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Competing in the Marketplace: Systems, Solutions & Services

15 Jun, 2003 By: Richard Norton imageSource

Competing in the Marketplace: Systems, Solutions & Services

Most observers of
the office products industry believe that the services offered by sellers of
multifunction products will need to change in the next several years. While in
the copier business it was sufficient to be able to service the hardware that
you sell in order to sell it, in the future, we believe that the types of
services and capabilities offered by the seller will change from strictly break
and fix hardware services to more sophisticated systems and solutions services.

This variety of
services can be thought of as a pyramid that builds upon each other beginning at
the bottom with an analysis of paperwork or document flow around a customer's
office. Services graduate upward through networking and consulting on a document
management system and eventually top off with workflow tools or applications

Taking a look at
what some of the larger companies in the industry are already doing in this
regard can serve as a leading indication of what every seller will need in order
to compete in this evolving marketplace.

Successful Solutions

Xerox starts with the very basics. Each sales rep is required at every customer
engagement to do an analysis of paperwork flow around a customer's office. This
forces the rep to understand the basics of information management and the input
and output of paper to the customer's network systems. At the very least, the
sales rep will come away better positioned to sell a wider variety of hardware
into that environment. At best, the sales rep is given an entrée to sell other
types of services to the customer. If the customer wants to move upstream from
the Xerox MFP hardware, Xerox is capable of following the plug up through the
customer's network. Through Xerox Connect (a business that Xerox acquired four
years ago - something like a dealer acquiring a local VAR to augment his systems
capabilities), Xerox is able to install all the network hardware required in a
customer's location such as routers, switches, hubs, etc. Xerox can also install
a network operating system for the customer.

Moving up the value
pyramid, Xerox, through their Professional Services Group or the Global
Solutions Group, is able to consult with a client about his document management
needs as well as design systems to manage all of a customer's document and
information requirements. Finally, also through Xerox Professional Services,
Xerox is able to install a wide variety of applications software that can be
used in customers' locations. Over the years, Xerox has assembled a wide variety
of application software via partnerships or homegrown capabilities. Xerox can
address information needs in virtually any vertical market.

On a somewhat
smaller scale, IKON operates in much the same way. IKON's philosophy is that
they always put one face to the customer. The sales rep is responsible for a
document assessment of every customer (although policy, we believe that common
sense dictates whether a full blown document assessment is done for small
accounts or not). This document assessment tracks the use of paper and
information in a customer's office and leads the sales rep to a better
understanding of the customer's business needs.

IKON had formed a
Technical Services Department a few years ago from some of the systems dealers
that they had acquired in the mid 1990's. That Technical Services Group is now a
part of IKON Professional Services. The technical people have various
certifications to handle a wide variety of software and network applications.
These are levels of technical proficiency that tell the customer that IKON
engineers are among the most proficient in servicing networks and network
operating systems.

IKON can also
consult and design document management systems for their clients using a variety
of "home grown" software. For example, IKON's Virtual File Room
software which has evolved into Legal Document Services for legal markets or IBM
Lotus Notes partnership software are ready for installation on a client's
network. Finally, IKON can offer a variety of software suites that can handle
anything from large data stream print applications to moving documents across
the Internet. IKON offers its customers the ability to outsource their document
management and printing needs.


While neither Xerox nor IKON brings all of these capabilities to every account,
it is interesting to note that both companies have gone through the exercise of
creating those capabilities. Companies like Xerox and IKON will promote these
services to their customers as a means of generating new revenue streams for
themselves, but also proving to the customers that they have the technical
capabilities to understand the sophisticated world in which multifunction
products exist.

In the future, it
will become more difficult for a seller of copiers to do business without being
able to demonstrate rather sophisticated systems capabilities to the potential
buyer. That is the playing field that Xerox and IKON are trying to establish in
the office products marketplace. The implications for independent dealers are
that dealers will need to demonstrate similar types of systems capabilities in
order to be perceived as competent in handling multifunction products.

One of the areas
that many manufacturers must improve on is their guidance to their dealers.
While the manufacturers are providing solutions to their dealers, they often
ignore the paper flow analysis and network capabilities. This creates an
incomplete set of solutions and a lack of foundation for the dealer. If a dealer
does not acquire this expertise on his own, he eventually may be put at a
competitive disadvantage.

- - -

Norton is the president of the Saratoga, CA-based market research firm
DocuTrends. Norton can be reached at rcn451@aol.com or 408.253.2763.

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