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Remote Diagnostics Leads to Measurable Results

11 Dec, 2006 By: Bob Sostilio imageSource

Remote Diagnostics Leads to Measurable Results

In 2003 we asked copier dealers if they utilized remote diagnostics. The
resounding NO! startled us. Here we were on the threshold of digital/networked
MFPs and 86 percent of responding dealers ignored the value of monitoring their
installed base, let alone selling the idea to their customers.

Granted there were some real expenses involved at that time such as fitting
each device with a modem and dedicated phone jack, yet these same dealers
reported having 34 percent of their black/white and 76 percent of their color
copiers connected to a network. That was a puzzlement. Certainly they needed to
know the operating status of their machine population, but why wait until the
customer called it in?  Why were they ignoring the value proposition of using
remote diagnostics?

It’s in the Charts

In the nearly four years since that survey, remote diagnostics has come into
its own and has gained incredible acceptance. This year, when we asked the same
question, dealers reported that machines-in-field (MIF) had a 45 percent connect
rate (see Chart #1) for black/white copiers. That’s a 32 percent increase in
connectivity over 2003.

The larger dealers (those with over $30 million in annual sales) have a
larger MIF and a greater number of older analog machines to upgrade and
therefore are just slightly above the mean average while smaller dealers (those
under $5 million in annual sales) tend to suffer from lack of resources or
insufficient number of certified technicians with ratios was well below the mean

When asked about current sales and the connect rates, all dealers indicated
higher ratios. As Chart #2 illustrates, the mean average for new sales
connectivity went from a 45 percent connect rate for the MIF to 70 percent rate
of new MFPs sold with the trend of smaller dealers being below the mean average
and larger dealers above continuing. Since color connectivity ratios are well
above 90 percent, we choose to concentrate on black and white since they
represent the largest component of the machines in field.

The survey revealed that as the connect rates climbed, 25 percent of the
dealers added service technicians, while 44 percent said their service headcount
remained unchanged and 31 percent terminated service techs. The net effect
however, was a mean average increase of only 0.6 service technicians in our
sample. Smaller dealers actually ended up reporting a negative net service
employment, reducing their service departments by -0.2 to -0.9 technicians which
indicates that more than anyone, smaller dealers could benefit the most from
remote diagnostics.

SAI made a comparison between dealer size, connectivity, service technicians
and remote diagnostics (see Chart #3). In all cases, the smaller dealers were
below the mean average on a consistent basis. They added fewer customers, fewer
sales and service personnel and virtually ignored the use of technology.

We specifically asked the dealers about remote diagnostics and how many were
employing it. In our 2003 survey, only 14 percent of the surveyed dealers
responded that they utilized remote diagnostics, where 39 percent said they used
it in 2005,and 19 percent said they would be adding it in 2006,for a total of 58
percent. That’s an increase of 178 percent and 314 percent respectively. But
it’s still way too low.

The flip side of the research implied that 42 percent of dealers have no
intention of employing remote diagnostics. When breaking down the data by
dealership’s annual sales, we learned that once again, it was the smaller
dealers that were not utilizing this technology.

Historically, remote diagnostics, as we previously mentioned, required dial
up modems at each device and usually were polled late at night after working
hours, well after users had gone home or access to the installations was not
available. The methodology at that time was somewhat of an inconvenience to the
customer and very expensive for the dealer who had to install phone jacks near
each device and switch boxes to be compatible with their client’s phone systems.
But those barriers have now been eliminated with the introduction of the web and
wireless networks. Now that all networked devices have an IP address, a
diagnostic error report can be transmitted in real time via the web and
technicians can be dispatched by the device itself, sometimes before the
customer knows there is  a problem.

Today, there is no excuse for any service organization to ignore the cost
savings and value of remote diagnostics given that service is the second highest
contributor to revenue following black and white copier sales. Virtually every
MFP and printer manufacturer either has their own remote diagnostic tool (i.e.
Ricoh’s Remote, Kyocera Admin, Sharp’s Admin, Xerox’s DRM) or have partnered
with third party companies like Imaging Portals, now a MWA Intelligence
subsidiary, BEI, OMD or Print Fleet. Virtually every authorized dealer should
have it and use it.

What’s a better way to manage a service technician then to have him/her
prepared for the next service call? Certainly there is no profit when a
dealership sends its technician out to diagnose a problem when a remote device
could identify the problem before the technician was dispatched.  Certainly it’s
more efficient and profitable to have a service technician resolve the break/fix
call once and to ensure the right part is in the technician’s car stock.

Remote diagnostics is one tool that provides preemptive detailed data on
network installed devices and, in most cases, can schedule a maintenance call
depending on usage analysis. Not only can remote diagnostics implementation
provide better management of the technicians and parts, but improves dispatching
efficiency to enhance customer satisfaction.

Utilization of remote diagnostics is no substitute for incompetence of a
service technician nor will it increase connectivity ratios, but it can aid in
identifying troubled accounts or call-back service visits. Properly monitored,
remote diagnostics provides a real time day-to-day performance record of the
installed base and helps a dealership adjust service coverage relative to usage
patterns and page volume, not by the number of assigned accounts. Remote
diagnostics can lead to greater customer retention because of faster response
times, less time on site to complete repairs and fewer repeat visits due to lack
of correct parts on the first call. Those few improvements are due in part to
the technician knowing before hand what the problem is and what steps and parts
will be needed prior to getting there.

Just like the larger dealers, small dealerships need to know what is
happening in their base before a deluge of problems erupt. The investment in
service tools such as remote diagnostics produces measurable results, greater
efficiencies, better utilization of resources and assets, and more importantly
an increase in knowledge of how the products they sell are being deployed. All
this leads to greater customer satisfaction which means higher customer
retention and results in uninterrupted service and supply revenues. The increase
in revenue leads to greater profits which, in turn, means a lot for a small
dealer looking to generate enough funds to add more sales reps, grow the client
base, hire more technicians and introduce more value to customers.

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