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When Hardware is Not Enough

15 Jul, 2009 By: BY Dennis Amorosano imageSource

When Hardware is Not Enough

The office equipment industry continues to undergo significant changes that
are transforming both customer expectations as well as vendor and channel
delivery capabilities.  What was once an industry grounded in the delivery of
reliable hardware offerings and effective service is now an environment where
these capabilities barely open the door to winning a customer’s business.  So
what has happened?

In the last several years, the functional capabilities that in the past
offered significant separation between hardware providers, has become more
difficult to discern.  Have they gone away completely? No.  However, they are no
longer easy to distinguish and in many cases have led customers to view most
hardware within the industry as commodities ripe for pricing negotiations and
deep discounts. The results aren’t pretty.  As most manufacturers and channels
will attest, the ability to hold pricing and margins is much more challenging
today than in the past.  Throw in challenging economic times and you have a
recipe for a market where customers are in control and technology providers are
at their mercy.

Faced with these challenges, manufacturers and resellers are looking for ways
in which they can be more effective in their sale of technology and are often
searching for technologies beyond the traditional hardware that has been
responsible for their core revenue generation.  This in turn is leading to a new
set of dynamics in the industry and a race to re-invent the roles of
manufacturers and resellers alike.

Take today’s more effective resellers.  When studying these organizations one
will often find they have three primary delivery capabilities including
hardware, software and services.  When digging deeper into their customer
approach and sales engagements it is often the case that these organizations are
not approaching customers to sell them hardware (although this is often one of
the outcomes of their engagements), but instead is focused on targeting specific
business operations within their customer base that can be effectively improved
through the combination of hardware, software and services.  Is this easy?  If
it were, everyone would do it.  Unfortunately, today’s reality is that the
majority of resellers don’t possess the people or skills to drive this type of
business model and as a result are stuck in the downward spiral of hardware
focused selling.

Case Example

Herein lies the dilemma.  Traditional resellers have traditional skills
while today’s marketplace requires something different.  Of course, transforming
an organization from a traditional hardware reseller to a consultative solutions
provider is not impossible.  It can be done and there are many excellent
examples in today’s marketplace that offer a blueprint for success. Take
SymQuest, a regional Canon Dealer located in the thriving metropolis of
Burlington, Vermont.  Five years ago, SymQuest resembled many traditional copier
resellers, reliant on hardware and service for the bulk of their revenue
generation. Today however, SymQuest is a much different company with a much
different organizational structure.  SymQuest recognized what many small
resellers began to see in the market; a shift from traditional hardware needs to
more integrated requirements.  To address these changes, they took a proactive
approach and structured their organization by establishing two distinct groups,
a traditional copier dealership and an organization focused on delivery of
software and network management and support services.  As with many copier
dealerships that have made this transition, SymQuest leveraged the health of the
core copier business to fund and nurture the new business operation.

The results have been nothing short of ideal.  Now SymQuest is not only
capable of managing a customer’s office equipment fleet, but is also able to
manage and support the network to which the equipment is attached.  To say that
this company has become mission critical to their customer base would be an
understatement.  In the process of making this transformation, they are now
positioned to deliver what few competitors in their marketplace can; a total

This company is just one of many examples, but they all have several things
in common.  They all saw an emerging trend, took definitive action, and
structured or purchased a separate organization to build a net new business. 
Like SymQuest, many of these dealers have now more tightly integrated both
operations and are reaping the benefits, the biggest of which continues to be a
level of customer differentiation that’s hard to beat.

Never too Late

Is it too late to make this transition?  Certainly not, although the current
state of the economy makes this more challenging for today’s dealers looking to
migrate as compared to those that took the step a number of years ago.

Opportunities continue to abound in the market.  These opportunities reside
in more comprehensive offerings associated with document imaging, document
management and managed print services to name a few.  Each of these areas, due
to its close proximity to a dealer’s core business makes them ideal for an
expanding business model.

The question for dealers remains what are you waiting for?  There’s no time
like the present to embark upon a direction that will help maintain
competitiveness, drive new streams of revenue and profit, and position a
dealership for long-term success.

The changing landscape of today’s market has made it clear that customers
want and expect something different.  Those dealerships that expect to thrive
and survive have realized that hardware is no longer enough. 

Close Up on SymQuest Group, Inc.

The SymQuest Group was founded in New England as an technology services
company in 1996, originating from three distinct divisions of a regional office
products company: a Canon copier dealership, a computer / software training
company (MS Office, Excel, etc.), and a network engineering company (designed
computer networks & systems). The company is led by CEO, Larry Sudbay.

Integrated Solutions

SymQuest began with a strong IT structure already in place, selling training
hours, services and fee-based technical labor. In the late ‘90s, they helped
train Canon dealerships on connectivity technology under the program,
“Connectivity 2000” which was established to aid sales representatives, techs
and executives in need of further information technology training.  Canon
selected SymQuest based on their networking and technical training expertise.
According to Joseph Noonan, Vice President of Sales & Marketing, the companies
merged seamlessly to grow a complimentary infrastructure (copier dealership with
hardware devices and networking component to enhance one another).

Remote monitoring soon followed, maintaining clients’ networks for a monthly 
fee,  increasing  revenue  margins while  providing  a  much  needed service.

Through The SymPowered Office, the company is steadfast in:

  • Computer Networking Solutions (design/installation/network
    support/remote monitoring/security/server virtualization, etc.)\\
  • Document Management & Hardware Solutions (copy/print/fax/scan); asset
    management, EDM, service/support programs & agreements, and rentals (also
    leases computer hardware to meet client needs).

 “Writing leases on networked hardware is profitable,” confirms Noonan,
stating that, “SymQuest has 5,000 MFPs and 12,000 single function printers
currently under contract.”  He goes on to indicate that those devices rely
largely on remote monitoring.

Transition Steps

When asked to specify some steps taken to transition from a copier dealer,
IT assist-type company, Noonan explains that the transformation to a ‘hybrid
total provider’ began 5-6 years ago.

“As we were born from a core infrastructure based on hardware & IT initially,
our growth has been evolutionary versus revolutionary,” recalls Noonan. “We have
grown and diversified with the trends emerging from technology.”

When asked if they used a business consultant to help transition the company,
Noonan replied, “We’ve used a business consultant for years.  Our executive team
ultimately makes most strategic decisions, with our CEO breaking any ties.”

On the challenge of investments for restructuring, Noonan said that the
company invested further in technology, growing their IT staff base and the
systems used for increasing workflow productivity, through software platforms
that reside on their hardware systems offerings, CRM and Inline Business
Systems, three monitoring systems (including Printfleet), and specific
workflow-driven solutions from notable providers such as eCopy, among others. In
addition, SymQuest is now New England’s leader in virtualization technology.

“Cost of any one component is irrelevant when compared to what is gained
overall through successful computing or printing (services).”

Noonan goes on to say, “We started with 85 employees and today our staff is
158. All employees at SymQuest are marketing ambassadors.  We have one full time
person dedicated to coordinating our marketing efforts. We have 28 sales people,
70 in service (engineers & technicians), and 35 people working in
admin/operations, among others. All of our service people are and always have
been fully educated and certified.  We invest in further training, educating and
developing our people every year.  We have an anecdote about this... Manager 1:
‘What if we provide training to our people and then they choose to leave?’
Manager 2 to Manager 1: ‘What if we don’t train them and they choose to stay?’”

Educating Clients

When questioned on what was or is the most challenging aspect in
transitioning to the total solutions dealership, Noonan pointedly remarks, “Our
one-system theory.”

“Educating our clients to understand that their entire network is really a
single system (and should be managed from a single resource) is part of our
ongoing strategy. Clients should come to realize that the best plan for
efficiency and cost concerns is for their entire network and its print
environment to be overseen by one reliable source,” states Noonan. “Clients need
the continuity of a technology partner to help in every aspect of their

To help illustrate this fact, imageSource asked Noonan a key question: If he
were to recommend to other dealers looking to develop their business model, and
they had a weak IT foundation, just what would he advise them?

“I think that the best and quickest way for a traditional copier dealer to
get into the IT business is through acquisition.  The complexity of the business
requires a long period of time to understand, and through actual experience,”
indicates Noonan.  “A business with no previous experience in the IT world can
save themselves a lot of time, money and frustration by purchasing an
organization that already understands a lot of the business, but may lack the
cash flow that a copier dealer has.”

When asked for any suggestions that he’d give to a small dealer that wants to
transition from a hardware dealer to a multi-provider of services in their
region, Noonan reflected thoughtfully.

“The single most important thing that a small dealer can do, is to
standardize on a solutions-oriented sales process, and then make sure it is used
by the entire sales force.  Selling solutions is very different than selling
hardware, and traditional copier sales people will need help to make that
transition.  It doesn’t matter which sales process you use, just choose one and
make it part of the culture.  You can have the best technical solutions around,
but if you don’t have sales people capable of presenting them correctly, you
will fail. Don’t let that happen."

Noonan’s words emphasize both the pitfalls to avoid and the issues to
accentuate, and in so doing, believes innovative dealers are making strides in
transforming their dealerships in order to grow and prosper. He is optimistic
that many will flourish.

In effect, as today’s customers look to retain companies that have
transitioned to meet most or all of their needs, much like SymQuest, handling IT
networking along with selling & leasing needed hardware, the resultant growth
for dealers will be exceptional.

The SymPowered Office

Empower an office with productive, cost-efficient, proactive office
technology solutions! A SymPowered Office will increase peoples’ capabilities,
streamline workflow and improve the bottomline. SymQuest will be out front and
with you throughout the life-cycle of your technology and equipment.

Dennis Amorosano is Senior Director of Solutions Business Development,
Imaging Systems Group, Canon U.S.A., Inc. For more company info visit
www.canon.com. (SymQuest Inset by Sand
Sinclair, Editor).  Visit www.symquest.com
for more info.

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