ENX Magazine Business Profile

Edwards Business Systems based in Bethlehem, PA, along with its sister company Virginia Business Systems based in Charlottesville, VA, are like many dealerships transitioning their businesses into managed print services. As any dealer who has made that transition or is in the midst of one will tell you, it’s a transition ripe with challenges. Yet, like transitioning to digital technology and then connectivity, it is a matter of survival for virtually every dealership in the industry.

We had an opportunity to speak with Ray Fuentes, President of Edwards Business Systems, about those challenges and his plans to transition his organization into a MPS-driven dealership. We think you’ll find his comments insightful and illuminating.

How’s business this year at Edwards Business Systems?

Fuentes: Slightly up, more so as a result of the last four or five months. We had a real horrendous winter here in eastern Pennsylvania, so it started off slow then picked up in the spring. Then in the summer, which tends to be slower, the activity was very good, so that’s encouraging. Overall, we started behind but climbed to slightly ahead.

Can you attribute that to any one thing?

Fuentes: A combination of things. We went aggressively after certain business to get some larger deals like everybody does and had our share of successes. The more interesting part of what we’re doing is we’re growing our managed print services and solutions business. Our managed print services doubled and our solutions business quadrupled, but it still only represents 10% of what we do. We’re talking about migrating that and giving it more significant impact in the next year.

I’m really curious about your PrintPlus+ program, what was the inspiration?

Fuentes: That’s our branded MPS program. We started that about two years ago and have had some good successes. We had some dedicated people, but geography made that too difficult. We went with champions and have had some successes that way. Not everybody here has adopted it. There are still some people who want to sell traditional products and services. We’re in the throes of turning everybody who works here into an MPS rep come the first of the year.

Why do you think your managed print services program, PrintPlus+, is a differentiator compared to your competitors?

Fuentes: Managed print services has almost become like cost per copy. At one point when we started to do cost per copy some years ago it was unique. Now everybody is doing it. We separate ourselves by offering a true managed print services program, not just offering toner and printer service and throwing on a tracking tool, which is what a lot of MPS providers do. We are escalating MPS to the point where we have developed a solution set. We’re attacking managed print services by vertical market. In terms of how you go after anything these days, it’s a more practical approach and a little more challenging for us, because we’re mostly in secondary markets and we don’t have a city where we say, “Your job is healthcare, just go for it.”

We have to tweak those things. We have a combination of geographic and vertical market responsibilities based on our conditions. But everyone is going to be selling managed print services into their assignments whether by geography or a vertical market.

How did you prepare your current sales reps to sell managed print services?

Fuentes: It’s an ongoing process and starting the first of the year we’re not just going to hit them with a magic wand. We’ve been doing a number of things the past couple of years, originally starting as voluntary and for those people that were most interested we gave them more support. We’re now telling them we’re making it mandatory. We’ve aligned with Thomas Cook’s Learning Outsource Center, which we’ve used for years, focusing on how to get wider and deeper into your client. He’s had that program for years and has now transitioned a portion of that program to managed print services and we are sending our people to that. They go through basic training and applied concepts, which is very good.

Once someone starts with us, after 90 days if we’re happy with their activity and work ethic, we get them into applied concepts. Sometime after that, depending on scheduling and how well they’re doing, we’ll put them through managed print services training. Depending on where they are in their development, if they’re going to stay with us they’re to be there by the end of their first year—some will get there sooner, some later.

We will back it up with a comp plan. We’ve taken a look at any number of models. I belong to the Select Dealer Group and they’re all saying the same thing, it’s all using the Hanson Hey model, so the better dealers get it already. It’s just a matter of what it’s going to take your company to get there and we all have different challenges. Ours is size; we’re a $35 million dealership. What we’re looking for is the effort. We know what the challenges are going to be. All these things we’re putting into place, and we don’t expect everyone to be on board, but we have to go through the process of bringing those who are willing or will make some kind of attempt, and then deal with the others.

What was the biggest challenge of getting the PrintPlus+ program off the ground and is it still a challenge?
Fuentes: The biggest challenge is an internal one, getting people to make the cultural change, to go from selling products to being consultative sales people. And it’s still a challenge. There are going to be some people who embrace it and run with it, and there are some people further along in their career and will probably figure out how to do just fine from now until then. And we’ll work around them. Then there’s the vast majority in the middle who say, “Okay, show me how to do it.” That’s probably where our work is going to be.

How different is the PrintPlus+ program compared to two years ago when it first launched?

Fuentes: Two years ago it was revolutionary. We were way ahead of the pack. We created a branded Help Desk we call FirstPass. Two years ago that was unique now it’s rather blasé.
We’re taking the next step in that program by bringing on, from an application standpoint, more management capabilities and wrapping that with different acquisition programs. The fuel for all this is not to go in and say, “We’ll take everything over and do it on a month-to-month basis.” You can’t do that month-to-month; you need an extended contract. The wrapper we’re going to put around all of these services is an extended contract so you can provide those things at a reasonable cost, save the client money, and be able to make the investment.

What percentage of your business is managed print today and what percentage would you like it to be in another five years?

Fuentes: Today it’s 10 percent. I’m looking for it to triple next year. It’s going to take a few years before it becomes the engine of the future so obviously the cash flow is still from the engine of the past.

How will hardware fit into that since you still have to meet manufacturer quotas?

Fuentes: You still have to feed the beast. There are still deals you have to buy and do things from a traditional standpoint in order to maintain your buying power and maintain cash flow. It’s like everything else: if we do 90 percent this year, next year it may only be 80 percent. There are still some traditional deals that are not MPS and very profitable. We’re not at a point of desperation, but if we didn’t do anything for a couple of years I think we would be.

What’s it going to take to triple and continue to grow your MPS business?

Fuentes: It gets back to what I was saying earlier, we have to make sure our sales force goes in the direction we give them, not just by telling them they have to be MPS reps, but by the training we’re giving them and will continue to give them, and by their compensation plan.

You can have a sales rep who knocks down a $50,000 school deal and he goes up against 20 other people and we do what we have to do to win the business and he makes $500. Or you can have a $50,000 deal, which we have a few examples of, and that’s a nice sweet spot—$35,000-$50,000 and blend it on under MPS along with some application software and professional services and put a wrapper on it where we now make 40 points or $20,000. Under that kind of deal the rep would probably make $5,000. That’s a reality. We’ve done it a few times already and we’re going to bring that reality home to them. Here’s why you want to do this versus here’s how you’ve been doing it.

With all of these changes, whether managed print, solutions, etc., has it made life more complicated for you?

Fuentes: I’m 61 years old, but I’m still excited. Yes, I’d love to go back to the days where I threw a Royal 115 in the trunk, went down the street, sold it, and then had a beer after work celebrating. I had a lot of fun doing that. I made good money, but you can’t go back. As Alexander Graham Bell said, “When one door closes, another one opens.”