GROWING WITH MANAGED IT SOLUTIONS: REFLECTIONS ON DAY ONE OF ITEX 2017
Andrew Palmer & Dave Leabeater, 20 April 2017
ITEX 2017 is back in Las Vegas and Andrew Palmer and Dave Leabeater are on-site. This is Andrew’s 5th year visiting ITEX while it is Dave’s first year.
Andrew’s Day 1 Summary:
We started the day going through some Market Analysis as per prior years: print margins and print volumes are in decline year on year by 2%, although business inkjet is up 11% and analysis shows this will continue to grow.
The primary reason for US dealers’ growth in the last 12 months have been:
- Better internal business systems/processes
- Increased services
- Added sales staff
The biggest challenges dealers have faced in the past 12 months were:
- Price/margin pressure
- Ability to sell solutions/complex contracts
- Generating new leads
Growing your Business Profitability with Managed IT Solutions.
This session clearly revealed that dealers now prefer to build or partner with, rather than acquire, an IT company. Data shows that IT companies are too expensive and a cultural fit is very hard.
Interestingly, copier companies that sell a Managed IT solution grow 20% quicker than just IT companies. This is because copier dealers traditionally have a better sales process, a client list to sell to that are on contract, and know how to sell a finance solution.
It was pointed out that If you chose to invest in a Managed IT solution, analysis shows that it will take you 3 years to make a profit.
Success in Selling Cloud Solutions
There are heaps of cloud based solutions out there especially in the Content/Document management areas. If you are going to implement one of these solutions you need to commit and:
- Find a Subject Matter Expert (SME) that can sell a solution as you do not want to distract your copier sales guys from the core business and they will not sell this well anyway! (SER has touched on this in our Managed Services Series)
- Implement the solution at your office. “Eat your own dog food” was the American colloquialism used
- Have patience
- Acknowledge that the sales cycle is longer BUT in the long run it is more profitable and leads to more hardware sales!
I will hand it over to Dave to fill you in on what he got out of the day.
Dave Leabeater’s Day 1 Summary
General office printing has the traditional black and white print declining (5.5%) faster than the up-take of colour (1% increase). Equipment supplies and service of core office print of A3 and A4 are in decline at 2%. As a result, the conversation around a broader product and service offering as increasingly important continues.
Off the back of the decline of core office usage, the number one dealer challenge is Price/Margin pressure. To maintain revenue against the tide, whilst MPS facilities has the largest up take at the top end of town (500+ seats), across the board the performing dealers have focused on:
- MIF protection
- Efficiency of sales and service
- Creating lock-in (stickiness) with solutions and services
The session on ‘Transform with MPS’ supports the above, however more importantly it highlights the need to hunt new business as existing client retention sits at 89%.
To tackle this transformation, the key is in assembling the right sales team aligned with your company’s objectives, market strategy, and ensure this is underpinned by continuous marketing, training, execution, and adjustment.
A perspective which caught my attention was:
“MPS is a financial deliverable, not a technology deliverable for your client.”
The integration of Managed IT into your copier business continues to revolve around 3 options:
Whilst “Build” appears to be the least preferred due to the heavy investment outlay, no one has found the ideal approach. However, the key elements of venturing down this path are:
- Be patient (approximately 3 years to pay off)
- Choose ONE target customer size range
- Have ONE offering
- User-based as opposed to device-based
Why would you enter the Managed IT arena?
- The most expensive part for your clients regarding their IT isn’t acquisition, but support and maintenance.
- IT budgets continue to grow.
- Research indicates Managed IT is the most consistent and profitable IT business model.
General Manager, S.E. Rentals
S.E. Rentals are the finance as a service specialists that will help you grow your business by providing finance solutions in an 'all things technology' future. We provide you with the flexibility, scalability and agility to help you achieve your Managed Service objectives, and our unique in-house software platform automates the process for you with a One Bill Solution - your bill - your document - your branding.