IKON Executives Assume Responsibility for Ricoh Americas

The rumors were confirmed yesterday as the executive team from IKON assumed all of the senior roles at Ricoh Americas.

Kevin Togashi announced in a memo to Ricoh and IKON employees

“First, to manage the asset value and to execute governance of all of our sales companies in the Americas, I will be leading a newly formed holding company, Ricoh Americas Holdings, Inc. (RAH), as Chairman and CEO. RAH is a wholly owned subsidiary of Ricoh Company, Ltd. and owns 100% of the shares of Ricoh Americas Corporation. Ken Tokuhiro will report to me and assist in developing the role of RAH in the Americas. I am excited about my new role and look forward to continued involvement with Ricoh Americas in this new capacity.

Second, I am pleased to announce Matt Espe’s appointment to Chairman and CEO of Ricoh Americas Corporation. As Chairman and CEO of IKON since 2002, Matt’s strengths in leadership and vision have delivered outstanding results for IKON, and his recent responsibility leading the business improvement teams gives him a strong foundation to lead Ricoh Americas. In addition to Matt’s role leading the day-to-day operations, he will also oversee the integration planning for Ricoh U.S. and IKON.”

Matt Espe announced in his memo:

“We have a lot of work ahead of us, but also a tremendous opportunity. As we enter FY10 and develop our integration plans, we will pursue a balanced business approach with three key objectives:

• Growing revenue and increasing market share through an unrelenting focus on our customers and our dealer channel and by delivering the most valued products and services in the industry.
• Increasing our efficiency and creating the most competitive organization in the industry.
• Attracting, retaining, motivating and developing the best team in the industry as an employer of choice, while remaining committed to living our values and conducting business with the highest level of integrity.

In order to accomplish these objectives, I am pleased to announce a new Ricoh Americas Corporation leadership team that will report to me and have responsibility over the entire Ricoh Americas organization, including IKON. In addition to the day-to-day operations, this team will work closely together on developing a multi-step integration plan for Ricoh and IKON in the U.S. The following leadership structure will be effective April 1, 2010:

• Martin Brodigan will take on a new role as Executive Vice President and CFO, with responsibility for leading the Finance organization for Ricoh Americas Corporation, with both Dennis Dispenziere and Henry Miller reporting to him. He will also have responsibility for Ricoh Canada and Ricoh Latin America, with Glenn Laverty, President and CEO of Ricoh Canada, and Peter Stuart, President and CEO of Ricoh Latin America reporting to him. In addition, Martin will be responsible for the Business Development team led by Vince Roma. Martin brings a strong background to this role, most recently as President and CEO of Ricoh U.S. Prior to his current role, Martin held the position of CFO for Ricoh U.S., served as President of Ricoh Canada for eight years, and held other leadership positions throughout his 19 year tenure with Ricoh. Martin will bring strong leadership and experience to his new responsibility.

• Jeff Hickling will take on a new role as President and CEO of Ricoh U.S., with a leadership team who will have operational responsibility for both Ricoh U.S. and IKON. Jeff’s background and experience will be instrumental leading this team and developing our integration plans. In his current role as IKON’s President and Chief Operating Officer, Jeff has responsibility for IKON’s U.S. sales, services and operations functions. Since 2005, he has held responsibility for supply chain and customer administration, and played a key role in IKON’s Oracle stabilization. Jeff will send additional information to all U.S. employees shortly to provide more detail about the Ricoh U.S. structure and integration planning.
Rounding out the leadership team for Ricoh Americas Corporation are the following direct reports:

• Mark Hershey, IKON’s Senior Vice President and General Counsel, will expand his role to Senior Vice President and General Counsel for Ricoh Americas Corporation, with Allen Hans reporting to him.

• Hede Nonaka, Ricoh’s Executive Vice President of Marketing, will become Senior Vice President of New Business Development, with responsibilities including strategic alliances such as IBM. Dan Murphy will report to Hede.

• Shun Sato, Ricoh U.S.’s Senior Vice President of Corporate Marketing, will succeed Hede Nonaka as Senior Vice President of Marketing for Ricoh Americas.

• Tracey Rothenberger will continue to lead IT as Senior Vice President and Chief Information Officer, expanding to a Ricoh Americas role.

• Donna Venable will continue to lead HR as Senior Vice President, expanding to a Ricoh Americas role.

• Ike Kakegawa, Vice President of Environmental Sustainability, will continue to have responsibility for environmental initiatives.

• Akira Oyama, Joji Tokunaga and Steve Poole will form the Strategic Management Office to help lead our integration planning and improve strategic alignment.”

Jeff Hickling then went on to announce:

“In conjunction with Matt’s announcement of a new leadership structure for Ricoh Americas Corporation, I am announcing an integrated leadership structure for Ricoh U.S., with leaders that will have day-to-day functional leadership for both Ricoh U.S. and IKON. Additionally, these leaders will oversee the development of functional integration plans. The following senior leadership team will report to me effective April 1, 2010:

• Mark Bottini will lead the direct Sales organization as Vice President, Direct Sales, Ricoh U.S. Dave Greene will report to Mark with continued responsibility for Ricoh Business Solutions sales, and IKON’s four Regional Vice Presidents will continue to report to Mark with responsibility for IKON. In addition, Associated Business Systems and Automated Business Products, both Ricoh companies, will report to Mark.

• Kiyo Shimizu will continue to lead the dealer channel for Ricoh U.S. as Vice President, Dealer Division, Ricoh U.S.

• Glen Mandernacht will lead Technology Services as Vice President, Technology Services, Ricoh U.S., with responsibility for the Ricoh U.S. and IKON service teams and operations. Brian Murphy will report to Glen.

• Tom Hammond will lead the Customer Administration / Customer Care organization as Vice President, Customer Administration, Ricoh U.S. and Dan Piccoli will report to Tom.

• Suzanne Shenk will lead our Supply Chain operations as Vice President, Supply Chain, Ricoh U.S. Hank Ando and Dan Piccoli’s current Supply Chain direct reports will report to Suzanne.

• Tim Vellek will continue to lead the Production Printing Business Group (PPBG) as Vice President, PPBG and Matt Sakauchi will continue to lead the Office Printer Business Group (OPBG) as Vice President, OPBG.

• Vic Rainsford will lead Enterprise Services as Vice President, Enterprise Services, Ricoh U.S. Enterprise Services includes Managed Services and Professional Services, as well as the Ricoh Technology Center and the Solutions and Services Business Group (SSBG). Carl Sills and Mark Minshull will report to Vic.

• Mike Dane will lead a new Ricoh U.S. marketing organization to support both the direct and dealer business as Vice President, Marketing, Ricoh U.S. Mark Boelhouwer will report to Mike.

• Gary Crowe, Vice President, Finance, Ricoh U.S., will provide financial support to Ricoh U.S. and will report to Martin Brodigan.

• Mark Pagenkopf, Vice President, Human Resources, Ricoh U.S., will provide HR support to Ricoh U.S. and will report to Donna Venable.

This new U.S. structure is the important first step in building the plan to integrate the Ricoh and IKON team. As Matt mentioned, we will continue to explore business synergies and are excited to blend cultures, including foundational elements such as vision, mission and values, organizational vitality, and diversity and inclusion.”

I assume next week the announcement will come out that Ricoh America’s headquarters is moving to Malvern…….

ITEX 2010—What a Great Event

Wow, ITEX was phenomenal this year. For those of you that attended, and there were many, I know you agree because I have heard the feedback. What makes ITEX such a great show? To me the number one attribute of ITEX is the networking opportunity; most of the industry decision makers attend the show. When I say decision makers I mean dealer/reseller principals and senior management. Company owners and senior management have a unique perspective on the industry and having the opportunity to speak with thousands of this group provides untold benefits to all, including companies like mine in the consulting field.

The second benefit of ITEX is the education. Unlike many shows, where the sponsors get all of the speaking spots (Nothing against listening to a software or hardware vendor giving their perspective on the industry but after all, won’t the vendors pay you to listen to them), ITEX vets the presenters and chooses those that bring benefit to the dealer/reseller community. For less than $100, the entry fee, attendees get to choose from dozens of educational tracks on all aspects of the business. SD has presented for years and this was the first year we had a booth at the show, and we were asked to speak months before we were asked to consider exhibiting.

If I had to critique the show I will say that I was disappointed with the “Hybrid” moniker. Every time I hear hybrid I think of a car or fuel option. It seems to be the most over used word in the English language these days. I can’t pick up a newspaper or magazine without reading about some company, industry, or option presenting themselves as hybrids. I think it supplanted “solution” as the most ubiquitous word in the business press. ITEX is more than the hybrid dealer, covering education on all aspects of running a successful company. That was reflected in the educational options offered at ITEX.

Strategy Development consultants presented in many areas of the business and each of our classes had approximately 200 participants. David Ramos presented on self managed teams and opportunities in the color space. Ed Carroll presented on professional service. Mike Woodard presented on creating the ideal service and IT team as well as managing the base to control service cost. And I (Tom Callinan) presented on repositioning your business model, which was essentially business planning.

So if you look at the educational offerings presented by Strategy Development we covered sales management, color opportunities, professional services, service operations, and business planning. And, there were dozens of other well (albeit the SD seminars were sold out…) received educational offerings.

If you missed ITEX you missed a great event, and we missed you! We’ll be at the BTA Northeast and Southeast events as well as InfoTrends Solution Summit 2010 in Chicago. Like ITEX, all of these events provide a great ROI. The BTA events have solid education and networking opportunity, on a regional level, and InfoTrends provides enough research to make the trip well worth the effort. If you cannot make these great events we hope to see you next year at ITEX 2011 in DC.

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.

What is MPS?

Yesterday, Document Solutions Daily, a great publication available by subscription, had a link to a blog post titled “MPS Isn’t Just for the Big Boys.” Although the post details what can be described as an admirable job by a sales person to place a MFD, and that sales person works for a well known and respected copier company—so this commentary isn’t directed at either the sales person or the employer—does the post really describe an MPS agreement?

I ask the question for two reasons. First to define the MPS space, because if selling one MFD to replace an older MFD and some printers is MPS we may as well simply pull out the market size stats that have been put forth by Info Trends, Gartner, and IDC for the last few decades and change the title at the top from “copier and printer market” to “MPS Market.” It seems like anything with MPS on it sells so why not? Second is focus, the MPS space is a high growth high profit business today so should dealers / resellers really be looking at single placements of MFDs as an MPS opportunity?

Don’t get me wrong—I want sales professionals that can solve problems to get me new customers and retain those customers. If I still owned a copier dealership I would want them to sell copiers and I would want reps with problem solving skills to sell MPS. But I would clearly define my MPS space so I am not spending time in areas with little to no ROI.

Few companies with 250 – 1,000 knowledge employees are in MPS contracts today so why deploy resources at companies with fewer than 10 employees? Moreover, why focus on the hardware placement when the profits are in the aftermarket? We shouldn’t be measuring MPS by selling and MFD….we should be measuring MPS by how much recurring revenue it brings to our business. Strategy Development has been encouraging traditional copier dealers to get away from measuring sales success by hardware sales and to start measuring sales success by aftermarket growth. If you own the contract on the equipment you will sell the equipment.

So congratulations to that sales professional and the company mentioned in the blog—it appears as if you helped that customer solve a business problem with the correct MFD. But I would encourage companies to take a rifle approach to MPS and focus to the sweet spot, companies with 250 – 1,000 knowledge worker employees. Once that market is saturated with MPS contracts you can work your way down the food chain if you find it necessary and profitable. Don’t lose focus just yet!