With the amount of hype surrounding Managed Services one might think that it’s the perfect panacea for all the ills plaguing the document imaging industry. If you’re a dealer, you’d be a fool to ignore this trend. At least that seems to be the prevailing sentiment throughout the industry.
As you probably know by now the primary feature in this month’s print version of ENX is “Managed Services Made Easy.” We’ve been supplementing that article with additional Managed Services coverage throughout the month of July here in ENX/The Week in Imaging. The past two weeks we’ve outlined some of the fears experienced by dealers around Managed Services as well as the common mistakes made by those who have taken the plunge into the Managed Services pool. This week we complete our coverage by asking the experts whether every dealer or reseller should be offering Managed Services, or if this isn’t the best option for every dealer or reseller?
The consensus is that it isn’t for everyone, and there are various reasons why the experts feel that way.
“You need the ability to invest enough to move down this path even if you’re partnering with someone, and that’s the ability to invest in at least three or four people dedicated to this initiative,” contends David Pohlman, Office of the President/COO, GreatAmerica Financial Services Corp.
If you can’t do that, he says, this may not be the right direction for your dealership.
Another indicator that this isn’t the right place to be is if you’re struggling in your core business as measured by the Johnson model, for example.
“Taking on a new business you know less about is not likely to give you any gain,” states Pohlman. “It might actually be the boat anchor that takes you down. Improve on that first, then this is the next logical step.”
Britt Siedentopf, managed services manager, Leapfrog Managed Services by Muratec, also finds the financial factor critical for deciding whether you should do it. “It comes down to capital investment,” he says, “you’re either all the way in or all the way out, there’s no dipping your toes.”
With that in mind he adds, “If you have money to invest and are willing to commit it could be right for any dealer.”
Charles Lamb, president & CEO Mps&it Sales Consulting, doesn’t see there being a choice about getting into Managed Services if you’re a document imaging dealer. However, he is realistic. “Let’s face it not all copier dealers have enterprise level customers. I’ll be willing to bet when we look down into the cross section of their customer base we’re looking at mostly smaller to medium customers, and probably mostly smaller. With that aspect it’s right for every dealer, but it depends on the product [offering].”
For the smaller Managed Services customer he suggests something called “MPS Lite.”
“An MPS deal of consequence takes about 110 working days from start to finish. Does that mean every deal should be run that way, absolutely not,” says Lamb. “You need to know what level of product to take in. I have a product called MPS Lite; it’s a short term two week thing, you take that to your small customer, and quite honestly every customer that has a copier might have three printers. When we talk about account penetration, account retention, I want all their business, and if I don’t get it, some other dealer will.”
“I’m about building businesses that are profitable and stable,” adds Dave Sobel, Director of Partner Community at Logic Now. “They have predictable growth curves. I think the Managed Services model is one of if not the strongest model to build that kind of business because it’s built around the idea of recurring revenue and the more you grow in that model, it makes for great predictability and makes for a business that you can scale with it because of that revenue predictability.”
Sobel doesn’t feel that Managed Services is right for everybody, but he does believe it’s the easiest way to build an IT Services business that is stable, predictable, and profitable.
So should a dealer get into Managed Services?
Absolutely,” says Sobel, “my advice is to get into it, but get into it in a way that makes sense for your business. Most imaging and printing devices are already networked devices, so there are already services that you can wrap around that offering. Start by monitoring the devices you already have with the customer. If you’re really concerned, partner with an IT solutions provider.”
“I don’t think it’s for everyone,” concludes Dean Swenson, President of The Swenson Group, who also feels dealers who don’t are missing out. “There’s a lot of great dealers where the leadership is partially engaged, but most dealers appreciate the recurring revenue portion of our business and Managed Services is indeed that. Fundamentally, it’s an adjacent offering that makes sense for the right type of organization.”