Log in

ISM Article

Threats to your Managed Print Services

6 Jun, 2007 By: Darlene Sheldon imageSource

Threats to your Managed Print Services

Corporations are getting smarter, or at least they are taking notice of how
much network printing is costing. As the backlash against high printing costs
intensifies, a rebellion against the high cost of color will eventually result
in a cut in color per page prices by half. As more corporations invest in a
print strategy, key outcomes include a reduction in the number of devices, a
reduction in the number of manufacturers and models, and a reduction in the
number of vendors. For long term survival, the dealer must consider expanding
his service offering as the customer is demanding. Are you that one stop or is
your competitor?

As a result, some dealers are being squeezed, while others are growing their 
business by offering more managed services. Managed Service Providers are
delivering a unique service that not only manages all aspects of a corporation’s
network printing, but offers value-added services: pro-active device
selection/swapping, on-time supplies, and quarterly printer fleet assessment
reports for Corporate Management. These providers  offer  unique service using 
internal processes  that are efficient with cost controls  and automation
processes built in.

When margins are being squeezed, how can you grow your business such as
these successful Managed Service Providers?
The answer can be simplified
into two areas:

Decrease expenses: Input costs for servicing the customer must be
reduced, requiring renegotiating of supplier agreements for hardware and
consumables. Major resellers for the hardware/toner manufacturers may have this
opportunity, but smaller dealers do not, having introduced cost per page
programs to their resellers and VARs. The reseller should be wary of the
contract terms in these programs, such as, minimum obligations, contract terms
and other obligations concerning customer loss or default. Another way is to
reduce human resource costs through cost controls and automation, increasing the
productivity of the service and support technicians that manage the printer
fleets. Techs must service more customers in less time, using automation of
manual jobs, decreasing drive time, etc.

Increase revenues: As you have a dialogue with existing customers it
should be easier to increase your service revenue from them, over selling to a
new customer. They already have a desire to deal with fewer vendors. 
Additionally, increasing your sales to existing customers should make your techs
more efficient.

Managed Service Provider needs to understand the value proposition being
offered. The value proposition for selling a service is considerably different
than selling a product.  When selling a product, printing devices are
commoditized, and the dealer is leveraging his relationship with the
manufacturer. The deliverables have become price points. We have made printers a
commodity to the point where even the brake-fix service offerings have become a
commodity. Hey, let's face it, it’s much easier to sell functions, features,
printer speed, and device options.  Even services exist only to sell the
printers. The relationships dealers have with their customers may become
competitive and based on price. The CPC model is a result of this

Value proposition for managed services: When providing managed services, the
deliverable becomes a unique, customized IT service. The processes established
with the people employed to deliver the service are the critical leverages. But
to get there, the core offering must be defined, which incidentally becomes the
Managed Service Provider’s reason to exist. The MSP is no longer selling
printers or products, rather managing printing environments. The provider is
offering a service that ensures customers' IT printing is accessible, reliable
and appropriate.   The MSP is selling reliable output, not printers. And at a
reasonable cost!  The MSP and his customer become partners in delivering and
reducing the printing requirements.

So let's get on with defining our Value Proposition for Managed Services. Of
course you have a choice to do nothing. But competitors who are addressing their
revenue threats will be the ones who will survive. After all, 35-40 percent of
VARs will go out of business if they do not make significant changes.  Be
assured that Corporations are getting smarter about their network printing

WebinarCase Studies and White PapersSand Exchange Blog

imageSource Magazine Quick Links
Upcoming Events
ITEX Expo & Conference
©2015 Questex, LLC. All rights reserved
Reproduction in whole or part is prohibited
Please send any technical comments or questions to our webmaster