Delivering on the MPS Promise30 Aug, 2012 By: David Ramos
I have read articles recently and also in speaking with the independent dealer community have heard firsthand accounts a groundswell of negative pushback regard MPS’ failure in delivering on its promises of increased revenues and margins. Questions and doubts regarding profitability, market positioning, and sales structure abound.
First, you have to put a specialist in place when launching the initiative because the general line needs to continue to focus to hardware sales so that revenue stream doesn’t disappear. New initiatives, in order to be successful need 100% focus. Second, you need to have a compensation plan that rewards net-new contracts and compensates on clicks captured. Third, your team needs sound training on the sales process related to MPS. Of note, they need to be really good at assessments, because there are no shortcuts in an MPS sales cycle.
MPS converts unknown variable costs into known fixed costs, reduce help desk calls, eliminates multiple vendor and department involvement tied to supporting the fleet, reduces hardware downtime and efficiently controls the printer supplies. The result is freed up IT resources, elimination of the need for a company to inventory printer supplies, it extends the useful life of the fleet, and there is an improvement in end user satisfaction.
Today, most companies have undocumented and/or fragmented budget costs for printing and imaging, which are the result when IT, Purchasing and Facilities rely on multiple vendors for their printing assets and multiple manufacturers for their hardware needs. They receive multiple invoices per month for consumables and services, and the IT staff, which is increasingly understaffed and over tasked in these tough economic times, is tied up in non-value-added maintenance tasks. Information Week publishes an annual Top 10 for CIO focus areas and of note is the fact that 80% of IT spending is likely to be focused on “keeping the lights on.” Basically, managing the existing infrastructure, if you will. Yet at the same time the CEO is looking for IT to contribute to improving business results.
So what improves business results, dealing with output devices? Gartner estimated that 23% of IT help desk calls are printing and copy related. That is valuable IT time taken up in a non-value add a reactionary issue which takes away from more strategic projects.
When prospecting for MPS opportunities, you focus on an understanding of the existing environment and seek agreement from the prospect of the inefficiencies/problems they currently face with managing their printer fleet. The value proposition focuses on the advantages of managed print services and how with an effective MPS provider the pain points will be addressed. You also are focused on validating the ability of the party you are meeting in effecting and approving change withintheir organization. Without this it is pointless to move to the next phase, the assessment.
This article assumes you have, at this point, gained support of a decision making executive (when I taught MPS during my time at Strategy Development we would call this person your “advocate with juice” or your “champion” / http://www.strategydevelopment.com) and have agreement from that executive on the pain points of an unmanaged output fleet. With your advocate in place and agreed upon pain points, you have built your business case for moving forward with the assessment phase of the sales process…and here is where it all goes wrong.
The mistakes frequently made by managed print specialists when conducting assessments, and the reasons for their low close ratios on contracts are:
1. They want to use a non-disclosure before doing an assessment. If you have an advocate with juice and have built your business case through pain, why would you put an obstacle in place for getting the assessment completed?
2. They take on doing an assessment for the 200+ printer installation with their largest customer first. There is a learning curve involved, learn on the smaller installations and work your new process for service and back office operations
3. They believe by using ONLY a Data Collection Agent – (DCA) they will collect the data faster and more accurately.
4. They believe DCA software will give them 100% of the information needed to create a financial proposal.
5. They miss key data by not conducting an effective walk-thru of the prospects environment. A walkthrough of the facilities helps identify connected printers not scanned by the key, local printers, the remaining imaging and print devices such as faxes and stand alone copiers and looks for redundancy in technology i.e. printers, faxes, scanners and copiers all in the same workroom or office location. It also allows you to talk to end users about how they use the printers in their area and where they store their “local” supplies.
6. This isn’t a slam on software companies, my point is, the software is a tool but isn’t a replacement for doing the walk-thru.
The points mentioned happen all too often and are the result of either overcomplicating or trying to simplifying the process by skipping the walk-thru and missing key data necessary to ensure a high close ratio on contracts. Remember the key goal of MPS is to manage then optimize your prospect’s imaging and printing environment, and to balance cost, ratio of employees to assets, and technology.
It is critical to assess the entire imaging and printing fleet, not just the printers, many specialists lose sight of that and focus on desktops only. This speaks to the level of detail you need in your walk-thru. In an initial walk-thru assessment of an imaging and printing fleet of 50 to 60 assets it will take between 90 to 120 minutes to complete, and there are variables like the level of security in a building, the layout but the 90 to 120 minutes is average. You want to identify scanners, fax units, copiers, data center printers, digital duplicators, etc.
Quickly, let’s identify the tools to conducting the assessment and an effective walk-thru to identify their imaging and printing environment.
1. Rapid assessment key (RAK) or data collection agent (DCA) tool.
a. You can make the assessment process easier with tools like FM Audit’s WebAudit. WebAudit is a perfect complement to the managed print services sales process. Conducting a print assessment with a USB key requires two visits to a client: one visit for the initial meter readings and a second visit for the final readings. While the first meter reading is typically conducted on a sales call where the rep proposes an assessment, the second meter reading is often an inconvenience to the client. FMAudit enables one call assessments. Simply use the USB key to take the meters on the first visit. For the second meter reading, simply email the WebAudit link.
2. Guide to pulling a device’s meter count manually for local printers and faxes.
3. Digital camera or cell phone with camera, this data is very effective in communicating their situation when you get to the financial proposal. Visuals help communicate the story to everyone involved, from finance, to facilities to IT.
At the conclusion of your assessment process you should have all the data you need to work through a strategy with the prospect and create a compelling proposal for closing the contract.
You can be successful in MPS; you can realize increased revenue and margins. It requires dedication and focus, the same dedication and focus that made your company successful in hardware sales. You want to close more MPS contracts and build up your MPS program? Ensure your specialist know how to conduct thorough assessments. Don’t allow them to overcomplicate or simplify the process; be thorough but flexible as each situation will be slightly different. And remember, it will be impossible for anyone to justify MPS on a Total Cost of Ownership (TCO) basis without the necessary information so you have to work hard to get it.
Article by by David Ramos, Industry Consultant. Formerly with IKON, Strategy Development, Inc., and other organizations, Ramos has key experience in dealer and vendor sales management, consulting and training, including on MPS. Contact him at David_Ramos@infotrends.com.