35 Systems Architecture, providing seamless integration with netppm. Both models offer on-line paper capacity of up to 5,600 work applications. For example, with Sharp OSA, a user could sheets. Designed for small- to mid-sized workgroups, the MX2300N and MX-2700N print and copy in both color and black scan an invoice on a Sharp MFP and integrate that into an accounting software package without user intervention at the and white at 23 ppm and 27 ppm, respectively. They offer feathe desktop. tures not typically found on MFPs in this category, such as

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Terminology Challenged? Here are some document management definitions by: Gregory Schloemer, DocuWare Corp.

hat is the dif ference between document imaging and document management? What is the meaning of the term records management? Confused when people start talking about electronic filing? It is no wonder confusion reigns. The document management industry is packed with terms, buzzwords and acronyms — most of which are very confusing — particularly to those who are new to the industry. To make matters even more complicated , quite often terms are used interchangeably — even by those in the industry, further adding to the uncertainty. This ambiguity can make it extremely difficult for a customer to understand exactly what he (or she) needs in order to make a purchase decision. This confusion can lead to indecision where the discussion stops or, worse yet, the sales process stops. One method to communicate effectively and consistently is to practice using the correct terminology. By using the proper terms in conversations you will demonstrate knowledge and competence that will separate you from the competition. But most importantly, by understanding the terminology and then using it in the proper context, you will eliminate confusion and indecision. By visiting the Web sites of leading consultants in our industry, the following is offered as a guide to help eliminate some of the confusion. The goal is to examine the terms that describe the different disciplines and distinctions within the industry, so that one can begin to decipher and gain a better understanding of what the terms actually mean. Document Imaging — First let’s examine the phrase document imaging (DI). This term refers to the ability to scan

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paper documents and use optical character recognition (OCR) and barcode recognition technology to easily index and later retrieve these documents. DI is very helpful for handling high volumes of paperbased documents, such as vendor invoices, delivery receipts, test reports and résumés. Document Management — The t er m do cum ent m an a gem ent (DM) focuses on supporting the collaborative work of creating a document. DM has a strong emphasis on the versioning of documents, check-in/check-out of documents and is widely used, for example, for those documents created with PC applications such as Microsoft Office. A DM system might be very helpful when creating and managing documents, such as contracts, technical drawings, research notes, QA reports and advertising copy. Records Management — The term records management (RM) is used to describe an organization’s ability to comply with legal requirements related to document security, document retention or document audit trails. RM might be used to comply with tax authorities when it comes to retaining accounting records or complying with laws, such as the Sarbanes-Oxley Act and the Health Insurance Portability and Accountability Act (HIPAA) in order to monitor access to financial and medical records. The term can apply to other document types as well, for example, retention periods and storage of all incoming and outgoing e-mail. Enterprise Report Management or COLD — Enterprise report management, also known as COLD (computer output to laser disk), is the term used to describe the capturing and handling of computer-generated reports from a mainframe

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or PC application. This could be greenturn helps in the selection of the right Understanding industry bar reports, end-of-month listings, solution. After careful consideration, an terminology is the first accounts receivable invoices, account integrated document management step to communicating statements, production orders or invensolution typically will be the right fit for tory listings. most company or department needs, clearly and eliminating providing an easy way to manage busiDocument Workflow — Document confusion, which in turn ness documents in one document pool workflow is the term used to describe helps in the selection of without the complexity and cost of automating and optimizing documentthe right solution. most ECM solutions. n supported business processes. DocuGregory Schloemer is president ment flow can be determined ad-hoc or of DocuWare Corp., a wholly owned subsidiary can be based on defined rules. Good examples are accounts of DocuWare AG. Founded in 1988, DocuWare payable processing, purchase order requisitions, product is a pioneer in electronic filing. releases, test procedures and hiring processes. The company’s product, DocuWare, Integrated Document Management — The five terms is a modular designed IDM software just listed — document imaging, document management, solution offering a range of standard records management, enterprise report management and features. Schloemer can be reached at document workflow — together make up what is called greg.schloemer@docuware.com. integrated document management (IDM). An IDM solution Visit www.docuware.com. can capture and manage any document type — regardless of source — such as: PC generated files, scanned images, incoming e-mail, images coming from a copier, incoming faxes or mainframe spooled text information. Furthermore, it can organize and index the information into one central document pool. An IDM solution has many functions, including the ability to support collaborative documents that need to track versions and workflow processes, as well as other features. Other terms used in the industry include: Digital Asset Management (DAM) — This is a relatively new term used to describe information management needs when it comes to publication and utilization of copyrightrelevant content. For example, a DAM helps organizations index and archive digital text, images, audio and video. DAM solutions differ from IDM solutions in the types of files that are stored. Web-Based Content Management — This is a term that refers to an organization’s editorial system for publishing and managing content within an intranet and/or the Internet. Enterprise Content Management (ECM) — This is the term most often used to describe large company-wide information management solutions. However, ECM, when properly defined, encompasses the five disciplines of integrated document management plus the disciplines of digital asset management and Web-based content management. Understanding industry terminology is the first step to communicating clearly and eliminating confusion, which in 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 | M a r c h 2 0 0 6 | 19

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Share Your Triumphs Case studies play a pivotal role in educating clients by: Darrell Amy, Dealer Marketing Systems

R

ecently, as I was training a software solution looks great in group of sales representaa controlled demonstration. However, their often unspoken tives with skills to succoncern is that the solution ceed in the document solutions won’t work in their office. Good business, I made everyone raise case studies give proof that you his or her right hand and repeat: can install solutions into real “I promise to write a case study business environments that on every print management and actually deliver on the promises document management sale that you make. I make in 2006.” Why? Because (2) They present an example case studies may possibly be the of your competence. Let’s face it, most powerful sales and marmost of your clients know your keting tool to use as you build One of several case studies posted on the Web site of dealership as a copier company. your solutions business. BTA member dealership MT Business Technologies, And despite your best efforts to In his must-read book, “How based in Mansfield, Ohio. Visit www.mtbt.com. feature document solutions in to Get Everything You Can Out of All You’ve Got,” Jay Abraham says that the goal of marketing your sales presentations and marketing materials, they may is to become your clients’ most trusted advisor in your area find it difficult to see you as a technology integrator. Case of specialty. studies are a good remedy to this problem. They go beyond How do you become your clients’ most trusted advisor in the marketing fluff to prove that you really are competent in the area of document solutions? You educate them. As you implementing technology solutions. help clients give words to their business challenges and (3) They reinforce your proposals. During the solution provide plausible ideas to solve these problems you become sales process proposals are generated that show the client hypothetical returns on their investment. If the their most trusted advisor. One of the simplest and most powerful ways to educate client has already seen case studies profiling your ability your clients on how your document solutions can solve their to deliver on your promises, they may be more trusting in business problems is through case studies. your ROI estimates. (4) They defeat the big objection. One of the biggest Educating Your Clients objections dealers get as they enter the solutions business The reason case studies are so effective is that they cut is: “Who else in town is using this?” You can shut this through the marketing hype. Past all of the necessary solu- objection down proactively by providing case studies early tions messaging in your proposals, Web sites and mar- in the sales process. keting collateral, case studies ground the great ideas to the (5) They change the focus from future to now. How real world. many times have you presented a document management Here are five reasons why case studies are so effective. proposal and heard, “We plan on getting around to that (1) They tell a real-world story. Many clients think your some day ”? We can help create a sense of urgency by 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 | M a r c h 2 0 0 6

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demonstrating that other businesses in the area are already benefiting from the solution.

ABC Realtors, a local real estate company in the greater metropolitan area, fac e s th e se chal l en ge s d ai ly. A s a growing agency, managing documents between eight offices continued to be a frustrating and costly component of the business …” The Solution — In this section explain how your technology solved the client’s problem. The goal is to make the solution seem simple. To do this, avoid overly technical talk. Instead, use simple words to describe the concepts. Make sure to explain any acronyms like OCR or EDMS. The Benefits — List out three to five business benefits. Add two or three supporting sentences for each benefit. Quantify the results as much as possible. A specific result like “monthly costs were reduced by 24 percent” is more credible than “monthly costs were reduced.” Brevity is the soul of wit. Most case studies can be presented in one page. Some more extensive case studies may

Even if you don’t have the greatest writing skills, you can do this. (You just have to send your draft through an editor or proofreader before you click print!)

Writing a Great Case Study Preparing a case study is a relatively simple process. Even if you don’t have the greatest writing skills, you can do this. (You just have to send your draft through an editor or proofreader before you click print!) The case study should have three main sections: (1) Challenge, (2) Solution and (3) Benefits. Let’s explore the steps in putting each one of these sections together: The Challenge — Write a brief summary of the challenge that your client faced. In this paragraph briefly highlight your client’s business. For example: “Real estate companies face tremendous challenges in managing documents BTA Ad 2/15/06 10:52 AM Page 1 through the listing and closing process. Bob Smith, owner of

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merit a four- or five-page white paper format. A good rule of thumb is to write the case study and then go back and cut about one third of the words. This ensures that the case study will be readable and concise.

business journals as a press release. They are often looking for good local content. If the story is printed it will be great exposure for your dealership. Direct Mail — Include summaries of your success stories as a part of a vertical market direct mail piece. The case studies can be summarized in a cover letter and then included as attachments. Displays — Create a display in your demonstration room of your successful solutions implementations. Have the case study displayed in a frame, along with a thank you letter from the client, their logo, your logo and a few photographs. In today’s evolving market case studies can play a pivotal role in your dealership’s success in the document solutions business. Make a point to start creating a library of solutions case studies today. Darrell Amy is president of Dealer Marketing Systems, an organization helping dealers succeed in the document solutions business with consulting, sales training and direct marketing services. For more information visit www.dealermarketingsystems.com. Contact Amy at (501) 626-4110 or damy@dealermarketingsystems.com.

A good rule of thumb is to write the case study and then go back and cut about one third of the words. This ensures that the case study will be readable and concise.

Other Formats Case studies can be presented in a variety of formats beyond the traditional one-page case study. The more ways you find to present a case study, the greater the chance that your clients will see the case study. And clients that might not be inclined to read a case study may read your dealership’s newsletter, proposal or Web site. Newsletters — In each of your dealership’s monthly or quarterly newsletters include excerpts from your case studies. Invite clients to go to your Web site to download the full version. Proposal Templates — Include brief summaries of success stories in your proposal template. This helps differentiate your dealership as an organization that delivers on what it promises. It may also spark additional opportunities inside a customer location where a copier is being upgraded. Web site — Feature brief summaries of the case studies in prominent areas on your Web site. Let the clients download the full case study in PDF format. Press Releases — Consider sending the case study to local

Need Ideas to Help You Write Case Studies? Five tips that can help you write great case studies: (1) Incorporate Quotes from the Client When you meet with them to ask about writing a case study, get a few juicy quotes to spice up your case study. Use quotes that will help reinforce your sales message to future prospects: “The solution from ABC exceeded our initial expectations…” (2) Use Headlines and Bullet Points People read headlines and bullet points first to make the decision if they will read the full text. At a minimum you should be able to get the overall theme of the case study from the headers and bullets. (3) Include a Picture of the Client Putting a face on the case study helps increase its credibility. Try to get a good picture of the client in their natural business environment. For example, if the case study is about a medical clinic, include a picture of the doctor or nurse. Make sure to set your digital camera on the highest resolution to ensure a good quality print. (4) Create a Graphic Template

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Have your graphic designer create a slick looking template that matches your company colors, logo or Web site. Keep the template uncluttered; professional looking documents have a lot of white space. (5) Use Pull Quotes Take the best sentence from the article and feature it off to the side in a large font. A good quote captures the attention of readers and entices them to read the rest of the case study. Four ways to quickly create a library of case studies: (1) Have a sales contest. Each case study submitted gets an entry for a cool prize. (2) Pay a spiff for each case study. (3) Have your marketing person do one new case study each week. (4) Pay a third-party to interview your clients and write case studies. You or your salesperson may lack confidence in your writing skills. Don’t worry. Just write the case study to the best of your ability and send it to a good writer to edit.

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EDUCATION CALENDAR BUSINESS TECHNOLOGY ASSOCIATION • March 2006

EDUCATION CALENDAR March 14-17 ITEX 2006

Las Vegas, NV The schedule for the office technology industry’s largest trade show features 100 hours of education and 200-plus exhibitors. To register, visit www.itexshow.com.

May Ann Barr Telemarketing Seminar Lisle, IL Ames Supply Company is sponsoring this full-day seminar/workshop. Resellers of imaging supplies are encouraged to attend. Learn how to write attention-getting opening statements, sell against discount warehouses, find additional business in existing accounts and much more. Limited to the first 20 who register. To register, contact Ann Barr directly at annbarr3@cox.net or call (757) 463-0924. Visit www.sellingsupplies.com. (BTA member coupon applies toward this class.)

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June 7-8

BTA ProFinance Washington, D.C. Analyze current business practices and evaluate strengths and weaknesses. Participants will explore important issues surrounding profitability benchmarks, asset management, expense controls and employee productivity. They will leave with a clear set of benchmarks and proven strategies for successful implementation with a target goal of 14 percent operating income. This course is sure to help you take control of and improve the financial performance of your company.

For more information and to register for BTA seminars, visit www.bta.org or call (800) 843-5059. www.of ficetechnologymag.com | March 2006 | 23

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COURTS & CAPITOLS

Protecting Company Names Make sure to file or verify the proper registrations by: Robert C. Goldberg, General Counsel for the Business Technology Association

It is generally an easy matter to search a everal years ago the National Office Your company name state’s records on its Web site to determine Machine Dealers Association behas great value to you if a particular name is available. Let’s came the Business Technology Assoin the marketplace. To assume that you have done that and deterciation. The solutions being offered to mined that the name “Elmer J. Fudd Inc.” is end-users were no longer limit ed to ensure that value is available and you go ahead and form a cormachines and thus a new name was necsolely for your benefit, poration with this name. This is now your essary to describe the association’s scope. take steps to protect company ’s legal name and no one can When I first began working with NOMDA, your name from others. form a company with the same name in many of th e m emb ers had c omp any the state in which you have incorporated. names like “Bob’s Typewriters.” They, too, But the mere fact that a state has allowed you to form a had to change their names, often from “typewriters” to company named “Elmer J. Fudd Inc.” does not ensure that no “copiers” and more recently to “business solutions.” When clients ask that we form a company for them, whether one can attack your rights to that name, although it will help it is a corporation, a limited liability company or a partnership, your case if your parents are Mr. and Mrs. Fudd and they what is usually foremost on their minds is the name they will named you Elmer. This is because trade names gain protection use. Also, the names of existing companies are often evaluated through actual use, not through registration, and, as is so often to determine if they still fit the business being conducted. the case in the law, prior in time is prior in right. Thus, the newly formed Elmer J. Fudd Inc. may find itself being sued for Once you have a name it is best to take steps to protect it. Every business, like every person, has a legal name. If your unfair competition or trademark infringement by another parents named you “Elmer Fudd” but your friends call you Elmer Fudd. Just try to open a restaurant named McDonald’s “Bob,” your legal name is still “Elmer Fudd.” So, too, if your even if your name is Bob McDonald; prepare to defend yourself. There are, however, ways to gain some measure of proteccompany’s name is “Elmer J. Fudd Inc.,” but you do business tion. While trade names cannot be registered as such, if your under the name “Elmer’s,” your legal name is still “Elmer J. Fudd Inc.” “Elmer’s” is what is known as an assumed name or trade trade name is also used in connection with the sale of goods or name. A company’s legal name is a part of the public record services, you may be able to register the trademark at the state most often as part of your state incorporation. If you do busi- and/or federal level. Federal registration of trademarks and ness under a trade name, this, too, should be made part of the service marks is available only if you do business in interstate public record by making the appropriate assumed name filing commerce, i.e., if your goods or services are sold in more than normally in the county where your business is located. This one state. State registration of trademarks and service marks allows people doing business with Elmer’s to know that its true is available if you do business solely within a single state. legal name is Elmer J. Fudd Inc. The important point is to Again, state and federal Web sites can be searched to determine if a name is available. If it is not, you can most likely file a protect your name by making the proper registrations. A state will allow you to form a company called “Elmer J. request for registration online. Be sure to have your credit card Fudd Inc.” so long as it is distinguishable from the names of handy for there are fees involved. Your company name has great value to you in the marketother companies already formed in that state. Thus, if there is an existing “Elmer Fudd Inc.,” you will probably be able to use place. To ensure that value is solely for your the name “Elmer J. Fudd Inc.,” but you will not be able to benefit, take steps to protect your name from adopt the assumed name “Elmer Fudd.” You may decide to just others — file or verify proper registrations. n Robert C. Goldberg is general counsel for the use your initials and to name the company “EJF Inc.,” but keep Business Technology Association. He can be in mind that this name may not be available, since there are reached at robert.goldberg@sfnr.com. lots of people with the same initials.

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SERVICE CONNECTIONS

Service Pricing One dealer’s view on the factors to consider by: Ron Hulett, U.S. Business Systems

here is no doubt about ? it, pricing office techre ? t a ors a nology service is not Wh petit ? the easiest task for dealers. m ng co argi This is particularly true in ch today’s competitive environment. And, of course, the opinions and pricing practices vary. In an effort to offer “one dealer’s views” on service pricing, Office Technology a sked m e to sh are a fe w thoughts on the topic. Perh aps th e o bser vation s I share in this article mirror yours. The hope, however, is that I can share some new ideas or insight that could lead to new strategies in your dealership. First, I believe that any discussion of service pricing must begin with this simple reality: While you may put an abundance of work into developing your pricing structure, you must be prepared to be flexible in certain instances. How many pages will the prospective client be producing? What is the environment like? Who is the competition? Will the client sign a long-term contract? Many factors can come into play when making that ultimate decision — what to charge — on a given deal. The old saying “The best laid plans…” is apropos here. After all, the price you can charge is what the customer is willing to pay — end of story. Also, I should acknowledge that your particular market may be considerably different than mine or the next dealership’s. Are there five competitors in your market? Or, is it like mine, where there are about 20 to 25? With these thoughts in mind, following are a few factors and strategies for dealers to consider when rethinking or establishing (and presenting) service pricing.

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Look to Your Manufacturer Today, of course, your manufacturer should be able to provide you with some basic reports that detail the cost per

page (CPP) for parts, supplies, etc., based on optimum .00 0 performance. However, keep .0 6? Wh 0 in mind that these reports $ sho at uld are based on optimum per? charg we ? formance in a controlled e fo lab or? r environment. Depending on the manufacturer, they can be either “pretty close” or “way off track.” I have seen reports from m a n u f a c tu re r s th a t w i l l detail a cost at $0.002 per p a ge i n clu di n g l ab or f or Segment 2 machines. This is of t e n n o t re a li st i c . Yo u might get one now and then to perform to that level, but not very many. If you use these reports to base your pricing, I suggest putting in some margin of error prior to adding in the level of profit that you expect. This can be an easy way to get a structure in place and begin analyzing the data. Another method is the old-fashioned way — determining yields and costs of the major consumable items (toner, developer) and a few parts, such as feed rollers, etc. You can then get to a rough CPP, apply some margin of error, add in a flat rate for labor and profit and off you go. Historically, we have factored in about $0.004 to $0.006 for labor. However, you have to study this carefully as it can put you out of the game. Again, it becomes an exercise of volume, market conditions, etc. If your manufacturer provides you with a cost analysis of the models, this information can be pulled from those reports and adjusted accordingly. You may want to vary from the yields to get a CPP. In studying the actual yields of one manufacturer we represented, for example, we found that the actual drum yields were better than they indicated. However, the developer yield was worse and so were a few other items — drum blades, etc. So, I collected all the data and established a CPP based on my findings. There is also the method of studying your existing base in

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models across your line. By generating reports on different models from your database — and the cost and profitability of each model — you can again get to an average CPP and work from there. Typically, there are very few radically different model changes from year to year so you can assume that this year’s 35-page-perminute machine will operate at about the same cost as last year’s model.

Facing Competitive Tactics Beyond your efforts to establish the right CPP, it is important to keep in mind another key reality: Many clients are only looking at the bottom line on the quote. So, the client will buy from your competitor’s low quote. But then, after the deal is signed, additional charges are added. At that point, the client has already bought the machine and so, unfortunately, does not want to go back through the process with someone else (i.e., your dealership) just because of those “few extra dollars” being added to the cost. I see this often. In follow-up meetings with the client — after we lose a deal — I uncover all sorts of things that were not in the quote. The claim of “everyone charges for that” comes into play here and is used frequently to bring in additional charges after the decision has been made. We see charges for shipping costs (even for a box of toner), use taxes on the parts used, monthly statement fees, administration fees, etc. There seems to be no end to the types of add-on charges. Most of the time, these fees are just paid because the person paying the bill is rarely the same person who signed the deal. I have also seen invoices from a competing megadealer that no one can even figure out. I have been managing my dealership for 13 years and if I cannot figure out what the customer is being charged for, the customer does not have a chance. One tim e I su g gest ed that th e cli ent ask hi s re p from th e megadealer to come in and explain the invoice. The rep could not figure it out either. My point: When presenting your service package, make every effort to emphasize to prospective clients the significance of your “all-inclusive” up-front quote. Perhaps they will then become more leery of some of your competitors and you will win more deals. More Factors/Ideas to Consider What else should the dealer consider? Here are three more key factors/ideas that are appropriate for today’s market: n I suggest looking at charging a per-scan price. As the

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market applications change, we must change as well. We have a client that has scanned about four times the number of documents they have printed and copied. The ADF requires feed kits and maintenance fairly regular. However, we would be collecting very little on a per-copy charge as they do not run many copies anymore. This trend may continue and we must acclimate ourselves to charging for that service as well. n When pricing a contract, you should also consider the expectations of the client. Will the client demand two- or four-hour response, free loan equipment, a cap on increases, etc? If the client is willing to forego some of these things — at least for the first year or two — you can offer a cost savings to the client. n In nearly every market there are companies that will do anything for a deal, giving away service at cost or for no cost. The ramifications of this practice will catch up with them sooner or later (hopefully sooner). Until then, build value into your agreements by offering services that your competitors do not offer. But, charge for them. No value is perceived if there is no price.

... Build value into your agreements by offering services that your competitors do not offer. But, charge for them. No value is perceived if there is no price.

Be Flexible and Competitive While this article provides only a brief look at a few of the factors to consider, I hope it provides some new thoughts and ideas. If you take away nothing else, remember the reality that I previously stated: In today’s market it is difficult to just put an across-the-board structure in place and adhere to it without fail. This is particularly true with today’s larger conglomerates quoting very aggressive prices to capture the client. Also, keep in mind that every salesperson on the planet says his (or her) service department is the best and all prospective clients want products and services for as cheap as they can get them. So, don’t forget, you must establish service pricing that is competitive. Of course, for many dealers, that reality leads to an altogether different topic to consider — the need to come up with new strategies for bringing in additional revenues. n Ron Hulett is managing director and co-founder of U.S. Business Systems, headquartered in Elkhart, Ind., near South Bend — an exclusive Gestetner dealership. Hulett can be reached at (574) 264-3065 or ronh@usbus.com. Visit www.usbus.com.

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PRINCIPAL ISSUES

Software-Based Solutions They are becoming an increasingly critical factor by: Joel Mazza, InfoTrends

n many ways, th e of fice document solutions market is an extension of the bro ad er of f ice equipm ent market, which includes the sale of copiers, printers, fax machines, scanners and related multifunctional derivatives of the first three. Anyone who is familiar with the equipment market understands that this is a mature market with limited year-over-year growth, where margins on hardware continue to disappear and most of the profits are earned on the supplies and service annuity. Despite the mature nature of this market, numerous vendors compete vigorously. While consolidation activities remain brisk, more than a dozen individual manufactured brands of equipment compete through a mix of channels, many of which are under significant price pressures. The need to preserve market share and maintain sales levels on a dayto-day basis has made it difficult for key players in this market to look ahead to new opportunities concerning value-added software applications, related consulting and professional services opportunities. Despite the day-to-day competition of hardware sales, we have seen significant evidence (as tracked by some manufacturers and software developers) that software-based solutions are becoming an increasingly critical factor in the sale of office equipment hardware in the United States. Furthermore, as solutions take a lead in defining the prerequisites for equipment bids, those vendors pursuing valueadded opportunities have shown an improvement in the margins for the associated equipment that is included in such deals. The equipment in these deals sold for as much as 8 to 12 percent higher than similar equipment sold without software or related professional services. The chart appearing on this page provides a more complete context on the point we are describing. In this case, we focused strictly on the revenue value for office equipment, concen-

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trating solely on networked printer - and copier -based devices that are sold into workgroup of fice environments. (The chart shows a comparison of hardware revenue for devices sold with and without software solutions.) While the overall market for this entire segment and class of office equipment shows a modest CAGR (compound annual growth rate) of 1 percent between 2004 and 2009, InfoTrends believes that the relationship between solutions and office equipment hardware products is creating a contrasting dynamic within this market. Concentrating on networked printer- and copier-based devices that are sold into workgroup office environments, InfoTrends compared the estimated hardware revenues for devices sold with and without software solutions. The results are dramatic. Looking at revenue alone, forecasts show that hardware sold with solutions is expected to increase at a CAGR of 29 percent from 2004 to 2009. Hardware in this same category that is sold independent of any solution, on the other hand, is projected to decline at a CAGR of -11 percent. While the office document solutions market remains relatively nascent as a standalone market, its impact on the broader office equipment market looks to be significant and it is expected to have a much higher gross revenue impact. n Joel Mazza is director of InfoTrends’ Network Document Solutions Consulting Service. Previously, he worked at EFI as a product manager and competitive analyst. This article is excerpted from InfoTrends’ U.S. Office Document Solutions Forecast. To learn more about this report, visit www.infotrends.com or contact Nicole Shown at nicole_shown@infotrends.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 | M a r c h 2 0 0 6 | 27

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PRINCIPAL ISSUES

Close-up: Konica Minolta OEM has multi-tiered solution-selling program by: Stephen T. Jones, Konica Minolta Business Solutions U.S.A. Inc.

Editor’s Note: Throughout 2006, Office Technology magazine will be inviting the copier/MFP OEMs that sell through the dealer channel to submit articles regarding their dealer support initiatives and/or training programs. The intent is to provide each of the OEM’s authorized dealers — and the channel in general — a better understanding of some of these current initiatives and programs. Following is the second of these OEM submissions, from Stephen T. Jones at Konica Minolta Business Solutions U.S.A. Inc.

Above: Konica Minolta’s “The Learning Place” Web site provides an extensive array of training modules. Above right: Dealers can take a guided tour of the features/functions of bizhub products. Right: The OEM’s Webinars allow dealers to gain immediate insight into a new product’s sales marketing tools.

s our dealer channel embarks on the second half of the decade, it must recognize that in order to increase its hardware sales, it must provide software solutions as well. InfoTrends, a leading worldwide market research and strategic consulting firm for the digital imaging and document solutions industry, reported in January 2006 that, “revenue on hardware sold with solutions is expected to grow (compound annual growth rate) 29 percent from 2004 to 2009 and revenue on hardware sold independent of any solution is expected to decline at a CAGR of 11 percent.” Konica Minolta understands that it is not an easy transition to software solution selling, but it is a necessary one in order for dealers to survive and be profitable. Keeping this in mind, Konica Minolta has established a well-structured, multi-tiered solution-selling program to make the transition as simple and as successful as possible.

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Document Solutions Group To spearhead our program, Konica Minolta formed the Document Solutions Group, which is headed by Susan Gain, 28 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 6

national manager of solution sales and engineering. The group provides solution-selling support to Konica Minolta’s dealer channel through its Digital Document Solutions Managers (DDSMs) and Solutions Engineering Managers (SEMs). The main goal of Konica Minolta’s DDSMs is to help our dealers develop their “value-added” software/hardware solution-oriented sales so that they can penetrate new markets and increase their unit base. The focus of the DDSM is to assist dealers through the transition to solution selling, helping them with sell-through and helping them to shorten the sales cycle. DDSMs are there to offer solution-selling assistance to a dealership as it prepares its own solutionselling program and as it obtains the necessary solutions training for its team members. The major responsibilities of the DDSM include: provide solution overviews; review a dealership’s account base and its resources, and assist with the development of a solution-selling strategy; perform sales training; deliver guidance for the successful development of sales processes for each solution; assist

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needs to be in place so that both the soluwith solution proposal generation; act as The more education tion specialist and the sales representaliaison between third-party software our dealers receive tives have the incentive to identify sales vendors, the dealership and the cusregarding the software opportunities across the board. tomer; and act as liaison between Konica The best practice insight that Konica Minolta’s National System Solution Group solutions available ... Minolta continues to receive from our (NSSG) and the SEM for support and/or the more equipped they Advisory Council will be delivered to our solution implementation. will be to grow their dealer community at large through mulIn 2006, Konica Minolta’s DDSMs will organizations. tiple avenues beginning this spring, be offering a new level of solution sales in clu din g a seri e s of m o d el s on our training and a new line-up of seminars to the field, including variable data and production workshops, MyKonicaMinolta intranet that detail infrastructure, best practice and compensation program suggestions. technology open houses and a “Lunch and Learn” series. Konica Minolta offers a second level of solution-selling support to its dealers through its SEMs. SEMs are the tech- Educational Component Konica Minolta also believes in continually educating our nical experts and they advise on how to optimize hardware/software solutions. SEMs aid our dealers with their dealerships regarding the latest solution offerings and selling initial software solution installations by providing scope-of- techniques. The more education our dealers receive regardwork documents, conducting installations, assisting with host ing the software solutions available, how the solutions connectivity and delivering end-user training. They are also improve a business’ workflow and how to effectively sell to there to assist with the growth of a dealership’s major leaders in IT departments, the more equipped they will be to grow their organizations. accounts and to assist with the acquisition of new accounts. Through Konica Minolta’s The Learning Place our dealers In addition, a major advantage that Konica Minolta offers through our Document Solutions Group and NSSG is our receive online sales training for each bizhub MFP that is solution support policy. When a software solution is pur- launched. The training features four elements: the Panel chased for a customer by a Konica Minolta dealer, the product O ver view, a Simulator, a Guided Tour and the Virtual System. The key element for solution selling is the Guided is always supported by Konica Minolta and the dealer. Recently, Konica Minolta’s Document Solutions Group aug- Tour. The Guided Tour showcases how the different prodmented its support program with the launch of its Solutions ucts and solutions can be joined together to achieve a Advisory Council (SAC), bringing together leaders from its variety of workflow applications. Additionally, it highlights top solution-selling dealerships to discuss best practices and how end-users would utilize the software solution and the the issues facing dealerships as they transition their focus benefits that they can achieve. from selling digital imaging machines to selling total soluThe Learning Place also offers Web-based Interactive tions for imaging/document management, production Tutorials for software solutions such as the recently introprinting, and output and device management. duced PageScope Workware. The Interactive Tutorial is tarKonica Minolta understands that dealers value the experi- geted for dealer solution-selling specialists. This in-depth ences and insight of their peers. With this in mind, we created tutorial educates specialists on the software solution’s conthe SAC to obtain firsthand knowledge about the transition to figuration settings and functional features, as well as pressoftware solution selling from our dealers who have success- ents them with document composition details/real-world fully completed the process. project scenarios and an interactive challenge. Konica Konica Minolta received some tremendous feedback from Minolta also plans to make these tutorials available to endour Advisory Council. It is our goal to share best practices users. The tutorials represent an all-in-one sales tool for the with our dealers so that their solution-selling success can be solution specialist, delivering the product basics and greater than they ever imagined. Some examples of best detailing the benefits for today’s businesses. practices that we received are training dealer sales represenWith the growing demand for digital imaging workflow tatives to be “bird dogs,” sniffing out solution sales opportu- applications specifically tailored to the needs of vertical nities and splitting the compensation between the sales markets such as healthcare, financial, government and legal, representative and the solution specialist. The silo compen- Konica Minolta is also launching a Solutions Portal through sation model does not work; a split compensation model The Learning Place in the spring of 2006. The Solutions 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 | M a r c h 2 0 0 6 | 29

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Portal will feature a classroom environWe at Konica Minolta realize that in We ... realize that in ment broken down into three different order to stay on top in today’s business order to stay on top sections: Business, Technology Overview world, manufacturing and selling topin today’s business and a History Book. Each classroom envicaliber digital imaging devices is not ronment will focus on a different vertical enough. A dealership will no longer be world, manufacturing market. The main section of the classable to increase its sales and profitability and selling top-caliber room will include a chalkboard with the based on device sales alone. In order to digital imaging devices different departments found within a parincrease the sales of devices, software is not enough. ticular vertical market environment, i.e., a solutions must be offered. The two can no law firm, and workflow scenarios, highlonger live in isolation. Combined hardlighting a variety of solutions, will be presented for each of ware and software solutions packages equal revenue growth. the departments. Through programs, support processes and educational initiaThis spring Konica Minolta will also be unveiling the Certifi- tiv e s, Koni ca Min o lt a i s c ommitt ed to cation Training Program for our dealerships. The incentive- teaching our dealer channel the importance based program features a combination of instructor-led and of solution selling and delivering the tools Web-based solution-selling modules and tests to enhance the necessary to ensure future success. n solution-selling knowledge of our dealer channel. The goal of Stephen T. Jones is executive vice president, U.S. the program is to prepare the channel to sell hardware/soft- dealer sales, for Konica Minolta Business Solutions ware solutions to today’s IT-based business environments. U.S.A. Inc. Visit www.kmbs.konicaminolta.us.

ADVERTISER INDEX Ames Supply Company (800) 323-3856 / (630) 964-2440 Fax: (800) 848-8780 / (630) 964-0497 www.amessupply.com / E-mail: info@amessupply.com

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Azerty (800) 888-8080, Ext. 2153 or 2154 / (716) 662-0200 Fax: (716) 662-7616 www.azerty.com/bta / E-mail: azerty-sales@azerty.com

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Business Products Council Association (800) 897-0250 www.businessprouductscouncil.org

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Color Imaging Inc. (800) 783-1090 / (770) 840-1090 / Fax: (770) 840-7029 www.colorimaging.com / E-mail: sales@colorimaging.com

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FMAudit (573) 632-2461 / Fax: (573) 632-2465 www.fmaudit.com / E-mail: sales@fmaudit.com

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InfoDynamics Inc. (888) 446-8228 / (317) 578-2167 / Fax: (317) 913-4580 www.infod.com / E-mail: intact@infod.com

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MKG Imaging Solutions Inc. (800) 881-7545 / (905) 564-9218 / Fax: (905) 564-9225 www.mkg.org / E-mail: sales@mkg.org

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Muratec America Inc. (469) 429-3481 / Fax: (469) 429-3311 www.muratec.com

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Print Audit (877) 412-8348 / (403) 685-4932 / Fax: (403) 249-9471 www.printaudit.com / E-mail: sales@printaudit.com

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