Is Your MPS Initiative Headed in the Right Direction?30 Aug, 2013 By: Miles Herman, LEAF Commercial Capital, Inc
Managed Print Services (MPS) isn’t dead as an offering, but it is certainly evolving at an ever-increasing rate. Originally devised as a means of containing the enterprise-wide expansion of printer fleets and the attendant expense, a comprehensive MPS solution today not only manages cost, but also extends into many additional areas. Equipment vendors are adding value to their MPS solutions—and directly to the customer as well—by bundling a wide range of services that all fit under the MPS umbrella. Understanding the shift between a cost-based approach and a value-based approach is the key to understanding the new MPS delivery model. It is also the first step in developing the next generation of MPS offerings that will ensure that your organization is moving in the right direction with regards to managed services.
The Proliferation of Print
Before one can understand where MPS is headed, one should first understand where it came from. This might be old hat to seasoned industry professionals, but for many industry newcomers, it is an important part of an evolving MPS strategy.
Over the past several decades, as desktop technologies advanced, printers, scanners and copiers began to sprawl across the corporate landscape. Feature-rich devices became increasingly powerful while paradoxically becoming smaller and less expensive. When viewed through the lens of corporate middle management, it seemed to make sense to equip personnel in various departments—or at least the departments themselves—with as much cutting edge technology as internal operating budgets would allow.
This approach would yield massive gains in personal productivity, at least theoretically. It would also make life a lot more convenient for employees who could print, scan, copy and fax directly from their desktop or department office.
When viewed through the lens of senior financial management however, the equation changed a bit. Although the cost of operating a single printer, scanner, or copier—often bundled into a single device with multiple functions—was relatively small, the total cost of these devices across the entire enterprise was significant. Furthermore, department managers and their employees typically were not aware of the related costs of these devices, nor were they held accountable for them. The cost of printer and copier supplies such as paper, toner and print cartridges was often lost in the departmental budget shuffle.
These costs added up, and when corporate controllers began to assess the Total Cost of Ownership (TCO) for their enterprisewide fleet of copiers, printers and scanners, the number was often enormous. Once it became apparent that these costs were out of hand, the need for MPS solutions became self-evident.
Managing the Total Cost of Ownership
When office product customers began to analyze all the component costs of printing across the enterprise, it quickly became apparent that there was a serious budget problem. The implementation of MPS systems by experts—the dealers and resellers who were already supplying the copiers and printers—was a logical solution. By this point in time, Cost Per Copy (CPC) billing was an industry standard. Instead of paying for the copier up front and then buying all of the necessary supplies, equipment vendors were offering a fixed price for each copy made. The CPC model made costs predictable, but it really did not serve to contain them.
MPS took CPC to a whole new level. Instead of simply fixing the cost of a single copy, dealers and resellers began adding services to help corporate management not only calculate their costs, but begin reining them in. Printing and copying experts from the dealership would work with the customer to optimize the fleet of corporate copying, printing and scanning devices in order to maximize efficiencies and reduce costs.
MPS provided an opportunity to help companies contain the escalating costs of printing and copying across the enterprise and to operate more efficiently. More importantly however, MPS did something else. Equipment dealerships began to leverage the MPS platform and solution as a foundation upon which to expand their relationships with their customers, while building loyalty, shutting out the competition and increasing sales. As an equipment vendor’s footprint within a customer’s business expanded, so too did the overall relationship. In this way, the MPS solution model provided tangible benefits to both the customer, and directly back to the dealer as well.
Adding Value to Evolution
Today companies of all sizes face new challenges when it comes to their printer and copier fleets, well beyond the basic issue of cost control. The evolution of technology is bringing together many diverse functions that previously existed as completely separate entities within an organization. This trend became apparent as large, high capacity copiers made their way onto corporate networks.
Document management systems followed along closely and continued to evolve while merging and converging with other technologies. As an example, security systems that protect not only data but the physical plant are now often a part of the corporate network. The same applies to the data and voice communication infrastructure that are now fully integrated into enterprisewide networks and that interface with virtually all of the devices that are attached to the network. This convergence of technology has created a wide range of opportunities for equipment dealers and resellers, particularly for those who already have an existing MPS presence with a particular customer.
In much the same way that office equipment vendors were able to control printing costs through MPS programs, today they can also help organizations gain control over evolutionary and rapidly expanding technology solutions. Furthermore, new trends in the green workplace along with the rapid integration of mobile technologies into corporate technology platforms provide even more opportunities for Managed Services solutions. A dealer with the appropriate skill sets can help address environmental impact concerns, while also taking advantage of the benefits and productivity gains offered by mobile technologies.
Needless to say, the evolution of technology within customers of every size is happening at an increasingly rapid pace. Forward-looking dealers, particularly those with active MPS/MS solutions in place, are perfectly positioned to capitalize on these new developments. They are taking the necessary steps to develop offerings that extend beyond the traditional confines of the office equipment space by embracing the new technologies and devising ways to become involved. This is accomplished by transitioning to a more comprehensive approach that bundles a wide and diverse range of services and then manages them.
These solutions allow the customer to focus on their core business while off-loading increasingly complex technology issues to a trusted partner, while reducing costs in the process.
A Team Approach
One of the biggest challenges that an office equipment vendor faces in offering a wider and deeper solution is finding the requisite expertise necessary to implement it. Many office equipment dealerships have found success in this regard by first partnering with their finance company. The finance company serves as the hub at the center of the MPS solution, not only by providing funding, but also by helping to coordinate the billing and payment for all of the solution providers.
Dealers and resellers who implement state-of-the-art MPS solutions today understand that it is not a requirement for all of the necessary professional expertise to originate in-house. By partnering with other vendors and providers in different industries, the dealer can establish a virtual partnership that comes together to deliver the solution. The biggest challenge with this approach is the coordination and management of not only the various professional organizations, but the administration of the joint effort as well.
A progressive finance company can streamline the process very effectively in several ways. First, a finance company that has been around for a while typically has a pool of expert professional resources, both internal and external, that it has worked with in the past. The virtual team has already proved itself and has an established track record, minimizing the risk of bringing outside entities into an existing customer relationship.
Second, the finance company serves as the glue that holds the entire solution together. Invoices are processed and submitted, payments received and funds disbursed according to the MPS solution plan. Along with the finance company, the office equipment vendor is at the center of the solution, which is both profitable and beneficial in terms of long-term relationship building with the customer. Regardless of how many vendors and providers are involved, the originating dealer remains the single point of contact for every interaction with the customer.
The team approach that enables a complex MPS solution to be possible is an excellent way to expand business volume without a corresponding investment in human resources, training, and infrastructure.
If you are an equipment vendor or reseller that delivers MPS solutions, now is a good time to evaluate your MPS strategy. MPS presently encompasses much more than an organization’s printer and copier fleet. To reflect this change, many vendors are eliminating the reference to print altogether, and simply calling their offering Managed Services.
Whatever you choose to call it, the new direction of MPS/MS is for an equipment vendor to expand into a wider and deeper offering. This approach represents a fundamental shift from a focus strictly limited to cost control to one based primarily on value. Many equipment vendors are adopting an end-to-end view of solution planning and implementation that extends well beyond the lifecycles of individual pieces of equipment.
In the final analysis, the shift to a value-based approach is the most important consideration when determining how your organization will implement MPS or MS. Cost control will always be important, but it is no longer the primary, driving factor in an MPS environment. Dealers and resellers are instead focusing on the end-to-end value that they deliver to many different aspects of their customers’ business.
Like everything else in business, particularly where technology is involved, MPS is evolving rapidly, and becoming more important in the process. Customers are looking for the turnkey, comphrensive benefits that a well-designed—and well-executed—MPS/MS program can deliver. To succeed in this space, there are two things to consider. First, move quickly. Agility in the marketplace is invaluable. Second, focus primarily on delivering value, and then on managing costs.
Mr. Herman is President & Chief Operating Officer of LEAF Commercial Capital, Inc. since its formation in 2011 and held a similar position at LEAF Financial Corporation starting in 2001. Mr. Herman has more than 25 years of operations experience at commercial finance & leasing companies in various senior executive operational roles with Fidelity Leasing, Inc. and its successor, the Technology Finance Group of CitiCapital Vendor Finance, as well as Tokai Financial Services, LSI Leasing Services, Inc., and Master Lease Corporation.