CONTENTS Volume 13 No. 9
FEATURE ARTICLES 10
Device Management Don’t overlook these ‘value-add’ solutions
A Tool or a Liability? Cell phone policies must be revised to include PDAs
by Brent Hoskins Office Technology Magazine
by Robert C. Goldberg BTA General Counsel
From the buyer’s perspective, competitive products may simply appear too similar. Something needs to distinguish one vendor’s product offering from another. There are “value-add” solutions that may be overlooked in some dealerships — device management tools and applications.
It is time to revise your cell phone policy to include Blackberries and PDAs.
PRINCIPAL ISSUES Operational Improvement Careful planning separates you from competitors
by Tom Callinan Strategy Development
The Color Business Overcoming the common hurdles — cost and control by Michael Greenberg PrinTelogy
It doesn’t seem to matter whether you are a copier dealer, solution provider or printer reseller, we are all scrambling to deploy color to our customer base as quickly as possible — and we all face the same hurdles to increase our color business.
COURTS & CAPITOLS
‘The Open Road’ Sharp hosts National Dealer Meeting Feb. 5-8 by Brent Hoskins Office Technology Magazine
Effective operational improvement will divide successful from marginal industry players.
New Name, New Outlook How Copy World became Stratix Systems
by Brent Simone Stratix Systems
A company name change should not be approached on a whim and without research.
SELLING SOLUTIONS Sales Compensation Plans need to cater to your employees’ needs
With a focus on its Open System Architecture (Sharp OSA) and expanding product line, Sharp Document Solutions Company of America hosted 500-plus dealership attendees Feb. 5-8 for its National Dealer Meeting.
‘Connect for Growth’ Konica Minolta hosts Business Conference & Expo By Brent Hoskins Office Technology Magazine
Introducing dealers to the first product in its next generation bizhub line — the bizhub C550 — Konica Minolta Business Solutions U.S.A. Inc. hosted its Connect for Growth_2007 Business Conference and Expo Feb. 6-9. 4 | www.of ficetechnologymag.com | March 2007
by Jim Strauss MOTIVE8S Inc.
There are important elements you should consider when creating compensation plans.
DEPARTMENTS Business Technology Association
April-May Education Calendar BTA Membership Application
Executive Director’s Page
BTA President’s Message
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EXECUTIVE DIRECTOR’S PAGE
BTA Finalizing 2007 Compensation Report
Answers: (1) A ; (2) C ; (3) A ; (4) B ; (5) B ; (6) A
6 | www.of ficetechnologymag.com | March 2007
(3) What is the median total compensation package for a general manager? (A) $72,000 (B) $81,000 (C) $94,000 (4) What is the median total compensation package for a warehouse supervisor? (A) $28,000 (B) $36,000 (C) $48,000 (5) What is the median total compensation package for a solutions sales rep? (A) $44,000 (B) $60,000 (C) $68,000 (6) Which region of the United States offers the highest median total compensation package for general managers? (A) East (B) Southeast (C) Mid-America (D) West (7) Among respondents in the West region of the United States, what is the median total compensation package for a sales rep with six-plus years of experience? (A) $93,500 (B) $107,500 (C) $127,500 (8) Among respondents in the MidAmerica region of the United States, what is the median total compensation package for a service technician with 3-4 years experience? (A) $33,591 (B) $26,441 (C) $40,861 (9) Among respondents with annual gross revenues of $3-$5 million, what is the median total compensation package for CEOs? (A) $80,000; (B) $90,000 (C) $100,000 (10) Among respondents with annual gross revenues of $10-plus million, what is the median total compensation package for service technicians with 1-2 years experience? (A) $24,700 (B) $30,600 (C) $44,300 Is your current compensation plan competitive? To find out, you need to see how your fellow dealers are compensating their employees. Download your copy of the BTA 2007 Compensation Report. —Brent Hoskins ; (7) C ; (8) A ; (9) C ; (10) B
s I write this, the BTA staff is finalizing the BTA 2007 Compensation Report, preparing it for availability to the association’s members. It is based on the data submitted by 77 dealerships regarding their compensation plans for sales, service and administration. The report, which also includes the percentage of respondents offering each of various employee benefits, was compiled for BTA by eBrain Market Research. It is the latest in the association’s Benchmarking Series of reports. I know you will find the results of interest. The full report will be available to members to download for free in the members-only section of the BTA Web site (www.bta.org). For non-members, the cost is $200. Watch for it online. Click on “Research” and then “Benchmarking Series” from the home page of the site. To provide you with a taste of the type of information it provides, here is a sampling of some of the metrics from the report. Just for the fun of it — as I’ve done in the past — I’ll present it here in the form of a quiz (the answers are at the bottom of the page). That way you can see if your “hunches” are correct. If not, then you would especially benefit from downloading the full report: Among all respondents to the survey (questions 1-6): (1) What percentage offers employees a medical plan? (A) 91 percent (B) 77 percent (C) 59 percent (2) What percentage offers employees a dental plan? (A) 38 percent (B) 68 percent (C) 57 percent
Executive Director/BTA Editor/Office Technology Brent Hoskins firstname.lastname@example.org (816) 303-4040 Associate Editor Elizabeth Marvel email@example.com (816) 303-4060 Contributing Writers Tom Callinan, Strategy Development www.strategydevelopment.org Robert C. Goldberg, General Counsel Business Technology Association Michael Greenberg, PrinTelogy www.printelogy.com Brent Simone, Stratix Systems www.stratixsystems.com Jim Strauss, MOTIVE8S Inc. www.motive8s.com
Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Membership Marketing Manager firstname.lastname@example.org Cathy Kenton Membership Sales Representative email@example.com Gary Hedberg Accounting Manager firstname.lastname@example.org Mary Hopkins Accounting Clerk email@example.com ©2007 by the Business Technology Association. All Rights Reserved. No part of this publication may be reproduced by any means without the written permission of the publisher. Every effort is made to ensure the accuracy of published material. However, the publisher assumes no liability for errors in articles nor are opinions expressed necessarily those of the publisher.
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First BTA ProSolutions to be Held April 16-17
he Business Technology Association is known for many things — its long, rich history, its many education programs, research reports and services, and its success in facilitating opportunities for dealers to learn from one another. Among those who know BTA very well are the many members who have come to rely on the guidance the association provides them. Certainly, we are always seeking ways to help dealer members ultimately boost the bottom line. I’m pleased to share with you some details on BTA’s latest initiative to help its dealer members. Without a doubt, those members who take advantage of this new BTA offering will be better positioned for future success. In recent years, many of you have reaped the rewards of BTA’s ProFinance class, led by John Hey and John Hanson. Many have also taken advantage of our CD-ROMbased ProTech training. In April, we will be launching a new addition to this family of education courses — ProSolutions. You may already know our instructor, Darrell Amy, president of Dealer Marketing Systems Inc. In recent years, Darrell has helped numerous dealerships as they made the transition to solution sales through his Document Solutions Specialist Boot Camp. Today, that class is ProSolutions and, as a BTA member, you can receive a tuition discount of up to $580 less than the nonmember tuition fee. (BTA’s $150 discount coupon can be used for this course.) I like Darrell’s take on the solutions transition. “It’s time for dealers to stop 8 | www.of ficetechnologymag.com | March 2007
talking about solutions and start landing profitable sales,” he says. “The dealer’s customers don’t want to know about technology. They want their business problems solved. The solutions specialist or major account sales rep is just an ‘empty shirt’ until he or she can understand customers’ business problems.” ProSolutions will fill that empty shirt with an individual who can help take your dealership to new heights. Attendees will learn, for example, how to get the attention of the top decision maker and conduct a business process analysis. They will also learn how to overcome the common objections inherent to the solution selling process, sell billable consulting services and create ROI-based proposals. Solution specialists, major account reps and sales managers will all benefit from attending this class. Darrell’s reputation as a presenter is outstanding. Written comments from a couple of his past students confirm this reality. From Christopher Zurn, director of professional services, Erie Copy Products: “Darrell’s Boot Camp has given me the knowledge and confidence that I need to sell solutions.” And, from Glenn Pinckney, sales director, DocuSource: “Darrell has an outstanding understanding of how this industry is changing … Committing to Darrell’s training is money well spent.” Do you have some “empty shirts” walking around your dealership, making no strides in the area of solution sales? If so, I encourage you to sign them up today for ProSolutions. The first class will be held April 16-17 in Little Rock, Ark. To register or for more information, visit www.dealermarketingsystems.com/BTA. — Dan Hayes
2006-2007 Board of Directors President Dan Hayes Purcell’s Business Products 222 E. 1st St. Campbellsville, KY 42718 firstname.lastname@example.org President-Elect Shannon Oliver 25 Wheaton Circle Greensboro, NC 27406 email@example.com Vice President Ronelle Ingram Steven Enterprises Inc. 17952 Sky Park Circle Ste. E Irvine, CA 92614 firstname.lastname@example.org BTA East Thomas Chin Accolade Technologies LLC 604 Hampshire Road Mamaroneck, NY 10543 email@example.com BTA Mid-America Mike Blake Corporate Business Systems LLC 2018 S. Stoughton Road Madison, WI 53716 firstname.lastname@example.org BTA Southeast Bill James WJS Enterprises Inc. 3315 Ridgelake Drive P.O. Box 6620 Metairie, LA 70009 email@example.com BTA West Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. P.O. Box 1170 San Bernardino, CA 92408 firstname.lastname@example.org Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkle Newman & Rosenberg Ltd. 222 S. Riverside Plaza Ste. 2100 Chicago, IL 60606 email@example.com
Device Management Don’t overlook these ‘value-add’ solutions by: Brent Hoskins, Office Technology Magazine
he paper capacity, print speed, finishing capabilities and price are important, but, today, the buying decision is often determined by the “value add.” From the buyer’s perspective, competitive products may simply appear too similar. Something needs to distinguish one vendor’s product offering from another. From the dealer’s perspective, competing on commodity features, price or even brand name does little to set the dealership apart from others. To address the need for a “value add,” the industry has turned its attention to software-based solutions. The list of third-party vendors, along with the many MFP OEM software products, seems endless. From variable data printing to forms printing to document management, many dealers are pursuing the opportunities to help customers with their workflow needs. Software is often the driver of the hardware placement. Of course, dealerships are at various levels in the transition to a software-based solution sales focus. Some have solution sales specialists on staff and have carved out a profitable market niche with several software products tied to MFP placements. Others see the opportunities and are ramping up in the software arena. Still others remain primarily, if not exclusively, focused on pushing hardware, with only an awareness of the need for a software sales strategy. No matter where the dealership lies in the transition to software-based solutions, there are “value-add” solutions that may be overlooked in some dealerships — the standard, often free, device management tools and applications offered by OEMs. Yes, there are third-party vendor device manage10 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
ment products that should be considered, but, perhaps, the place for many dealerships to start is with those solutions offered by their OEM partners. Commonly Available Today, there are a number of device management solutions offered by OEMs. A brief look at some of these solutions — along with insight from OEM representatives — provides a better understanding of the “value add” these solutions can bring to the hardware sales process. Canon USA Inc. — Canon’s imageWARE Enterprise Management Console (EMC) is promoted as “a highly scalable Web-based management utility capable of installing and managing multiple Canon and third-party networked devices on customer networks.” In addition, Canon offers the Canon Print Server Appliance, “a turnkey server appliance that automates the process of setting up print devices on a network.” “The primary reason that Canon developed these tools is to assist customers in driving down the total cost of ownership associated with the devices,” says Dennis Amorosano, director and general manager of Canon’s Solutions Business Development Division, highlighting the “value add” the products offer. “They are focused on use by an IT administrator and are designed, ultimately, to lessen the cost of managing these devices once they are deployed in an environment. That’s the primary purpose.” EMC provides a core framework of basic device management and device configuration services, says Amorosano. “But we also have plug-ins that can be loaded, as necessary, based on the needs of the customer,” he says. “For example,
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also offers a similar tool we have an address book “... If you want to capture called KM-Net Viewer, a management plug-in that meters on the last day standalone PC-based appliallows for the management of every month at 2 a.m., cation, ideal for companies of address books on imagewhere there may only be one RUNNER devices. We also you can create a task IT administrator monitoring have a printer plug-in, which to do so. Again, the the devices. Other Kyocera allows an administrator to objective here is to help device management soluvery easily push printer customers more easily tions include such tools as drivers to user desktops. facilitate device deployment ...” KM-Net for Accounting, an Finally, we have a meter — Dennis Amorosano administrative product that capture plug-in that autoCanon U.S.A. Inc. tracks device usage by asmates the process of capsigned department accounts turing meters on devices. for all applicable Kyocera printers and MFPs, and KM“All these plug-ins can be scheduled using the tasks that can be created within the Enterprise Management Console NET@ServiceGateway, which provides automated meter read itself,” he adds. “For example, if you want to capture meters reporting and the capability to import data into software on the last day of every month at 2 a.m., you can create a packages from such companies as OMD and e-Automate. task to do so. Again, the objective here is to help customers KM-Net for Accounting, along with a Print Job Manager, more easily facilitate device deployment and, more impor- which allows for the storage and management of print jobs, are available as plug-in consults in KM-NET Admin. tantly, the management of those devices.” Ricoh Corp. — Its PC-based SmartDeviceMonitor allows Kyocera Mita America Inc. — A Web-based administrausers of Ricoh devices “to print successfully the first time in tive console, Kyocera Mita America describes its KM-Net Admin Device Manager as a solution that “allows you to less time,” the OEM promotes. “The software lets you know organize your devices into logical groups, view their status when printers are available, how they’re configured, at a glance, set up automatic e-mail alerts, upgrade Kyocera toner/paper levels and other useful information right at your device firmware and run comprehensive reports.” Those desktop PC.” Ricoh also offers a Web-based version of the reports include such things as usage totals, errors, error tool — Web SmartDeviceMonitor II, described as making it “easier to configure, organize, diagnose and update all your rates and device properties. “These provide a ‘value add’ to the MFPs and printers we networked devices.” And, because it is Web-based, “you can sell to dealers and market to customers,” says Bill Cassidy, perform all these tasks at anytime, anywhere.” Of particular note is Ricoh’s Intelligent Remote Device associate director of product marketing at Kyocera Mita America. He explains their value from the end-user’s per- Management System, known as @Remote. The product, as spective: “‘We have these printers and MFPs in our office promoted by Ricoh, “collects data on a company’s fleet of and we really love them, but how much are we actually using multifunctionals and printers to automate the meter them? What if there is an issue? The paper is out. The toner reading process and gives IT managers the data needed to is out. There’s a paper jam. There is a call required. Our optimize device usage and reduce TCO.” The product, which printers and MFPs are spread out over four floors. How do I is available as an embedded function or through a hardware appliance, automatically transmits data, including meter know when these things are happening?’” KM-Net provides the answer, says Cassidy. Otherwise, by reads, to the secure @Remote service. Reporting through the the time an end-user experiences a problem with a printer service includes fleet population, utilization and trending. It or MFP and tells anyone else “it is too late, because it has collects print, copy and fax output usage data. Starting in April, Ricoh is introducing “true device manalready caused a problem for someone else using the device,” he explains. “How can you be proactive in moni- agement functionality,” says John Carlomano, senior martoring and managing the devices on the network? The keting manager for @Remote. “That will include the ability to send automated service alerts and toner alerts to the answer is device management.” Because it is Web-based, KM-Net Admin allows for mul- dealer, if the customer desires. The dealer will also now be tiple administrators to monitor network devices. Kyocera able to do things like remote firmware upgrades.” 12 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
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completed?’ or ‘I’m about to Carlomano describes the “Most of the benefits send a big color job, let me type of scenario where that can be achieved first check to make sure @Remote’s new service-alert through device paper or toner levels are ok.’” feature will be beneficial. At the next level, the “Imagine that you are the management don’t really network administrator or customer and, at 7:30 a.m., change the dynamics key operator “wants to be you begin preparing some of the sales process. All able to configure a specific materials you need for an 11 they do is enhance the device, access it remotely or, a.m. meeting,” he says. “At strength of your offering.” maybe, clone a setting on a 10:45 a.m. you are ready to — Vince Jannelli, Sharp Document device,” says Jannelli. “Then hit ‘print,’ but, at that point Solutions Company of America Inc. there is the IT department you discover that the printer who is managing multiple is offline. If the device had devices. They want to make sure that all the devices are remote device management, in the form of @Remote, when the customer began work at 7:30, the service provider would properly configured for the network, assign IP addresses, have been made aware that the device needed service by way distribute drivers, etc. “The final level within an account would be the person of a service alert. The service person could have been on the responsible for the money,” he continues. “It could be somebody phone with the person responsible for that device or like an office administrator, who does click count collection, all someone could have been dispatched to the location.” “In fact,” continues Carlomano, “the service provider the way up to the CFO, who is looking for fleet optimization.” could have had someone onsite to repair the machine before the customer even realized there was something wrong with The More You Shine As Jannelli explains, promoting the benefits of today’s it. So, from the customer standpoint, automated service device management solutions can bring added value to the alerts have a real contribution to uptime.” Sharp Document Solutions Company of America Inc. — MFP or printer the dealership is placing. And doing so, he says, Sharp has several device management tools to make “your job does not extend the sales cycle or otherwise negatively change easier and faster while reducing your cost of owning Sharp the dynamics of the sale. “Most of the benefits that can be products.” They include: Sharp Printer Status Monitor, achieved through device management don’t really change the designed for the user to easily view paper and toner status, dynamics of the sales process,” he says. “All they do is enhance etc.; Sharp Printer Administration Utility (PAU), a thin client the strength of your offering. The more you shine, the more application that allows network administrators to monitor all successful you are going to be placing an MFP.” Are you looking for ways to separate your dealership from network devices from a single console and speed up the installation and configuration of all Sharp connected devices competitors in the eyes of your customers? Are all of your on a network; Sharp IMAGER Home Page, the device sales reps demonstrating the value of the device manageembedded home page designed, in part, for managing key ment tools offered by your OEM? Do they fully understand device functions and monitoring device status; and Sharp the capabilities of these tools? Perhaps it is time to take a Remote E-mail Diagnostics (RED), enabling key operators, closer look at these cost-saving, time-saving solutions. “As the marketplace becomes more competitive from the network administrators and dealers to automatically receive standpoint of pricing, certainly, dealers are looking for ways device notifications, including meter reads. Vince Jannelli, associate director of applications and part- to differentiate themselves,” says Canon’s Amorosano. “We ners for the Product Management Group at Sharp, empha- believe that device management tools can be sizes how the OEM’s wide range of device management key ways in which they can do just that.” Brent Hoskins, executive director solutions can be used to provide a “value add” at various of the Business Technology Association, levels within the customer location. For example, the is editor of Office Technology everyday user would be most interested in his or her specific magazine. He can be reached print job, he says. “It communicates back to them about the at firstname.lastname@example.org. job they sent to the printer,” he explains. “‘Did my job get 14 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
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The Color Business Overcoming the common hurdles — cost and control by: Michael Greenberg, PrinTelogy
t does not seem to matter whether you are a copier dealer, solution provider or printer reseller, we are all scrambling to deploy color to our current and prospective customer base as quickly as possible. We have all considered color output as the next golden opportunity to increase our revenues and profits dramatically; it is a new frontier to continue the growth of a relatively flat industry. We all seem to face the same hurdles to increase our color business — cost and control. If only our customers would adopt color as quickly as we would like to sell it. Last year, my organization was having quite a bit of success deploying color to a number of our customers, including a major account that had accepted a proposal to replace 15 percent of its aging black-and-white printer fleet with 27 brand-new, network-connected, color laser printers. Sure, the customer had concern for the cost of color, but rationalized the purchase as a requirement for color documents within the organization for marketing, plus the impact of color versus traditional black-and-white output. The customer assumed the company’s workforce of 500 employees would understand that color printing is more expensive than monochrome and hoped the employees would only print in color as a necessity, with regard to the well-being of the organization. So the company deployed these devices to the network and provided full access to all of its employees to print in color at their own discretion. During one of our standard quarterly reviews, we discovered the customer was spending more than ten times the cost of printing traditional black-and-white documents now that they were printing in color. Without any regard for the cost of color printing, docu16 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
ments were being produced in color, whether they required color output or not. More than 30 percent of the customer’s traditional black-and-white documents were now being produced in color. At first glance, most dealerships, including my own, would think this is a good situation; why wouldn’t I want to get ten times the revenue from every print? Shortly thereafter, executives of this company learned of the situation and declared that all color printers be removed from operation until a “fiscally responsible solution” could be deployed to reduce cost. Within a few weeks, an RFP (request for proposal) was mandated and a response was requested of PrinTelogy and a half-dozen of my competitors. Initially, I was upset with this customer for creating an RFP for a business relationship that was several years old. Why wouldn’t the customer just request another meeting and ask for a cost reduction? What could we have done differently to avoid this situation? After quite a bit of introspection, I realized the answer to this problem was relatively simple, but would require a risky response to this RFP. I would have to risk the entire relationship with this customer but I knew it was the right solution. The local copier dealerships were proposing high-speed multifunction color machines, with fixed cost-per-copy agreements of between seven and 10 cents per page to replace the more expensive color printers. However, their mistake was not including the equipment cost into their cost-per-page, a strategy that would not work with this customer. Other local toner suppliers were claiming the ability to dramatically reduce their expense on the fleet of color laser printers by providing remanufactured toner. These proposals were failures
because the customer acquired these by more than 50 percent, equating to a ... The issue for this and devices to improve their printing output, total annual savings of 32 percent. not to reduce costs. More importantly, this customer has many of our customers Upon further examination, the issue signed a new three-year service agreement does not lie completely for this and many of our customers does for their devices, they continue to deploy within the expense the not lie completely within the expense the color printers within the organization and customer is incurring, customer is incurring, but in the lack of they have signed a support contract for but in the lack of control control over the documents they are prothe software solution. In exchange for over the documents ... ducing. My response to this RFP was to these new agreements, my revenues from propose a software solution that would this customer have declined slightly by help them control color output by restricting color usage and about 3 percent, but my profits have increased by more than 18 encouraging fiscal responsibility within the entire organiza- percent. I have regained the confidence of this customer and tion. Of course, I discounted the toner expense a slight the solution I have created will make it difficult for any comamount to help this customer reduce the aftermarket color petitor to try and compete. The software solution also makes it expense for these devices, but I also guaranteed another 15 difficult for the customer to bid elsewhere. percent annual reduction in expense if they purchased and I learned a very valuable lesson from this customer that deployed my software solution as I specified in the RFP has since changed the pre- and post-sales process of my response. The customer agreed and committed to a 90-day entire organization. Instead of reacting to our customers’ trial period for this solution. That was more than six months concerns over cost and control, we now lead with a software ago and we have since reduced this customer’s color output solution for all of our prospects’ and customers’ color
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requirements, and have changed our tions as to the controls our customers We address concerns pre-sales approach to color. We address put in place for controlling their docuconcerns about the deployment of color, ment output. We now have the ability to about the deployment cost and control head-on, before they accurately review the total cost of their of color, cost and control become a barrier of entry or potentially output, both color and monochrome, on head-on, before they ... put a long-standing business relationa quarterly basis. An added benefit is the potentially put a ship at risk. ability for us to monitor the use of our long-standing business Our standard service agreements competitors’ equipment so when the relationship at risk. now include and require the deploytime comes to upgrade, replace or ment of our software solution. We have refresh, we are the front-runner to incorporated the cost of the software into the click charges deploy additional equipment. No longer are we just another of their output devices, so we can monitor the use of all doc- printer or copier vendor, but a true partner that provides uments (color and monochrome) and make recommenda- greater value to our customers. More importantly, this solution is increasing our color sales by a run-rate of 32 percent and our profits by more than 40 percent. Color output is a requirement for virtually all organizations; however, it is often being deployed with reckless abandon. These concerns are often the overwhelming obstacle for many customers and prospects. Many traditional dealerships will wait until the manufacturers slowly transition more of their product line to color devices, hoping to have the solutions they need; their customers will then have little choice but to adopt the color technology. Forward-thinking organizations will create a solution for their customers and will begin to provide value and increase the deployment of color devices now, before their business is put at risk by their customers’ concerns. It will require a new sales pitch, not the traditional “it’s time to upgrade to a more cost-effective device” or justifying an increase in capital expense for a reduction in output costs. Instead, it will require a true understanding of customer concerns over color deployment, providing a true, lasting solution to these concerns. Instead of pushing color output, we now lead with our ability to enable our customers with the ability to control the cost and responsible use of color output. We preach the “who, what, why and quantity” of every color print. By doing so, we are creating more value for the customer, tearing down barriers of entry. Michael Greenberg is president and founder of PrinTelogy Inc., a 14-year-old Denver-based corporation. He provides continual consulting services for NER Data Products Corp. for the delivery of its Print4 Program as well as Toshiba’s Encompass Total Print Management Program. Greenberg can be reached at email@example.com. Visit www.printelogy.com. 18 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
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‘The Open Road’ Sharp hosts National Dealer Meeting Feb. 5-8 by: Brent Hoskins, Office Technology Magazine
ith a focus on its Open System Architecture (Sharp OSA) and expanding product line, Sharp Document Solutions Company of America (SDSCA) hosted 500plus dealership attendees Feb. 5-8 in Las Vegas for the OEM’s National Dealer Meeting. Much of the meeting emphasized the growing opportunities Sharp dealers can expect by taking “The Open Road” — the meeting’s theme and a reference to Sharp OSA and the Sharp dealer’s new ability to become closer to customers through personalization of the MFP and its applications. During the meeting, more than 30 of the current 70-plus Sharp OSA developers showcased the solutions they have created through the Sharp OSA development platform, including specialized applications for the financial, legal, healthcare, insurance and manufacturing industries. Among the participants in the opening General Session, Ed McLaughlin, president of SDSCA, addresses dealers during the demonstrating Sharp OSA applications, were rep- recent Sharp National Dealer Meeting in Las Vegas. resentatives of Google, Yahoo! and Microsoft. The Google representative, for example, demonstrated how of the competition.” In addition to its emphasis on Sharp OSA, SDSCA Sharp OSA-enabled MFPs can be integrated with the Google Search Appliance to create enterprise search solutions from announced the launch of three monochrome production systems for the high-volume market — the MX-M850, MXthe MFP’s touch screen. “I’m going to suggest to you today that we’re going to M950 and MX-M1100, offering print and copy speeds of 85 make a little bit of history,” said SDSCA President Ed pages per minute (ppm), 95 ppm and 110 ppm, respecMcLaughlin in his welcoming comments to dealers during tively. The three models, to be available this spring, offer the opening General Session. “This industry is changing and an online paper capacity of 8,050 sheets, with a 250-sheet document feeder. “With the introduction of our new flagwe’re the ones who are going to change it.” Sharp OSA will bring a new level of value to the MFP and ship models,” said McLaughlin, “Sharp is taking our opportunity to Sharp dealers, said McLaughlin. “The real strength in document solutions to a whole new level.” During the meeting, McLaughlin also addressed another opportunity today is in the customized user interface,” he said. “The new battlefront is not on features, it is not speed change of particular interest to dealers — Sharp’s recent and it is not even on operability — it is on how the user announcement of plans to acquire up to 20 dealerships as interfaces with the MFP. That is where Sharp leaps ahead part of the newly created Sharp Business Systems direct 20 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
sales operation. “About four years ago, I Sharp experienced when IKON and “That distribution hole made the statement in a similar environDanka dropped the Sharp line. “That disment that we would never have direct tribution hole really created a gaping really created a and that we would be dealer only,” he abyss inside the organization and we gaping abyss ... If said. “I very much meant it at the time.” struggled back from it. But, if we were to we were to ever let However, he said, Sharp ultimately ever let distribution get away from us distribution get away made the decision to begin acquiring again, it would be pure suicide.” from us again, it would dealerships. “To date, we have acquired In recent years, continued McLaughbe pure suicide.” exactly one dealer (Phoenix-based lin, Sharp has watched the growing Davidson Imaging Systems Inc.),” said number of OEM acquisitions of dealerMcLaughlin. “We will close another on Feb. 20 (Pleasanton, ships. “In our major markets out there, we said, ‘We need Calif.-based Pinnacle Document Systems) and there are to do something to make sure that we secure the distributhree more in due diligence at this time. So, we are moving tion,” he explained. “We will be good citizens. We will help forward at a rapid rate. drive the market, raise visibility in the markets where we “We decided to do it, very frankly, because we could see will co-exist and we will be good businesspeople. We are things changing in the industry and to ignore it, based on my not out there to be predators.” own emotion and my own feeling on the strengths of Sharp at Brent Hoskins, executive director of the Business Technology the time, would have been a disservice to you and a disservice Association, is editor of Office Technology magazine. to Sharp,” said McLaughlin. He then recalled the setback He can be reached at firstname.lastname@example.org.
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‘Connect for Growth’ Konica Minolta hosts Business Conference & Expo by: Brent Hoskins, Office Technology Magazine
roviding dealers with an introduction to the first product in its next generation bizhub line — the bizhub C550 — Konica Minolta Business Solutions U.S.A. Inc. hosted more than 700 attendees at its Connect for Growth_2007 Business Conference and Expo. The event was held Feb. 6-9 in New Orleans. Kevin Kern, vice president of product planning and development, introduced the next-genAbove: Attendees view the bizhub C550. Top Left: Stephen Jones, eration color bizhub C550 by executive vice president of dealer sales. Bottom Left: Kevin Kern, first emphasizing the rapidly vice president of product planning and development. changing nature of the industry ultimately leading to today’s growing demand for color. “In bizhub C550 features a swivel/tilt full display, featuring tab 1995, we launched the 7050,” he said, during the opening browsing; Emperon print system for built-in productivity; General Session. “In the past 12 years, this industry has Pagescope software for network integration; data security changed from analog to full-color digital products. It’s like and a new biometric authentication option; and a 6,650-sheet maximum paper capacity. going from horse and buggy to jet airplane in 12 years.” “We’re going to drive the transition to color by providing Today, he said, Konica Minolta is poised to continue making strides, with the goal of achieving 30 percent mar- increased performance, a lower cost of service and a difketshare in color MFPs and 20 percent total marketshare. ferent level of total value than has ever been offered in this “This market, we believe, is prime this year to transition industry before,” said Kern. “I can tell you that the product even further to color,” he said, noting that the bizhub C550 we are introducing today will really be a ‘game changer’ in will be the first of several next-generation color MFPs to be the marketplace. We believe that we will be able to do things — particularly replacing Segment 4 monochrome, which is a launched by the OEM in 2007. Kern touted some of the advancements included in the huge part of our base — that no competitor can.” Kern also announced Konica Minolta’s plans for additional bizhub C550, which provides 45-page-per-minute (ppm) color output and 55-ppm monochrome output. They include a char- products in 2007 — ten in all — including new monochrome coal-gray “bold new look” for the office environment, featuring printers and bizhub-based products. There will also be display lights on the front of the MFP that reveal the status of announcements regarding new third-party software developprint jobs and paper levels, making it “very easy to identify ment partners for Konica Minolta’s bizhub OpenAPI (applicawhat is going on from across the room.” In addition, the tion programming interface). “We will be announcing a series 22 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
of what I call ‘meaningful software relaasked the audience. “Do I need different “We cannot do it tionships,’” he said. “We want to do skill sets [in these positions]? I need to things that will allow you to meaningfully understand that and, hopefully, we can without you. Fifty deploy this technology, increase your talk about that while we are here in the percent of our revenue revenue and pick up service contracts for next two days.” right now comes the aftermarket support and software.” At the meeting, Konica Minolta also from this channel; 50 In addition to an emphasis on new revealed plans to provide some assistance percent from direct ... products, the meeting provided an opporin hurricane-ravaged New Orleans, We need you.” tunity for executives to express a commitannouncing the company’s goal of raising ment to further strengthen Konica up to $200,000 to support the historic Minolta’s relationship with dealers. “We cannot do it without McDonogh 15 School for the Creative Arts, located in the you,” said Stephen Jones, executive vice president of dealer French Quarter. The money is to be used to renovate portions sales. “Fifty percent of our revenue right now comes from this of the school and purchase digital arts equipment. Konica channel; 50 percent from direct ... We need you.” Minolta will also provide $45,000 annually to assist students Jones noted that company executives value the input of the who cannot otherwise afford the cost of private education. It Konica Minolta Dealer Advisory Council and he recognized will also award scholarships to graduating students to be used the members by name. He also appealed to dealers to provide toward private high school education. feedback. For example, he noted that the company had added Brent Hoskins, executive director of the Business Technology more field people in the areas of production print, color and Association, is editor of Office Technology magazine. solutions over the last two years. “Do we continue that?” he He can be reached at email@example.com.
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COURTS & CAPITOLS
A Tool or a Liability? Cell phone policies must be revised to include PDAs by: Robert C. Goldberg, General Counsel for the Business Technology Association
revious columns have discussed the liability of employers for automobile accidents that occur during a mobile phone conversation regarding company business. Policy statements are available that set forth the conditions under which an employee should use a mobile phone to conduct business. Simply stated, mobile phones should not be used while driving. There are now additional concerns for employers who provide BlackBerries or Personal Digital Assistants (PDAs) to their employees. Let me share with you two recent occurrences. In the first instance, a dealer had issued BlackBerries to his delivery and service personnel. Each device could be used as a telephone, to receive e-mail and had been loaded with a navigation system. While on the way to a service call, one of the employees was involved in a serious accident when he ran a red light and plowed into a vehicle, causing serious injuries to the passengers. In preparation for his trial, it was determined that the employee was looking down at the navigation system on his BlackBerry when the accident occurred, making him responsible for the accident. The employer’s insurance company settled the case for $4.1 million. Accidents like this are driving home the point that employers will be held liable if an employee does something dangerous or stupid while using an employer-provided PDA device. The device itself will reveal what the employee was doing at the time of the accident and whether it was work related. Employees must be instructed that a PDA navigation system should only be used when the vehicle is stopped. The policy should be in writing and distributed to all employees. PDA’s have given us the ability to be available 24 hours a day, seven days a week, which creates the second issue — overtime compensation. Nothing can be more solid evidence of 24 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
after-hours work than records of evening and weekend communication on PDA devices. This evidence has resulted in numerous claims by employees seeking back pay for uncompensated overtime work. Employers are most vulnerable to these types of suits when PDAs are issued to nonexempt employees. This would include most of your service and delivery people. Employees who do not meet the Fair Labor Standards Act definition of executive, administrative or professional workers are non-exempt. An instruction to an employee to turn the device off when not working may not be sufficient to eliminate overtime compensation. If an employer receives the benefit he (or she) must pay the price. Although you may be required to pay overtime despite violation of the rule to turn off the devices, it does not preclude disciplinary action for the rule violation. If these two examples were insufficient to cause you to reconsider issuing PDAs, consider this as well: the American Physical Therapy Association issued a report in December officially recognizing “BlackBerry Thumb” as a painful condition. Will we now face workers’ compensation claims because of sore thumbs? It is time to revise your cell phone policy to include BlackBerries and PDAs. The policy will help show that the employee was not engaged in dangerous or harmful activity at the company’s request. The policy will not completely insulate an employer, but it creates one more barrier to overcome in order to establish a successful claim. Revise your policy, discuss it with your employees and monitor compliance. Using these tools is great, but limiting the liability for doing so is better. Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at firstname.lastname@example.org.
EDUCATION CALENDAR BUSINESS TECHNOLOGY ASSOCIATION â€˘ March 2007
EDUCATION CALENDAR April 3-5
Sales Management Workshop Chicago, IL This three-day workshop, presented by MOTIVE8S Inc., is designed for the office technology sales organization â€” specifically for owners and sales managers, executives, vice presidents and supervisors. Workshop focus areas include leadership, situational management and team culture. For information, call MOTIVE8S at (515) 210-2136.
16-17 BTA ProSolutions
Little Rock, AR Your clients want their business problems solved, and you need to understand these problems before you can provide solutions. Learn how to get the attention of top decisionmakers, understand business challenges, conduct business process analysis, present ROI-based proposals and much more. Register at www.dealermarketingsystems.com/BTA.
FIX: Cost Management for Service Workshop Austin, TX Learn proven service management and customer service strategies to use in your company. Costing out the service hour, effective and profitable maintenance agreements, efficient vehicle operations, reducing personnel turnover, competitive compensation plans and identifying profit-making opportunities through the service operation are issues that are critical for success.
Service Management Workshop Kansas City, MO This two-day workshop, presented by MOTIVE8S Inc., will provide office technology dealership service managers with improved management techniques and enhanced team productivity. The goal of the program is to help service managers improve consistency, accounting and productivity through the development of new mind-sets, strategies, processes and tactics. For information, call MOTIVE8S at (515) 210-2136.
15-16 BTA ProFinance
Chicago, IL Analyze current business practices and evaluate strengths and weaknesses. Participants will explore important issues surrounding profitability benchmarks, asset management, expense controls and employee productivity. They will leave with a clear set of bench marks and proven strategies for successful implementation.
For additional information on BTA and other industry events or to register for courses visit www.bta.org or call (800) 843-5059. BTA offers dealer members a $250 discount coupon toward FIX and ProFinance. Members may use their $150 discount coupons for ProSolutions and the MOTIVE8S workshops. www.of ficetechnologymag.com | March 2007 | 25
MEMBERSHIP APPLICATION PART I – COMPANY INFORMATION Company Name: Street Address:
May we communicate with you via fax and/or e-mail? Yes No May we include your fax number in the BTA Membership Directory? Yes No May we include your e-mail address in the BTA Membership Directory? Yes No Occasionally, BTA makes its member list available to companies who wish to present opportunities to our members. If you prefer not to receive such information, please check here: Contact Names (first name listed receives all mail): Principal Contact:
Service Contact: No. of locations (include parent):
No. of employees (include owners):
PART II – PRODUCT INFORMATION
Please indicate the products you sell (check all that apply):
Equipment/Products: Audio/Video Presentation Equipment Bar Coding Equipment Binding Equipment/Supplies Cash Registers/Point of Sale Check Writing/Protection Equipment Computers/Accessories/Parts/Supplies Copiers (MFPs) B&W/Accessories/Parts/Supplies Copiers (MFPs) Color/Accessories/Parts/Supplies Duplicating Equipment/Parts/Supplies Facsimile Equipment/Parts/Supplies Filing Systems/Electronic Organizers Furniture Identification Systems/Labeling Equipment
Mailing/Shipping Equipment/Supplies Networking Products/Services OCR Scanners Office Supplies Paper Handling Equipment Phone Answering Equipment Power Protection Printers B&W/Accessories/Parts/Supplies Printers Color/Accessories/Parts/Supplies Recycled/Remanufactured Equipment/Supplies Security Equipment/Systems Shredders Software Development/Sales/Support Time Recording Equipment
Services: Circuit Board Repair Consulting Equipment Rental Financing/Leasing Insurance Internet Solutions Publication Service/Repair Training/Education Other:
PART III – MEMBERSHIP Categories, Classifications and Investments Retail Dealer/VAR Memberships
Vendor Associate Memberships
Service Associate Memberships
$1,500 Annual Sales up to $5 million
$500 Annual Sales up to $1 million
$2,000 Annual Sales $5-$10 million
$750 Annual Sales $1-$5 million
$2,500 Annual Sales over $10 million
$950 Annual Sales over $5 million
$1,395 51+ Locations $125
Branch Location (in addition to parent)
$150 Publications Associate
Will your OEM reimburse you for your membership dues? Call BTA at (800) 505-2821 for details. Payment Enclosed (Make check payable to Business Technology Association)
PART IV – INVESTMENT Annual BTA Dues:
MasterCard Visa American Express
$ $ 25
Card Holder’s Name:
Membership dues must be submitted in U.S. funds. Dues paid to BTA do not qualify as a charitable tax deduction, but do qualify as a business expense. $45 of the annual dues pays for your subscription to Office Technology magazine. I hereby apply for BTA membership: Signature: Date: Don’t let my membership lapse! Renew my membership using this credit card number at the end of my membership year. Return to: Business Technology Association, 12411 Wornall Road, Kansas City, MO 64145 Phone: (800) 505-2821
Fax: (816) 941-4838
26 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
Join online at www.bta.org
MAR 07 OT
ProFinance thinker full pg
Do you crunch the numbers,
or do the numbers crunch you?
he BTA ProFinance course will teach you how to set the strategy, track critical performance measures and manage your assets according to a proven business model designed to improve the profitability of your company.
To register for ProFinance or get more information on pricing and quantity discounts, call BTA at (800) 843-5059.
Instructors John Hanson and John Hey of Strategic Business Associates take a holistic approach to the redirection of your business — from sales rep compensation and projecting service revenues to inventory management and an action plan for implementation — with the short-term goal of achieving a minimum of 14% operating income. You can achieve these results by monitoring 24 key benchmarks and making strategic shifts as discussed in the program.
Upcoming ProFinance course: May 15-16, 2007
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ProFinance is designed for owners and executive-level staff who make the critical business decisions that impact your company’s success. Many OEMs reimburse for ProFinance tuition through advertising co-op or professional development funds. Check with your OEM to be sure.
Operational Improvement Careful planning separates you from competitors by: Tom Callinan, Strategy Development
he copier industry seems obsessed with benchmarks. But before I receive a letter from my alma mater requesting that I send back my degree, let me state that I strongly believe in using financial analysis in planning and to measure execution against a plan. I also believe that benchmarks provide an educational function. They eliminate the “possibility” discussion — “Is that even possible?” As long as you are factual, it is difficult to dispute a response like: “Well, it is an industry benchmark that many companies are achieving and exceeding.” I do use benchmarks and I am not suggesting that you ignore them. What I am stating is that benchmarks are only a measurement; they make you feel good when you are exceeding them and they give you a goal when you are subpar. I rarely encounter financial executives or entrepreneurs from copier dealerships discussing how they are executing against their plans to improve operations or close any gaps to benchmarks. They simply want to know the benchmark and/or how their results compare to the benchmark. Take the time to reconcile your financials with an industry model so that you know what is possible. Make certain you have your revenue, cost and expense categories aligned with the model so that any delta to benchmark is due to operational performance and not financial modeling differences. This will cut down on any debate regarding comparability. You have now completed step one on the long and disciplined journey to operational improvement. Your willingness to model your results is a good sign. You are showing commitment to improvement. In the copier industry today — a mature industry undergoing significant changes and converging with other technologies — disciplined planning will separate the very successful from the marginal players. So now that you know where you stand relative to benchmark, what is the next step? Are you managing too few copies per technician? If so, do you lay off the required number of technicians to get to benchmark? Is your revenue per sales rep too low? Would you fire some reps to prevent 28 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
this? Is your reschedule for parts ratio too high? If so, do you buy more parts? Without planning and process changes, these three actions will more than likely result in longer response times and reduced quality of service, lower equipment revenue and reduced asset efficiency with minimal decrease in rescheduled calls, increasing to the current level in short order. If your processes require your current number of techs to maintain your machines in field (MIF) with an acceptable response time, you need to address your processes, both business and management, to impact your results. Parts reschedule ratio may be one of your issues but if you do not have a sound technician-stocking process, buying more parts may only have a short-term impact on your reschedule rate, with long-term asset management issues. If you do not have your sales coverage set correctly and are not driving increased business with account reviews and sound sales management processes, you may be optimized at your current revenue per sales rep with your poor processes; any reduction in staffing will result in less revenue. The benchmarks were able to show you the opportunity, but they did not provide you with the knowledge to close the gaps in your performance. If you just
Piecing Ideas Together.
The BPCA was founded in 1963 with the vision of forming a best practices organization that unites leaders of independently-owned office equipment dealers. The concept is quite simple - bring the leaders of these companies together so that they can share ideas, learn from each other, and take their businesses to the next level. Our members will attest that it’s well worth the investment by making each of them better leaders and bringing more value to their dealerships. Feel like there’s something missing from your organization? Let BPCA bring together all the pieces of the puzzle.
“Better Dealers Through Learning and Idea Exchange.”
If you’d like more information about our organization and how to join, please send us an email or give us a call. Phone: 800.897.0250 Email: email@example.com Website: www.businessproductscouncil.org Membership Director BPCA c/o BTA 12411 Wornall Road Kansas City, MO 64145
better selection process (hiring process) take action without a sound plan, suphow much will that increase your producported with financial analysis, you will be ... You know what to tivity? Intend to improve your sales manworse off, not better. build on, what to fix, agement process? What will that equate to I believe you need to start your planopportunities to go after in additional revenue per rep? You are ning with a SWOT analysis of your by leveraging your going to identify the poor performance in company. SWOT is an acronym for strengths and threats you Segment 6 and put a plan in place to strengths, weaknesses, opportunities and need to minimize using increase placements; quantify the actions. threats. The strengths and weaknesses are those same strengths. Do not forget that your average unit selling internal — they pertain specifically to price (AUSP) will probably be lower year areas your company controls. Your 1,200 loyal customers would be an example of a strength. Poor after year so you will need to make up that drag as well — results with Segment 6 placements would be a weakness. quantify that revenue decline. Of course, you will have the Opportunities and threats are outside influences you need to benefit of a shift to B2C so quantify that in your plan as well. Get your detailed plans in place and work with your finandeal with — you do not directly control these. Your vendor opening a direct branch in your territory would be an example cial analyst to layer them all into your operating plan for the of a threat. The printers in your copier customers’ offices year. Start with last year’s results as your base and integrate all of the “puts and takes.” You will want the plans at a level of would be an opportunity. The SWOT analysis will help guide your actions. Make detail that allows you to tie your monthly results into your certain your actions are supported by your analysis. For operating plan. If you miss revenue for the first quarter you instance, say you find through your financial analysis that your should know if you missed the mark on the shift to B2C; did installation expense on connected copiers is too high because you execute poorly on the steps required to train your reps to you are using specialists and want to move the responsibility lead with B2C or did you miss on the B2C AUSP? Did you miss to your technicians. If your SWOT analysis has uncovered that on your planned improvements in Segment 6? Where in the your service productivity is low, resulting in poor customer detailed plan was the execution breakdown? Identify the service, you will want to address your service issue before issues and address them immediately. If you missed, you not only need to address why, but you adding more responsibility to this group. If your vendor just introduced a fantastic production color unit, you would want will also need some new — and shorter-term — plans to make to understand why you have not been successful with Segment up the miss you experienced. As you tweak your original plans, 6 black-and-white placements before you spend a lot of money make certain you implement some plans to make up the gaps; you may even get to wear your promo hat to address some of to launch the production color unit. The above examples could surface in your planning work. the short-term issues. Sales promotions are not a substitute So far, your financial analyst has prepared a schedule that for good planning but they are a solution to some problems shows you how your financial results compare to industry and they can be fun. So let us go back to the opening sentence of this article. If benchmarks. You know specifically where you have opportunity, your entire management team has participated in the benchmarks are the motivation for you to put plans in place to SWOT analysis and you know what to build on, what to fix, improve all areas of your business, I believe they have served a opportunities to go after by leveraging your strengths and wonderful purpose. I believe that planning and then executing threats you need to minimize using those same strengths. You those plans is the key to success in our mature industry. Use now need to spend time planning to close each gap between the benchmarks but focus your attention on how to improve your current results and industry benchmarks; or, more your operations with sound planning. Tom Callinan is the managing principal of Strategy simply, you should just be improving every area even if you are Development, a management consulting and advanced sales above the benchmarks. You would expect greater improvetraining firm. From 1998 to 2005, he was an ment where you are below the benchmarks but you should executive with IKON Office Solutions. Prior to always be improving and helping to pull the benchmarks up. Is your sales productivity (revenue per sales rep) low? If so, that he was the founder and CEO of Copyfax Inc. He can be reached at do you want to focus on improving that area? How much firstname.lastname@example.org . improvement can you get out of better territory structure? If Visit www.strategydevelopment.org. you could reduce your sales rep turnover by 10 percent with a 30 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
New Name, New Outlook How Copy World became Stratix Systems by: Brent Simone, Stratix Systems
hanging the name of a company is not for the faint of heart. It should not be approached on a whim and only considered after objective research has been conducted to see if it’s right for you and your company. In my case, I elected to change the name that had served us for 36 years. It definitely put a lump in my throat, but this was certainly no lark; it became a project that lasted more than two years — we even devoted six to nine months to name selection alone. If you are considering renaming your company, I would strongly suggest that you first objectively determine that a name change is truly necessary and/or beneficial to your organization. My motivation was that, as the next-generation CEO of an established company, I intended to run my company for the next 30 or 35 years. My thought was that the existing name of the company would become increasingly inappropriate in describing what our business would become over the years, based on indications from industry forecasters and my own feelings. But I didn’t act immediately on my gut feeling. I began to investigate the possibility, though. I conducted objective research to support or deny the need for a name change. This research included putting together focus groups that would first determine if the existing name still had legs. I wanted to be absolutely objective and diligent, so I hired a well-known marketing and brand development firm, tom sheehan worldwide, for assistance. I did my homework and visited with a
number of ad agencies and marketing firms and, in addition to their experience with similar issues and their capabilities, Tom Sheehan and I clicked; we both understood what we needed to do. Conveniently, they were also located in Reading, Pa., near our headquarters. Sheehan and I laid out a plan by which we would proceed and we laid out a clear mission and vision statement. Some of the focus groups included staff, while others included customers. What the focus groups revealed was that, in today’s marketplace, our name conveyed meanings and messages that did not even exist when we began as a company and that did not match up with what we were doing as an organization. Over the years, companies with “world” in their name have come to have a retail-discount-store connotation. We also discovered that the name “Copy World” conveyed a perception in w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7 | 31
employees and then our present cuspeople’s minds of being like a Kinko’s — Our staff adopted a tomers. This began about one month that is, a retail copy center, and not the before our anticipated changeover. At one value-added sales and service organization reinvigorated attitude ... point, we mailed out teaser cards to we actually are. I don’t think any of us promote the change and stimulate Finally, the old name just did not seem anticipated the degree interest in it. Our sales reps made ambasto reflect the future direction of the of morale boost and sador calls to clients explaining what was industry. I’m sure copiers will remain a camaraderie that we going to happen and why. Once explained, big part of the business in the years to saw almost immediately. our staff, customers and everyone we come, but who knows what else the next spoke to saw the merit and bought into it. 30 years will bring to the mix? Surely, we will see technology that has not yet been invented or even Over a period of about three months before and one month after the name change, I devoted about eight to 15 hours a thought about. Having determined that a name change was the right thing week to name-change procedures. There was one thing I noticed right away. Our staff adopted for us, the next step was to decide on the best name. When originally naming the company, I doubt my father put as much a reinvigorated attitude and pride about our organization effort into it as I did. Honestly, I do not think he could have, once the name was changed. I don’t think any of us anticibecause he didn’t have anything like the tools and resources pated the degree of morale boost and camaraderie that we saw available to him 30 years ago that we have today. Again, Tom almost immediately. We also noticed that our customers and Sheehan’s organization played an important role. We dis- prospects behaved differently. For example, about a month cussed what we wanted to convey — what we wanted the new before the changeover, one of our sales reps was speaking with name to “say” to prospective and existing customers. The a prospect about an involved solution. He mentioned to the name had to sell value and technology. It had to be dynamic prospect that we would be changing our name in a few weeks, and memorable. And it had to fit what we are today and what to which the prospect responded, “I like what you’re telling me we might evolve into in the future. Sheehan’s group came up and have confidence in you, but I have to tell you, it will be with a pretty lengthy list of candidates — and many of them much easier for me to get this through my IT staff with your were more than suitable. After weighing the options, we finally new name.” That was exactly the reaction I had been hoping for, and in settled on Stratix Systems. Stratix Systems had a good, tech-inspired sound to it, which hindsight, it made sense. Prior to the name change, our sales we definitely wanted to convey. It was derived from “strategy,” staff and I spent a great deal of time educating people about which is an important part of what we provide for our clients. what we could do versus what they perceived we could do Also, it was sufficiently broad so that we would have flexibility because of our name. Although we were excited about the name change and we in the future regarding what this industry might become. We will actually define what Stratix Systems stands for to our cus- needed to educate our clients quickly, we also needed some tomers, but as Sheehan repeatedly pointed out, it is our cus- balance. Certainly, we had to focus on the name change, but we also had to stay focused on sales. So, we had to continually tomers and prospects who will ultimately “own” the brand. The next step was to create our corporate identity, starting shift gears a little and make sure we devoted equal effort to with a logo. That, too, was a lengthy process. But even having both in order to protect our revenue during the transition. As I gotten to that point, we were still months away from a mentioned, this entire process was time-consuming for changeover. We were careful to be diligent, leaving nothing to everyone in the organization. Many people have asked me about the name change’s chance. I was of the feeling that we would determine a specific changeover day and when that day came, there would be no impact on sales. Stratix Systems rolled out on Nov. 1, 2006. looking back. There would be no phase-in that might draw out Since then, I cannot say that there has been any measurable a period of confusion. On that chosen day, the signs would be impact on sales one way or the other. But I did not expect up, the business cards, invoices and letterhead, the truck let- there would be. It is too early and I do not think I will see the tering — everything would become Stratix Systems — even impact for six months to a year. This industry tends to have long business cycles, especially with solution-oriented sales, so down to how we would answer the phone. This required a lot of planning (and a postponement or two I would not expect any different result in the short term. But I as well). We developed a strategy to first educate our see differences that cannot be quantified in numbers. I think 32 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
of them as â€œearly benefits.â€? collateral materials would not be ready to It [the Web site] was I see differences in our sales reps. They go by rollout day â€” our signs, leaveare taking a different approach to selling behinds (like new coffee mugs), the truck looking tired and we than they did before. Our customers â€” lettering, printing, etc. And we had thoudecided to use the primarily other businesses â€” get it. They sands of machines out there that needed occasion as an understand why we did what we did, new stickers on them. opportunity to completely partly because we explained it to them We also saw an opportunity to comrevamp it so it would be and also because, as businesspeople, pletely re-do our Web site. It was looking entirely new, fresh ... many of them face a lot of the same decitired and we decided to use the occasion as sions we face every day. I sense a feeling of an opportunity to completely revamp it so admiration from our clients because we set out to fix some- it would be entirely new, fresh and engaging. It would not be thing that was not necessarily broken, but certainly needed the same old site with a new name. fine-tuning. As business operators, they appreciate that there I would definitely recommend using outside help from a is never a good time to do something like this, but that delay is specialist like tom sheehan worldwide, because you need that costly. The sooner you begin, the sooner you benefit and I objectivity. You need that marketing expertise and they have intend to benefit for a long time. done it all before, so they can guide you around the potholes In the end, if you are considering a name change, my best along the way. advice is: first, recognize that a name change is not a good As a company, we have not looked back since the day we idea for everyone. If I could have avoided it, I would have. If began answering the phones, â€œGood morning, Stratix our name had been something more generic, say â€œXYZ Busi- Systems,â€? and we are all excited about our future. After all, itâ€™s ness Solutionsâ€? or something similar, we probably would not going to be my future for the next 30 to 35 years. have considered making a change. A name like that could Brent Simone has been working within the office technology probably carry you into the future, and you could still benefit industry for more than 15 years. He is CEO of from years of branding and all the equity you have built with Stratix Systems, headquartered in Reading, Pa. that brand. with offices in Allentown, Lancaster and Second, if you make the decision to change your name, Philadelphia, Pa., and Trenton, N.J. Simone can make sure you budget properly in time and money. There will be reached at email@example.com. be delays. One of our 30-day postponements was because our Visit www.stratixsystems.com.
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Sales Compensation Plans need to cater to your employees’ needs by: Jim Strauss, MOTIVE8S Inc.
ompensation plans for salespeople are an interesting topic. When I travel around the country working with office technology companies, I find that this subject comes up quite often. Compensation plans fill the spectrum — from very simple plans, where all sales employees in a company, regardless of their territory or account assignment, have the same plan — to complicated individualized plans that seem to change with every order written. Some plans have not changed for years and go back to the days of the founding of the company while others are progressive and advanced, keeping up with the times. When you speak to the top executives of larger firms and the owners of small ones, they all have one thing in common: they are interested in what works in today’s market. At MOTIVE8S, we try to consider the following elements when we help organizations design compensation plans for their salespeople: Does compensation align with company interest? Does compensation drive the company’s initiatives? Does compensation reward performance? Is compensation flexible for change? How can compensation be a recruiting and retention tool? Aligning with Company Interest It makes sense to say that a company’s compensation plan should line up with the company’s interest, but too often I find that this is not completely true. How does this happen, you may ask? Well, it happens often over time. If the compensation plan used today was designed 15 or 20 years ago and has seen little change, chances are the plan does not line up with the needs of today’s market and it needs to change. If too many changes have happened over the years because the compensation plan was modified for short-term issues, situations and needs, it too could be misaligned with the company’s interest. Let’s talk about the concept of little change versus too much change. Often, I find that compensation plans that were set up many years ago are designed primarily to drive revenue. Salespeople hit their numbers month after month by selling new solutions to new and current customers, but more likely they just turn over the current customer base. On the surface this does not sound like a bad idea, but if you look closely, it is slow 34 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
death to an organization. Let’s take the example of a copier/ multifunctional device. Each time we upgrade the machine and replace it with new gear, we create a positive situation and a negative situation. The positive situation is that we kept the customer from being picked off by the competition. The negative situation is that this customer, who was paying for a service agreement that was profitable in the past, is now paying less (in order to be competitive) and our most important revenue and profit center (the service agreement) is declining year after year. If you analyze this situation closely, it is the compensation plan that drives this type of activity. Change the compensation plan and you will change this outcome. One progressive consideration for this problem is to tie the salesperson’s compensation to the profitability of the service base of his (or her) territory assignment. The organizations that do this find that there is less premature “churning” of the customer base. The salesperson has an incentive to keep the customer, who has a profitable service agreement in his territory longer. When the profitability of the service agreement begins to become less —
typically thanks to its age — it is replaced with a new solution: lining up the salesperson’s interest with the company’s interest. It may take sophisticated software to tie a salesperson’s compensation with his service base, but these software solutions are available for use.
needs but sometimes we need to drive the organization in a direction that requires momentum. Using incentives can provide a short burst, but they will lose effect and momentum in a longer period. Both should be used during the year, though. Create small elements in the compensation plan that hold true each month throughout the year and then spice monthly or quarterly results up with short-term incentives (not written in the compensation plan).
Create small elements in the compensation plan that hold true each month throughout the year and then spice monthly ... results up with short-term incentives.
Driving the Company's Initiatives Compensation plans drive the direction of sales teams. Most of us know this, yet without building an element in the compensation plan that is based on the company’s current initiatives, we allow the sales team members to get what they want, while finding the company owners off their mark for what they want or need. Each year a company should evaluate its position in the market and study its profitability points, weaknesses and strengths. Once this is done, it should sew up its weak spots and poor profitability points and drive the sales team in the direction it needs to go to create more growth and profits. If compensation plans do not have an element that drives company initiatives, the team will not move in that direction. It is one thing to get up in front of the sales team members and talk about the new direction. It is another thing to reward them through their compensation. Now, one reason that companies do not do this is because they do not want to reinvent the compensation plan over and over again — and they shouldn’t. On the other hand, not building in an element to drive company initiatives is a mistake. The secret to this is to take a part of the compensation plan and work with it. This can even be done on an individual basis. I mentioned earlier that some organizations have different plans for each salesperson — I do not recommend this for a number of reasons, including discrimination liability, for one. But if a company were to build standard compensation plans with an element that allows for individualized initiatives, you can achieve the results you desire with less downside. For instance, you may designate 10 percent of a tenured rep’s compensation to expanding business with current clients with products or services that he usually does not sell, like IT services. If the company is interested in driving imaging sales, one of the salespeople who has been successful with this could assist others in the group, helping the company sell more. He could receive bonuses for the group’s sales if certain related goals are met. It is one thing to create short-term incentives to drive initiatives; it is another to have them built into the sales compensation plan. Short-term incentives are a great idea for short-term
Rewarding Performance An important aspect of designing a compensation plan is to reward good performance. When defining good performance, one needs to keep a couple of things in mind, including the salesperson’s assignment, tenure and experience. I find it interesting when I work with clients and find that everyone on the sales team has the identical compensation plan and
w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7 | 35
where a good portion of the plan is stable and that there is little to no consideration for A good percentage consistent and a small portion is flexible, you assignment, tenure and experience. Conof new sales hires ... allow for change. sider this: let’s say that you have a terriare less experienced. With this strategy, you can slightly tory assignment that is new ground for modify your compensation plan each year, the organization. Does it make sense to The concept of rewarding adjusting to market and company needs have a compensation plan that is the new salespeople for without chasing your salespeople off. Most same as one where there is an established “activities versus results” importantly, it allows for change each year. customer base? No. Yet, I see it all the ... is progressive. Salespeople can adjust to change if they are time, and one wonders why salespeople not greatly affected by it and can plan for it. with a territory like this turn over so much. Let’s face it, when you already have a client base, you If you use this strategy, it makes sense to let your people know that every year there will be a change in the compensation plan. have a big leg up on success. When you are starting from scratch, you struggle. So, it Let them know that this change is not huge, but it will happen, makes sense to provide more stability and security for and that it is based on the company’s latest initiatives and goals. Do not be afraid to change your compensation plan. Of someone without the client base by providing more salary versus commissions. The same is true with tenure and expe- course, there is a right way to make change and a wrong way; rience. A good percentage of new sales hires in this industry the wrong way brings disaster. You know this and this is why are less experienced. The concept of rewarding new sales- you hesitate to change. But not making changes brings dispeople for “activities versus results” during the start-up aster, too. Careful design, change and execution of a sales compensation plan can provide the results you desire. period in their territory is progressive. Sometimes we have new people doing all the right things — making calls, showing products, etc. But for whatever Recruiting & Retention Tools Sales compensation plans are critical when it comes to reason, they are not seeing results. Because their compensation is based on results, they begin to get confused and dis- recruiting and retaining high-quality sales professionals. couraged and, many times, they change or reduce their Spend enough time evaluating your current sales compensaactivity, ultimately working against their own success. This tion plan and strategy and see if it cannot only help your profhappens all the time. If a compensation plan builds in itability and growth as a company, but also be used as a tool rewards for activity initially and then changes over to reward to recruit and retain the type of quality you need to survive results (within a realistic time period for both the sales- and prosper in this competitive marketplace. If your compensation plan is well-designed, you will not person and the company), the likelihood of success goes up, creating tenure. Of course, the more tenure, the higher the only keep your tenured people, but you will also build better retention with your new hires. profits for the company will be. When compensation plans line up with elements that take Flexibility for Change into consideration the things we listed above, including lining Flexibility for change is a must in compensation plans. Why? the sales team up with the company, driving initiatives, Because the market changes and in order to be competitive, one rewarding activities and results and allowing for stability as must be flexible. Now, on to the extreme. Too much flexibility well as flexibility for the individual’s situation, you build and change can be an administrative nightmare, and can be success that creates a reputation that your company is the company for the professionals in the industry to work for. counter to the company’s overall interest. A simple way to build in flexibility while not creating too Once you have this reputation, recruiting and retention will much change is to take a portion of the salesperson’s compen- not be an issue. Industry veteran Jim Strauss is president of MOTIVE8S Inc., a sation and allow that portion, let’s say 20 percent, to be open company that serves the office technology to change each year. This works for sales managers, too. If 80 percent of a compensation plan is stable, you create an industry with training, mentoring and coaching of sales and service professionals. element of stability for the salesperson — something that he He can be reached at can count on. This element of stability helps with retention. firstname.lastname@example.org or (515) 210-2136. The 20 percent can be changed each fiscal year, for instance, to Visit www.motive8s.com. drive particular company initiatives. By having a general design 36 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 7
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