The Road Map to Reposition Your Business Model

There are untold numbers of industry players “shouting from the roof tops” about MPS. Opinions vary widely on everything from the definition of MPS to what will happen to your company if you do not enter the MPS space today. Regardless of what decision you make to enter the MPS space—or not—or even to continue your business or sell, you should make that decision based on facts and not hype. At this ITEX seminar, taking place Wednesday 11:00 AM – 12:15 PM Tom Callinan, the leading expert in MPS and business planning, will be presenting The Road Map to Reposition Your Business Model. In this don’t miss seminar, Callinan will cover industry statistics and trends you need to consider in planning your next five years in the imaging industry. If you are attending ITEX this seminar is included with your general admission ticket. Arrive early as preregistration is extremely high.

How to Make Money in MPS

That seems to be the new theme of all of the MPS conferences and road shows. I guess just holding a MPS event is passé so the event coordinators needed a new theme. As a member of the leading consulting firm in the MPS space, I thought the theme was rather humorous. I mean could anybody really be in MPS and not be making money in a 56%+ GP business? Then, and this is true, As I was writing this blog post I received an e-mail from a dealer asking me for some free advice on how to fix his MPS business, on which he is “getting killed.” I took that to mean he is losing money.

This dealer principal explained that he had worked with two “consultants” on how to set-up his MPS program and inferred that they had sent him down the wrong path (he named the consultants but I will not). I’ll note that this dealer principal had spoken to me about two years back regarding helping him set-up his program and remarked that SD was too expensive; the two “consultants” in question seem to make a living speaking at vendor events about MPS so maybe he didn’t even pay them for their “advice.” Now after getting his bargain basement advice he wants to know how to fix his program for free? Doesn’t sound like much of a bargain….maybe Strategy Development was less expensive afterall.

The e-mail isn’t the point of the post I originally was writing it simply changed the focus slightly so let’s get back to the point. You can make a lot of money in MPS; the model is tried and true and Strategy Development has clients that have been executing on it for the last five years. If you go back and read the articles written by Strategy Development consultants you can pretty much design your own high profit MPS program based on our model. Those dealers and resellers that are committed to MPS—who invest in getting a real MPS program off the ground—are earning profits in excess of the copier model of 15%.

How do you achieve those returns? Not by going to conferences with a bunch of vendor’s giving you their spin on MPS; so you can stop doing that now and just add that expense back into your profit.

The first thing you need is an absolute commitment to building an MPS business. You need the same passion and commitment you had when you started the company you now lead.

The second item is an investment. I don’t know how to put it any other way except to state that you cannot rationally believe you can enter a new space without any investment, yet I see people trying to do it every month with MPS.

Third is an education. If you are a copier dealer that started your company you probably had experience in the copier space. If you are a VAR you probably had experience in the VAR space. Unless you have experience selling outsourcing (facilities management) it will be a long road for you to travel to learn the MPS space. You can travel that road alone but you’ll pay one way or another—either through mistakes or by investing in a consultant. An important note on the advice you seek: Make sure you are investing in real expertise. As the aforementioned e-mail demonstrates not all advice is equal.

Last, and tying into the commitment, is an open mind. Although MPS is about “putting marks on paper,” just like selling printers or copiers, it is not selling printers or copiers and it requires a different approach.
Follow these simple steps and you won’t have to worry about making money in MPS. You’re worry will be that more companies crack the code and start to experience success in your area!

The Obituary is Written: Is the Patient Dead?

“Long before digital tools such as listservs, e-mail blasts, and even Facebook enabled us to easily broadcast messages, photocopiers were the most efficient way to distribute information to groups of all sizes. If the boss needed to discuss a new company policy, workers got memos in their (physical) in-boxes or slipped under their office doors. Community newsletters, fliers for parties, and the oft-maligned Christmas letters in holiday cards were all made possible by the automated copying machine, which made its commercial debut 50 years ago.

‘It was democratizing technology,’ says Stephen P. Hoover, vice president of global software solutions for Xerox.”

Is it me or does this read like an obituary? It is from an article in the February 8, 2010 Fortune Magazine titled Paper Chase, celebrating the copier’s 50th birthday this year. Note the phrase I highlighted, which I think we sometimes forget: Copiers were used to distribute information. Is that the functionality you think of today when you think copier?

Many in the industry don’t want to talk about it but the copier is dying. Unit sales are dropping and are forecasted to continue their decline. More disturbing is that prints produced on mono A3 devices (devices with 11X17 platens) is forecasted to drop by more than 50% by 2013. Those clicks are your profits.

There is tremendous opportunity in all of this change, but it will not come naturally. If you plan and use some of the cash you are generating in your copier business to move into the services business you can generate more revenue and earn more profit than ever. You will also be able to make acquisitions of smaller competitors on the cheap—nobody is paying 5X adjusted EBITDA today.

I am instructing a seminar at ITEX 2010 titled “The Roadmap to Repositions Your Business Model,” at 11:00 AM Wednesday. I encourage you to attend. At the same time Mike Woodard, service consultant, will be instructing a service module on “….Managing The Base to Control Service Cost,” which is perfect for your service leadership. If you want more information contact Marc Theaman at Theaman@strategydevelopment.org

Top 10 CIO Issues for 2010

Bob Evans, VP of InformationWeek Global CIO Unit wrote this week on the focus areas for CIOs in 2010. When I read the article I started to think about where MPS fit in allowing CIOs to accomplish their goals this calendar year, and how to approach those regarding MPS.

Top 10 CIO Issues for 2010 per Bob Evans, VP of InformationWeek Global CIO Unit

1. The cloud imperative – Cloud computing takes the top spot because this allows for CIOs to really attack #2. Despite all the questions and concerns, it offers CIOs huge potential for flipping the 80/20 ratio and exploiting #3 (driving revenue growth).

2. The 80/20 spending trap – If the majority of your IT dollars are spent keeping the lights on, then how will IT organizations fund transformative and customer-centric projects?

3. CIO-led revenue growth and customer engagement – If you don’t become part of the company’s revenue engine, and you choose to keep yourself isolated from customers, how can you expect to be taken seriously in today’s economy?

4. Mastering end-to-end business processes – CIO has the chance to analyze and understand all business processes end-to-end. It’s a remarkable opportunity. Where is the waste? Where is the latency? How is the revenue mix changing? Where is the new-product opportunity?

5. Business Intelligence and Predictive Analytics – You’ve got plenty of data, but how much insightful information? Are you able to see over the horizon? CIOs that seize the initiative will have a huge advantage.

6. External information vs. internal information – What is going on outside your four walls is more important than what’s going on inside. What are customers saying about you? Do you talk back? Do you listen?

7. CIO priorities, CIO compensation, CIO evaluation – Does comp reflect growth and customers and market –centric innovation? Is performance measured by plumbing-style metrics or by business-value breakthroughs?

8. Vendor consolidation, with radical exceptions – For the past couple of years CIO’s have reduced the vendor list – but have you also cut access to innovative ideas? Have you connected with unconventional vendors whose solutions might help spark a breakthrough?

9. The mobile enterprise – If a team of peers, customers, and competitors were to do a day-long review of your company’s mobile capabilities, would you be eager to share the results with boss?

10. The transformation quotient – When the economy turns, CIOs need to be out in front with new ideas and leadership on how their companies can aggressively tap into the new opportunities that await while shedding old restrictions about what a CIO’s responsibilities area and what they are not.

This paints a pretty complete view of what is important in IT organizations today. Obviously MPS doesn’t address all 10 and that is ok. Number 1 is out obviously, unless you are already an expert in Cloud Computing with applications like Software as a Service (SaaS), Utility Computing, Web Services, Platform as a Service (PaaS), etc. in your portfolio of professional services. Also out are numbers 3, 5, 6, 7, 9 and 10. What, did you think MPS was going to eradicate every IT woe in the world?

How does MPS address numbers 2, 4 and 8 respectively?

Number 2 - CEOs are increasingly focused on IT strategies that aggressively shift budget dollars from an internal focus to external.

MPS accomplish this by allowing IT to reallocate their resources to more strategic external focused projects by shedding the managing of the fleet of printers. This also allows them to outsource a nuisance area because printers are not strategic in the IT world and they don’t like dealing with them. Typically they have no imaging or output fleet strategy because equipment, supplies and maintenance are reactive. I hear the objection coming…”What happens when the IT person I am working with wants to “protect” the employee that is doing four to 10 hours a week on printer repair?” A) You are at the wrong level. B) IT organizations of today/tomorrow will be tasked with generating revenue (see #3 above) and if they don’t understand this today they will soon enough. Maybe you are the resource to help them realize this.

Number 4 – Mastering end-to-end business process as it relates to an imaging fleet is difficult when investment in supporting the fleet is so fragmented over multiple internal budgets.

The assessment process in MPS allows for you to identify and quantify all of the cost related to managing and maintaining the fleet. The assessment will also find waste as it relates to how the fleet is utilized. You also identify waste in manpower, capital expenditures on hardware and costs related to maintaining and supplying the infrastructure. After completing the detailed assessment you will work with them, in the strategy session, on a plan to capitalize on this opportunity and manage what they have today. Over time they can reduce the investment with proper device selection and management.

Number 8 – Vendor consolidations… this is always a tricky obstacle.

In complex organizations where decision making is made up of multiple players you have to recognize that there are existing relationships with many of these vendors that you are suddenly trying to unseat. These vendors are engaged with numerous employees and functional areas, and possibly each of them has worked with their primary contacts in areas such as purchasing, facilities, IT, finance, etc. for years. I know MPS and the reduction of multiple invoices is a good talk track but what about the discussion on overlap in responsibility or the discussion on current procurement methods or the time each vendor wants with their primary contact and their getting involved with other functional areas. Each of these relationships takes time to maintain and that pulls resources from what they need to do on a daily/weekly/monthly basis.

The bottom line – MPS is not going to cure every IT organizations challenges but if you have the right discussion points prepared for IT’s focus areas you will have a higher probability of building a business case for moving forward.