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An interview With…Stephen T. Jones, Executive VP of Konica Minolta Business Solutions, U.S. Dealer Sales

7 Dec, 2004 By: Editorial Staff imageSource

An interview With…Stephen T. Jones, Executive VP of Konica Minolta Business Solutions, U.S. Dealer Sales

Stephen T. Jones joined Konica Corporation in 2001 as vice president of color
operations, but the former Sharp and Xerox executive soon found himself thrust
into the middle of a merger of two worldwide electronic heavyweights. In early
2003, Konica and Minolta Co., Ltd. announced they would combine to form Konica

Seven months ago, the industry veteran suddenly was playing a much larger
role in the company, heading up the 700 company dealer channel as the executive
vice president of Konica Minolta Business Solutions, U.S. dealer sales.

It’s been an interesting experience,” said Jones. “You can take this to the
bank; I don’t want to go through another merger. I don’t have much hairline left
at this point.”

After sifting through the hundreds of issues that had to be resolved to make
the merger successful, Jones says things are heading in the right direction. He
discussed the direction of the company with imageSource.

imageSource: With the newly merged company sticking with a dealer channel and
direct network, will each be expected to have a specific focus?

Stephen Jones: What we don’t want is each channel fighting each other. We are
trying to slowly sway both the branch and the dealer channel not to be selling
into each other’s accounts. If the dealer has a large account, it is
counterproductive to have the branch in there attacking that market.

IS: But that happens.

SJ: It does. It’s getting better, but I will say to you we want them both out
there getting new business. That’s the only way we are going to grow. And there
is plenty of room out there with all the new technologies we’ve got in color and
production print. Without both channels there is no way we can cover the market
opportunities right now. The two companies combined at about 12 percent market
share. Our goal by 2006 is to be up 20 points.  That doesn’t even get us up to
the Canon or Ricoh market share numbers. We drop either channel right now, we
would remain at about 12-14 points in the market.

IS: What have been the benefits of the merger thus far?

SJ: We have a strong product line right now. We have a new, refreshed product
line coming next year. I don’t think it would have happened without the merger.
In addition, the window of getting the products to market looks like it has
accelerated immensely. I think, long-term, we are going to be able to provide a
much better array of products at the solutions level to the customers.

A good example is our market share is growing immensely in color. That is
absolutely the place where we are focusing. When dealers are selling color into
their accounts it is much more profitable for them. So we’re going to be putting
more and more focus there. I’ve also invested in a solutions team. We have
partnered with about 8 to 10 software companies. I have people focusing in and
being educated in each of these products and how they mesh with our products so
when they go out and meet with the customer we can show an integrated solution.
We are focusing all kinds of resources in this area. This is quite honestly very
profitable versus what I call the commodity business. I’ve told my entire senior
team we’ve got to help our dealers become document partners for their customers.

Even the smaller dentist office or the two man law office has a server
sitting in their offices. They’ve got to have a printer that is compatible and
software to print off their workstations. I don’t see a lot of standalone
business being sold anymore. Everything is digital.

IS: Every manufacturer is discussing the importance of solutions now.

SJ: Everyone is talking about being a solutions vendor. We are really looking
at who we want to partner with, like the Objectif Lunes of the world. Then we
need to figure out what solutions are the best fit from a vertical standpoint
for our dealers because we can’t be an end all to everyone. Pharmaceutical and
banking is going to be big for us.

IS: But how do you differentiate yourself with software? Everybody seems to
have the same plan.

SJ: The key to it is to make sure you have the support system in place. I’ve
got to have people out there supporting the dealers with training. You need an
800 hotline for support so the dealer can get quick response. You’ve got to have
a plan in place to make sure you provide incentives to the dealer. For example,
I’ve put incentives in place for dealers if they want to get serious about
solutions. We’ll do some funding to help them hire people much like we did with
color. You also have to encourage the dealer to dive into this thing. More
importantly, give them a success model that makes sense.

The realism of this marketplace, if you talk to the dealers, is that if you
get into solutions, it is very expensive if not managed properly. We have a
business model we work on with them to help them figure out how they are going
to attack the market. The other mistake I see the dealers making is you can’t be
the end all to everyone. You pick the markets you want to attack, specialize in
those markets, get real good in those markets, and you have a shot at making a
pretty good buck.

As a company, we have, give or take, 20 software solutions. Could you as a
dealer imagine trying to support 20 software solutions? Take maybe three or four
you really want to get good at and set it up that way. You can’t do it all.
Let’s walk before we run.

IS: What would say the transition period would be for having any success in
software solutions?

SJ: I think you have to go into it knowing you’re going to have a year of not
making a lot of money. I hate to say it. We’ve had enough experience in it now.
I’m constantly asking the channel, what do you think? I’m getting about a year
before they see any hard evidence that it is worth the investment. By the way,
if you don’t stick with it I can tell you this, you will not keep up with the
competition. I’ve seen all kinds of guys put some major front end money into the
solutions business expecting quick return. It is not realistic.

IS: Are sales flat for your company?

SJ: I can’t give numbers, but our second quarter, we had a record quarter.
The first quarter we were about flat. I think everyone was trying to get to know
each other like a high school dance. I think everyone has gotten past the
issues. I think the channels are moving forward. We have got a great product
line right now. The bizhub, it’s a new color device. Our back order was huge in
September. We made huge investments in color and we’re seeing the fruits of the
investment. The other piece is the market is growing right now and it wasn’t for
a couple of years.

IS: What can we expect in 2005?

SJ: I don’t see a huge change. We will continue to focus on support of color.
The big change is we will release the bizhub PRO1050 Production Print systems.
That is a whole other league, 105 pages per minute. Historically, this is the
most profitable market for Xerox. We’re building a plan for dealers to sell into
this marketplace. It’s a very tough market to sell into.

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