MWB Business Systems22 Mar, 2006 By: Darrell Amy imageSource
MWB Business Systems
Money is always the focal point
of a sales agreement—clearly.
in order to make a print management sale to a larger company, or any business
for that matter, you have to think beyond your customer’s initial costs and
understand that offering an inexpensive deal is not enough. Print management is
about the savings being offered to the company now and in the future.
This approach can be particularly successful in bigger organizations that have a
Chief Financial Officer or controller looking for creative ways to reduce
overhead expenses. CFOs are relentlessly seeking innovative ways to save and
manage assets that were previously out of control.
Targeting the CFO is a tactic that MWB Business Systems, a Global company with
six locations in Southern California, uses when approaching large companies.
Meeting with the CFO allows MWB to explain the financial benefits of
PrinteGration, its print management program.
MWB pioneered the PrinteGration analysis process to examine the true operational
costs associated with document creation, management, production, distribution,
This approach caught the attention of Billabong USA, one of the world’s most
recognized surfboard and sports apparel companies. Billabong products are sold
in more than 60 countries and it has operations in Australia, New Zealand, North
America, Europe, Japan, and Brazil.
The Initial Contact
Using a team selling approach, MWB typically sends an account executive to
prospect for new business in a specific territory. The approach is to introduce
MWB and the PrinteGration process, highlighting the benefits of reduced expenses
and increased office productivity.
When the account executive called on Billabong initially, the value proposition
captured its CFO’s attention. Brenda Merrill, MWB’s director of sales for Orange
County, who specializes in selling from a financial perspective, was called in
to help with the meeting.
At the time, Billabong was experiencing growth through various acquisitions.
With its business expanding, the corporation wanted to keep up with the
increasing demands of document production, output and distribution at its
Irvine, California corporate office.
“We gave our pitch of doing a free analysis with the goal of finding ways to
reduce expenses, increase productivity and leverage new technologies,” recalled
In a joint effort, MWB worked alongside Billabong’s IT group and finance
During a 30-day period, MWB’s team of document management experts performed a
detailed PrinteGration analysis. The goal was to determine the true costs of the
corporation’s management of documents, including printing, copying, faxing,
scanning, and document storage. The analysis was conducted from both a financial
and operational perspective.
To collect the data, interviews were held with top management, workgroup
managers and other office employees. MWB’s objective was to gain an
understanding of the company’s document processes and the challenges associated
with these processes. In addition, MWB analysts visited Billabong twice a week
to gather meter readings on devices.
The Issues Uncovered
The analysis uncovered several key financial and productivity issues.
1. Designers and marketing staff needed high-quality color output. File sizes
from color documents were growing and the company’s printers at the time were
getting bogged down.
2. The administrative staff experienced increasing document volume as the
3. The IT department’s resources were tapped managing printers on the network.
4. Its current systems were slow and unproductive
1. The company had multiple vendors and equipment manufacturers.
2. The company’s document production costs were undetermined.
Based on the analysis, Merrill recommended a comprehensive program to optimize
and manage the surfboard and apparel company’s entire output infrastructure.
The partnership agreement centered on an all-inclusive cost per page deal that
included equipment acquisition, installation, implementation, and ongoing
management of Billabong’s entire fleet of printers and copiers. In addition, the
solution paid off all of the corporation’s existing lease obligations and
replaced it with one consolidated monthly invoice.
The ideas were presented using a five-year cash flow analysis format. It showed
the financial impact during the one, three and five-year plan for the
implementation. The net result of the financial projections showed a 20 percent
savings over three years with no upfront capital expenditure.
The next hurdle was to turn the projections into reality by creating a leasing
agreement that met all of Billabong’s accounting standards. To make this happen,
Merrill worked closely with the CFO to create a true operating lease to meet
Financial Accounting Standards Board (FASB) 13 guidelines.
FASB 13 provides the definitions and criteria for deciding whether or not a
lease agreement is to be considered a purchase/sale agreement (a capital lease)
or a usage agreement (an operating lease). The distinction between capital and
operating leases has important financial consequences. It determines who (lessor
or lessee) has ownership rights, who takes depreciation for the leased goods,
and who can treat lease costs as expenses.
Billabong wanted to ensure that the terms and conditions of the agreement met
the standards of FASB 13. This required approval by one of the company’s outside
accounting firms and their home office in Australia.
For many major accounts, it isn’t necessarily about how much the proposal costs
as it is about how the costs are accounted for. By creating a true operating
lease, organizations are able to simply pay for usage of the equipment and
services. As a result, the company does not have to show the hardware as an
asset or a debt on their balance sheet.
With the agreement determined to be FASB 13 compliant, MWB can now add equipment
on to the agreement in the future without repeating the approval process.
The initial installation bundled hardware from a variety of vendors, including
Sharp (www.sharpusa.com), Xerox (www.xerox.com) and Lexmark (www.lexmark.com).
Sharp machines, such as the AR-M455n, were placed in high-volume production
Xerox and Lexmark devices were set up in specialty areas. The Xerox machines
offer the graphic arts color server, EFI Splash G640 (www.efi.com), which can
run a high-end color unit on a Macintosh Print operating system—a requirement in
one area of the company. Lexmark has a laser printer that has the ability to
feed the cloth paper used to print the clothing tags sewn into the back of
• Four color laser multifunctional systems replaced seven color laser printers
• Seven 45 ppm monochrome multifunctional systems with copy, print, fax and scan
services were added
• Six low-volume multifunctional systems were brought in
• Fifteen 35 ppm workgroup laser printers were installed
• Four existing Lexmark printers were taken under management.
Billabong has benefited from a productivity and financial standpoint.
The new high-volume laser color production devices increased color document
productivity by 300 percent, which improved efficiency in the design and
marketing areas. In addition, these departments no longer need to send documents
outside for proofing.
Black and white printing devices were replaced with new high-speed laser
printers, facilitating both AS400 and Windows printing on a low cost per page
Financially, the FASB 13 compliant lease agreement allows Billabong to enjoy
these productivity enhancements without adding any assets or debts to its
Since the initial implementation, Billabong has experienced tremendous growth
both in the corporate office and through acquisitions. To serve the additional
needs the company has added 18 extra multifunctional systems and 22 printers, an
obvious benefit to MWB.
“Billabong is continually growing,” Merrill said. “We consult with them on an
ongoing basis to inform their IT Department of new technologies that may benefit
the company in the long run.”
Ultimately, this strong partnership will continue to benefit MWB as well.
Brian Mould, president of MWB Business Systems, recently shared his perspective
on the evolution of document solutions with imageSource.
imageSource: What part of the market do you see as the hottest
Brian Mould: The sweet spot for our industry’s integrated product
offerings is going to be the enhancement of our customers’ document integration,
particularly in the mid-size companies that do not have the internal capability
to support a fully digitized document imaging initiative.
IS: What is MWB doing to address these challenges?
BM: We are continuing to develop our internal document solutions group,
but we’re also training all other areas of our business to understand the
opportunities these changes will create. So from sales to service to
administration all areas are being trained in the use and sale of these new
document solutions products.
IS: What advice would you give to other dealers building their solutions
BM: Get involved personally to understand the opportunity and maximize
the use of the vendor resources initially to reduce the cost of market entry.
Software and copier vendors have staff support.
Sound Sales Advice
Brenda Merrill, MWB’s director of sales for Orange County, offered some sound
advice to sales representatives seeking out print management deals with sizeable
1. Be Patient: Inside a large company a decision of this magnitude will involve
multiple people. It is likely that the organization has other priorities. So you
must be patient and understand the reason for delays. Since large accounts take
time don't forget the little guys to fill in the gaps.
2. Know the Numbers: A print management sale is primarily a financial sale. You
have to be able to talk the language of a Chief Financial Officer. They are
interested in how the solution positively impacts their financial objectives. A
good idea is to take a basic accounting class at your local college.
3. Present a Forecast: The CFO is more concerned about the financial impact of
your proposal than the brand of the equipment. Make sure to show the financial
impact in detail. Make a one, three and five-year forecast, and make certain the
numbers are accurate!
4. Look Out for Number One: Once you get a large customer make sure to take care
of them. If you look out for their best interest they will look after yours!