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Embrace the IT Business Plan

15 Feb, 2005 By: Kern Lehman imageSource

Embrace the IT Business Plan

There is no denying it any
longer. Digital MFPs are now the standard in most offices; manufacturers all
offer advanced scanning solutions and product integration with most technology
platforms, and our customers are demanding more deliverables. What dealer model
is needed to be successful in this environment? 

At our manufacturer dealer
meetings, equipment and service contract margin pressures, and the added expense
of specialized technical resources are the main topics of conversation. Yet,
very few dealers seem to have a comprehensive long-term plan to address these
very real concerns. We continue to cling to our comfortable and time-honored
methodology while trying to impress upon our customers how advanced our
solutions are and the positive impact they can have on their document workflow
and bottom line. Do you practice what you preach? Some questions to consider:

  • How many of your solution
    offerings, such as document imaging and records management, do you actually
    use internally as part of your core business operations?
  • Do you incorporate scan to
    email/data base/FTP for internal communication or are you still faxing
  • Do you provide device
    support or copier service? Do you sell network communication devices or office
    equipment? Systems integration or equipment installation?

This may seem a matter of
semantics, but customer perception of your organizational capabilities can be
significantly enhanced by embracing an IT support methodology.

We would all agree it is much
easier to keep and create incremental sales with current customers than gain a
new one. Certainly, every dealership has more than a few sales representatives
that derive a significant portion of their income from upgrading.  How then do
we leverage the expanded offerings and solutions to provide value added services
and differentiation, which result in both increased revenue and profit? 

The answer: expand your IT
resources and services offered and manage it as a business unit. Most
independent dealers have an established and loyal base of customers. They trust
us and will readily provide you an opportunity to expand your scope of services
if you have the infrastructure, resources and procedures to support them. 

While the following ideas and
concepts may not be appropriate for all dealers, those seeking to sustain and
grow their market presence can benefit from IT services. It can have a
tremendous impact on profitability.

IT Personnel—Does your IT
staff handle everything in your dealership? Do they support your internal
infrastructure and also perform network communication device integration (MFP
installation) for customer installs? I suggest having three IT departments
operating under one division:

  • Internal support and
  • Network systems support
  • ProIT consulting and project
    management services

Each of these have separate and
distinct functions and also provide a built in career path for training and
retaining quality IT professionals. It also provides consistency for the
customer’s convenience. 

Internal Support/Helpdesk—You
should have dedicated personnel that are responsible for handling all internal
support and external customers that pay a premium for 10-minute response. Most
problems can be handled remotely using desktop share programs such as WebX or
PCAnywhere. This is the first tier of response and if necessary, incidents can
be escalated to network systems support or ProIT for onsite service.

Network Systems Support—NSS
primary responsibilities are in-field network support for installed MFPs, new
placement installation/ integration and sales support. All time is tracked in
the same way as a traditional copier technician. Sales support time is also
tracked and billed back at the branch level P&L as a pass through cost. Minimum
N+ certification is required.

proIT Consulting—ProIT
provides complete IT consulting and project management. This department
typically has a broad knowledge base covering not only advanced network design,
implementation and support, but also other IT services such as:

  • Document imaging/records
    management solutions
  • Voice over IP telephony
  • Cabling
  • Wireless solutions
  • Datacom solutions (T1, DSL)
  • Network security, firewalls
    and VPN solutions
  • Remote server monitoring
  • Enterprise server, email
  • Business process
    re-engineering services/project management

For my company, it has taken two
years to design, build and implement our programs and infrastructure. Our sales
representatives charge for copier networking in 90 percent of our transactions.
Just a few years ago, the reps believed the deal would be lost if they even
talked to the customer about it.

How do you pay for this?

  • Bill your IT resources
    provided just as you would a chargeable service call, or sell a technical
    maintenance agreement. Track and evaluate product time just as you would any
    service technician and manage accordingly.
  • IT personnel are one of your
    most expensive human resources, so don’t make network install charges the
    instant giveaway on tight equipment sales. 
  • Acquire talent and broad
    skill sets and bill for additional services.
  • Sell monthly IT support
    contracts to your small and mid-sized customers            that cannot afford
    an IT of their own or don’t need full time staff.

The IT personnel at my company
cost our dealership approximately $325,000 annually, which does not include
burden rate, training, etc., in compensation prior to implementing the programs
above. This was virtually a pure expense and direct cost of doing business. 

In July 2004 we created a
separate divisional P&L for IT services, including all three departments listed
above, accurately tracking revenues and costs, general and administrative
expenses, and charged corporate allocation. For the five month period ending in
November, this operation generated $359,000 in revenue and $173,000 in gross
profit. This accounting does not take into consideration the increased
sales/profitability in our core business. With focus, planning and dedication
you can bring your dealership to the forefront in your local markets as an A to
Z, one stop shop, integrated solutions provider!

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