Yesterday, I heard about a business model, with an amazing growth track, that sells herbs across the United States. They’re not just selling plants—they’re selling an amazing dining-and-food-prep experience by helping clients focus on the things they love to do without worrying about how to maintain herbs.
They assure their customers that the herbs will outlast any other company’s product, and for some plants, they’ll never have to purchase another of that kind. Based on each client’s specific order, they dispatch a complete strategy including ongoing weekly recipes and shopping lists with timely instructions to properly care for the herbs. By monitoring every client’s ZIP code, they even send alerts to help customers protect the plants from harsh weather.
Who would’ve guessed that an herb company’s business model could lay out the perfect example for office technology?
When you read articles from within our industry, many zero in on something that creates strong opinions—what today’s perfect business model is, or what the business model for the future in our industry looks like. I enjoy canvasing such articles and have an extreme interest in the roadmap for the future technology-sales organization. I’ve heard a lot about “flex-tech” offerings and “everything-as-a-service.” I think we’ll get there, but I don’t believe they’ll be as easy to implement as they are to advertise.
Dealer of the Future
The dealership of the future will have a completely different market to master. It’ll not only have to find new products and services to replace the mature MFP, MPS and IT markets, but it has to sell to a millennial buyer—a buyer who has a completely different view on how business should be done.
These buyers are used to a stress-free, no-cost, make-my-life-easier mobile app that does amazing things with a walk-away commitment. They typically don’t sign long-term contracts, and because they know that technology is changing faster than ever before, they expect (and demand) that updates deliver constant improvement to their experience. And as they take on leadership roles, they’ll carry those expectations into your marketplace and measure your performance with those standards.
Not too long ago, I was at a technology show in Las Vegas. At lunch, I overheard a large group of vendor sales reps who call on dealer principals sharing how difficult it was to get dealers to change the way they do anything! Isn’t it ironic that the dealer’s business is constantly introducing change to their marketplace, but they themselves, for the most part, fight change? Several times there was a resounding “amen” as they all agreed how stubborn some of their clients were. As they finished up lunch, most were relieved to find out that they weren’t alone and others face this exact challenge. They laughed, shook hands and dispersed.
You might ask, “What does that have to do with anything?” And I’d reply, “Everything!” If you’re one of those hardheaded, stubborn, unwilling-to-change dealers, I’ve got news for you. As your market competes worldwide and your target prospect takes over from the millennial generation, you’d better find your change gear and shift it, or you’ll cease to be relevant.
Which brings us to what “flex-tech” or “everything-as-a-service” (XaaS) from earlier in the article actually mean. Both refer to your “product” offerings. I know a lot of people have a hard time understanding that services are products too, but that doesn’t change the fact that they are. Let’s look at “everything-as-a-service” first, and then consider how “flex-tech” might influence it.
What it All Means
“Everything-as-a-service” can literally mean everything. Any process that runs inside a business can be purchased from a service provider who performs those services. But imagine that your company provides it all. The advantage to the end user usually means they’ll get a worry-free experience (like the herb company), and a better, faster and cheaper performance-to-cost result. But saying “everything-as-a-service” is easier than actually executing it. Just look at the challenges traditional MFP dealers have had trying to sell MPS—ring a bell?
Almost always, it’s the dealer who has to interpret and transform the manufacturer’s offerings (purchased one way) to fit the dealer’s offering (sold another way). Compound that with the desires of the millennial buyer, who wants to add it or remove it anytime they feel like it. With that model, how do you create a revenue forecast, or harder yet, a commission structure that actually works? Challenging, isn’t it?
When you consider the list below, where would you start?
- Operations-as-a-service
- Infrastructure/communications
- Backup/recovery
- Applications/support
- Digital marketing/Web strategies/ecommerce
- CRM/call center/automation
- Sales process/forecast
- ERP/finance
- HR/recruiting
- Integration/software development
- R&D/product development
- Supply chain
Each of these disciplines carries an enormous value to the right client. Yet if you break down the adoption of just one item from the above list, you’ll see how enormous the “everything-as-a-service” product really is. Transforming your company to deliver such value demands an extreme strategy.
Methodical Approach
I would eat the elephant a bite at a time. You’ll have to analyze every part of your business, and develop your adoption plan into each department. Start with the services that are closest to your current offerings and build that roadmap strategy, making sure you define for your team what success looks like. A great self-evaluation for your company could help you find your first steps forward.
Obviously, you must maintain today’s business levels while finding your future. Imagine adding only three of the above categories (that you don’t sell today) to next year’s go-to-market strategy. Can you see why you can’t wait, and why it’s so important to build out a roadmap? Pushing any three of the list above into your organization’s sales could kill momentum if not done carefully.
Now, you’ve decided on “everything-as-a-service” as your destination. Great! Your current business’ success means you should already know what you do well and what you don’t. You understand your weak spots and performance challenges.
Early on in the MPS world, there were dealers who modified their website to include managed print services who, if called on, had no chance of executing MPS well. Rather than that approach, set your company up for continued success by fixing the things that are broken today that will support your “everything-as-a-service” requirements for tomorrow.
Services can also be regional. When you’re building your roadmap, make sure you consider what products will fit your existing marketplace best. For example, take a rural dealer who wants to do MPS, but has few customers with more than three or four print devices. His desire to sell MPS doesn’t outweigh his market’s reality—make wise choices.
The secondary product I believe will be influential is “flex-tech,” in which technology services are fluid. They grow or shrink in monthly fees and scope based on the client’s shifting need for support. If you attach an “everything-as-a-service” mentality to a “flex-tech” financial model, you’ll see things become more of a challenge. Most sales forecasts consider both net-new business and existing business. The benefits of flex-tech could be a major advantage for attracting net-new business; it doesn’t create the same benefit for forecasting on the client retention side. Imagine every client has the ability to add (a good thing) or shrink (a bad thing) each and every month. Did your stomach just wrench up? Be prepared, because I believe it is coming.
With application development as one of the fastest-growing industries across the world, it seems possible that every month will reveal bigger and better business solutions. “Everything-as-a-service” is the delivery model, but it must be backed with perfect execution, or it’ll become “nothing-as-a-service.” I don’t think there’s any question that a services model is where we’re headed. Combine that with a “flex-tech benefit” to create an unbeatable value for your end users and a bottom line value for your organization. The question is, can you deliver it?
