In talking with service managers over the last decade, I have encountered a variety of opinions about Managed Print Services (MPS). Some service managers think it’s a profitable addition to their revenue stream. Some find it difficult to manage due to the wide variety of equipment and the difficulty in becoming proficient at supporting a multitude of brands and models. Others see it as an unprofitable nuisance mandated on their department.
No matter how it is viewed, MPS is here to stay. Sales departments will continue to sell the program, and service departments will have to continue supporting it. So companies need to find ways to make it both manageable and profitable.
The best client profile from the service perspective is one with a high density of devices in a compact geographic area, as it reduces the drive time associated with servicing the client.
Let’s discuss several challenges to the service department created by an MPS program. We will also look for steps to take to improve the serviceability of a contract and the profitability.
A typical prospect for MPS may already have a wide variety of printer makes and models. In many cases, the printer chosen for a specific location was simply on sale when they wanted to add one. The resulting mix of printer manufacturers and differing models is a challenge for the service department to manage.
Associated with this is the wide discrepancy in operating costs between the devices. In most cases, the sales department sells a blended rate that applies to all models. This rate does not take into account the specific costs of the models. The result is that some, or perhaps most, of the devices in the fleet may not be generating enough revenue to provide the desired profit margin.
The diverse-model portfolio also requires more car stock and more inventory to have the needed parts on hand. In many cases, the necessary training for all the different models may not be available, or the cost to obtain the training may outweigh the potential profit in the contract.
Another consideration is the cost of the supplies for the printers., as some printers have much higher page costs. Using aftermarket toners helps, but there may not always be reliable aftermarket cartridges for all models.
There is also a potential trap in truly managed print services. The premise is that by managing the output and shifting print jobs to the appropriate device, you reduce the operating costs for the client. The result is good for the client, but bad for the service department since managing print reduces revenue and profit.
Improve the Situation
Avoiding these issues starts with the sales process. During assessment, you should provide a list of the prospect’s current printer models to the service manager for evaluation. The service manager will then need to identify the models that may be a challenge, either from a cost standpoint or because of serviceability issues.
Construct the MPS agreement so the dealer can replace the models that are a challenge. Make sure the contract allows for remanufactured equipment and cartridges, so that challenging models can be replaced by low-page-cost devices with comparable features.
The process of standardizing the fleet has significant benefits for both the client and the service department. For the client, it simplifies supply management—they will not need to maintain as much inventory, since more devices use the same cartridges. It will also simplify printer management on the network, requiring fewer print drivers.
For the service department, developing a standardized list of replacement devices makes it much easier to manage both the needed training and the inventory., and a standardized fleet also improves technician proficiency.
The best client profile from the service perspective is one with a high density of devices in a compact geographic area, as it reduces the drive time associated with servicing the client. The worst clients for the service department are small companies with few printers, as they’re typically less profitable due to increased drive time.
Clients such as hospitals, universities and corporate headquarters may justify the expense of having one or more hot-swappable devices for critical areas. This allows the technician to install a replacement while waiting for parts or troubleshooting an issue. A standardized fleet of equipment simplifies this process. Be sure to include the cost of purchasing the hot-swappable devices in the proposal.
Rewards and Benefits
A well-structured and managed MPS process will generate additional revenue, and most dealers have the available technician time to cover these accounts without having to hire new people. When the volume exceeds the available staffing, you can hire technicians with less experience to service the MPS accounts.
It also provides the sales department with the potential to reach new clients and increase the revenue per client from the existing client base. For clients, it simplifies the management of their printer fleet.
Many dealers are taking MPS to the next level with a relatively new program, Seat Based Billing (SBB). SBB is designed to leverage the advantages of an MPS program while eliminating the challenges. If you are not familiar with the program, I would recommend investigating the program and processes involved.