Document Imaging—the Evolution and Revolution

Many people ask me where I see the copy/print industry in the future. To answer that, we must first define what we mean by “future.”

I see the future as a constant journey towards relevance. As we witness the world’s many technology advances over time, we must agree that technology is created to replace and improve the past. It doesn’t take us back in time—it brings the future to today. Some will capitalize on this, while many stubbornly continue “bringing the past to the future.”

The world of document imaging is modifying. Are you?

Some generations grew up with no option but to make physical copies of documents. In response, our industry always found a slogan, and always had a value proposition. Printing was growing, and things were great. The market was one of the greatest service annuity businesses in the world. I believe the copy/print industry not only invented they perfected the business of the service annuity platform. As Edith and Archie Bunker sang long ago, “Those were the days.”

Well, it’s not 1980 anymore, and most of today’s businesspeople are heading to the cappuccino machines, not the copy machines, as digital copies have become more prevalent. Recently, I was at a doctor’s office and asked for a copy of the co-pay receipt. The billing coordinator asked, “Sure, what’s your email address?”

Many organizations are learning hard lessons when evolution changes how customers engage. The copy/print customers’ desired outcome is producing physical documents from a digital world, while also moving some physical documents to the digital world. Which means everyone in this industry must ask this question: When will the digital world become the preferred means by which customers read, manage and distribute documents? Many would say that time is now.

Physical document imaging will continue declining for the foreseeable future. And the benefits to its equipment resellers and service providers will also diminish greatly. Those organizations that capitalize on industries in decline will prosper. But sadly, many will continue under the belief that the past has a responsibility to them while operating under their old ways.

“If we don’t understand how we can be defeated we are at the mercy of those who plan and execute our defeat.”

What the future holds for document imaging is known only to the future. No secret lenses allow us to see tomorrow. However, there are plenty of examples of those who put more focus on maintaining the past than exploring the future, and we know what those situations tell us. The leaders of the Document Imaging Industry must take the warnings seriously—markets have no loyalties to obsolescence.

Customers determine the value of a business. They always have and always will. The signs a market is in trouble is when customers of “old-style thinking” resellers dismiss their outdated value propositions and purchase more with a commodity mindset. When things decrease in needs, they also decrease in value regardless of a reseller’s wishful perceptions.

Where are we headed?

Document imaging equipment is quickly moving to the realms of the pull-economy. Customers will no longer be sold a value proposition regarding dots on paper. Dealers and manufacturers must listen to customers, while also keeping abreast of industry trends so they can continue to innovate.

For example, there are currently two deliverables associated with print/copy equipment: equipment sales and service/repair. Thinking that these two deliverables must or will always remain together is the kind of stubbornness a new competitor seizes on.

End users will continue declining in their need of print services. A3 will become strictly a vertical product. A4 can fulfill the needs of over 70 percent of the market, and its duty cycles and speeds have made segment selling of the past obsolete.

Nearly every document created over the last 20 years was born in the digital world. Customers are becoming less enthusiastic about analog-to-digital conversion features, as well as going to the internet from a copier’s/printer’s control panel. The decreased value of faxing was the first victim of this.

The industry will transition with or without anyone’s permission. Like many others, it is at the mercy of the customers. We cannot force the old methods to customers’ desired outcomes. We can, however, create the new methods. We can re-invent how we deliver what customers want. And we can diversify our deliverable to offset the losses in revenues from decreases in print product use.

Here are three suggestions for every copier/printer dealer.

1) Define who you are.

Don’t fool yourself—you’re not a solutions provider if your services (not including print) produce revenues less than 20 percent of your revenue from print sales and services. Don’t fall into the mindset of overvaluing your services. Write a business plan and start diversifying. Otherwise, customers will begin to spend less and less with you.

2) Change how you do what you do.

Look for ways to deliver differently. Listen to customers and make sure your value proposition has value to them. For example, if your organizations was in the market for a copier/printer, what would you buy? Every dealer provides service, and most fight each other over the .0000’s. Print is declining, and represents less than 2 percent of nearly every IT budget. Dealers must stop pretending that customers would go out of business if their copier/printer is down for four hours or was completely removed.

Today’s customers have replaced the concerns over the copier with those of cybersecurity. Customers are worried about backups, not the ability to go to apps on their copier, or dealing with leases, buyouts and end-of-lease return options. Customers want transparency, flexibility, and most of all, equipment with less service intervention. They want experiences void of all the complexities of the current deliverable. And out of this, providers must be inspired to find new solutions, as new, innovative companies re-invent the game.

Remember: Customers who rely on service platforms value them more when they are void of the need for service, rather than how good service is when they constantly need it.

3) Know and control your cost with discipline.

My last suggestion comes from my passion for improvement, and is a warning based on observation.

For over five decades, our industry has focused mostly on what the customer spends, and trying to save them money. But now is the time for businesses to focus on the cost of delivering what they sell. There will surely be pioneering changes in the delivery of print equipment and its services. However, the industry cannot offset cost overruns as it once did when the print deliverable was growing. Diversifying to the new deliverable, or completely re-inventing the old one, will take astute attention to cost details.

The ability to control costs and align them with the impacts caused by market conditions and equipment improvements will be paramount. So it’s time to rethink everything. Rethink why you’re overselling equipment based on outdated segment classes. Rethink why you’re warehousing more than four weeks’ inventory of parts and supplies. Rethink how the old service department will become the new service department or, how the reduction in service needs will impact human capital needs. Rethink how your leaders and their teams can modify and rethink your value.

Imaging dealers will need to decide if this new world is something they truly want. If not, it’s time to plan your exit strategy. Today, they have three choices. They can diversify and grow, they can maintain, or they can exit. Those choosing to maintain are fooling themselves that it’s an actual option. So, they either grow through diversification, or they exit the industry. A planned exit or a growth strategy takes the ability to control and recapture wasted operating dollars. Those exiting will gain more with a higher EBITDA, and those wishing to grow will need to re-invest in their expansion.

One thing is crystal clear: dealers must ensure their cost to deliver services aligns with the reduction in service needs and service revenues.

“What all business leaders in all industries must prepare for, is the new competitor who doesn’t care at all about how things used to be.”

Ray Stasieczko
About the Author
Ray Stasieczko, is CEO/Founder of TEASRA, The Innovation Channel, a collaborative platform for corporations who service resellers from all channels. He has been involved in the office technology channel for nearly 30 years. An ENX Magazine Difference Maker, Ray is an industry thought leader and a contributor to many industry publications.