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Straight Talk: State of the Remanufacturing Industry
Why Most Dealers Don’t Do MPS Right
Business Profile
A Conversation with Steve Valenta President of Offix The Journey of Managed IT Services The MPS Playbook How to Turn 5 Key Business Challenges into MPS Success Inkjet is Back! Can You Teach an Old Dog New Tricks?
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www.enxmag.com l April 2013
We Saw It In ENX Magazine
We Saw It In ENX Magazine
April 2013 l www.enxmag.com
l
11
e n x
IN THIS ISSUE
ENX Staff
Susan Neimes Publisher & Editor
Ronelle Ingram Contributing Editor
Business Profile ePartsroom
IN THIS ISSUE
Page 26
• Why Most Dealers Don’t Do MPS Right by Scott Cullen
Page 20
• State of the Remanufacturing Industry by Christina Kim
Page 30
• The Journey of Managed IT Services by David Pohlman
Page 36
• A Conversation with Steve Valenta, President of Offix by Scott Cullen
Page 40
• The MPS Playbook by Khanh Pham
Page 44
• Can You Teach an Old Dog New Tricks? by Gary Schwartz
Page 48
• Inkjet is Back by Lou Slawetsky
Page 50
Contributors
Scott Cullen
Contributing Editor
Khanh Pham Toshiba America
• How to Turn 5 Key Business Challenges into MPS Success by Michael Rich Page 54 Julia Gonzales Graphic Designer
Christina Kim Associate Editor
Britt Horvat The Parts Drop
12
l
• NASCAR Marketing by Ronelle Ingram
Page 56
• Introduction to the Xerox Phaser 7500 & 7800 Printers by Britt Horvat Page 66 • Printer Tech Tip by Laser Pros
Page 69
• Tech Help by Smarka!
Page 70
• Display Advertisers Index
Page 58
• Calendar of Industry Events
Page 62
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April 2013 l www.enxmag.com
l
19
e n x
By Scott Cullen
STATE OF INDUSTRY
I “
“
Why Most Dealers Don’t Do MPS Right
s it true that most dealers don’t do MPS right? To be honest, that’s an exaggeration, but the reality is that many dealers are still struggling with MPS even as others have it all figured out. There are a couple of places where you can go wrong in significant ways,” says Bill Melo, Vice President of Marketing, Services & Solutions for Toshiba. “The first is being able to provide a price quote to the customer that provides you a good profit margin.”
That may be a no-brainer, but it’s one of those issues that nitwits who don’t know how to price MPS properly can ruin it for everyone. It’s sort of like that kid in class who acts up and the teacher ends up penalizing the entire class even though they did nothing wrong.
“A lot of times we’re captive or Bill Melo vulnerable to our dumbest competitor VP of Marketing and if they quote 8 mils a page for a Toshiba monochrome printer and you don’t know if that’s profitable to you or not and you decide you need that deal, you can be upside down in a major way,” adds Melo. “Pricing one of these deals can be extremely complicated and labor intensive and you can make a serious financial error if you don’t have the right tools or right skills to do that.”
Consider that statistics show that the average customer with say 50 printers will likely have more than 20 different printer models each with different toner, different yields, different costs, etc.
“And every one of those 50 printers may print with higher image areas or lower image areas,” notes Melo. “All of those are factors you individually have to calculate to come up with a price for taking over that fleet. If you have someone who doesn’t know how to do that, or doesn’t have the right tools, or just makes a mistake on a spreadsheet, you can be upside down really fast.”
The other place that dealers go wrong in MPS is on the execution side. “Now you have these 50 printers you’re servicing and they’re ordering toner every day; you have to make sure you know how to manage those so that you’re not shipping out excess toner to people and that you’re shipping them the right toner,” emphasizes Melo. “Imagine 50 different printers for Xnumber of customers if you don’t have a good apparatus for doing that. You may have priced the deal right, but you’re executing it wrong.” 20
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You have to start with the understanding that the revenue in prints is five times the revenue in office copiers,” explains Tom Callinan, managing principal of Strategy Development. “If a copier company had copier aftermarket revenues (service and supply) of $3-million they would need $15-million in printer aftermarket revenue to have the same printer market share as copier market share. Taken in that context, most dealers don’t do MPS right.”
He emphasizes that there’s pain in change and MPS remains a big change for the copier industry.
“For decades the copier business has had a simple formula: Sell a copier and gain aftermarket revenue. We all followed the ‘model,’ developed at ALCO (IKON) and popularized in the dealer community by Tom Johnson, after he left ALCO, which tied sales compensation to equipment revenue and margin. This model effectively suggests that a ‘normal’ sales person should earn an income of approximately 35 percent of the true equipment GP they bring to the company. But with units and images declining is paying on equipment GP still the correct approach? Of course not. Changing compensation is never fun for the company or the sales professional but it has to be done Tom Callinan as the industry has changed. Sales Managing Principal professionals need to be paid on the Strategy Development total revenue they bring to the company. The industry needs a new compensation approach to be effective with any services-led sales approach, including MPS.”
This leads to the second change required, business owners focusing on total revenue increase and profits rather than equipment sold. “I use an example that shows a 60-printer outsourced transaction that generates $2,400 a month in revenue at 50 percent GP vs. a three-unit copier deal that generates $25,000 in equipment revenue at 35 percent GP and $300 per month in aftermarket at 50 percent GP, and 100 percent of the time the copier audience says they want the copier deal over the printer deal,” says Callinan. “But in reality the printer deal produces 2.4X the revenue and almost $30,000 more GP than the copier transaction. The gal who brings in the $25,000 copier transaction gets a trophy and the guy who brings in the $2,400 per month MPS transaction gets no recognition. We don’t analyze the true value
We Saw It In ENX Magazine
continued on 22
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e n x
STATE OF INDUSTRY
Why Most Dealers Don’t Do MPS Right of a transaction because we’re hypnotized into the simplicity of thinking equipment revenue equals success.”
Callinan also believes dealers need to better segment the prospects they target and educate their sales professionals on enterprise-selling skills.
“It’s a lot harder to segment than to send sales professionals out randomly cold calling, but it is a critical foundation to success in any business,” states Callinan. “Moreover, our sales professionals have been trained for far too long on selling lease to lease.” Finally, Callinan points out that the operations aspect is far different than copiers.
“There are a lot more printers, they move, disappear, reappear, and are in remote locations. You need an IT person to keep the remote monitoring software stable and you need a CSR to get meter reads. This leads people to believe that the business is a lot more expensive on the G&A side when in fact it has lower G&A than the copier business.”
He adds that the average MPS customer generates $4,500 per month in aftermarket, more than 30X the average copier customer.
“So you have less billing and less collecting,” states Callinan. “You also don’t stock the type of inventory you do with copiers so you have significantly fewer assets tied up.”
To do MPS right, a dealer needs to develop a network of service providers and understand the nuances of repairing printers.
“These operational differences are a significant change, and hence barrier, to success—not that they’re difficult to overcome, just that they need attention,” concludes Callinan.
D
oug Johnson, Senior Vice President of Supplies Network, finds that some of the biggest challenges to selling MPS these days are burnout and the willingness of some resellers to secure a deal at any price.
Doug Johnson Senior VP Supplies Network
“Everybody has talked about it and rallied around it, and these guys are out there competing to the fourth decimal point for pricing on deals. People get burned out because it can be overwhelming.” 22
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Not to turn this into a commercial for Supplies Network, but Johnson notes that at the end of the day if a reseller is out there making money and doesn’t know why, Supplies Network can provide the tools that can help them peel back the layers and find out where they have holes in the bucket while identifying how they can fix them or Supplies Network can fix them.
“More often it’s a combination of both and that gets them back on track,” says Johnson. “For the newer guys who haven’t invested a lot on the operational side and are just buying pages from us, the conversation is a lot easier. We’re just billing them for the pages their customers consume.”
The biggest thing he’s seen over the past few years is that most of the focus in the industry has been on the business of selling managed print—sales training, how to do assessments, and how to close.
“Obviously that’s very important, but we’ve found a lot of resellers and OEM partners come to us on the operational side,” states Johnson. “You can teach resellers any day of the week how to make 40-50 percent gross margin on the front end, but how do you not lose all of it and then some on the back side? That’s our specialty and we can provide them a range of a la carte services or a fully inclusive cost-per-image at the device level where they buy a page and sell a page and it enables them to more confidently sell the next deal so at the end of the day they’re going to make money when it’s all over.” Not every dealer or reseller is willing to admit they need help, especially those who have been doing it a long time and have built the program themselves and have an infrastructure in place, even if it’s not working well.
“Letting go of some of that and partnering is a little bit harder for them,” acknowledges Johnson. “A lot of the guys that are newer to this are either VARs or managed services providers who are getting into this space because it’s adjacent to the managed services they’re selling. They realize they’re not experts at this as are some of the BTA/office products/IT supply [dealers]. They’ve been less protective of building up their own operational infrastructure and more willing to partner with companies like ours and others to get that done so they can focus on the customer. The thing that every retailer has is that customer relationship. Our message to both of those camps is to let us do that dirty work behind the scenes; it’s hard and complicated, and is the difference between netting 10 points and losing 10 points. You go grab those fleets and get them under management and focus on what got you in the business 20 or 30 years ago—those great customer relationships.”
We Saw It In ENX Magazine
continued on 24
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e n x
STATE OF INDUSTRY
“
Why Most Dealers Don’t Do MPS Right
The most common hurdles dealers need to overcome with MPS are in pricing deals with confidence, training and implementing a consistent sales process, and managing the operational requirements of program delivery,” says Ray Loisel, Senior Vice President of MPS for West Point Products. “West Point has been consistently responding to our customers’ needs by providing Ray Loisel additional MPS solutions via our Senior VP Axess Program. In the past two years West Point Products we have developed the industry’s most accurate TCO pricing tool, which is powered by industry data from BEI Services; comprehensive sales training; and Axess Express, a full-service, turn-key program for dealers seeking to partner for MPS program fulfillment.”
“
West Point often sees an opportunity with dealers who have had bad experiences selling MPS in the past.
When we are working with a dealer who has had a prior bad experience either selling or managing an MPS contract, we view this as an opportunity to assist the dealer in being more successful moving forward,” states Sarah Henderson, Director of MPS Operations for West Point Products. “Sometimes the solution is simply being able to utilize the Axess TCO for pricing calculaSarah Henderson tions, training and implementing a Director of MPS consistent sales process or even outWest Point Products sourcing contract management. One size does not fit all, which is why our team looks to provide flexible and comprehensive solutions for each dealer’s unique needs. Moving forward with MPS after a past failure can be difficult from a psychological point of view, but we find that in many cases the solutions we provide give dealers the confidence they need to move forward and be successful.”
K
en Stewart with Photizo Group references how the Photizo channel research (Hybrid Provider Index and POWRR Assessments) continues to reveal the same success barriers to MPS over and over again. Those encompass commitment from ownership as well as the willingness for management to take ownership of the MPS program. Stewart notes that many dealers still don’t understand the amount of 24
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time it takes to start and grow an MPS practice as well as the lengthy sales-lead times.
A go-to-market strategy (packaging and pricing) is another area where dealers consistently stumble and fall. Stewart suggests bringing in the right expertise and figuring out a compensation plan as well as some sort of financial alignment to measure progress.
“Ensure the ball isn’t dropped after it’s sold,” states Stewart. “You need to install key processes in the sales, implementation, and management aspects of the process. Have your management team walk through closing a deal and taking care of the customer.”
Finally, it comes down to execution and that requires aggressive marketing. “Each line manager should understand key performance metrics and the entire team should be talking the same language,” notes Stewart. “The tough thing about this kind of transition is that there are more hurdles to overcome than just getting your monthly sales numbers on the board. The operaKen Stewart Photizo Group tional aspect of executing profitably often eludes most resellers until they are well into the program, feeling like they’ve made all the investments. Then they look around and don’t understand why things aren’t working the way they are supposed to.”
Stewart emphasizes the need to measure progress while plugging Photizo’s MPS Provider Scorecard. “This gives dealers a quick, cost-effective way to measure themselves against our MPS Leaders’ Index,” says Stewart. “We’ve also found that offering stronger financial analysis is important as well. The key issue I continue to see in resellers around the globe is that they are doing all this hard work, but not seeing the benefit they could be realizing by tuning up their business.” u
Scott Cullen has been writing about the office technology industry since 1986. He’s a regular contributor to ENX.
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BUSINESS PROFILE
ePartsroom
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Providing Dealers with Cost-Efficient, Total Environmental Solutions since 1996
his isn’t breaking news. ePartsroom is quickly becoming an industry leader in providing remarketers, leasing companies, manufactures and copier dealerships with total end-of-life environmental solutions including the reuse, recycling and remanufacturing of office equipment, parts and components. Their innovative remarketing and recycling programs offer their partners the highest residual values from lease-end assets through an innovative inverse-manufacturing process. From a component level they offer additional revenue stream while ensuring clients are provided the industry’s most advanced environmentally responsible, data security (hard drives) and recycling Solutions. What differentiates ePartsroom from their competitors? They work with their clients to design a cost effective end-of-life management process that solves their needs by unlocking value in a variety of materials and reducing the demands on our natural resources. Each step of the demanufacturing parts process is systematically designed to increase efficiency and add real value to any service department. And not many dealers are aware of this, but Epartsroom is currently the industry’s only certified downstream recycler. Recovery and Refining •
Efficient and Secure Reverse Logistics to ship material
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Manual Demanufacturing with automated processes
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• •
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DoD Standards Data Security Protocols (Hard Drives)
Mechanical Demanufacturing with separation, shredding and sorting technologies Industry compliant and audited material waste-stream
Certified electronics recycling downstream partners (R2, e-Stewards) Refurbish and Remarketing
Full automated testing of all equipment, components and parts
Wholesale and retail outlets
Multiple E-Commerce Sites
Transparent online revenue and asset reporting technology
From a Dealer’s perspective, ePartsroom’s commitment to providing the highest quality copier parts, components and supplies at the lowest possible prices offers real value and increased service profitability . Not only do they offer every part in their online catalogs at wholesale prices, but they also ship their products to multiple countries outside the 26
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continental United States! They understand the demands that are placed upon office equipment service departments in meeting customer needs. That is why most parts are in stock and can be shipped the same day. In addition, the company stocks a large number of hard to fine expensive parts at used parts prices. Once placed, all orders can be tracked online from the point of confirmation to delivery, with expedited shipments or special requests given the highest attention in order to limit the customer’s down time.
Let’s face it, used and refurbished parts are nothing new to the office equipment industry. In fact for years dealers and many manufacturers have realized the cost savings associated with used parts. This common boneyard practice has helped both large and small dealers save millions of dollars throughout the years.
“We know used parts are nothing innovative in this industry. It is how we provide this used parts solution that’s truly unique,” says Tom Porter, General Manager.
“Quality and accuracy are leading objectives inside our processes; we begin by de-manufacturing a copier classifying all of the parts and components so that our customers can find any part by part number, description, by model, and by category. This level of search increases the success of our customer’s online shopping experiences,” explains Daniel Garcia, Product Manager.
Stephen Parker of Marimon Business Systems Inc. says about their website, “I like the way it’s laid out—just a few clicks of the mouse to get to the right accessory or part. Quick and easy check out process. Very reasonable prices.” Howard Kancilia of Celerity Corp adds, “We like using the website for a resource.” “It is a go-to resource,” says Leslie, his partner and wife, “I use it all the time. I would also recommend their excellent customer service and online knowledge base.” They also add, “[ePartsroom is] always prompt. Their warranty process is easier than with manufacturers, and whenever we have a difficult question, the staff is very responsive.” Roger Tupa of Countywide Copier Services says, “Very helpful outstanding service…If I have questions, it’s easy to get a hold of them, make sure [our] customer is happy and answer any problems. I buy a lot of equipment from them too.”
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BUSINESS PROFILE
ePartsroom
BENEFITS TO OEM’S & LEASING COMPANIES
Whatever the issue, ePartsroom is there for their dealer customers. ePartsroom regularly conducts surveys to identify what is important to their customers. When it comes to purchasing parts and supplies for a dealership, for some, pricing is the top priority. For others, it is making sure the product matches OEM quality. And, of course, it’s the customer service that one receives that makes all the difference.
{A new approach to remarketing wholesale machines}
When customers are asked if they will use ePartsroom again, the answer is a resounding, “Yes!” all around.
BENEFITS TO DEALER CUSTOMERS : {Building a customer-centric organization}
a a a
a
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a a a a a
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Offering same as OEM Quality products
Website is a great research tool, since every product can be sourced through no less than 5 different search methods
OEMs many times list new parts and the same older model parts with different part numbers and higher price; however, at the ePartsroom website if you search the new number or the old number you get the same low cost part Customers can track and make changes to their orders prior to shipping, all from a secured web-based dashboard, with email notification throughout every step of the “Pick, Pack and Ship Process” updating customers of the order’s status
Bar coded order management: UPC Bar Coding throughout the entire process (e.g., sales orders, picking and packing tickets on every product) ensures a higher degree of order accuracy Unabridged Secure Customer account access from the website, viewing all account activity as far back as 2005 Simple checkout/Same day shipping/Free shipping on orders over $200/Hassle free returns All products are repackaged to new OEM standards 30 day satisfaction guarantee
100% Security Hard Drive Privacy
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ePartsroom has closely monitored the regulatory landscape, tracking the increasing number of states to enact electronic waste regulations for end-of-life electronics and the inevitable comprehensive Federal laws that will eventually pass in Washington. ePartsroom has developed built-in systems and processes to provide stakeholders empirical data on recycling material and believes that as these new regulations on recycling and reuse operations are the law of the land, that copier manufacturers will realize that recycling is not among their core competencies and choose to outsource these operations to companies like ePartsroom who have specific product knowledge and already established, audited and certified downstream recycling partners.
a
Manage End of Life Assets
a
Support reducing carbon foot print marketing initiatives
a a a a a
Source to remarket Excess & Obsolete (E&O) Inventories Certified Recycler/Audit Downstream Environmental compliance Data Security Compliance
ePartsroom process supports OEM’s sustainability objectives
OEM’s outsourcing closed-loop recycling to ePartsroom can focus internal resources on mission critical operations
“Our mission is to provide cost effective solutions to our dealer customers in an increasingly competitive business environment,” adds Tom Porter. “It’s not just a plaque on the wall, it’s truly a guiding principle for us.”
ePartsroom strives to achieve professionalism and prompt service for their customers by maintaining one of the industry’s most extensive inventory of high-quality used copier parts and compatible supplies, so they are ready to be shipped out. Their inventory of used parts, refurbished components and assemblies are processed under the highest Quality Assurance protocols in the industry. Each product is inspected to ensure they meet or exceed OEM quality parts performance standards, and they are meticulous about attention to accuracy of product descriptions and part numbers to ensure customers receive the replacement parts they order. With a strong inventory management system, a simple online ordering process, and, when needed, a hassle-free return policy, there’s no question why smart dealers choose to partner with ePartsroom. u
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GE Capital
Buy direct from GE Capital Choose from off-lease and repossessed machines competitively priced to sell from manufacturers including: Canon, Ricoh, Toshiba, Sharp, Konica, Xerox, Kyocera and more! With a wide range of configurations and low-usage machines available, we provide Internal and External conditions on all copiers. We have inventory at various locations throughout the US, contact us now for all your used copier needs. For more information on availability of copiers, please contact: Ryan Ahearn 203-749-6011 ryan.ahearn@ge.com Or visit: www.geasset.com/copiers
Scan this code with your smart phone to visit our showcase now.
IMPORTANT NOTICE: Nothing herein shall be construed as (i) an approval or commitment to sale by GE Capital to any person; and all transactions are subject to final investment/compliance approval by GE Capital and the execution of mutually satisfactory definitive documentation; or (ii) any guarantee or promise of pricing/financing terms or availability thereof which may fluctuate or cease to be available depending on any change in the relevant market. All sales of available equipment will be for commercial use only and not for any personal, family or household use, and will be “as is”, “where is”, with all faults, without recourse or warranty of any kind or nature, express or implied. Any available equipment warranty will be provided by third parties unrelated to GE Capital and neither GE Capital nor any of its affiliates has any responsibility with respect to such equipment warranty. NOTHING HEREIN CONSTITUTES A REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND.
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STRAIGHT TALK
State of the Remanufacturing Industry
actually shirt business away from new molds to remanufactured products since remanufacturing stands on much more solid IP footing due to right to repair doctrines. 3. Core availability is a big challenge as cores are the lifeblood of legitimate remanufacturers. New mold makers use this as one reason for the development of new molds, which circumvent the need to James P. Meyers collect. The bottom line is this; in most NCC markets 60-70% of all cores are still thrown away. It comes down to consumer education. The cores are there, we just need to incite the end user to remove them from landfills and to re-use them versus send to the OEMs for grinding. They need to understand that sending for re-use ensures their consumer choice, whereas sending to the OEM hastens the demise of the aftermarket which will ultimately lead to a lack of alternatives to high price OEM consumables.
Meyers: The continued supply of clone cartridges is a huge challenge to the remanufacturer. We believe continued focus on presenting a quality product made in the U.S. offers us a competitive advantage over imported clone product.
Roderick: The greatest threat to the industry is the same as it was 5, 10, 20 years ago...providing poor quality products. Inferior quality or puffed up marketing claims do nothing more than denigrate the perception of what our industry can offer. Our strategy is simple, build products that perform and partner with resellers who have the same values.
Goldberg: There are still plenty of cores. Clearly OEM first sale restrictions and OEM collection impacts the base of available cores but given that the vast majority are still thrown away we have millions at our disposal. We just need to present a more compelling value proposition to users than OEMS can to sway their choice in terms of where their collected cores end up.
4. How has MPS impacted the remanufacturing business?
Goldberg: Mostly positive. It has opened up two channels of business for us that didn’t exist before: On the end user side, MPS has allowed us to penetrate the formerly OEM only bastion of enterprise sized end users who were contractually locked up. Major dealers are now penetrating these accounts using remans. On the dealer side, we now have access via managed print and managed services to new customers in the IT/VAR realm that wouldn’t have touched a toner cartridge prior to MPS. In addition, most major copier OEMs offer brand agnostic MPS solutions powered by high quality aftermarket products for devices that aren’t their own. This has fostered a great deal of OEM/Aftermarket cooperation.
Roderick: MPS has seen growth over the last few years in some channels. The biggest change to the remanufacturing industry has been the innovation the industry has brought to the table to create longer lasting, higher yield models to reduce the number of units that need replacing, increase call avoidance and drive the CPP lower. This type of innovation continues to provide a greater value to the end user and the reseller than an OEM strategy.
Willert: Technology changes and advancements are always a threat. What we have done is partner with our vendors that are the “best of the best” in the industry to keep ahead of the latest cutting edge technologies.
3. How do OEM cartridge collection programs and the first sale doctrine restrictions affect how you do business?
Willert: This is obviously a concern, and everyone is watching this very closely. Every day we are improving and streamlining our core collection strategies and this will never stop. Our goal is to ensure we take care of our customers and future customers without any interruption. Roderick: As OEMs have increased their effectiveness in collecting empties for destruction there has been a significant impact on the pricing and availability of certain models. In late 2011 we invested heavily in our ReCore program, which allows us to 1) Comply with first sale, 2) Acquire the necessary raw materials at a favorable cost and 3) Provide our resale partners with another tool to help them deliver new value to their end users. 32
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Joe Shulman ILG
Shulman: The opportunity to save money, time, and the freedom to know that printer services are automated is extremely important. To the remanufacturer, it gave us the challenge to create new products and offer extended yields for these CPP opportunities. Aftermarket toners compete well and give the industry an edge to offer value, especially with the Jumbo yield products.
Meyers: If the MPS provider is independent from the OEM, it potentially is a great benefit. MPS providers have an inherent interest in high quality, low cost per image performance. That is a great match for us as a supplier to these providers. Willert: For us it has been a great success. The programs that we have put in place over the last couple of years have just taken off. Most of our dealers are growing by leaps and bounds.
We Saw It In ENX Magazine
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STRAIGHT TALK
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State of the Remanufacturing Industry
5. Itâ&#x20AC;&#x2122;s been said there can be quality issues with remanufacturing if virgin cores are not used. As a result, most cores get used once and end up in a landfill. So while some say remanufacturing is good for the environment because it reuses, others say it is better to recycle the cores. Has there been any significant development in your R&D to address this issue?
Goldberg: This reuse versus recycle is a major tenet of OEM marketing against our industry. In some cases the OEMS are correct if we only use cores once and throw them away. The reality today differs from what OEMS propagandize; most major remanufacturers are ISO 14001 certified and go to great lengths to document continuous improvement in terms of landfill waste and recycling. In many cases parts that arenâ&#x20AC;&#x2122;t reused, ranging from plastic, corrugate metal, and aluminum, are recycled. In addition, there are strides being made to recycle 34
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non-virgins. We are investing heavily in this area, as are others. We will only do so if there is no fall off in quality.
Meyers: Reusing anything is a much more efficient use of resources than to recycle. At NCC, we take our charter seriously as we strive to reuse as much of our supply as possible while strictly maintaining quality.
Willert: We never compromise on quality, period. We have too many MPS providers that absolutely rely on the performance of our cartridges. We have tripled our R&D and Quality Control staff over the last couple of years and are seeing amazing results. For the cartridges that cannot be remanufactured to our specifications, we have an end of life solution that recycles the cartridges into reusable product. And this is not â&#x20AC;&#x153;waste to energy,â&#x20AC;? i.e. burning cartridges, which is widely used. We have a great solution for our dealers as well as We Saw It In ENX Magazine
the end user.
Roderick: This argument has been around a long time and we continue to see an ebb and flow between OEM only - multi cycle production models. The best remanufacturing companies today do not allow any of their non-usable units to end up in landfills and have not for the last few years. The effective use of both downstream waste expert service providers and reuse of certain OEM cores provides us with both the greatest environmental benefits as well as cost and performance considerations. Our company has invested heavily over the last few years in continuing to analyze the practicality of multi-cycling the cores on a model-by-model basis. As newer materials and processes continue to be developed, we are committed to being at the forefront of this, with an absolute and unwavering commitment to quality first. u
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By David Pohlman
MANAGED IT
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The Journey of Managed IT Services
early everyone in the office equipment industry readily admits that our industry is undergoing change. Many decidedly progressive dealers are down the path, or determining their path, of evolving their businesses. While equipment margins continue to fall in the industry, service-related margins remain fairly solid. Managed IT services brings fresh enthusiasm and opportunity. Clearly, new skills and technical abilities are essential, but the business model bears a close resemblance to what dealers have been practicing for years. Office equipment dealers are quite at ease with placing equipment, refreshing hardware and providing services for recurring revenue. If you’ve started down this path, or are considering doing so, it’s important you view it as a journey. One that will develop over time as you learn, gain experience and build the tools and processes for success.
Where does the Journey Begin?
If you’re considering getting into managed IT services, there are three options to consider: you can build, buy or partner. There are benefits and drawbacks to each option. Generally speaking, building your own solution allows you the most control over your managed IT offering, but this takes time, a significant amount of resources and can be very costly. Buying an existing IT business is another viable option, but can also be cost prohibitive. A dealer needs to perform proper due diligence to ensure the business it is purchasing has best-in-class tools and qualified personnel to bring to the table. When acquiring another business, company culture alignment is paramount and can be quite a challenge. If speed to market and minimizing the upfront investment is important to you, then partnering is often a great way to get started. It can allow a dealer to create a profitable recurring revenue stream starting with the first agreement signed by the first customer. 36
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Just over three years ago, we recognized the need to help dealers and resellers offer managed IT services to their customers. To provide a relatively low cost and quick way to enter this space, GreatAmerica started Collabrance LLC and invested in the Network Operations Center (NOC), Help Desk, tools and processes to help our customers succeed. Since that time we’ve been on our own journey. We’ve leveraged our knowledge of and experience in the office equipment space and information technology to speed our own success. Alongside our customers, we’ve figured out best practices.
Who Needs This Service?
As you embark on your journey, you’ll find there are a lot of organizations that would love managed IT services, but you don’t necessarily want them as customers. Simply putting your “managed IT services shingle out” and signing up every customer that comes your way can be disastrous.
So let’s talk about the customer profile. From the Collabrance perspective, we see the ideal customer size within the range of 15-50 users, particularly in the early stages of a managed services provider’s business. Within that range, our dealers are able to create great value and alleviate the IT burden.
Greater than 50 or so users, and companies tend to have their own IT departments and are accustomed to a level of onsite attention that can be difficult to replicate as an outsource provider. Larger customers can also make it difficult for your internal resources to scale effectively, putting customer satisfaction at risk. It’s important to note that while a service and support offering from a partnership like Collabrance has the capability of
scaling quickly, your onsite technical resources and processes also need to be ready to keep up with customer growth.
Beyond size, we also encourage our Collabrance partners to consider choosing prospects that depend on technology and value its uptime. If the customer is too small, or isn’t highly dependent on system availability, cost is just going to be viewed as too high for value delivered. They are going to be very cost oriented, require a lot of attention, and will likely avoid investing in upgrading technology, all of which will reduce your ability to create a profitable relationship with them.
Once you’ve identified the general profile of a prospective customer, take the time early on to really understand their technology environment. Your customers’ technology environments are going to have a wide range of stability and reliability. The range spans from completely out of date and dilapidated, to highly efficient with current hardware and software, perhaps only requiring a few tweaks to become optimized. If you jump in and offer fixed cost managed IT services to those customers with completely out of date and dilapidated environments, you’ll end up with far more effort required and a significant profit margin reduction. Additionally, your customer’s satisfaction will be compromised. By getting an accurate technology assessment upfront, you will have the opportunity to educate your customer on the status of their environment and the best approach to help them achieve their business goals efficiently and effectively.
This may involve more effort upfront, including investments in their infrastructure, such as, servers, PCs, etc. This effort makes their environment more efficiently supported and increases their continued on 38
We Saw It In ENX Magazine
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MANAGED IT
The Journey of Managed IT Services performance, uptime and satisfaction. These hardware investments are often ‘swallowed’ better by putting them on a monthly payment. Sound familiar?
Getting the Technology Standardized Improves the Journey
Stabilizing the customer’s environment prior to signing them onto a fixed price managed IT services agreement is generally how dealers grow profitably. They tend to get there by realizing the critical benefit of standards. This includes your technology offering, or “technology stack”.
When it comes to the technology offering, dealerships must think like a CIO. In a larger enterprise setting, the CIO strives to standardize the technology its employees use. They understand that you can’t be an expert in every antivirus software program, hardware platform or firewall. CIOs rely on standards. This is a similar approach to your dealership standardizing on one or two OEM copier lines, because you can’t be an expert in four or five. You can quickly see how this becomes problematic when considering all of the technologies in a customer’s environment. How can you become an expert on every hardware, software, security, email, and data protection technology? You can’t. So consider thinking like
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a CIO, and standardize the technology offered to your customers, and your customers will benefit from your efficiency.
If you choose the customer profile well, assess their situation and engage accordingly, your experience will be smoother and your profits on this journey will be greater. This is where a solid partner can be a big help by bringing proven processes and technology standards to the relationship.
Does the Technology Offering Evolve with the Journey?
I think the answer to this question is yes. These days, it’s easy to get overwhelmed with the technology solutions that IT can provide. There’s mobility solutions, cloud computing, virtualization… and the list goes on. Additionally, you’re used to focusing in on your customers’ print output devices, now there’s servers, workstations, software, etc. There are aspects of the technology offering that are simply going to require you to become more educated.
Before selling your first managed IT contract, we recommend getting comfortable with your initial technology offering. Look around your own office; ask a friend who owns a small business with 20 workstations or fewer if you can take a look around their office. (Or a couple of customers that match this criteria.) Don’t try to sell anything, just get a feel for where your dealership will be able to provide the most value. Is it data protection, providing uptime, end user help and/or security and email that will be in your initial offering? Something different? As you do this with a few smaller environments, you’ll find there is a core set of things they all need. Again, standardize on these offerings so that you gain efficiencies for you and your customers. You can then start your product portfolio there and grow it as you grow with your customers and as you gain We Saw It In ENX Magazine
knowledge and experience.
Though You’ve Arrived, the Journey Doesn’t End
Imagine getting a call from one of your customers. They’re asking for your opinion relating to the new building they’re constructing for their business. Their call to you is the first call they’ve made seeking advice. It is at that point you know you’ve arrived! They truly see you as a trusted advisor. They’re buying IT services from you with a predictable monthly payment, and they’re using all the services in your wheelhouse. But even then, the journey doesn’t end. Through quarterly or monthly reviews and continued engagement with your customers you’ll be viewed as an integral part of their team, helping them support their overall business strategy. When you’ve got that kind of relationship with your customers, you can quickly see where offering managed IT services can be a great way to enhance your existing successful business. u
David is Chief Operating Officer and member of the Office of the President at GreatAmerica Financial Services, the parent company of Collabrance LLC. In his role as Chief Operating Officer, David is responsible for the sales, marketing, operations and strategic planning for all eight Business Units within GreatAmerica.
Note: David Pohlman is moderating two dealer panels at ITEX 2013, one titled A Better Path to Partnering for Managed Network Services, held on April 17th at 11:00 a.m. The other session he is moderating is titled Top Lessons Learned in Building My Managed IT Services Business. This session is being held April 18th at 10:00 a.m.
We Saw It In ENX Magazine
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DEALER SPOTLIGHT
A Conversation with Steve Valenta President of Offix
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rowth is nothing new to Offix, a Gainesville, Virginia-based office technology dealership. They’ve been growing consistently since the company was founded in 1999 by President Steve Valenta and have their sights set on future growth. The dealership which sells a mix of Canon, Sharp, Océ, Kip, MBM, Secap, HP, and Samsung devices along with solutions from EFI, eCopy, Drivve has also been a long-time provider of managed print services. We spoke with Valenta about his business, the industry, and his strategies to grow the business. The year has only just begun, how’s it going so far?
Valenta: We’re extremely busy. We acquired another company the first week of December and that branch is starting to take off like crazy. What segments of your business are doing well?
Valenta: We’re doing well with connected products, software solutions, and managed print. We just landed another large managed print services contract. That’s been very good for us. We’ve been doing managed print services for many years even before they made it a big deal by calling it MPS. Who are your customers?
Valenta: We’re in one of the better markets in the United States—the Washington D.C. market. Even with the economic downturn the government is growing and we’re growing a lot with them. And of course with the government we’ve got government contractors, including a lot of the larger ones. We’re also in one of the better real estate markets. Our customers are just about everywhere although they’re mainly government contractors and real estate. Who is your biggest competition in your market? Valenta: We probably go head to head 40
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with everybody. Being in the D.C. market, you have your Sharps, your Konicas, your Ricoh directs, and you probably have four independent dealers for each manufacturer all in the same market. Why do customers end up choosing Offix?
Valenta: I’m not a sales and marketing genius, I’m an ex tech, ex service manager. Everything we do is focused on providing the best service to our clients, from imageWare to e-info, to Remote Tech, to FM Audit; we’ve been using these solutions since they were first introduced. We’re on the leading edge of technology when it comes to service and we give our service guys everything they need to be successful and make decisions on the spot. We don’t need 50 managers. That’s helped us tremendously with retention, and when we tell the story and people check our references, they find out that it’s true. You’re looking to grow through acquisitions, what has your experience with acquisitions been like in the past?
Valenta: We’ve done two other acquisitions and have sold a company in the past. They’re all different and they’re all a lot of work. I’m not seeing a lot of new companies starting up. Basically, I’m seeing all the dealers going after each other’s clients. If you’re going to grow I believe it’s got to be through acquisition because the economy is not strong enough to grow any other way. What have you learned from past acquisitions?
Valenta: Because of the infrastructure we have in house we’re able to grab a customer base, along with some service techs and a few admin [people] and we’re able to integrate them into the Offix family a whole lot easier, especially with technology. Fourteen years ago when I bought my first company they didn’t even have a computer system, it was all done on cards—index cards, We Saw It In ENX Magazine
Steve Valenta, President Offix
service cards, and punch clock cards. Even our most recent acquisition was not at all up to date with technology. I think they all shared one e-mail address in the whole sales department. If companies today aren’t going to get up to date with technology I don’t know how they’re going to survive, so we’re looking for those opportunities. You also have a five-year plan to add one new office every year, why is that important?
Valenta: Like I said, we’re all out here taking each other’s clients because there aren’t any new businesses out there opening up like it used to be. So the only way we’re going to grow is to grow by acquisition. I talk to a lot of my other friends in the business and they’re all doing the same. Last year you grew your managed print services business at 150 percent year over year, how’d you do that?
Valenta: Everybody has made a big deal about managed print services over the last two or three years, but I’ve been in this industry for over thirty years; it’s no different than a cost per copy on a copier machine. We’ve been doing it forever; what’s made it better for us is companies like FMAudit and Print Audit, they’ve given us a software solution to manage [the devices] much better than we were able to in the past. We have used technology to our benefit which has helped us continue to grow. What did you learn about selling managed print services during that time that you didn’t know at the beginning?
Valenta: Nothing really. To me it’s not much different than what I’ve been doing continued on 42
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DEALER SPOTLIGHT
continued from 40
A Conversation with Steve Valenta, President of Offix
with copiers, it’s just the software has made it so much easier. The manufacturers have made their MFPs and copiers easier to manage as well with this new software technology. I wish I had that 10 or 15 years ago, it would have been great. There’s a lot of talk about managed network/IT services, do you see an opportunity there?
Valenta: That’s actually how we started our business. We used to sell computers, install them, and manage the network. I got out of it because I got tired of dealing with computers. Back then we didn’t have the capability to manage networks remotely even though you still need to go out and see clients on occasion. We still manage four networks, but had around 30 at one time. We’re reevaluating if that’s a market we want to get back into because that can help us deal with anything that goes in workflow solutions, solutions sales, as well as 42
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product sales.
What’s your biggest challenge running a dealership?
Valenta: In certain circumstances it’s dealing with manufacturers—getting answers and things resolved. We deal with four manufacturers now and they all do things differently and there’s no roadmap to success with any of them because you need to follow a different map each time to resolve issues. That and finding competent sales people are our two biggest challenges. As far as the business goes, we have a great model and it runs itself for the most part. What would you say is the biggest difference in your dealership today compared to 1999?
Valenta: In 1999 I was by myself. I drove the truck and did it all. Now I have a great supporting staff and team to help the company grow. We Saw It In ENX Magazine
Where do you see the biggest opportunities for growth going forward?
Valenta: If you’re not working the solution sales, that’s going to be the determining factor a lot of the time. Not every company out there needs it, but if you’re going to dabble with the medium and large-size companies, you’re going to have to be up on technology and solutions. What does the rest of the year have in store for Offix?
Valenta: We’re looking to make more acquisitions. I’d like to do two this year. We’re moving into a new office in our Tidewater area and working on a new location for the Richmond area. The biggest thing is opening two new offices and showrooms, making more acquisitions, and gaining market share through our sales and marketing department. u By Scott Cullen
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By Khanh Pham
MPS FOCUS
A
The MPS Playbook
s is the case with about every new product or service entry, the evolution of managed print services, or what is commonly referred to as MPS, has been a work in progress. Each MPS provider may have its own methodologies, interpretations and approaches to MPS. However, they all share the common interest of meeting customer requirements.
A successful MPS provider must be able to provide value added solutions and processes to meet key customer objectives. In its most simplistic form, customers mainly have three needs: supplies, service and a streamlined, easy-tounderstand billing.
Although few would place MPS on the technology pantheon with mobile computing, smart phones, digital music or even digital duplicators, better known these days as copiers or multifunction printers (MFPs), in the business document management world, MPS is as equally important as the aforementioned since it has measurably facilitated business printing. MPS provides customers with a major benefit — a single vendor, or the proverbial “one throat to choke.”
The advantage of purchasing goods or integrated services from a single vendor is often times a game changer for customers. Rather than managing the inefficiencies that are inherent with having multiple vendors, a MPS customer can enjoy the benefits of having a document management ecosystem — one source for supplies and a break/fix service along with single invoice and vendor point of contact.
Depending on the customer business model, having a single vendor could also mean no longer having to outlay capital expenses for MFPs, scanners or fax machines. To further simplify expenses and costs, customers also have the option to pay one flat cost-per-page fee, inclusive of equipment, supplies and service. 44
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The ability to assess, implement and execute is vital to a successful MPS engagement. Providing an ecosystem for a customer begins with defining their requirements, which starts at the assessment process. The key to a successful assessment is gathering and defining the customer requirements as much as possible to better create a more thorough assessment playbook. The playbook contains such information as customer workflows, print policy, surveys and questionnaires. The playbook should also contain a vendor’s printing strategy while providing guidance to the assessment analyst as he or she begins the process.
The success of an assessment relies on effective recommendations and presentations. Assessment data can be overwhelming and unmanageable without the proper tools and processes including floor plans, asset tagging, device move or removal, data jacks and model-naming consistency. The ability to gather the data and present it in a simple, concise and easy-to-understand format to the customer is essential.
As one of the first MPS providers, Toshiba has created tools and processes in pursuit of more effective assessments and clear, easily understood customer presentations. With the award-winning Encompass assessment application, Toshiba analysts and dealers are able to store and manage the data in one database and present effective professional proposals.
Winning an account can be an exhilarating feeling. The culmination of hard work, persistence, resource and time investment have paid off. Now comes the difficult part, delivering on the promises made to the customer.
Whether implementing a mid-size or enterprise-level account, a MPS provider needs to have strong implementation processes and support infrastructures to be successful. As mentioned earlier, cusWe Saw It In ENX Magazine
tomers mainly care about fulfilling three needs – supplies, service and easy-tounderstand billing. A successful provider creates programs and processes that enhance the customer experience in these three important areas. The deliverables should be documented and agreed upon by both parties before the actual implementation, normally in the form of a Statement of Work (SOW). The SOW needs to clearly define each party’s roles and responsibilities, setting proper goals and expectations. A fleet monitoring tool is paramount in establishing the rules of engagement. The tool allows the vendor to create an entitlement list, inspect devices, collect meters for billing, set up service alerts and depending on the vendor’s capabilities, provides auto toner replenishment. A MPS engagement, especially cost-perpage, starts with the entitlement list. The list defines the devices covered under the agreement. Success may hinge on the ability of a vendor to effectively monitor and manage the list. Knowing when to add, remove and make changes to a device can impact both customer satisfaction and vendor profitability.
Part of making a customer value proposition is recognizing what one is capable of offering. Provide customers with options; however, keep the options simple and executable. When it comes to supplies management, many customers believe the process is uncontrollable from both an administrative and cost standpoint. The value that a MPS provider brings to a customer is simplicity. Offer the customer a portal to order consumable supplies for all of their print devices. At Toshiba, we’ve taken the supplies fulfillment process to the next level through our auto toner replenishment program. The auto toner process provides efficiencies to the customers by delivering oncontinued on 46
We Saw It In ENX Magazine
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MPS FOCUS
continued from 44
The MPS Playbook
time toner without end user involvement. Equally as important, auto toner allows the vendor to exercise greater control over the fulfillment process, which is an important cost control driver for cost-per-page accounts.
One of key areas to Toshiba’s success in MPS is our device agnostic approach. Aside from selling Toshiba and nonToshiba branded devices, we provide break/fix services to a wide range of devices as well. Similar to supplies management, customers look for vendors capable of providing break/fix service for all of their devices. In addition to diversity, enterprise customers require vendors capable of providing national service coverage along with a national dispatch call center. Most MPS vendors do not have the capability of providing service for all devices or national coverage; therefore, finding the right partner is the key to success. 46
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Billing encapsulates all the services provided to an account. It is a functional area that is often undervalued. It has greater significance when revenue or profitability is not at or below expectations. Since MPS is such a fluid engagement, there is an inherent risk for a vendor to not understand their true profitability. Cost control and billing are two sides of the same coin. Cost control drivers such as an entitlement list, auto toner replenishment and advance inspection help control cost. Billing needs to capture all cost related revenues – meters, billable supplies, time & material costs and install, move, add and change (commonly known as IMAC) expenses. To maintain and understand true profitability, it is important for the vendor to establish a reconciliation process or system to consistently monitor billing accuracy. Seven years ago, MPS was a relatively We Saw It In ENX Magazine
new business practice introduced to the business document management world. Today, it is not just a norm, it is a business requirement for a vendor to be MPS capable. The differentiation between a capable and expert MPS provider is the provider’s breadth of value-added services. u Khanh Q Pham is Director of Pricing and Program Management for Toshiba America Business Solutions, Inc. He is responsible for overseeing all activities related to national accounts pricing and programs and he also manages the company’s post-sales implementation and operational management for national accounts. Since joining Toshiba in 1997, Khanh has been instrumental in designing and implementing key operational processes, programs and solutions, including Toshiba’s eCommerce system, global services portal and MPS.
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By Gary Schwartz
SALES MANAGEMENT
I
Can You Teach an Old Dog New Tricks?
n 2003, DreamWorks released a comedy entitled Old School. Will Ferrell headlined an ensemble cast. The premise of the movie was grown men reliving their college experience complete with creating their own fraternity among other things. In short, they thought that by doing the things they used to do, they would enjoy similar success. Sadly, things did not work out too well for the guys in Old School. Unfortunately, all too many firms in our industry are finding themselves in the same boat. What used to work out well ‘back in the day’ does not yield the same results today.
I speak at various industry events and conduct workshops with business leaders and reps on a monthly basis. This interaction has led me to the conclusion that many dealers are still struggling to shed the old ways and transition to a more targeted approach. One glaringly obvious area is cold calling. You would be shocked at the number of people who are still knocking on doors. I can promise you this: there are not many successful ‘door knockers’.
Unfortunately, most of the Old Dogs are extremely set in their ways. They will be the first in the group to vehemently extoll the virtues of the ‘T’ Call or the ‘Territory Blitz’ or similar approaches to covering the perceived opportunity in a
territory. Much like Will Ferrell’s character shouting, “We’re going streaking!” as he runs alone down the streets; it seems that many are prepared to defend the old ways to their death or more correctly the death of their dealership.
So if there are any Old Dogs who happen to be reading this article, let’s look at some facts. The following is an accurate representation of what you will find calling on your average industrial park:
• • • •
•
40% of the units are single placement segment 1 or 2, many of which are customer owned units
5% are Fortune 500 companies looking for a national provider
5% are a branch office that does not maintain decision authority 5% are current customers
5% are named to another rep at your company in the CRM
The result is that the rep has wasted 60% of his or her time randomly cold calling! At the end of the day the rep has probably collected some business cards and been shown the door a lot. They may even think they have an opportunity to upgrade that segment one customer owned unit at the tire shop. Or perhaps they feel as though they can convince that defense contractor to make local decisions. Is this really what you want your rep focused on? Do you want them spending even more time working a deal that will not come to fruition? Sure there was a time that cold calling was necessary. Even if you were unsuccessful at gaining an appointment, many times you were able to gain intelligence about the account - but at what price? Are you spending your valuable selling
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We Saw It In ENX Magazine
time collecting business cards and lease expirations when you could easily find the same (or better) information by doing some simple research on the web?
I realize for many it is unconscionable or at least uncomfortable to not call on every single account in a given geography. When I tell folks they should be focused to 250 accounts, I usually hear, “What about the other 375 accounts in my zip?” The answer is simple: if it were my business, I would want my reps focused on the 40% of the accounts that hold true opportunity for both the rep and the company. I do not want time being wasted calling on the 60% of the accounts that are dead ends. Of course, Old School worked out with the typical Hollywood ending. The protagonists saw the error in their ways and changed for the better and the bad guys got what was coming to them. The good news is it is not too late for the cold callers out there to get on a more successful track.
By creating a well-defined target list and gathering intelligence prior to making contact, reps can make better use of their prospecting time and ultimately add more real opportunities to the pipeline. So, can you teach an Old Dog new tricks? It all depends on the dog and the teacher.u
Gary Schwartz is a sales consultant with Strategy Development and has over 14 years of broad based experience in the business technology and outsourcing space. Gary was a senior manager with IKON Office Solutions, and later with RICOH in sales, finance, and operational roles.
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By Lou Slawetsky
FLASH REPORT
INKJET IS BACK
ell, I feel somewhat like Rip Van Winkle. When I hit the couch for a much needed nap (recommended by a doctor who kept using the dreaded phrase, “a man of your age …”), inkjet printers had been relegated to home offices or the lightest of office use. While the purchase price for the printer or MFP was (and remains) extremely low (some for less than $100), the cost per page, especially for color output, was high, often exceeding 10 cents per page.
At the same time, hardware cost for laser, toner based systems began to drop dramatically, making these systems more cost effective than inkjet for volumes of any significance. In addition, laser systems required a service component (contract) making them completely compatible with the dealer service model. Inkjet systems, on the other hand did not. What’s more, significant numbers of users would visit the Internet to purchase supplies at below dealer cost.
Bummer! Inkjet printers and All In Ones (AIOs) carried a low price with no margin coupled with no residual service or supply revenues. Dealers howled and for the most part ignored these products. Pundits gleefully ganged up on the technology and relegated it to either low volumes or specialized applications such as photo printers.
But, then, I awoke from my nap and found the world had reversed itself. Inkjet was back. And back with a vengeance. It leapfrogged from low volume, specialized applications to high volume digital printing driven by the need for shorter run on-demand or transactional applications. In fact, our friends at InfoTrends have forecasted that, within the next few years, inkjet will account for 40% of digital press output.
claim offer full color output at half the cost of laser printing. Moreover, the Brother system features a lateral feed system that allows for A3 printing without an appreciable increase in hardware cost.
What happened? Has the world gone mad? Not exactly. However, several trends emerged almost at the same time to produce a “perfect storm” of inkjet potential. Here are just a few.
Pigment Based Ink – until now,
most inkjet inks were water or dye based. Yes, they were less expensive. But they tended to fade over time and were sensitive to the substrate (paper) being used. Porous papers would cause the ink to spread, reducing image quality. More recently, pigment based inks have gained traction. These are less sensitive to the substrate selection. Colors are brighter. And images, while not necessarily archival, will outlive us all.
Office Printing – while the world
was focused on inkjet technology for digital presses, Hewlett-Packard leveraged their Page-Wide Technology that features a fixed “Page Wide Array” print head the width of the page. Since the print head doesn’t move, the system is theoretically able to print as fast as you can move paper. It sounds similar to the now defunct Edgeline™ products. But those used water-based inks. These use pigment based inks, eliminating many of the problems found in the older systems. Typical of HP, they took a good idea and
What about the office? Inkjet manufacturers (HP and Brother in particular) are currently featuring products that they 50
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made it better. How much better? How about 70 full color pages per minute on a multifunctional system that retails for about $800.00? The newly released HP Officejet Pro X576dw AIO and its printer version, the OfficeJet Pro X. Moreover, HP claims a cost per page that is half that of toner based, laser systems. You can see a YouTube video of the AIO printing by visiting this address or scan the QR code. http://www.youtube.com/watch?v=9hHI2 fXkl9k&feature=youtu.be
Kodak’s Prosper Systems –
featuring continuous in-line inkjet printing and roll feed, Kodak’s Prosper system offers superb image quality on two sides at speeds of up to 650 feet per minute. Please don’t make me do the math, since the system can print “n-up” images. Suffice it to say that it’s REALLY REALLY fast. Walk behind the press and you’ll note ink being fed from 50gallon drums. Kodak took us to a massive customer production facility in South Dakota to see it in action. Big data meets VDP presses. This may well be the most profitable segment of Kodak’s business.
continued on 52 We Saw It In ENX Magazine
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continued from 50
INKJET IS BACK
Xerox Acquires Impika – a
French manufacturer of high-speed inkjet digital presses using water (dye) based ink. This is a departure for Xerox who, until now, had been promoting their solid ink technology in their CiPress products. Impika uses the piezoelectric D.O.D. inkjet technology generating ink drops by mechanical distortion, as opposed to thermal D.O.D., which generates them by temperature increase. Some say the move signals trouble for solid ink in a production environment, while others say it allows Xerox to offer something for everyone.
Memjet and Fuji Xerox – remember Memjet? Believe it or not, the company has been with us for more than 10 years! They were touting page width array inkjet printing at the same time that HP launched their own system 52
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in their Edgeline products. Now, in partnership with Fuji Xerox and others, the company has launched a 60 page per minute water based system targeted toward the office space. The company says that the new systems will be available using an “all in” pricing plan that includes hardware, service and supplies on a per page basis. Sounds a lot like MPS to me.
Landa – yes, Benny is still with us.
Now, the company has announced a series of new aqueous inkjet digital presses capable of speeds of up to 13,000 cut sheets per hour. The innovative technology is said to dry the ink on an intermediate blanket before applying the image to the paper. This, in theory, will eliminate many of the problems associated with water-based ink. I was impressed with their launch video from We Saw It In ENX Magazine
DRUPA. You can check it out at (or scan the QR code). http://www.youtube.com/watch?v=oKRz DwzYens
Get the picture? Inkjet is coming at us from all sides. It’s a technology we’ve avoided simply because it didn’t fit our business model. I don’t think we can ignore it any longer. Perhaps we need to take another look at the business model itself. Full color MFPs at 70 ppm for $800. Would you rather sell it or compete with it? u By Lou Slawetsky, CEO, Industry Analysts, Inc.
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MPS STRATEGY
How to Turn 5 Key Business Challenges into MPS Success
M
anaged Print Services (MPS) are increasingly being adopted by organizations looking to enhance how they manage printing and imaging resources. To date, most MPS strategies are focused too narrowly on reducing cost per printed page, and not enough on end-user needs. Print and imaging vendors and dealers must help organizations shift their focus on MPS to achieve the strategic goal of balancing between digitizing more business processes and managing paper-based workflows.
Work habits are changing, and much of this change is being felt in the conversion from paper to digital. The office printing market is under pressure from a variety of forces. One look at how mobile technologies have permeated the entire office ecosystem can demonstrate that quite clearly.
These factors have steered the office market’s transition to MPS. As traditional printing continues to decline, manufacturers and dealers are promoting MPS as a way to drive growth. Unfortunately, the value proposition for MPS today remains focused on reducing printing to lower costs, and many dealers are taking a short-sided view to the market opportunity. In many ways, the entry-level market for MPS has evolved to become a “land grab” strategy with providers utilizing MPS as a way to steal pages from competitors.
The basic problem with the “land grab” approach is there simply are not enough pages to go around. Multifunction printers (MFP) in the field or pages under contract remain the primary measurement criteria for most MPS providers today. In order to drive profits through MPS, providers consistently look for ways to take cost out of the system and to push cost-per-page rates lower and lower. In many ways, MPS has become a business driven on price—a commodity. 54
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It has become clear that a better value proposition for MPS is required, not only to expand into the broader market, but to create a sustainable business model for providers.
The good news is MPS has grown significantly over the past few years, and experts are predicting this trend will continue for at least the next several years. Global revenues from MPS reached $11.03 billion in 2011, according to independent market research firm IDC, with printer and MFP vendors accounting for 73 percent of the total, while the channel dealers/resellers and professional service providers accounted for 27 percent. Most market research firms, including IDC, predict double-digit compound annual growth for MPS over the next five years.
Vendors look to capitalize on the growth of MPS but they do so by leveraging the “reduced cost” value proposition to take market share from their competitors. But ultimately, the goal of any managed print engagement should be to drive worker productivity by creating the most efficient and effective document workflow environment. This is critical for providers because as revenue from clickcharge contracts continues to erode, the opportunity to replace that source of income lies in value-added workflow services.
This requires a completely different selling motion and approach to the customer. It requires a shift in taking an MPS strategy focused on lower print costs to leveraging customer relationships to deliver value and process efficiencies. Including MPS software in their offerings will better position print and imaging dealers and their customers to achieve the full potential of MPS initiatives. Software that works in multi-branded MFP environments is an indispensable component of any successful MPS engagement. Only the right assessment We Saw It In ENX Magazine
By Michael Rich
and monitoring tools and software can provide insight into how users interact with their MFP resources and give organizations the ability to influence user behavior in document input- and outputrelated tasks. Dealers can leverage MPS software to equip organizations to address the following five key business challenges:
1. Runaway Printing Costs. Organizations are looking to gain control over their print environment equipment, consumables, replenishment, repair and IT operating costs. MPS software provides activity tracking and analysis capabilities for all printing, photocopying, faxing and scanning to identify improvement areas and cost savings. It can deliver results that include improving placement of devices to avoid print and scan backlogs, and rerouting print jobs that don’t require the highest quality output to lower cost devices.
2. Network and Data Security Vulnerabilities. With company confidential information moving through workflows every day, organizations need to establish a chain of custody for every document. MPS software can ensure the security of every print, copy and scan job. For example, it can hold documents in a secure server until users authenticate at the MFP so documents are never left unattended in an output tray. MPS software also authenticates user access at MFPs during scanning to enforce network authentication and permissions when individuals connect to business applications. 3. Tackle Information Governance Risks. Effectively managing the lifecycle of documents across the enterprise is essential in managing records management and statutory compliance risks. MPS software can help organizations be sure personnel adhere to company policontinued on 55
MPS STRATEGY
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cies regarding the retention, destruction and distribution of information. The software also provides activity tracking to create a useful audit trail of which people and documents were involved in scanning and printing.
4. Address Business Continuity. Organizations cannot risk that a business disruption – ranging from equipment failures and user error to devastating natural disasters – will result in valuable information assets being permanently lost. MPS software ensures that document capture processes conform to corporate data protection policies so information is backed up and recoverable in the event of an outage. These policies need to cover scanned documents both at the server and desktop levels to mitigate business risk.
5. Stop Counterproductive Workflows. A key part of any MPS strategy needs to be analyzing office and departmental workflows to identify where automation can streamline processes and optimize productivity. Scanning provides an onramp for adding paper-based information directly into business applications. It creates searchable digital files which eliminate the labor required when users hunt for information manually – office workers on average spend 16 percent of their time searching for information. Print management capabilities also improves workflows such as preventing abuse of high cost-per-page devices by redirecting documents to the most cost-effective output system.
An effective MPS strategy will leverage integrated software and tools to help print and imaging dealers go beyond cost savings and turn customer printing resources into a source of productivity improvement—in other words, a strategic business asset. As a result, vendors and dealers can strengthen their customer relationships to become an indispensable partner. Driving value and profits for customers translates to repeatable, long-term business that is not easily replaced by competitors. u
Michael Rich is the senior vice president and general manager of the Nuance Imaging Division, responsible for marketleading office productivity solutions that include eCopy, Equitrac, PDF Converter, OmniPage and PaperPort.
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By Ronelle Ingram
MARKETING
I
NASCAR Marketing
have been told my business cards, and those of the overachieving members of our service department, look like the exterior of a car decked out for a NASCAR race. But I take that as a compliment, for according to the National Association for Stock Car Auto Racing, NASCAR is consistently able to “package product attributes that capture latent markets.” My favorite business cards are crowded with colorful logos, certifications, authorizations and newly achieved awards, as I have always been a believer in being certified whenever possible. Besides, identifying an appropriate goal and achieving it is always worth personal acknowledgement and public announcement of the attainment. Furthermore, I prefer to work and do business with people that I believe to be by nature goal orientated and a bit competitive— people who are always striving to achieve the next level of knowledge and willing to do the extra work required. These are the types of people I believe will keep their word and go the extra mile when becoming my partner in business. Extending this personal philosophy to my business, attaining industry certifications and awards, along with business and social recognition that will place us ahead of the competition, is a priority. Once achieved, make sure your company maximizes the internal and external value of your accomplishments. Make a habit of positively differentiating your company and specific staff members by recognizing each significant attainment on business cards, email signatures, websites and other business literature. This allows your customers and competitors to view the level of your of business leadership. Each new recognition can also be a subtle way to encourage your staff to continually take advantage of company-sponsored or personally-directed educational programs. Having your company encourage and sponsor plans for continuous improvement is a good way to counteract the commoditization of the CPC and MPS pricing. The companies with a proven history of well-educated staff and progressive management can provide tangible proof that their company provides a complete package of network administration, document management, managed print services and equipment acquisition. The independent dealer can quickly earn the right to charge a fair and appropriate price for the products and services they offer by achieving and updating the marketing of their programs and
practices that set them apart from the competition. There is a fine line between selfaggrandizement and enabling your (potential) customers to understand just how complete and competent your business offerings are. Certifications provide an official stamp of approval from the organization that has set the standards of competency. It also ensures your company and staff understands the importance of how to plan, start and complete necessary business functions. A professional way to have your entire staff continually advertise the significance and depth of your company’s ability is to design a visually attractive business card or to customize the signature section of your email. Your web page, social media, brochures and catalog should also reflect company and staff achievements. The commoditization of MPS, document management and networking administration, and competing with Internet pricing increases the need to continually market the accomplishments that differentiates the products and services your company provides.
I recently retrieved a business card I had received from an office equipment dealer who had attended one of my seminars. I was following up on a couple of items he had requested. Rather than having to write a long emailed explanation, I decided to just call the company owner. Much to my surprise, his business card had the standard address, email, website and telephone number. But there was no area code listed on the business card next to his phone number. Google quickly helped me discovered that 307 is the only area code for all of Wyoming. With all their offices in Wyoming I imagine he figured it was neighborly not to include any unneeded information. This revelation made me shake my head in despair when I realized our current local servicing of Southern California included 14 different area codes. Each of us must figure out what is appropriate to include in our business advertising. Take a look at your business card. What does it say about you and your company? Upon returning from an industry or community seminar, conference or trade show, take a look at the business cards and other information you collected while attending.
Before reviewing these business cards, add your own card to the group. Take a quick look at each card and divide them up. First appraise each card’s overall first impression. Which cards stand out in a positive way? What differentiates a card from all the others? Is it the color, the logo or company slogan, a map to your office, the type of card stock, or something else that caught your attention? If you perceive yourself as a creative, state-of-the-art, full-service company, make sure your business card and other printed or internet based information reflects your perception. continued on 57
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During your sorting process, separate out the boring or unattractive cards. Where does your own card fit within the group of newly arranged stacks? What does your business card, and all the other items that represent your company say about the type of organization you represent? Is there an ecological statement or green insignia? Is there a reference to a social media contact? Does your sales and service staff have their CompTIA certifications or sales awards listed? Is there 24/7 contact information? Is there a company slogan or eye-catching logo? What memorable statement does your business card make that will make the receiver want to follow up with the company or person that card represents?
Are there any cards that you (or the giver of the card) personally wrote something on? Sometimes the giver or receiver will make a notation on the back of their card. Often this is overlooked when business cards are being reviewed face up. If someone writes on the back of the card, make sure there is a notation on the front signifying to turn it over. You can use a handwritten arrow that points to the edge of the card or fold a crease in the card that reminds the receiver to turn the card over.
Once you figure out what images and words are most appropriate to attract new customers and re-assure current clients that you and your company are industry leaders and worthy of their business, extend this information to your web page, social media offerings, brochures, mar-
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If your company uses pre-designed advertisement where you just add your own company name and logo, you can easily customize these basic marketing materials (provided by many vendors) by printing on colored, embossed, or lightweight card stock. You can also have stickers designed with logos or certifications that can be added to any pre-existing card or other company literature. The addition of a branded logo, company color scheme or company slogan can quickly customize and increase the brand familiarity of pre-designed marketing aids.
price. Creating an appropriate advertising style that reflects personal and company achievements can help maximize the unique values your business and staff provide your current and future clients.u
Ronelle Ingram, author of Service With A Smile, also teaches service seminars. She can be reached at ronellei@msn.com.
Your companyâ&#x20AC;&#x2122;s customized business literature need not to look like a speeding NASCAR advertisement. Your goal is, however, to make sure your company is consistently recognized as a leader in your market. People are usually willing to pay more for a superior product. Value has nothing to do with the cheapest We Saw It In ENX Magazine
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Recharger East Expo 2013 May 16-17, 2013 Keiv, Ukraine www.rechargereastexpo.com Tiara Group Toner 2013 Conference June 2-4, 2013 Santa Barbara, CA - USA www.2013tonerconference.com Reciclamais South America Expo 2013 June 18-20, 2013 Sao Pãulo, Brasil www.reciclamais.com
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By Britt Horvat
TECHNICAL TIPS
Introduction to the Xerox® Phaser®7500 & 7800 printers he Phaser® 7500, and 7800 which followed, make some stunning full color prints. They are also designed with some new innovative technologies which reduce energy consumption. They are well received in the market and there are quite a few of them out there nowadays. Some of the 7500s are beginning to come off contract so they’re beginning to show up in the aftermarket. It’d be a good idea to learn a bit about them.
In this article, we’ll take a quick look at the new technologies which these machines utilize. We’ll also focus on the Fault Code meanings and how to clear some of the faults from diagnostics (the codes which require resetting).
The first innovation is that instead of using a traditional Laser Unit or Raster Output Scanner (ROS) assembly, these use LED arrays (LPH = LED Print Heads). In the brochures, they call the technology “Hi-Q® LED” technology; the advantages are that the LEDs use less energy and are quieter than a machine using a laser with its ROS motor constantly spinning the mirrors. I imagine that with less mirrors and no moving parts, this solid-state design will likely require less attention, although time will tell if the LED bars hold up or if they develop problems later in life.
The newer model, Phaser 7800, also introduces a new type of fuser, which uses Induction Heater (IH) technology. Taking a Phaser 7800 fuser apart leaves one with more questions about how it works than answers. Induction Heating is definitely alien to what we are all used to seeing. It is said to require less energy, especially in standby, and yet it has a far quicker warm up time (15 seconds compared to 46 seconds for the 7500 model which has a more traditional design using good ol’ heat lamps).
Phaser 7500
two models with the Phaser 7760 that these guys replaced.
It appears that the newer models are indeed more efficient, especially when you see that they use less than half as much power at standby. Not sure why the 7800 shows a higher wattage use during printing and so high a wattage in Power Save. Maybe the tradeoff with the new Induction Heater is that it takes more power to run prints when called on. Pretty cool stuff.
Now here is an abbreviated list of the Fault Codes which the machine may report. The codes with asterisks next to them require resetting from Diagnostics. We’ll have a peek at how to clear tech rep codes later on. The full list in the Service Manual is over 300 lines long, so this list has been trimmed down with generalization about some groups of faults (010-xxx are all fuser faults, for example) and then the list goes on to list a few of the specific ones of particular interest because they are either common or they require resetting from Diagnostics.
So, just how green are these machines in the final analysis? Let’s compare the stats from the OEM brochures for these
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Phaser 7800
This is a pretty quick glimpse. At least with this list you’d have a rough idea where to look in the machine if a fault code is coming up on screen.
Note: **Some faults (marked with asterisks) will not reset by themselves. Once you have repaired the cause of the fault, you will need to go in and clear the fault before the machine will even attempt to get printing again. Below is how to clear tech rep faults: 1. Hold down ‘Back’ and ‘Help’ buttons together while turning the printer on.
2. Continue to hold the buttons until you see “Service Diagnostics V. x.xxx, Initializing” on the display; you can then release the two buttons.
3. Scroll down through the Service Diagnostics Menu and select “NVRAM Access”. In the submenu which shows up, scroll down to “Clear Tech Rep Faults”. Choose this and then look for the fault you are experiencing and reset it.
You can also choose from the same “NVRAM Access” list: “Reset CRU Life Counters”. This is necessary if you are replacing any of the Customer Replaceable Units (CRU) such as the
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TECHNICAL TIPS
Introduction to the Xerox® Phaser®7500 & 7800 printers
continued from 66
Fuser Module, Transfer Roll Assembly, Belt Cleaner Assembly or Toner Waste Bottle.
Well, hopefully that should do the trick to get everyone started at least. We’ll have to return to this series and find out more about what else you can do from Diagnostics in a future article. Happy repairs everyone.u
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Xerox brand copiers, printers and fax machines. You can find more information, including many of Britt’s past ENX articles on their website, www.partsdrop.com. If you’d like to read more about Xerox brand office equipment, there’s also a complete listing of past articles under contributing writers on the ENX website (www.ENXMAG.com).
Britt works for The Parts Drop, a company whose primary business is providing parts, supplies and information for
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PRINTER TECH TIP
Printer Tech Tip
HP Color LaserJet CP6015 and CM6030/CM6040 MFP Transfer Access Sensor Error
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Stay Connected
Issue:
Printer/MFP boots up with a Transfer access sensor error. Solution: 1
2 3 4
Check the 2nd-transfer-roller assembly and ensure it is properly seated. Clear area of any debris. If the issue persists then replace the registration 2ndtransfer assembly. (Q3931-67909)
If issue persists after replacing the registration 2nd-transfer assembly check the Interlock-switch assembly. If faulty replace it (RM1-3589-000CN) If the issue is still not resolved then replace the DC Controller.
Connecting People, Ideas and Products in the Document Imaging Industry since 1994
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That’s a pretty quick glimpse. At least with this list you’d have a rough idea where to look in the machine if a fault code is coming up on screen. u
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TECHNICAL TIPS
TECH HELP
Subject: Canon IR-C4080 - Blue Background
Question: I’m getting blue background on the entire page. It looks kind of wavy too. You can still see the image of what you are copying / printing though. It happens on Full color, Auto Color and all single colors; yes, even when I pick “Yellow” as a single color I still get the blue background. However when doing a black / white copy or print it is fine. The transfer belt is clean and I just changed the Cyan drum too, but it didn’t help. Also, I switched the Black and Cyan laser units, but no help there either. Could it be the DC controller? HiVoltage? Cyan drum ground? Help! Answer: Go into service mode, select “Copier,” “Function,” “Clear,” then “Dcon.” Press OK. Reboot copier. Good Luck. Hope this helps.
Q: Thanks so much! Would doing a Dcon clear reset anything important? Like Network scan settings, DV Bias, voltages, etc? Also before I do this should I print out or write down all settings first? I know on the IR C3200 doing a D-con clear wouldn’t affect all the above but not sure on this box. A: Before you do a D-con clear, check the drum door ground. Open the door the drums are behind; on the left side of the door near the yellow label is a hole with a ground contact. Make sure it makes contact with the machine because this causes cyan background that is wavy looking. A: It could be a bad drum unit.
Q: Thanks for the help! It was the ground peg on the drum door for Cyan; it was pushed under the cover. I touched it with my screwdriver, it popped back up and now the machine works great! I learn something new every day. Thanks to everyone else for your help as well!
Subject: Ricoh Afficio MF 161 - Faded Copies
Q: I am working on this machine that was called out for lines on the copy. I cleaned the optics and replaced the drum. Now I am getting a perfect copy when printing, but when copying on the left side about 2 inches in, it is very faded. The rest of the copy is dark only when copying. It is like the mirrors are out of position. I checked them and everything seems to be ok. Any ideas, please let me know. Thanks in advance. 70
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A: It sounds like the drum/developer cartridge needs to be replaced. Q: I replaced the whole unit. It seems to be something with the optics but I don’t see anything out of place. A: Try cleaning the slit glass and, if needed, the laser unit.
Q: Thanks everyone for your responses. I went back out and it was a mirror out of place. A: I’ve had this problem several times— at the end of cleaning the mirrors you must air brush them.
Subject: Canon PC940 - Jams on Multiple Copies
Q: I have a customer with a Canon PC940 that runs one copy at a time just fine, but when you try to run more than one it jams and makes a noise. Any suggestions besides replace the machine? Thanks.
A: Jams where? Fuser, before fuser, paper feed? Give us something to work with. I know it is hardly worth the effort if the customer doesn’t want to pay a service call but call them up and ask them where, if toner is on the page, etc. Is it in the middle, sticking out and so on. A: I am having a déja vu. Or am I? I seem to remember this scenario on other old equipment. Not necessarily this make and model. Isn’t it the registration clutch? One feeds fine. But if the solenoid or (in the olden days) the wrap spring clutch is sticking, the reg rollers continue to turn and jams. Also, this can happen on some if the paper size is set incorrectly. Not an issue on these models. But the reg clutch on these gets all gummed up. If you can remove the side cover and watch during feeding you may see it. Or maybe it’s the paper feed clutch. Good luck. A: I’ve seen the sticky solenoid foam tape on lots of others, especially Canons, but this doesn’t have that. It could, theoretically, be a feed problem with feeding a second sheet, but I’ve never seen that particular problem on this model and I’ve seen probably a thousand of them. And of course, we have no idea what kind of jam he’s getting—are the copies blank, does registration shift, etc. And like you said, this machine does not sense paper size in cassette. Reg clutch problem means We Saw It In ENX Magazine
usually it’s either not stopping the paper (which will look half blank with lead edge in middle of page) or it’s a complete stop. Q: As Paul Harvey would say, “And now the rest of the story...” One copy at a time works fine. On copies of two or more the first copy comes out fine but the second jams right in the nip of the reg roller, but it works fine through the bypass though. Thanks.
A: Since you can’t run multiple pages through the bypass, that doesn’t help as much as usual for troubleshooting. You said “at the nip of the reg roller.” By that, do you mean the lead edge is at or in the reg roller? If the lead edge is past the reg roller, it should have print on it at normal registration if it is not the reg clutch. It does sound like the reg clutch is hanging up but usually if it does it allows paper to pass right through. But who cares what is “usual.” I had one in my shop last week that after repairing a broken frame tab (sheet metal screw) copies would shoot right through and the reg clutch would not engage; no pause. Not feeling like taking the clutch apart (I don’t remember if that one is easy or not and I was lazy) I just sprayed the reg clutch area with carburetor cleaner or some solvent in my garage. Within two copies, the machine came back to normal and ran beautifully. I think in my case, my home-made repair with an oddball spring and sheet metal screw may have overpowered the clutch. But you can try the same thing; or, just pour some alcohol over the clutch. A: I seem to recall the feed rolls can be in wrong. The rubber part is not in the plastic holder correctly.
Q: Thanks for all the input! We sold them a new machine instead.u Tips appearing in this section are reprinted courtesy of Smarka! The Copier Tech’s Info Source. Tips are randomly selected from submissions emailed to Smarka! Smarka! and ENX Magazine make no guarantees as to the accuracy of tips presented here. Email your tips to Tips@smarka.com. All tips become public domain.
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