Forget the hardware at FY18’s Dealer Meeting–this year’s focus was on new and enhanced applications, services, and programs.
If anyone arrived in Las Vegas on April 18 for the Kyocera Document America’s (KDA) dealer meeting expecting to see a boatload of new hardware they were a year too late.
Instead, the emphasis was on new and enhanced apps, programs and services that add value to the box as well as enhance the way Kyocera does business with its dealers.
And you know what, that was alright. As one dealer told me, “my customers are already two generations behind and they’re still oohing and ahhing over the products released two years ago.”
This was a dealer who loves Kyocera’s three-tier color concept. And as a member of Kyocera’s Dealer Advisory Board, he was also well aware that after last year’s 43 new introductions this would be a quiet conference on the hardware front. His recap of the event was positive, and he told me he appreciated the simplicity and directness of this year’s message.
While other OEMs tend to operate on an 18-month event schedule, Kyocera remains committed to a 12-month schedule, and as one dealer told us, that’s just fine by him. Although he appreciates the opportunity to travel to whatever destination the meeting is held to hear about the company’s latest initiatives and strategies, and see the latest product offerings, equally valuable is the opportunity to network with his peers on a yearly basis.
The theme of this year’s event was “Navigating Your Success.” For a company rolling out new applications, services and dealer programs, it was an appropriate theme. Let’s recap the highlights.
Kyocera by the Numbers – It’s always fascinating to listen to the spin or watch the dance the OEMs do when it comes to discussing their previous year’s financial performance. Overall, the news was positive. Kyocera’s business in the North American market was up 4% compared to the previous fiscal year while consolidated sales on a U.S. dollar basis was up by 1% compared to the previous year. The Latin American markets also performed well, with Kyocera Mexico setting the pace with 17% growth. As we learned from KDA President & CEO Yukio Ikeda during the press and analyst briefing towards the end of the first day, that number is deceptive because Mexico still only represents a tiny portion of Kyocera’s business in the Americas while the U.S. remains its biggest market in the Americas.
TDS 2.0 – This is the latest iteration of Kyocera’s Total Document Solutions approach and now encompasses services for Business Process Improvement, Business Process Outsourcing, and IT Services. “TDS 2.0 builds on Total Document Solutions as the foundation of our approach, while broadening our offerings,” stated Ikeda. “These services will help customers improve the way they manage not only document-related processes, but ALL business processes.
Alliance with DataBank – Originally announced last September at the Hyland Community Live event in Orlando, the alliance with DataBank, a workflow solutions and workflow outsourcing provider, is an integral element of Kyocera’s TDS 2.0 strategy. Beginning in FY18, Kyocera’s North American dealers can offer customers business process improvement services through Kyocera’s and DataBank’s BPI specialists. Through DataBank, Kyocera has direct access to the entire portfolio of Hyland enterprise content management offerings from small company/departmental solutions to the enterprise. The services will initially be launched to a small group of dealers in the first quarter of FY18, and extend beyond that group during the second of the fiscal year.
IT Services Coming Soon – Starting in FY18, Kyocera dealers will be able to offer customers IT Services via Kyocera’s “Workspace as a Service” initiative. (We hope to delve deeper into this at a later time.)
Update on Kyocera Fleet Services (KFS) – Launched last fiscal year, Kyocera’s fleet management tool reportedly offers the potential to reduce a dealer’s service costs by providing data on usage and maintenance issues. According to Terry Knopsnyder, vice president, it’s been gaining traction in the market and more than 250 dealerships have signed up for KFS in the U.S. More than 40,000 machines have been registered in the system for dealers in the United States with another 10,000 units throughout the rest of the Americas. Knopsnyder also reported that Kyocera is bringing a thousand additional machines online each week.
Lots of Apps – A tour of the exhibit area offered a first-hand look along with previews of a host of apps, including PintPoint Mobile, DMCConnect, AccuSender Cloud, Google Connector, and Kyocera Net Manager. Admittedly, these app demos get a little overwhelming as you rapidly bounce from one station to the next, but apps like these are what Kyocera does and does well. And they fit squarely into the company’s TDS approach.
Partner Commerce System (PCS) – One of the initiatives outlined by Ikeda was making it easier for dealers to do business with KDA through infrastructure improvements. Here’s where PCS, Kyocera’s web-based order tracking system, comes in. PCS enables dealers in the U.S. to merge their major accounts and standard accounts numbers into a single account to make the dealer’s interaction with KDA more streamlined and simple. U.S. dealers now have one login and one account number, and can identify major accounts within this merged number. The company is doing a phased rollout of the PCS by region, starting in early May. In addition to PCS, Kyocera has made significant improvements to the user experience on its external sites, and on the new KDACentral.
Challenges and Opportunities
During the General Session Norihiko Ina, president of Kyocera Document Solutions, outlined five challenges and opportunities for the company.
The first is becoming more price competitive in the document market by focusing on Kyocera’s factories in China and Vietnam. Ina reported that the factory in China has been expanding production and is currently producing almost 100% of the company’s A3 MFPs. Kyocera is looking to reduce costs further by increasing productivity with the development of a hybrid production line which combines people and robots. Production is also increasing at its Vietnam factory, which opened five years ago and now produces 50% of the company’s A4 MFPs and printers. A3 MFPs will eventually be added to the mix there as well.
The second is environmental responsibility. Ina reported that customer requests to meet environmental standards are increasing every year, particularly the need to reduce power consumption. Kyocera is meeting this challenge by providing a new toner that enables a lower toner fixing temperature, resulting in lower power consumption. The new toner has already been installed in the new series of Kyocera products, reportedly resulting in a reduction in power consumption by up to about 50% compared with the previous series. Ina added that further reduction of power consumption can be achieved by completely reviewing and improving the toner fixing process in the future.
Declining office print volumes is the third challenge. Despite the decline, Ina noted that there are several types of workflows related to documents that are essential, even if that workflow doesn’t involve a printed document. “We believe workflow will need to become more flexible and more adapted to customer needs, and also we expect this demand to increase more,” he said. “This is an opportunity to expand business, in particular, document BPO and ECM business.” Here, Ina referenced the alliance with DataBank a way to leverage this opportunity.
The fourth challenge is print demand. Ina explained that the commercial print market is shifting from large-volume offset printing to on-demand printing. “We expect the personalized print demand with large volume will increase, which is customized for each requirement as characterized by Variable Data Printing,” stated Ina. “In other words, we can have more opportunities for which we can utilize our on-demand technology other than the office printing area.” He added that Kyocera has been developing hardware products and solutions for several years, which adopt this Variable Data Printing technology and high-speed printing technology. This technology is scheduled to go into mass production during the first half of 2018.
The fifth challenge and opportunity is the Internet of Things (IoT). Ina sees the IoT being used in our industry for manufacturing and predictive maintenance. “Especially in Predictive Maintenance, we have started the approach in building the system from information collected globally and from internal trials,” he said. Kyocera is offering predictive maintenance through the aforementioned KFS.
Let me start by revisiting my earlier comment about the dearth of new hardware introductions at this event even if some of the products previously introduced will be reaching certain KDA Group markets represented at this meeting with minor enhancements throughout this year. Again, let’s be real. It’s not always necessary to roll out new hardware every year even though that seems to be a trend and expectation not only in our industry, but with most business and consumer technologies. I’ve learned long ago, you can’t judge the quality of a dealer meeting by the number of new hardware introductions. One needs to look at the big picture, and that’s what the dealers who offered positive impressions of this year’s Kyocera meeting have done.
But back to hardware for a moment because you can’t escape that discussion. During the press and analyst briefing, Ikeda was honest about the company’s lack of a true production device, admitting there was indeed a serious hole in the line. Now that’s a line about the line we’ve heard stretching back to the Mike Pietrunti days. Until that hole is filled, we can expect Ikeda or whomever is in his role in the future, to continue to answer that question at these annual press briefings.
Ikeda is still fresh in his new role, and he’s been fortunate that KDA Group has experienced positive growth during his short tenure. The future, however, is a little murkier with competitors looking to grab some of Kyocera’s market share. At the analyst briefing he expressed little visible concern when the discussion shifted to HP’s intent to target players like Kyocera, Sharp, and Toshiba to become a dealer’s secondary line. That’s not even counting the more focused push into the channel by Xerox, an initiative that could heat things up even more. What Kyocera has in its favor is a wealth of loyal dealers who may not be so easily swayed to go over to the other side.
Before I digress even more, let’s acknowledge that when it comes to applications, services, and programs that benefit their dealers, the company does those things extremely well. The focus on apps is nothing new to Kyocera, and those apps and the new services play right into the company’s TDS approach. I spoke with a few dealers while there and most were impressed by what they saw although as another dealer told me what was missing at this event was the “Wow” factor and that it was too low key.
That sounds about right. Regardless, Kyocera introduced enough highly practical new services and applications with the potential to positively impact its dealer channel and their customers even if these aren’t jaw dropping introductions.
Honestly, I can’t recall the last time I attended a Kyocera dealer meeting that was anything but low key—unless one counts the last press and analyst briefing presided over by Mike Pietrunti when he shared that the company’s goal was to reach what every analyst in the room regarded as some unrealistic revenue figure within some equally unrealistic time frame. (I can’t remember the exact figure or time frame, but both were insane.) However, that not-so-low-key lively discussion took place behind closed doors.
Anyway, yes this was a low-key meeting in keeping with the Kyocera Annual Dealer Meeting template. Most dealers were content with Kyocera’s message and its initiatives and if that’s the end result of your annual dealer meeting, then you did a pretty good job.
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