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Software Innovations: From Remote Diagnostics to Device Relationship Management

14 Apr, 2003 By: CAP Ventures imageSource

Software Innovations: From Remote Diagnostics to Device Relationship Management

The analog copier is
all but obsolete and networked copiers, printers, and multifunctional devices (MFPs)
are proliferating rapidly in corporate America. As a result, building blocks are
now in place for enterprises to gain control of the expenses related to copying,
printing, and faxing which are arguably, the last major uncontrolled network
expenses. In today's increasingly competitive environment and expense-conscious
culture, the ability to monitor and control the use of network printing devices
holds a strong appeal.

At the same time,
manufacturers and dealers who provide service for these devices are under
similar pressures, as product margins erode and the market becomes increasingly
commoditized. With the best margins coming from annuity revenues represented by
aftermarket service and supplies, these players are interested in reducing the
cost of service and improving service levels to maintain lucrative customer
aftermarket relationships.

Historically, remote
monitoring of printing and copying devices is a concept that has primarily been
applied by manufacturers using proprietary technologies or management systems
for measuring or monitoring the status of specific devices. As higher-priced
output devices like digital copiers are increasingly connected to networks,
manufacturers have an opportunity to employ lower cost Internet-based
technologies to provide proactive remote monitoring and diagnostic services with
their products. Proactive remote monitoring that combines use analysis and
diagnostics can increase productivity for service organizations, improve
end-user perceptions of reliability, and increase overall customer satisfaction.

Open architecture
which involves standards-based tools that provide an easy interface for
monitoring networked print devices, may also prove to be the application that
jolts the connectivity rate for network-enabled MFPs. With IT professionals
increasingly involved in buying decisions for connected devices, availability of
these tools has the ability to remove IT professionals' objections to the
proliferation of connected printing devices. These tools provide IT workers with
remote access to the devices in the same manner that they are able to access
servers, routers, and other network citizens. Although most networked MFPs can
be monitored via leading industry network management software tools such as Web
JetAdmin or Unicenter, these tools have been somewhat limited in scope relative
to the overall task of managing networked output devices.

Device Relationship
Management (DRM) is a new genre of software infrastructure. It is designed to
facilitate predictive maintenance and improve revenue streams from consumables
and support, as well as monitor usage of network printing devices.

DRM solutions
encompass remote diagnostics and remote device monitoring, and can be
implemented to scrutinize usage within the enterprise as well as establish
real-time communications between the enterprise and suppliers of repair and
maintenance services for networked copiers and printers. DRM solutions promise
more effective management of digital printing devices for the equipment supplier
and the equipment user. They also provide the opportunity to seamlessly
integrate with the Customer Relationship Management (CRM) and Enterprise
Resource Planning (ERP) implementations in which many companies have made huge
investments over the last several years.

CAP Ventures
incorporated a blend of primary and secondary research, including interviews
with vendors, a review of CAP Ventures' previously published research, and
visits to vendor and industry websites to analyze innovations and technology
standards for Device Relationship Management solutions as they apply to network
connected output devices.

Device Relationship
Management: A Primer Device Relationship Management (DRM) solutions have grown
out of the increasing prevalence of connected intelligent devices in all aspects
of today's world, and are fairly well-established in many industry sectors. DRM
is still an emerging application in the copier/printer world.

Copier manufacturers
and dealers have been able to perform remote diagnostics on equipment, even
analog devices, for many years through the use of dedicated telephone lines that
involved periodic incoming or outgoing calls initiated by the vendor or the
machine itself. Long billed as the advent of the "electronic
screwdriver," this capability promised manufacturers and dealers a way to
improve service levels while reducing costs, allowing service technicians to
manage a territory consisting of more machines. Xerox was first to market with
RIC (Remote Interactive Communications) in the late 1980s, and others were soon
to follow. As technology continued to advance, remote diagnostics would allow
vendors to: o Predict equipment failure before it occurred and execute repairs,
ideally without visiting the site. Xerox promoted RIC by promising a call or
visit from a technician before the customer even realized there was a problem! o
Initiate diagnostics from a remote workstation, PDA, or cellular phone. o
Identify and diagnose problems before deploying technicians to improve
first-call close rate, instead of having the technician diagnose problems on
site and return later with the right parts. This capability can also minimize
unnecessary technician visits that result in the call being classified as
"no problem found." o Better leverage specialist resources for
resolution of complex problems. A territory technician on site may be better
able to close such a call if assisted by a remote specialist with access to the
equipment via the web, without the need for the specialist to travel to the
customer site. o Monitor usage of toner, developer and other consumables to
trigger automatic placement of consumable reorders. This fulfills the dual
purpose of locking in the annuity supply replenishment business as well as
making the overall process easier for the customer. o Automatically retrieve
meter reads rather than employing call center resources to collect them or,
depending upon the customer, to remember to send meter reads in a timely and
accurate fashion. o Deliver automatic software upgrades.

These capabilities
were viewed and promoted as a customer benefit, and they did, in fact, add value
for the customer. It is possible to argue, however, that they ultimately
provided more benefit to the vendors, who were facing skyrocketing costs of
providing equipment service, excessive cost of parts carried by individual
technicians and tied up as "trunk inventory," and competition from
third party providers of aftermarket service and supplies.

The downside of this
model included the cost of installing a dedicated telephone line for each device
(or sometimes a telephone line shared among multiple devices), which the
customer may or may not be willing to assume responsibility for. Additionally,
educating customers on the benefit of remote diagnostics and convincing them to
install additional phone lines often involved additional decision-makers. This
lengthened the sales cycle and resulted in reluctance on the part of the sales
representative to push the capability.

DRM: How Does it
Work? A DRM solution employs a distributed architecture that can encompass local
and wide area networks, thus enabling enterprise-wide management of devices. At
the device level, software can either be embedded in devices, or can access
devices over the network via a server. A DRM solution will also include a
centralized server that aggregates and processes information.

associated with the DRM solution make processed information available in a
variety of reports or other formats, including automatic alerts when certain
conditions occur. These applications can also enable the user to directly access
the device to perform administrative or repair tasks. In today's Internet world,
these server-based applications are generally accessible anywhere through a
standard web browser and do not require the installation of client software.
This is a significant benefit in a climate where corporate IT departments
frequently exercise strict control over the client applications that can be
installed on corporate computing equipment.

This DRM
architecture is depicted in Figure 1. E-MAILED CAP VENTURES TO SEND IMAGE. WILL

For customer
organizations that are uncomfortable with free interchange of device information
through a firewall and via the Internet, data can be aggregated on a server
inside the firewall and periodically retrieved through a secure Internet
connection or dial-up line. IT departments are very careful about the Internet
traffic they allow, and for good reason. The process of getting device data in
and out of the corporate network must follow standards that the IT industry
accepts. Even if standards are followed, some IT professionals may still be
leery about bidirectional device information flow and might prefer a more secure
point-to-point dial-up connection.

As Figure 2
illustrates, DRM services can be arranged along a continuum, based on the level
of complexity and value they offer. At any point along this continuum, there is
opportunity to overlay additional revenue-generating services enabled by the DRM

Figure 2: E-MAILED

Conclusion Device
Relationship Management for networked output devices is still in its infancy. As
industry leader, Electronics for Imaging (EFI) points out, the printer/copier
industry is one of the few industries yet to adopt an effective industry-wide
supply chain management strategy. The increasing adoption of DRM solutions will
be a key factor in driving this change through the industry.

As users become
accustomed to DRM capabilities in other aspects of their business operations,
they will increasingly demand the same types of management tools for networked
output devices. For manufacturers of office equipment, building an integrated
DRM strategy today will help enable survival tomorrow. Not only will customers
require it, but the economics of delivering efficient and effective repair and
replenishment and other services will demand implementation of automated
processes in lieu of expensive on-site delivery wherever possible within the
supply chain.

For distributors and
dealers as well as third-party service providers, understanding the role that
DRM must play in the evolution of the office equipment industry, and the ability
to clearly articulate these values to customers, will rapidly evolve into a
critical success factor.

DRM enables
providers of networked office equipment to differentiate themselves in the
marketplace, incorporate more value-added services and offset the margin erosion
experienced in a mature industry which sells products that are all too often
perceived as commodity items.

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