MPS is Not the Door to Managed IT Services
Over the last few years, print and copier service providers have begun entering the Managed IT Services space. Those which have had success are realizing their history as print/copier providers do not, for the most part, offer them any real value toward their success in Managed IT Services.
Let me explain: Let’s say, one day, a particular taxi service company realized that over 90% of their passengers took rides to restaurants. Would it make sense for the taxi company to open a restaurant? The two business models are completely different. I don’t believe the taxi company’s fleet manager would necessarily make a good Maître d’.
Managed Print is not a conduit to Managed Services
It never was, and it never will be—as a profitable strategy. Have I upset you? I am not saying certain well-run companies can’t make the transition to Managed Services. I think some can, and I know that some have. The majority, however, will not understand my taxi analogy and will make a total mess out of their transition.
Think about the word “transition.” Nowhere in its definition does it have the same meaning as the word addition, which is what most print service providers do. They see Managed IT Services as an “addition” to their model. They like to say they have “transitioned” into an IT company, but I would say they simply sold someone some computers, printers or a server. All successful Managed Services providers know—that is not Managed Services.
Here are some facts: Managed Services providers know that recurring print revenue represents less than 2% of the total recurring Managed Services revenue. For example, if an organization with 25 users is engaged in a complete Managed Services agreement from end to end, the recurring services contract would be, at minimum, $4,000 a month or $160.00 per seat. This same customer would have a copier and maybe a couple of printers. They would generate five thousand pages a month at .015c per page. This would equate to just $75.00 a month, which represents 1.8% of the Managed Services contract. I am convinced this explains why the larger, more successful Managed Service providers never attempted to transition the other way: into Managed Print.
OK, I can hear the loud cries from some of the print providers reading this, saying that $4,000 a month is crazy and their customers would never pay that. I guess the answer to that objection is—you’re right, your customers will never pay you that. I say this based on your thinking, and the type of customer you seek. Anyone with a heartbeat is a copier prospect. In Managed Services, the provider must be selective or they will doom themselves to failure. When your print/copier company mentality changes or Transforms, you will understand the value and the real cost in providing end-to-end Managed Services. After all, the real reason for transforming from Managed Print to Managed Services is to prevent your business from a premature demise, as print and copy volumes continue to decline. Right?
A few suggestions for the transformation to Managed Services:
1. Stop believing Managed Print Service is a door of opportunity, opening into the world of Managed IT Services. Managed Print is merely the “peephole” in the door; you can look through it, but that does not mean you can open it;
2. Stop believing that your large base of print customers makes you a candidate for delivering Managed Services successfully to those Managed Print customers;
3. Stop listening to consultants who tell you the opposite of my first two suggestions.
Remember that Managed Print is simply the lowest hanging fruit on the Technology tree, and in saying that, it’s also the least valuable. Your success in Managed Service will only come from a “transition.” If you believe it is merely an additional service offering, the rewards will not come.
“You can’t walk a new path forward if you allow the old path to continually get under your feet.” RJS
Have you found this article, “MPS is Not the Door to Managed IT Services” helpful?
Ray Stasieczko is a forward-thinking and often controversial writer and speaker. You may not want to agree with everything he says, but you are compelled to read and listen. To do otherwise could spell doom.
He has called the imaging channel home for nearly 30 years and served in various roles and has contributed nearly 100 articles to the industry’s publications. Ray has also spoken at the RT Media Summits in Cairo, South America and China. You can contact him and watch him on LinkedIn.
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