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CONTENTS Volume 17 No. 5 G
FEATURE ARTICLES 10
18
Business Color Today, everyone is selling it, right?
PRINCIPAL ISSUES Succession Planning You must be prepared for an uncertain future
25
by Brent Hoskins Office Technology Magazine
by Jim Kahrs PPMC Inc.
The often-repeated declaration that “this will be the year of color” faded away long ago. Looking back, identifying which year was “the year” is difficult, if not impossible. Many would say it was not a single year, but actually a series of years that collectively led to color output being well established in the general office. Whatever the case, few, if any, would dispute that the color-enabled MFP has become commonplace. Business color is now a standard offering.
With the hustle and bustle that you face every day, it is sometimes difficult to set aside time for future planning. Rarely does the thought of planning your succession come to mind. Unfortunately, this has really come back to haunt some dealerships.
COURTS & CAPITOLS 27
Grand Slam 2010 BTA East district hosts event Sept. 23-24
by Robert C. Goldberg BTA General Counsel
When business is very good and profits are great, owners often neglect to remain focused on business details. In today’s economy, one area for potential problems is draws advanced against commissions to be earned.
by Brent Hoskins Office Technology Magazine
With the goal of providing office technology dealers with both education and networking opportunities, BTA’s East district hosted Grand Slam 2010 Sept. 23-24 at the Ritz-Carlton Hotel in White Plains, N.Y. The third annual event drew a total attendance of approximately 150, up from about 115 in 2009 and 65 in 2008. The event began the afternoon of Thursday, Sept. 23, with a dealer and manufacturer panel discussion moderated by Frank Cannata of Marketing Research Consultants Inc.
22
MPS STRATEGIES Long-Term MPS Success Do you have the right business model to thrive?
29
by David Factor Strategy Development
As we all know, managed print services are changing the imaging business as we know it. Today, various types of companies with historically different business models want it all — hardware, service and supplies for all devices.
Rules-Based Printing Software solutions that leverage the network By Denine Phillips Tech-Write LLC
The August Office Technology cover story, “Device Management: Providing remote MFP configuration & monitoring,” highlights how remote administration of network output devices (printers/MFPs) can save dealers and end users time and money. Indeed, device management (DM) solutions automate error-prone, manual tasks — meter collection, supply ordering, configuration and firmware updates — while also streamlining service dispatch and call resolution. 4 | w w w. o f f i c e t e c h n o l o g y m a g . c o m | N o v e m b e r 2 010
Draws Against Commission Establish a detailed, written commission plan
DEPARTMENTS Business Technology Association
28
G BTA Highlights
6
Executive Director’s Page
8
BTA President’s Message
30
Advertiser Index
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EXECUTIVE DIRECTOR’S PAGE
Color is ‘The Rule, Not the Exception’ f yours is like most MFP-centric office technology dealerships, then you have seen an increase in the number of placements of color MFPs in recent years. That comes as no surprise, given the rise in the interest in color output in the general office environment and declining costs. Today, business color is commonplace. As I began work on the cover story in this issue of Office Technology, I wondered about the extent to which color MFPs have advanced in terms of their claim on the dealership’s total unit placements. In March 2005, in preparing an article on the same topic, I surveyed dealers via e-mail regarding the color MFP product category. There were 67 respondents to that survey. How have things changed in five years? For this month’s article, I e-mailed dealers the same questions. This time, I received 77 responses. Below is a comparison of the responses to the two e-mail surveys. The results that appear in parentheses are from the 2005 survey. Perhaps the comparison confirms what we already know to some extent, but I believe you will find the results of interest. During the past six months, what percentage (please estimate) of your dealership’s total unit placements were color MFPs? Less than 10 percent: 5% (2005: 37%) 10 to 20 percent: 14.5% (27%) 21 to 30 percent: 6.5% (25.5%) 31 to 40 percent: 19.5% (4.5%) 41 to 50 percent: 18% (3%) More than 50 percent: 36.5% (3%) Among those custom er locations where you have placed color MFPs in the
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general office, what is your estimate of the average percentage of pages output in color? Less than 10 percent: 4% (2005: 18%) 11 to 20 percent: 38% (33%) 21 to 30 percent: 34% (22%) 31 to 40 percent: 23% (21%) More than 40 percent: 1% (6%) In the next six months, w hat percentage of the total unit placements by your dealership do you project will be color MFPs? Less than 10 percent: 4% (2005: 18%) 11 to 20 percent: 10.5% (34%) 21 to 30 percent: 5% (19.5%) 31 to 40 percent 19% (16.5%) 41 to 50 percent: 19% (10.5%) More than 50 percent: 42.5% (1.5%) The recent e-mail survey also asked the question: Do you have any comments regarding the market for business color in the general office environment that you would like to share? Here’s a sampling of the responses: I “The decline in the color-enabled unit cost, and the cost-per-copy, is driving the usage of color in the general office environment. Color-enabled devices are being placed more frequently as there is no longer a huge penalty to upgrade to color.” I “Color has become the rule, not the exception.” I “Business color is commonplace. The slow economy has caused offices to scrutinize their costs and, therefore, the color output is not as high as it was or will be, once the economy is perceived as getting better.” To see the other comments shared by respondents, see this column online at www.bta.org. I — Brent Hoskins
Executive Director/BTA Editor/Office Technology Brent Hoskins brent@bta.org (816) 303-4040 Associate Editor Elizabeth Marvel elizabeth@bta.org (816) 303-4060 Contributing Writers David Factor, Strategy Development www.strategydevelopment.org Robert C. Goldberg, General Counsel Business Technology Association Jim Kahrs, Prosperity Plus Management Consulting Inc. www.prosperityplus.com Denine Phillips, Tech-Write LLC www.tech-write.biz
®
Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Membership & Marketing Manager valerie@bta.org Mary Hopkins Database Administrator mary@bta.org Teresa Leerar Bookkeeper teresa@bta.org Brian Smith Membership Sales Representative brian@bta.org ©2010 by the Business Technology Association. All Rights Reserved. No part of this publication may be reproduced by any means without the written permission of the publisher. Every effort is made to ensure the accuracy of published material. However, the publisher assumes no liability for errors in articles nor are opinions expressed necessarily those of the publisher.
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BTA PRESIDENT’S MESSAGE
®
2010-2011 Board of Directors
BTA Southeast Hosts Successful Fall Event n O ct. 22-23, I had the opportunity to once again attend the BTA Southeast Fall Colors Conference in Waynesville, N.C. As in the past, I did not leave disappointed. This annual event takes place in the historic 1920s-era Waynesville Inn Golf Resort & Spa in Waynesville. It’s a great place to unwind, learn from the education sessions and visit with fellow dealers. This year, I had the privilege of being among the education session presenters, speaking on a topic that is very familiar to me — professional certifications, such as CompTIA’s PDI+ and CDIA+. My fellow presenters were Jim Kahrs of Prosperity Plus Management Consulting Inc. and Byron Aulick of DataVault Inc. Jim presented strategies for assessing the health of your dealership. Byron spoke about the opportunity to sell scanning as a service. In addition, a roundtable discussion was held at the conference, allowing attendees to visit on the topic of leasing with Lori McGowan, a vice president of sales at GreatAmerica Leasing Corp. There was also a general discussion on receivables and collections strategies, and dealership best practices. The schedule included dedicated time to visit with the exhibiting sponsors, who helped to make the event a great success. In addition to GreatAmerica, they were Canon U.S.A., Color Imaging, Digitek Computer Products, Diversified Computer Supplies, Muratec America and West Point Products. The event drew a total attendance of approximately 65. This number included veteran Fall Colors Conference attendees as
O
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well as some new faces — individuals who were either first-time attendees or who had not attended in recent years. For the most part, they were dealers from within the Southeast region of the United States. As a Californian, it is always nice to enjoy that southern charm and hospitality. There were plenty of opportunities to do so — at the opening welcoming reception, Saturday afternoon following the education sessions and Saturday evening during the closing dinner. Saturday afternoon, many went into historic downtown Waynesville to explore the many shops. Others played golf on the resort’s 27-hole course. Still others took a drive in the nearby Great Smoky Mountains or Balsam Mountains. Myself? Several other attendees and I spent the afternoon enjoying the fresh, mountain air while visiting on the porch of one of the guest rooms overlooking the golf course. I share the extra details here to emphasize a key characteristic of BTA’s growing lineup of district events. They are not only great learning opportunities, but there are also unparalleled opportunities to really connect with others in the industry. These are, of course, your fellow dealers who share your passion for selling, servicing and supporting office technology. They are eager to share their ideas and strategies and can often be excellent sources to call upon for advice in the future. Does this sound like the type of event you would like to attend to gather new ideas to help you in your dealership? If so, mark your calendar for the next two district events — Feb. 17-18 in Orlando, Fla., and May 3-4 in St. Louis, Mo. Watch www.bta.org and Office Technology for details. I — Rock Janecek
President Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. San Bernardino, CA 92408 rjanecek@burtronics.com President-Elect Tom Ouellette Budget Document Technology 251 Goddard Road Lewiston, ME 04240 touellette@bdtme.com Vice President Terence Chapman Business Electronics Corp. 219 Oxmoor Circle Birmingham, AL 35209 tchapman@businesselectronics.com BTA East Todd J. Fitzsimons Network Imaging LLC 122 Spring St. Southington, CT 06489 tjfitzsimons@networkimaging.biz BTA Mid-America Ron Hulett U.S. Business Systems Inc. 3221 Southview Drive Elkhart, IN 46514 ron.hulett@usbus.com BTA Southeast Mike Upchurch Business Machines Inc. 3121-C Glen Royal Road Raleigh, NC 27617 mike@bmi4u.com BTA West Greg Gray Burtronics Business Systems Inc. 216 S. Arrowhead Ave. San Bernardino, CA 92408 ggray@burtronics.com Ex-Officio/Immediate Past President Bill James WJS Enterprises Inc. 3315 Ridgelake Drive Metairie, LA 70002 bjames@wjsenterprises.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC 222 S. Riverside Plaza, Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com
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Business Color Today, everyone is selling it, right? by: Brent Hoskins, Office Technology Magazine
he often-repeated declaration that “this will be the year of color” faded away long ago. Looking back, identifying which year was “the year” is difficult, if not impossible. Many would say it was not a single year, but actually a series of years that collectively led to color output being well established in the general office. Whatever the case, few, if any, would dispute that the color-enabled MFP has become commonplace. Business color is now a standard offering among office technology dealerships. Although the tumbling economy of late 2008 and all of 2009 slowed the growth of the color MFP market, the promise of and enthusiasm for business color persists. Monochrome-only MFPs still dominate, but color continues to make strides. Among all U.S. unit placements (MFPs and both laser and inkjet printers) in the general office in 2009, about 24 percent were color devices, says Robert Palmer, director of Digital Peripherals Solutions for market research firm InfoTrends Inc. That number is projected to reach 35 percent by the end of 2014. In terms of the actual number of placements, looking only at MFPs, InfoTrends estimates there were 415,000 color MFP placements in the United States in 2009, as compared to 1.4 million monochrome MFPs. An e-mail survey of dealers, conducted by Office Technology in conjunction with this article, further reveals the growing focus on color. Among the 77 respondents, 36.5 percent indicated that more than half of their total unit placements in the past six months were color MFPs. In contrast, among the 67 respondents to the same survey question in March 2005, only 3 percent reported that more than half of their total unit placements in the previous six months were color MFPs. (See the Executive Director’s Page on page 6 for additional survey results.)
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A key contributor to the rise of color in the office is the decline or elimination of some of the long-lasting barriers, such as the high cost of ownership, spotty print quality and slow output speed. “I think most of the major barriers have been broken,” says Michael Hunter, director of product marketing for Ricoh Americas Corp., citing, in particular, output quality and the need for the MFP to slow down and re-calibrate during print jobs. “In addition, today, the black-and-white speeds match the color speeds. There was a day when an MFP that would print at 30 pages per minute [ppm] in black and white, could only print at 15 ppm in color. So, the productivity has increased dramatically.” Initial notable increases in the number of color MFP unit placements may not have come simply as a direct result of the declining barriers, but also as the result of a push among some vendors to claim market share. The philosophy embraced by some manufacturers, says Palmer, was: “We need to be the leader, we need to get market share, we need to get units in the field and the pages will come.” As a result, says Palmer, prices (and hardware margins) were driven downward and, similarly egregious, color output did not meet expectations. “They did get the units into the field, but what they found was that those customers who were willing to pay for those low-priced products didn’t print a lot of volume,” he says. “That caused a problem in the market — a business model that was not really a winning business model.” Hunter acknowledges the faulty business model prevalent in the color MFP market’s early years. “Many times, sales reps would receive higher commissions or incentives based on selling a higher-cost color system, without really considering the color output volumes or what the workflows
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ments. “The dealerships that should be,” he says. “But the “Most products on the are the most successful in sales reps did exactly what market today are fairly color have reps who walk we wanted them to do — into an account expecting they sold color devices.” competitive; they’re that there is a need for color, How has th e industr y comparable. There is because, let’s face it, most ultimately addressed the very little differentiation customers do have the need problem — the faulty busithat occurs on a hardware for color,” says Boatman. “So, ness model and the placelevel ... We are in a very having the expectation that ment of color MFPs with mature market now.” there are color requirements lower-than-expected color — Robert Palmer within every single account output? Dealers (and manuInfoTrends Inc. will help the dealership be facturers) have since seen more successful.” the importance of not just As suggested, placing color-enabled MFPs in the right enviplacing a color MFP for the sake of placing another device, but instead conducting workflow assessments to ensure ronments will help ensure that the dealership’s expectations for a customer’s color volume and the actual volume are more they are properly placed. Hunter says the current selling strategy has proven to be in alignment. However, adds Boatman, it is also important for the correct one. “Today, when we look at color volumes, we dealerships to take an extra step to make sure they meet proare typically pleased with the volumes when the device is jected aftermarket revenues. “Dealers can protect themselves placed in the right environment,” he says. “When devices are within their maintenance agreements by providing for annual not put into the right environment, you see that the amount reviews or some other period of time to review what the actual of color output expected versus the actual output is dramat- customer color usage is and make adjustments accordingly,” ically different. We now see our dealers making sure that the he says. “I think that has to be a part of what dealers consider device is put into the right environment. Once it is put into as color becomes more prevalent.” Hunter offers similar advice. “Dealers need to make sure the right environment with the right expectations, the they are going to get the return on the output,” he says. appropriate color volumes should be there.” Others offer similar comments. “I think it comes down to “They can do that by making sure they are doing the workunderstanding the customer environment well,” says Phil flow assessments [ensuring placements in the right environBoatman, manager of BSD (Business Solutions Dealer) ment] and by placing color minimums into the contract.” While dealers and manufacturers are now effectively program development for Lexmark International Inc. “That relationship between the dealership and the customer needs addressing the issue of correctly placing color MFPs, there is to be tight, so that the dealer can best understand what the at least one other “problem” that is now a commonly accepted reality. “Most products on the market today are color usage is going to be.” Hiro Imamura, senior director of enterprise systems for fairly competitive; they’re comparable,” explains Palmer. the ISG Product Marketing Division of Canon U.S.A. Inc., “There is very little differentiation that occurs on a hardconcurs. “We always recommend that dealers offer the best ware level. The user interface and, perhaps, some embedded solution for each customer opportunity,” he says, noting that software do offer some differentiation, but in terms of just a the result is a high level of color output on Canon product pure hardware perspective, there is not a lot going on placements. “We don’t simply push color just because we anymore that allows manufacturers to differentiate themwant to sell more color. That’s not what we do. We may have selves. We are in a very mature market now.” Of course, the argument could easily be made that workflow missed opportunities where we could have sold more color devices, but the bottom line is we like to place the optimum assessments leading to the correct placement of color MFPs products in the customer’s environment. As a result, Canon are helping to distinguish dealerships from their competitors. Likewise, as Palmer suggests, software-based solutions may dealers generally see very healthy color print volumes.” Of course, given that manufacturers and dealerships are also provide a key means of differentiation (many would say product and services sales companies, a part of placing color this is a definite differentiator). At least for the short term, as MFPs in the right environments is seeking out those environ- the economy remains on shaky ground, proactively helping 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 | N o v e m b e r 2 0 1 0
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customers control costs may color output for those who “Until two years ago, also ser ve as a primar y need to print color,” she says. customers were ... more means of distinguishing a “ Whether that is access accepting of color output dealership from the competicontrol for an individual user tion. “Until two years ago, or a group, Lexmark offers ... and they did not have a customers were more and those functions within a lot of concern about the more accepting of color outdevice so that an adminisadditional costs. However put coming into their busitrator can enable color us... concern about the cost nesses and they did not have age as needed throughout of color has reignited to some degree.” a lot of concern about the the environment.” — Phil Boatman additional costs,” says BoatWhile users may be seekLexmark International Inc. man. “However, during toing to better control access day’s economic challenges, in order to control costs, it concern about the cost of color has reignited to some degree.” does appear that the number of customers using color will Tina Caster, manager of the Worldwide Marketing Group only increase. InfoTrends’ end-user surveys reveal that 75 for Lexmark color products, says dealers can address end-user percent of respondents, regardless of company size, intend concerns about cost by offering them access control tools. to make their next MFP a color one, says Palmer — this “There are a lot of tools now that provide visibility of how despite the fact that more than 60 percent of survey responusers utilize a print device and provide means of allowing dents with a color device in place report that less than 10
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percent of their total volume when they can comfortably “I do believe we’re going is color. If color volumes are ramp up their color MFP to see some technologies low, why are so many plansales. “I do believe we’re ning to upgrade to color? going to see some technoloemerge that will make the “Because prices are coming gies emerge that will make pricing models around down,� says Palmer. “It’s a the pricing models around color much more granular ‘wish list’ kind of thing.� color much more granular in in connection with Although th e “ year of connection with coverage as coverage as compared to color� is somewhere in the compared to the traditional the traditional types of pricing models.� past and the placement of types of pricing models,� — Dennis Amorosano color MFPs has become says Dennis Amorosano, Canon U.S.A. Inc. commonplace, it appears senior director of solutions that some dealers may be marketing and business supholding back. Among the respondents to Office Technology’s port for Canon. “Certainly, that is a trend survey, 14.5 percent expect that less than 20 percent of their that is on the way.� total unit placements in the next six months will be color Brent Hoskins, executive director of the Business Technology Association, is editor MFPs. If the hesitation is associated with concerns about of Office Technology magazine. correctly charging for color output, at least one vision for the He can be reached at brent@bta.org. future may lead more dealers to look forward to the day
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Grand Slam 2010 BTA East district hosts event Sept. 23-24 by: Brent Hoskins, Office Technology Magazine
ith the goal of providing office technology dealers with both education and networking opportunities, BTA’s East district hosted Grand Slam 2010 Sept. 23-24 at the Ritz-Carlton Hotel in White Plains, N.Y. The third annual event drew a total attendance of approximately 150, up from about 115 in 2009 and 65 in 2008. “Four people from Rhyme have attended all three of the BTA East events and we all felt the events were well organized,” said attendee Mike Steinhoff, president of Rhyme Business Products, Portage, Wis. “The dealer/manufacturer panel this year was facilitated very well and was insightful. We felt that alone was worth the time we invested to be at the event. We learned a great deal from the guest speakers and felt the information shared was presented well. The social time we spent with other dealers and sponsors may have been the best time spent, and the Yankees game really finished the event off with a touch of class.” Attendee Ross McKinney, president and general manager of CNC Office Systems Ltd., Vaughn, Ontario, Canada, shared similar praise for the event. “This event and agenda of presenters promised to provide me a lot of information on the document systems market today, and it surely did,” he said. “The featured panel on the opening afternoon was particularly valuable, hearing from the senior executives of several manufacturers and the owners of very successful dealerships in the competitive marketplace of the Northeast.” As Steinhoff and McKinney noted, the event began the afternoon of Thursday, Sept. 23, with a dealer and manufacturer panel discussion, moderated by Frank Cannata of Marketing Research Consultants Inc. The panel featured three manufacturer presidents — Mike Pietrunti of Kyocera Mita America Inc., Jim D’Emidio of Muratec America Inc. and Ed McLaughlin of Sharp Imaging and Information Company of America. The dealer panelists were: Rick
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Clockwise from top left: Grand Slam 2010 began with a dealer/manufacturer panel discussion moderated by Frank Cannata; speaker Sally Brause; attendees listen to one of the five education sessions; speaker Robert Goldberg.
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Clockwise from top left: Grand Slam 2010 provided many opportunities for one-on-one dealer/sponsor conversations; BTA President Rock Janecek (left) recognizes Immediate Past President Bill James for his year of service; speaker Byron Aulick; the event featured 23 exhibiting sponsors.
Clockwise from top left: The second BTA Data Cleansing Summit was held in conjunction with Grand Slam 2010; speaker Tom Callinan; the event concluded with an evening in a private suite at Yankee Stadium, sponsored by EDA and GreatAmerica Leasing Corp. 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 | N o v e m b e r 2 0 1 0
Bastinelli of Centric “I have now exhibited at Business Systems two BTA events, most Inc., Owings Mills, Md.; Jerry Blaine of recently the BTA East LDI Color ToolBox, event ... Being a member New York, N.Y.; Anof BTA continues to drive drew Ritschel, Elecmore and more value tronic Office Sysfor Epson’s ... business.” tems Inc., Fairfield, N.J.; and Larry Weiss of Atlantic Tomorrow’s Office, New York, N.Y. Following the panel discussion, attendees enjoyed the Welcoming Reception, networking with others and visiting the tables of exhibiting sponsors. The learning opportunities continued throughout the day on Friday, Sept. 24, with four education sessions, along with additional time on the schedule to visit with the exhibitors. The education lineup featured sessions by: Bob Goldberg, BTA general counsel; Tom Callinan, founding principal of Strategy Development; Sally Brause, director of human resources consulting at GreatAmerica Leasing Corp.; and Byron Aulick, president of DataVault Inc. Grand Slam 2010 concluded with an evening in the largest suite in Yankee Stadium to see the Boston Red Sox take on the New York Yankees. The evening was sponsored by EDA (Equipment Data Associates) and GreatAmerica Leasing Corp. The event featured 23 exhibiting sponsors: Azerty, Color Imaging, Compass Sales Solutions, Digital Gateway, Digitek Computer Products, Densigraphix Inc., Diversified Computer Supplies, DocuWare, EDA, Epson America Inc., ECi Software Solutions, ESP, FMAudit, GreatAmerica Leasing Corp., Image Star, InfoDynamics Inc., Lexmark International Inc., Muratec America Inc., Polek & Polek, Relyco Sales Inc., SalesChain, Supplies Network and West Point Products. A comment from Bill Gates, channel development manager for Epson America Inc., was typical of those shared by exhibiting sponsors. “I have now exhibited at two BTA events, most recently the BTA East event,” he said, noting that he particularly liked the placement of all exhibit tables in the same ballroom as the education sessions. “I had numerous opportunities to interact with the attendees and had even more valuable conversations. Being a member of BTA continues to drive more and more value for Epson’s document scanner business.” Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine. He can be reached at brent@bta.org.
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Rules-Based Printing Software solutions that leverage the network by: Denine Phillips, Tech-Write LLC
he August Office Technology cover story, “Device Management: Providing remote MFP configuration & monitoring,” highlights how remote administration of network output devices (printers/MFPs) can save dealers and end users time and money. Indeed, device management (DM) solutions automate error-prone, manual tasks — meter collection, supply ordering, configuration and firmware upgrades — while also streamlining service dispatch and call resolution. To accomplish these tasks, DM solutions track: Monthly device utilization: both black-and-white and color volumes Service status: out-of-paper/toner, error conditions, etc. Device type: Ricoh, Xerox, Canon, HP, etc. Many other metrics are tracked, providing valuable insight into fleet usage and trends. Based on this information, sales professionals can partner with decision makers (CIOs, CFOs, IT) in an ongoing dialog about ways to reduce waste or resource abuse. It may be suggested, for instance, that a centralized high-volume MFP replace costly desktop printers. Measurable cost savings can then be realized through the elimination of redundant devices in favor of lower cost-per-copy, energy-efficient MFPs. Where does rules-based printing come in? “Rules-based printing is a common module within our suite of cost recovery solutions that can complement Ricoh’s @Remote Device Management offering,” says Craig Temple, output solutions manager at Ricoh Americas Corp. “So early in a customer engagement, the account rep assesses the customer’s print environment using @Remote or other assessment tools to track and collect raw data. @Remote Fleet Utilization and Green Reports, for example, uncover how many pages network devices are generating each month and may indicate that customers are printing a high volume of single-sided, color pages. In an effort to reduce those costs, a procedural change is instituted; users are asked to print
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black-and-white duplexed (double-sided) pages. This lowers paper costs, saves trees and decreases carbon footprint — which supports cost reduction and green initiatives.” Temple has found that over time, however, old habits resurface. “While procedural changes result in an initial decline in print costs, they eventually rise right back up to the same point or higher,” says Temple. “What ‘rules’ do is give customers the tools to ensure that savings are realized by redirecting print jobs to the most efficient devices and putting controls on printer usage and feature availability. Now, if you want users to print black-and-white duplexed pages, those rules are applied to users or groups on the network. So, if a user tries to print a 20-page report to his (or her) desktop printer, a pop-up message on the computer screen — customized within the admin module — might say, ‘It will cost the company $4.80 to print to your personal printer. Please send jobs of more than 10 pages to the MFP down the hall instead.’ If human resources is printing résumés from an e-mail application, there is clearly no reason why they cannot print in black and white and duplex. But just making that suggestion to users is not enough. The instinct is to just hit the print button. Unless the driver defaults are set to duplex and black and white, you are
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the MFP control panel. wasting valuable resources. With rulesRules-based printing based printing, the customer is lever Ricoh PCS Director is an optional aging software to realize actual savings, embedded application that enables the is a proven way to rather than relying on policy changes.” user to log in and then it tracks everything leverage the network “Before rules can be established, an the user does. At the same time, the adminto deliver significant assessment phase is needed to deteristrator can apply rules. If a user walks up cost savings, perhaps min e w hat c ontrol s are required ,” and tries to make 200 color copies, a screen leading to MPS explains Dewey Rodgers, worldwide pops up saying, “I’m sorry. You must use a engagements ... solutions marketing manager at Xerox different device. This device is limited to 20 Corp. “Do they need to limit the use of color copies.” color? Do they want to track usage to an individual or Using the Xerox Secure Access Unified ID System, the user department? Do they want to route those users to a more can authenticate at the device using a proximity card (swiped productive printer? It is not uncommon to find that a on a card reader attached to the MFP). PIN code authenticaprinter or MFP keeps breaking down because too many tion is also supported. The caveat: In order to apply rules or people are printing to that device, which is not rated for that reroute documents, the device has to know who you are. volume of use. This helps customers understand which MFP Using Canon’s uniFLOW, the administrator defines they need for a particular department. Then they can “access levels” at the uniFLOW server. Based on a user’s narrow down, from a rules-based standpoint, if a depart- access level, he is either allowed to use certain functions or ment is printing too many color pages. The administrator is denied access entirely. The common thread among these solutions: Only after a can then set a rule for an individual or group that says, ‘You user is authenticated on the network can the server apply need to direct this print job to the copy center.’” You may also ask the customer if he has a green initiative. rules to the logged-in user. Is there a specific target market for rules-based printing? Rules can be created that say, “You are increasing CO2 emissions by printing to your desktop printer,” or “Duplexing “When rules-based printing appeared five years ago or so, very saves X trees.” So it may be a cost reduction, color restriction large corporations were the early adopters,” says Dewey. “Today and/or green initiative that drives rules-based printing, and it runs the gamut from small law firms to major accounts.” Shah also considers the market wide open, with potential these rules can be applied to a device, user or group. Since the rules reside on a server, the administrator typically con- targets including any customer seeking to maximize office structs the rules using a wizard-type interface. The rule is efficiency and control the total cost of printing. Temple saved under a name and then the admin picks the target for drills down further, identifying any environment with five or that particular rule. The rule can then be applied to more connected devices as a “definite prospect.” everyone, just User A, or an entire department. Rules-based printing is a proven way to leverage the The principle behind Canon’s uniFLOW rules-based network to deliver significant cost savings, perhaps leading printing is essentially the same. As Shalin Shah, lead tech- to MPS engagements and further driving down the cost of nical marketing analyst at Canon U.S.A., explains: “uniFLOW doing business. A compelling sales opportunity, reps interenables the administrator to define the print job variables to ested in pursuing this type of solution sale need not go it be monitored, like the number of pages, user ID, color or alone. The manufacturers’ support engineers will assist in black-and-white jobs and more. Those rules are then applied analyzing the environment to determine exact needs. to a user or group. For example, if a user sends a print job of Though the sales cycle may be extended, there is a huge more than 10 pages to a desktop printer, the job can be auto- upside: Customers that deploy your DM and cost-recovery matically routed to an MFP. uniFLOW can also change print software also buy your hardware. job properties based on defined rules. A rule may say that Denine Phillips of Tech-Write LLC specializes any color print job of more than 50 pages should automatiin the development of marketing collaterals, cally be printed in black and white. Similarly, any print job of technical manuals and training materials for more than 100 pages should be automatically duplexed.” the office technology industry. She can be Rules-based printing is not limited to just print workflow. reached at denine.phillips@comcast.net. Ricoh, Xerox and Canon solutions support walk-up rules at Visit www.tech-write.biz. 24 | 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 | N o v e m b e r 2 0 1 0
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PRINCIPAL ISSUES
Succession Planning You must be prepared for an uncertain future by: Jim Kahrs, Prosperity Plus Management Consulting Inc.
ith the hustle and bustle that you face every day, it is sometimes difficult to set aside time for future planning. If you are like many other dealership owners, the few hours that you can set aside are used for planning future deals and maybe doing some budgeting. Rarely does the thought of planning your succession come to mind. Unfortunately, this has really come back to haunt some dealerships. According to Webster’s Dictionary, succession is the act of succeeding or coming after another in order or sequence or to an office, estate, throne, etc. It might be of interest to know that the word “success” was originally defined as the outcome of something, either good or bad. Over time, this definition has changed to mean a positive outcome only. So while succession is the act of replacing someone in the business, the actual replacement can and has been done with varying levels of success. The goal of this article is to provide some insight into why succession planning is so important and to outline a plan you can follow to create a succession plan that will provide a positive outcome. So, why is succession planning needed? The most obvious reason for having a succession plan is to provide for a dealership owner’s transition into retirement. Because of this, many people have a tendency to confuse succession planning with exit strategy planning. However, there are other reasons for succession plans in a dealership. What if something were to happen to the dealership owner or one of the key managers or employees? Unfortunately, I have seen situations where someone becomes ill or passes away unexpectedly, leaving the dealership vulnerable. These unplanned events wreak havoc on a business. With no plan in place, those left behind are left scrambling to come up with a plan. In many cases, this plan has simply been to sell the dealership for pennies on the dollar. Now let us take this down a level in the organization. What happens if one of your key managers is the one leaving unexpectedly? If you have not outlined a plan for replacing him (or her) and have not started the process of training someone, you will be starting from square one and the business will
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inevitably suffer. So, you can see that planning for the future replacement of all key employees is something that deserves a little attention. How can you be prepared for an uncertain future? First, let us look at the two scenarios one may face — a planned versus an unplanned succession. In a planned succession, you are calling the shots and replacing someone proactively. You typically have time to plan and handle the things that need to be done to ensure a smooth transition. Since the person is still there and functioning in his role, the worst case scenario is that it takes longer than expected for him to leave. When facing an unplanned replacement, there tends to be a lot of confusion and turmoil. In most cases, there are issues that go beyond the business that have to be dealt with and these usually come first. For example, if a key person in the dealership becomes ill, the focus is on helping them get better. Managing the dealership can be ignored during these times. The worst case scenario for the business here can be catastrophic. The moral of the story: Plan for the unexpected and be ready. When looking at your dealership, it is important to determine which positions require a strong succession plan. These positions are typically senior management positions like president, director of administration, CFO, vice president of service or service manager, vice president of sales or sales manager, etc. Once you have determined the need for a plan, there are some things you can do early in the process. First, make sure that you have a good write-up of what each of these managers does. We refer to this as a “hat write-up” and it contains things like the purpose of the post, the products or expected outcomes from the post, the key statistics or performance measures of the post and the duties and responsibilities of the post. This can and should be followed up with detailed procedural documents outlining exactly how each of the key duties is done. Ideally, these should be in place for all positions in the dealership, regardless of the need for a succession plan, but here is a good measuring rod. Look at your job and the jobs of your 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 | N o v e m b e r 2 0 1 0 | 25
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financials. If your successor does not have key people and try to imagine what would the ability to step into your entire role, happen if you or these key people were not One element in then he is not ready. there. Which areas would cause the biggest succession planning that An unplanned replacement is another problems or leave the biggest holes? These is often overlooked is story entirely. A sudden need for replaceare the areas to concentrate on right away. the need for oversight. ment is usually due to a catastrophic Get them written up as soon as you can. A business is most event. In this case, a plan needs to be Now that the hats have been written up, vulnerable in the event of worked out in advance that outlines the it is time to create a succession planning an unplanned succession. steps required to safeguard the company chart. This is a chart that lists the key and keep things on track. It works well to people in the business and identifies potential successors. We usually look at each position and list out the major actions that will need to take place in the determine a level of preparedness for that position. The first first 24 hours, the first week, the first month, etc. For level has a successor named and already on board with the example, in the first 24 hours, a meeting of the board must be company. At this level, the person is fully trained and ready to convened to assess the situation and determine a course of take over the position. This is a great place to be. The second action. A message must be prepared and delivered to the level is where a successor is on board, but needs one to three employees (and possibly the customers) and a temporary sucyears of training and experience to be ready. The third level is cessor must be named. In the first week, the board and the where a successor has not been identified. A level needs to be temporar y successor must work to plan a permanent determined for each of the key posts. Just doing this exercise replacement. Planning this process in advance can mean the alone can be quite an eye opener. It is not uncommon to go difference between making it through this event and having through this and realize that you do not have any successors the company go under. At the very least, it ensures the on board for yourself or your key managers. The good news is smoothest transition possible. The most important asset you have is time. A good succesyou can start building a plan now. One element in succession planning that is often over- sion plan can be drafted while time is on your side and far in looked is the need for oversight. A business is most vulnerable advance of it ever being needed. Though the odds of facing an in the event of an unplanned succession. If the owner or unplanned need for succession are very slim, it is worth being leader of the company is unable to work, the team can be left prepared for it. As a side benefit, it has been established that without the leadership needed to succeed. It is a good practice dealerships that invest the time and effort in creating succesto name a board of directors for the dealership that would be sion plans are more successful than those that do not. Just by able to help guide the business in case of an emergency. This putting your attention on the future, you inevitably find yourboard can consist of trusted colleagues or business advisors self drafting other business plans that help you build a who can help the managers navigate a transition. Members of stronger, more successful business. So, do not wait. Get your thi s b o ard c oul d includ e y our busin e ss c onsult ant, plan going today. You will be glad you did. Jim Kahrs has been a leader in the office systems accountant, banker, owners of other dealerships, other local industry for more than 20 years. He has been recognized as a business owners, etc. The idea is for them to provide guidance top sales producer, sales manager, operations manager, and direction and to help with making key decisions and dealership executive and business consultant. finding a replacement for previous owners or managers who As president of Prosperity Plus Management Consulting, are no longer there. Kahrs works directly with office technology dealership As mentioned earlier, there are two types of succession that principals and senior executives, helping them improve can occur, a planned succession and an unplanned succestheir sales, cash flow and bottom-line profitability. sion. When the transition is planned in advance, the process He has also helped many dealers successfully can and should be a much smoother one. Using the succession navigate the sales of their dealerships or chart discussed above, a replacement should be identified and the purchases of other dealerships. trained for the post. When taking over as the most senior Kahrs can be reached at (631) 382-7762 manager in a company, your successor must understand what or jkahrs@prosperityplus.com. makes the business tick. He needs to understand all aspects of Visit www.prosperityplus.com. the business, from sales and service to admin, cash flow and 26 | 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 | N o v e m b e r 2 0 1 0
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COURTS & CAPITOLS
Draws Against Commission Establish a detailed, written commission plan by: Robert C. Goldberg, General Counsel for the Business Technology Association
h en busin ess i s goo d and th e economy is growing, profits follow. When business is very good and profits are great, owners often neglect to remain focused on business details. Mistakes do not have the same impact on the bottom line in a strong economy. But in today’s economy, one area for potential problems is draws advanced against commissions to be earned. If you pay your salespeople a commission on each sale made, whether in full, or for just a part of the sale, the policy must be detailed and in writing. Commission plans pay on gross profits, net profits, gross sales, margin, sales above a minimum level and hundreds of other variables. There is no correct formula for a commission plan. Monthly spiffs and incentives further complicate compensation. The failure to regularly introduce new variables, contests and incentives can cause your sales team to lose motivation. Unwritten commission or compensation plans are like playing a childhood game of Telephone. Each employee hears the proposal differently. It is for that reason that all plans must be in writing and detailed. This applies to contests and other incentives as well. Begin with the accounting period for the measurement of commissions or contests. You must establish the point at which the sale is made. Is it when the sale is booked, delivered, installed or paid for? What are the salesperson’s responsibilities after the sale? Is the salesperson involved with the delivery, installation, training and/or customer follow-up? If all the sales functions are not performed, is the commission earned? Establish in writing each and every requirement necessary to earn a commission on a sale. How will returns be handled? Do you wait 30 days to pay the commission? Do you chargeback? Must the employee be employed on the date of payment to receive the commission? If others complete the sales responsibilities, is the commission shared or forfeited? In a litigated case, a salesperson made a significant sale and, based on his success, demanded a compensation increase. The owner refused and the employee quit. The written commission
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policy provided for several requirements after the order was written and one was that the employee had to be employed to receive the commission. The company refused to pay the commission and the court upheld the decision. The written policy was clear. The salesperson did not perform all the requirements and was not employed on the date required. Keep in mind, the employee resigned. The outcome would surely be different if he was terminated without cause. Many employers pay a draw against commission to help employees with their budgeting. In a difficult economy, it is not unusual for an employee to draw more than is being earned. If the employee subsequently quits, can the draws be recovered? A written commission policy will govern the situation. In addition, how the draw is characterized will be a factor as well. If the draw is stated as a minimum salary, it cannot be recovered. If it is a loan against commissions earned, it can. If the draw is a loan, then an appropriate note should be prepared to memorialize the indebtedness. Employers should also consider placing a cap on the amount of the draw. Rules also vary depending upon whether a salesperson is an inside or an outside salesperson. Minimum wage does not apply to outside salespeople if they are in the field at least 80 percent of the time. Inside salespeople on commission must receive at least one-and-a-half times minimum wage as compensation. This may be important in regard to your telemarketers who are selling supplies. If an employee owes you draw and leaves your dealership, it is important to pursue the deficiency. Failure to do so is a license for other salespeople to do the same. Bring your salespeople into the discussion when formulating a commission or compensation plan. Participation in the formulation makes acceptance easier. Most importantly, however, is having a written plan. In today’s economy, it is essential. Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com. w w w . o f f i c e t e c h n o l o g y m a g . c o m | N o v e m b e r 2 0 1 0 | 27
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BTA HIGHLIGHTS BTA would like to welcome the following new members to the association:
Dealer Members Advanced Office Systems, Arlington, TX Advanced Business Equipment, Allentown, PA Advantage Business Systems, Jackson, MS Arden Business Systems, Armonk, NY Braswell Office Systems, Corpus Christi, TX Complete Business Systems, Upland, CA Golden Gate Office Solutions, San Francisco, CA Janco Business Systems, Wolcott, CT Rayco Inc., Corinth, MS Service Associate Members Archipelago Financial Services International, Oxford, CT Emerald Executive Search, Castle Rock, CO Vendor Associate Members Sagemcom Canada, Montreal, Quebec, Canada For full contact information of these new members, visit www.bta.org.
The managed network services (MNS) opportunity provides a tremendous market for MFP dealers. The shift is occurring now, and forwardlooking dealers have an opportunity to build a customer base in this growing market today. Mitch Morgan of CEO Focus (www.ceofocus.com) will show attendees how MNS offers a more cost-effective way to diversify revenues and reduce reliance on equipment and clicks. For more information or to register online, visit www.bta.org/MNS. For more information on BTA member benefits, visit www.bta.org.
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For the benefit of its dealer members, each month BTA features two of its Vendor or Service Associate members in this space. BTA Vendor Associate member Epson America Inc. is the U.S. affiliate of Japan-based Seiko Epson Corp. Epson offers an extensive array of image capture and image output products for the consumer, photographic, business and graphic arts markets, including printers, all-in-ones, scanners, large-format printers and more. It is the company’s vision to drive digital image innovations by providing cutting-edge imaging solutions focused on imaging on paper, on screen and on glass. www.epson.com BTA Service Associate member EverBank Commercial Finance’s goal has been to help its business technology partners boost sales, grow profits and build strong customer relationships. Now, the company embraces its legacy of “Real People. Fast Answers.” to bring your company profit-enhancing products such as cost-per-copy, managed print services, document management, dependable execution and a commitment to individualized customer service. EverBank’s knowledgeable team is dedicated to the office products industry and your success. www.everbankcommercialfinance.com A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.
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MPS STRATEGIES
Long-Term MPS Success Do you have the right business model to thrive? by: David Factor, Strategy Development
s we all know, managed print services (MPS) are changing the imaging business as we know it. Gone are the days when one company works with procurement to “own� the copier and fax business while multiple companies work with IT on printers and related support. Ver y little conf lict existed within accounts since copier companies were never interested in what was perceived as low-volume, lowmargin desktop printers that required a minimal amount of service. Value-added resellers (VARs) also had no interest in copiers that required a high level of service and support. All parties were happy with this arrangement at the time, but that is not the case anymore. Today, various types of companies with historically different business models want it all — hardware, service and supplies for all devices. The small, medium or large VAR, dealer, direct manufacturer and even office superstore all think they are uniquely qualified to be the MPS provider for corporate America. Each type of business has its strengths in the space and can be successful as long as each business understands that MPS requires significant change in how business is done and are willing to make the investments in people, infrastructure and corporate culture that are required to be successful. The VAR, whether it is small or extremely large, has had a long-term relationship with IT and has greatly improved its service offerings. VARs now have access to very strong MPS infrastructures offered by their supplies and parts distributors that have invested heavily in this space. These distributors offer a turnkey approach for the VAR that is transparent to the customer. By utilizing these offerings, the VAR is a viable player in the MPS space. The copier dealer and manufacturer direct branch locations have been known and respected for quality and timely service of truly high-end devices. They are strong with leasing, cost per page and managing f leets of copier/MFPs and fax machines. They can take over and manage the entire fleet of
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printers as long as they realize the needs are quite different than those of an office copier/MFP. Taking over the fleet will involve a different sales process, sales representatives with a different skill set, and a service department willing to change and service multiple products from many vendors. Dealers have many of the tools to be successful in the MPS space as long as they are willing to learn and have people willing to change how they sell and service equipment. The most interesting entrant into the MPS space is the office superstore that once sold low-end hardware and supplies that the customer could purchase using his (or her) corporate credit card. The superstores are entering MPS in a defensive posture to protect the billions of dollars of supply revenue that potentially could be lost as dealers and manufacturers take down large MPS deals. The office superstores are perhaps making the largest investment in MPS. They are investing in back-office operations, service and hiring many people dedicated to the sales and service of MPS. Strong, long-term relationships with corporate America, combined with a national presence of locations nationwide, can certainly put the office superstores in a position to succeed in the MPS space. So, who will be most successful in MPS: VARs, dealers, manufacturers or office superstores? In reality, they can all be successful as long as they develop a plan, evolve, change and make the proper investments needed to be successful. The investments not only need to be in infrastructure and software, but also in people. Many of the companies that have entered the MPS space have complained of marginal success. These dealers are still looking at MPS as an equipment sale when it really is a professional services sale. Most dealers continue to sell through their general-line reps, which is not the way to go. Even though MPS is a new way of doing business, most companies are doing very little planning prior to launch. The ones that have turned MPS into a nice profit 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 | N o v e m b e r 2 0 1 0 | 29
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center have invested in Many of the companies the training and consulting that was the that have entered the critical catalyst. MPS space have MPS is the business complained of marginal model for success in the success. These dealers printer/copier/MFP are still looking at MPS space going forward. It as an equipment sale ... is important that you are in a position to take advantage of this opportunity with your current customers today. If you do not, those customers may not be yours for much longer. They may soon be customers of that local competitor or national office superstore. David Factor is the director of business development for Strategy Development, a management-consulting firm for the technology and outsourcing space, leading dealers and VARs into MPS. In addition to consultancy for business planning, sales effectiveness, and operational and service improvement, Strategy Development developed and delivers the BTA MPS Sales Workshop and BTA MPS Operations & Service Workshop. Factor has an extensive background in the imaging industry, having spent 18 years at OKI Data Americas. He can be reached at factor@strategydevelopment.org or (908) 336-8147. Visit www.strategydevelopment.org.
Having trouble finding money for your child’s education?
BTA Can Help. Scholarships for use at colleges or accredited vocational trade schools are available to the sons and daughters of BTA retail dealer and reseller members and the sons and daughters of their full-time employees. Scholarship recipients are chosen by an impartial and independent evaluator. Completed applications must be received at BTA by May 1. To obtain a scholarship application form, contact Mary Hopkins at mary@bta.org or (816) 3034031 or write to: BTA Scholarship Foundation, 12411 Wornall Road, Kansas City, MO 64145. ®
ADVERTISER INDEX 31 • BTA Marketplace
11 • Digital Gateway
2-3 • ITEX 2011
www.bta.org/BTAMarketplace
(866) 342-8392 / www.digitalgateway.com
www.itexshow.com
21 • BTA MNS Workshop
5 • DocuWare
7 • Konica Minolta
(800) 843-5059 / www.bta.org/MNS
(888) 565-5907 / www.docuware.com
www.CountOnKonicaMinolta.com
23 • BTA MPS Sales Workshop
17 • FMAudit
19 • Marlin Leasing
(800) 843-5059 / www.bta.org/MPSSales
(573) 632-2461 / www.fmaudit.com
www.marlinleasing.com
23 • BTA MPS Operations & Service Workshop
16 • Global Printer Services
9 • Strategy Development
(800) 843-5059 / www.bta.org/MPSOperationsService
(800) 588-3554 / www.globalprinter.com
(610) 527-3317 / www.strategydevelopment.org
30 • BTA Scholarships
32 • GreatAmerica Leasing Corp.
15 • Supplies Network
(800) 303-4031 / www.bta.org
(800) 234-8787 / www.greatamerica.com/Navigator
(877) 427-3261 / www.suppliesnetwork.com
13 • CIT
14 • IBPI
www.cit.com
(480) 393-1694 / www.ibpi.net
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Office Technology Magazine Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.officetechnologymag.com www.bta.org
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December 7-9, 2010 - Dallas, TX Sales Training* to teach the Managed Print Services sales process and develop teams with advanced deal crafting and interactive best practice sharing.
Your guide to MPS success *Now with ongoing support for alumni.
800.234.8787 | www.greatamerica.com/Navigator