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Is MPS Maturing?

28 Jun, 2013 By: Kevin DeYoung, Qualpath


Managed Print Services continues to be in the headlines. There is much dialogue about MPS, its viability, best practices and threats to the model.

Some current MPS headlines and opinions are:

  • MPS is Maturing
  • Profit Margins are eroding
  • Prints are diminishing
  • Tablets are diminishing prints
  • Young people don’t use paper
  • The paperless office
  • IT Spending is up but print spend is down

All can be argued as accurate. Data can be convoluted to whatever you want it to be. Let me share with you a business premise I’ve always believed in.

Darwinism. Two animals one island, both eat the same food leading to one survivor. Darwinism is not “survival of the fittest”. Darwin states “It is not the strongest of the species that survive, nor the most intelligent that survives. It is the one most adaptable to change.” In the example noted, if one animal adapted to eating different food co-existence would be possible.

The MPS Business Model provides the best foundation to adopt. The model takes an organization from print fleet management to business process optimization and perhaps managed services. A road map exists that can evolve for the provider and customer in a progressive continuum.

The MPS Model is attractive. Growth continues to be forecasted. A problem I’m seeing emerge is that rationale is shifting based on infrastructural availability devolving into product for price.

“Managed” Print “Services” is what MPS is. MPS in many cases is executed more like:

  • “PS” without the “M”
  • No “S” to the something being offered
  • Something that can’t use the “M”, the “P” or the “S”
  • Things that are products and not really services
    • Toner only Contracts
    • Toner and Service Contracts
    • Toner, Service with new Equipment

It’s common when I speak with customers who say they are doing MPS that they’ve engaged in a contract for toner and service fulfillment. There was little planning staging, no business reviews, no optimization, nothing.

This is not MPS, it’s a product, easily measured for a price, subject to margin erosion, and commoditization, something that will mature rapidly and won ultimately by infrastructure providers with the best economies of scale. Yes, its growth now, even in a commoditized form, but the base premise was problem solving through evaluation and non-off the shelf solution execution that could lead a provider and customer to improvements in a fashion not found before.

I quote Theodore Levitt. “Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. In every case the reason growth is threatened, slowed or stopped is not because the market is saturated. It is because there has been a failure of management.”

Industries that blew it:

  • Railroads; defined itself as being in the railroad business instead of transportation
  • Hollywood; defined itself as the movie business instead of entertainment
  • Electricity (utility) Companies; defined themselves as being in the electricity business not energy

Faith in static product definitions leads to decline.  For railroads the need to transport goods and people never went away, however new methods surfaced. Many Hollywood Movie makers went under because they snubbed their noses at television. Would they have gone under if the definition of their business was “entertainment”?

Managed Print or Management of Business Processes?

Product Orientation vs. Customer Orientation leads to decline, there is no such thing as a growth industry. To quote Theodore Levitt; four beliefs that lead to stagnation in “growth industries”:

  • Growth is assured by expanding populations
  • The belief that there is no competitive substitute
  • Faith in mass production and declining unit costs
  • Preoccupation with tweaking/improving existing product

Customers don’t want Managed Print Services; they want improved cash flow, increased human resource production, decreased expenses, improvement in competitive positioning, business sustainability, etc.

The Managed Print Service Association (MPSA) opines the following definition of MPS: “the active management and optimization of document output devices and related business processes.  Managed Print Service is not a click-charge, click charge with meter reading, or a marketing sales program.”

Is MPS Maturing? Theoretically yes. However execution of MPS is not. Infrastructural execution is maturing (supplies, break-fix) however the professional services that surround MPS are not maturing:

 

Assessment

Planning & Print Policies

Optimization

Ongoing Management

Understanding Requirements

Business Process Optimization

Enhancements to Document Flows

Human Resource Optimization

 

What is a print? I’ve always thought of prints as “imprints”. Webster says an “imprint is the optical counterpart of an object produced by an optical device (lens/mirror). What is on a page is migrating to the monitor, that’s the new print, but MPS addresses that in developing stages.

MPS by is a service-based solution if the “M” and the “S” are executed and not confused by off-the-shelf infrastructure or pricing schemes. Instead of looking inside our industry for answers we should look outward by focusing on the customer. Remember customers don’t want MPS, they want what it delivers.

My opinion about MPS has changed over the years. Here a comparative of my opinions in 2008 vs. 2013:

 

2008

2013

Prints are growing

Prints are digital and growing

Hardware is a irrelevant

Hardware connecting to the cloud, app-based, & ties to business processes is important

The Value Proposition ties to efficiency and reduced costs

The Value Proposition ties to the customer’s strategic objectives

Supply Service efficiencies are important, developing and different

Supply Service efficiencies are mature and similar

MPS competition is low

MPS competition is fragmented

MPS is a land grab

Still a land grab but there are weeds in some of those parcels

Customers need to be educated on MPS

Customers need to be deprogrammed on MPS

It’s about the ability to sell services

It’s about sharing & conquering challenges

Assessments uncover tangible data

Assessments uncover business gaps that impair business

Reps need a comp plan that ties to MPS to drive results

Reps need to be mentally wired to solve problems, comp plan is academic

You have to do Business Reviews

Business reviews have to be bearing gifts

Reps need to follow the MPS Sales Cycle

Reps need to understand the facets of business & requirements analysis and process improvement.

 

The original issues:

  • MPS is Maturing
    • Maturation does not equal saturation
    • It remains a growth opportunity
    • Define it as a customer centric solution
    • Execute Managed Print Services not “toner/supply agreements”
  • Tablets are declining prints
    • Tablets can print
    • Content is exploding
    • Are your devices connecting to them?

Our prints are not declining. We have made the burdens go away, lowered the spend, and people previously consumed with managing the fleet are now performing their core jobs functions. When something is no longer a problem it gets used more.

Tablet printing is not an offset to the prints they are taking away, but they also are not going to suck all the prints out of the universe. Mobile platforms and the need to control BYOD are an opportunity to assist clients with security and efficiencies when it comes to managing their documents.

  • Prints are declining
    • I hope we are the reason
    • Don’t run from it, run to it
  • Margins are eroding
    • What is your
      • Pricing Strategy?
      • Prospective Customer Target Profile?
      • Positioning?
      • Contract Terms?
    • Are you responding to bids?
    • Are you doing contract profitability analysis?
    • Are you doing business reviews?

Prints are going to migrate to the monitor; run to it. In the meantime prints are (at least in my world) not declining. The best barometer of print volume is what the actual customers are doing in your market.

Margin erosion causal factors are typically poor customer targeting, a formless value proposition, poor onboarding of the client, little if any contractual reviews and the inability to say no to bids or customers that just want CPP contracts in the disguise of MPS.

  • Young People don’t use Paper
    • They use less
    • Business Processes, not data on a page dictate our business
    • Follow the data
  • Paperless Office is Coming
    • See commentary on prints going away
  • It Spending is up, but print spend is down
    • Spending is up for cloud based initiatives
    • We are a reason why the print spend is down

Conclusion Ideas:

  • Prints are data on paper
    • Data on paper is migrating to the monitor
    • Follow the data, improve how it flows
  • Document Specialization is evolving to Business Analysis and Process Improvement
  • Pursuing paperless without regard to process improvement is a fool’s errand
  • Assessments have become business & system analysis, requirements analysis and process improvement consulting.
  • Positioning with the customer is everything
  • Targeting the right profiled customer is essential now more than ever
  • Ask what documents are being printed/scanned and what is their importance
  • MPS is an evolving model that goes beyond managing prints

Managed Print Services needs to be said, abbreviations sometimes change the value of the intended meaning. As long as one is “managing” and “servicing” with a customer centric focus the path forward is unlimited.
 

Kevin DeYoung is president of Qualpath. After graduating college he worked at Burroughs Corp. (now Unisys), selling fax machines. In 1986 he founded Ameritrend Corp., an Inc. 500 Company operating in the IT space. He later became president of Kodak’s Latin America division. In 2001 he started Qualpath, to focus on MPS; he also serves as the Vice President of the Managed Print Services Association. Visit www.qualpath.com for more information.

 




About the Author: Kevin DeYoung


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