‘Managed Print Services’ woos partners with better business opportunities

0
Read Article

MPS solutions are becoming more widely available, filtering down from the enterprise level to the mid-market and SME sector

As managed print services (MPS) are becoming widely adopted by vendors like Xerox, Canon, Konica Minolta, Kyocera and a few others, channel partners are becoming means for customers to manage printing costs. Many traditional printer partners are starting to diversify into MPS because the opportunities for the channel are huge.

Rudraraju Kumarraju, Managing Director, Tricom Impress, one of the leading Xerox MPS partners, located in Hyderabad, informs, “Today there are many MPS providers in the market and many interpretations of the service. As a service provider, we have to differentiate ourselves to build capabilities to offer the right MPS offering to the customer.”

A managed service helps businesses buy printers, supplies, maintenance and support in an all inclusive, ongoing contract, classed as operational expenditure rather than having to make large capital investments. It also provides resellers with regular income and the chance to build strong long-term customer relationships with upselling and cross-selling potential.

Delhi based Anuj Modi, CEO, Modi Infosol, who has gradually started adding SMB customers for MPS business, feels that MPS can give resellers a chance to deepen their engagement with customers. He says, “Under MPS, we need to understand the customer’s printing needs to streamline the document workflow for quicker and easier archiving, retrieval and sharing across the organisation, within a highly secure infrastructure.” He believes that MPS solutions are becoming more widely available, filtering down from the enterprise level to the mid-market and SME sector.

However, another large SI, Team Computers believes that MPS has become an integral part of its service offerings. Tabish Kaseem Azmi, Practice Head, Managed Print Services, Team Computers, describes MPS as a critical part of Team Computers’ offerings, which can be offered in conjunction with the provision of a wider range of managed services.

“We are currently leading the MPS space with our capabilities. Through our Proactive Device Management, which is an inherent part of our approach towards MPS, we can centrally track the complete printer fleet across all locations. It helps us study and analyse the working of printers as well as stay updated on the status of usage and consumption in real time. In partnership with all leading OEMs, we are able to offer a one-stop multi brand hardware and software support. As a result, from the aspect of vendor management, the pressure on admin reduces considerably,” Azmi shares.

Some partners like Som Imaging Informatics, Team Computers and Orient Technologies may already have a strong, established background in MPS and might be looking for ways in which vendors and distributors can add to their strengths. Whereas, others may be new in the space. Anand Karapurkar, Director, Infobahn Technical Solutions, informs, “Contractual business is way different than the transactional one. MPS being contractual in nature, we had to scale up the sales team by making them understand the financial and legal implications of contracting, putting people and process for monthly print count reconciliation, billing and collections and deploying support personnel for meeting the SLA requirements. We are a bit conservative in adding new customers, as this is not a transactional, but a contractual relationship.”

A natural shift
There are differences between what partners expect from vendors and distributors when it comes to MPS. But there will also be big differences in the services that their customers require – ranging from basic print services to more advanced MPS, including print and document-related solutions. Print vendors need to provide a configurable MPS platform with process capabilities, resources and flexibility across an entire continuum of MPS offerings.

Ujjwal Mhatre, Director – Sales, Orient Technologies, who has been operating in the MPS business since last five years, views MPS as part of the natural shift towards services that are dominating the whole of the IT market. He says, “As enterprise customers have been getting benefits of secure printing, print retention, reports on print-per-user, control on colour and mono printing, etc; MPS offers great opportunity for resellers to broaden their service portfolio, which plugs a need for SMEs that lack the in-house IT expertise required and need to focus on their core business.”

Azmi also echoes, “Vendor support is essential for partners taking their first steps into MPS as they lack the capital to manage maintenance contracts themselves. An OEM’s support is important in MPS and we enjoy it throughout the service cycle of a customer. From pre-sales support to product support, to solution support, we are backed by our OEMs throughout to make sure our customers’ environment is always optimised. Brands like Xerox also help us with software and tool support in some cases.”

Mindset for longer-term sales
For partners, MPS could represent a fundamental change in their traditional sales cycles. The approach of addressing an isolated business issue by offering a single product or managing an isolated element is no longer a business model for growth. To achieve this service-oriented approach and consultancy status, resellers must work closely with vendors to open the door to MPS sales opportunities and develop skills within their teams and move to a sales model that considers longer-term customer needs.

Modi believes there is a big opportunity for partners to move from products to services, expanding their markets and profit potential. But he thinks another way to potentially provide some differentiation is its cloud print service (CPS). “It expands the scope of MPS to include the complete document environment, outsourcing the print server, software and security to an off-site data centre.

Sharing his views, Modi says, “CPS has the potential to be a natural successor to MPS. It builds on the same proven benefits, making for an easy sale and helps customers release even greater resources, while making the print environment more flexible.”

Building and exhibiting a right set of service capabilities is essential for partners to stay relevant in the market and enjoy vendors’ support. Giving more stress on the capabilities, Roopa Sri, VP – Client Compute and Print Business, Valuepoint adds, “We offer a continuum of print services to our clients. Specifically with respect to MPS, we have strengthened our workforce in terms of sales, analysts, service delivery (including engineering resources) and also put together a helpdesk department (which can also be deployed on-site) to provide a complete, end-to-end customer experience. We also leverage a set of tools to manage the service – that provides basic to advanced functionalities like client dashboards, analytics on usage, management information systems, proactive monitoring, authentication-authorising-accounting solutions, mobile printing solution, etc. Additionally, we also use state-of-the-art assessment tools. From a business model perspective, we offer utility model (per-click), lease and click, etc.”

MPS promises healthy margins
Despite digital transformation initiatives across all verticals, paper-intensive processes still bog down many SMBs. A recent survey states that on average, 46 per cent of all SMBs report that time is wasted on these paper-laden workflows, every single day. Because these same organisations seek cost and paper reductions and improved and digitised document workflows, ample opportunities exist for partners to assist them with MPS contracts. MPS is a scalable model. So as your print requirements and complexities increase, MPS can also scale to manage the complexity.

In a typical MPS scenario, one of the crucial roles a partner plays is of MPS assessments. Partners can better engage prospects, highlight the fastest routes to cost reduction and productivity increases and win a spot as their trusted advisor. Assessments also highlight cost-saving opportunities through workflows, applications, and processes. Network and data security are top concerns for IT departments, making security important in mobile printing. When partners build recommendations into their assessments, it’s natural to introduce cloud, mobile and SaaS-based solutions as they become available, adds Modi.

Having the right set of devices at right places, MPS can translate into a healthy margin. In the case of Orient, it has been experiencing results in a tune of 30 per cent YoY growth and profits figures are moving in an upward direction. Last year’s results show the margins are up to 18 per cent.

In the view of Kolkata based Shantanu Som, CEO, Som Imaging Informatics, who has been into MPS for last 12 years, with a customer’s base of over 150, “MPS is becoming a steady revenue stream for partners although the deprecation of machinery and increasing competitions are making this space tough to accommodate more players. Traditional MPS contracts have a duration of one or three years, and the equipment is often replaced with a new, post a three-year contract.”

For Tricom, the MPS business records a margin of 20 to 25 per cent. Year after year, the Xerox partner has seen tremendous growth in business vis-a-vis MPS, especially with enterprises (mainly SMBs) embracing the services at a great pace. This year, it anticipates a growth of 50 to 60 per cent in MPS business.

Many enterprises are embracing print outsourcing and moving towards MPS. From future perspective, partners see a huge potential as the Indian market is wide open with an inorganic growth. “We are expected to grow by 70 to 80 per cent, as compared to last year,” Roopa Sri comments.

Giving an example of one of the customers, Karapurkar describes, “We have a large automobile manufacturer as our customer. Their major pain point is control on print. They wanted control, not only from cost perspective, but also from security and manageability perspective. So we offered them our MPS solution. As a pilot, we deployed it in one of their plants. We are now not only giving them count reports, but also user-wise print report which gets uploaded in their SAP system. This helps them assign exact cost per user, as well as department wise. This has given them complete cost control.”

Also through the remote management tool, the fleet gets automatically managed with minimum intervention from IT teams. The customer is now wanting to deploy this enterprise-wide. “Margins on MPS are in the range of 8 to 10 per cent, but the beauty of this business is that the contracts are for longer periods, so the revenues are assured. Moreover, we are focusing to grow with more devices within the same customer organisation, rather than adding more and more new customers. We plan to add not more than one large customer in one quarter,” he asserts.

Similarly, for Team Computers, one of the leading finance companies has been able to save up to 30 per cent of the overall printing cost, on existing print infrastructure. They have visibility of costs, which was unavailable earlier. Another customer is a well-known cement manufacturing company. With scattered manufacturing units across the country and quite a few in remote areas, they are now able to track printing costs centrally. They benchmark their printing costs centrally every year and Team Computers helps them achieve their targets every time. Also, with backup machines installed at critical locations, they don’t suffer from work loss due to printer downtime.

“In terms of margins and profitability, it varies, and depends on print volume, existing infrastructure, locations, among plenty of other factors. However, our focus is not always fixed margins, but to help customers take an environmentally responsible and financially wise decision to support their organisation,” tells Azmi.

Som explains, “As the adoption of MPS is catching up rapidly, large organisations have stopped purchasing large MFPs. When you purchase printers, scanners and copiers, you’re investing in hardware that can depreciate in value rapidly. The older it gets, the more it degrades in performance and grows more expensive to maintain. After five to eight years, it will need replacement by new hardware, leaving the company responsible for disposal of the old. Shifting to MPS involves moving from a CapEx investment – the purchase of new printers, scanners and multi-function devices – into OpEx, continually monitored and regularly assessed, with devices updated and replaced as and when necessary to deliver the appropriate service.”

It has also been seen that to offer CapEx over OpEx, many MPS players like Canon and Konica Minolta had been offering Reconditioned (RC) machines, thankfully with the recent BIS standards and new compliance, the import of such RC machines has been stopped in India. Som feels, “This recent move will allow a level playing field for partners, who otherwise used to refrain from this selling of second-hand machine. We look to add more new customers, however the machines will be expensive by 10-15 per cent. Even when MPS might seem like a more expensive option, it tends to win out when it comes to Total Cost of Ownership (TCO) across a period of several years. If you want to reduce risks, control expenses and give space for the company to scale, it’s simply the most efficient way to go.”

The market is anticipated to grow at a considerable pace, owing to the government/corporate regulations to curb paper wastage and improve cost of operation.

(With inputs from Rachana Jha)


If you have an interesting article / experience / case study to share, please get in touch with us at editors@expresscomputeronline.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here