Business Transformation Study – March 2010 – Taking the First Step in Managed Print


Topic One: Adding Managed Print Affordably

"Our first week in business we sold 2 million managed print pages."

That's a true statement by a Xerox Peak Partner who runs a growing and profitable managed print services business in South Florida.

You can add managed print services to your existing solution provider business - or start a managed print service from scratch - right now, affordably. An enormous potential customer base awaits managed print services, and a repeatable formula exists for managed print that works profitably with the way businesses really use print in their daily routines.

This particular Xerox Peak Partner in South Florida was in business as a traditional value-added reseller of technology and IT services before adding a managed print services business.

"We fixed so-called ‘dumb terminals’ and did some printer repairs," the South Florida Partner recalls. "Then in 2007 we went to a Xerox Summit, and Xerox really offered us a way to make money, when other printer companies we met with wanted to take it away."

From the Ground Up
Another Xerox Peak Partner in Michigan began what is now a lucrative managed print services and copier leasing business from his garage seven years ago.

"We started out as a mom-and-pop shop out of our garage, and I fired my wife several times," this Peak Partner jokingly recalls. "We started into leasing systems in 2004 so we would not have to give anything away [like the potential for recurring revenue], and right now every printer and copier that goes out the door we try to put under management."

Before partnering with Xerox, bad experiences with other printer vendors made it difficult to see the value proposition of managed print, and almost derailed the managed print effort. "Other print vendors talk managed print services, but they just want to sell the products, and they know it."

What separates Xerox's managed print formula from competitors is real math, not managed print hype. For example, instead of approaching managed print services from an outside-in perspective, where managed print service providers remotely monitor printers until it's time to refill consumables or replace parts, the Xerox manage print formula works more from the inside of the customer site, eliminating waste by taking under management the consumables supply chain and operating on a pricing model that removes the toner coverage equation, making print easier to budget for and use.

The Xerox model also provides more accurate quoting systems, which in turn lead to better cost controls for managed print services providers. How that savings works in practice can be found right here, in an earlier Business Transformation story called The Top 5 Per-Page Print Contract Follies & How to Avoid Them.

A Common Denominator
What's common among most of the Xerox Peak Partners interviewed for this story is that they built their managed print service businesses based on repeatable processes that kept each component of the business - from finance to culture - in line with the ultimate objective of success. It's possible to illustrate this type of cross-organizational process, which The Institute for Partner Education & Development (IPED) has done in Chart 1.

In IPED’s Seven Pillar Model, success in managed print services relies on all of the following:

A Sales Plan - A Systematic plan and road map for acquiring customers and ramping the revenue of the business. This can be accomplished through customer targeting and profiling which companies are candidates for managed print in your area, and then implementing marketing and sales pursuit strategies.

A Way to Ramp Up Customers -A stable, repeatable, branded methodology for bringing new customers online without interrupting the flow of their services or your operations. This has a lot to do with accurate customer assessments of their print needs and costs, and accurate setting of SLAs. Customers will transition along with you into managed service models if they clearly understand the value of where they are going.

Service Delivery - A Stable, process-driven execution of standard services, as well as a methodology for dealing with nonstandard services in a predictable manner. This is all about resource management. In managed print services, don’t be afraid to be creative. One Xerox Peak Partner captured services revenue by simply making the service call to a customer’s third-party copier leasing agent, eliminating the need for the customer to deal with the leaser.

Customer Management - Continuous engagement with the operational, financial and executive functions on the customer side to maintain visibility and value perception. The most important thing in managed services (since you are proactively preventing problems) is reporting. The value you’ll deliver when customers stop seeing your technicians on-site as often will be the reports of what you’ve been doing, how you’ve been saving them money, and how they have become more efficient.

Process for Running Your Infrastructure - Formal development and documentation of what you do and how you do it that can enable any "basic" technician to deliver your services with predictable quality. Simple: Make sure someone can run the place when you're gone.

Financial Management - Careful, continuous oversight of the financial performance of your contract services practice according to key ratios and predefined objectives. No one has a perfect story here, which is why the right vendor partner with the right support matters significantly.

Organizational Development - An overall plan for the structure of the business as it changes with the addition of managed services, as well as the human resources needed to sell, deliver and manage your services.

Organizationwise, sales teams that understand solution sales are halfway there to selling managed print services. When the Xerox Peak Partner in South Florida began to transition his IT network sales team into offering managed print services, it was much easier than he thought, because the sales focus remained locked on overall customer solutions, not just individual products. The result: "Our first week in business we sold 2 million managed print pages."

Next, we put all this into action. Watch for the next Business Transformation Study in our series: The First 100 Days – A Managed Print Playbook.

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