With printed pages declining, it’s time to refresh the definition of MPS.
How many dealers were making money with MPS prior to the pandemic?
According to The Cannata Report’s 34th Annual Dealer Survey published last October, 69% of the 342 dealers responding to our Survey offered MPS, and for those that did, MPS was responsible for 13% of their revenues. It will be interesting to see what that percentage looks like in two years. (This year’s 35th Anniversary Dealer Survey focuses on dealers’ 2019 performance.)
We used to surmise that the percentage of dealers offering MPS would eventually exceed 80%, given the emergence of seat-based billing and other billing options. Another contributor to that projected increase would be acquisitions by large dealerships such as FlexPrint that were bringing MPS to acquired dealerships who did not offer MPS. However, since the beginning of March and the onset of the market decline stoked by the fallout of COVID-19, acquisitions have largely ground to a halt. Because of current conditions, we don’t see MPS accelerating at the same pace, compared to past years…at least under the traditional definition of MPS.
Another factor that will impact MPS is the expanding mobile and remote workforce. More workers than ever are now working remotely, and it is expected that many will continue to work from home long after the pandemic subsides, even if it is on some sort of staggered schedule—a week at home, a week in the office—for social distancing purposes.
In this environment, MPS solutions will have to do a better job of accommodating this expanded remote workforce. Even though some print management software tracks mobile and remote workers’ printing habits, not every solution is able to track what is happening beyond the boundaries of the traditional office where most print devices are located. And those solutions are only useful if people are printing on the A4 devices in their homes. That is a huge caveat, courtesy of West McDonald, president of the Managed Print Services Association (MPSA).
“This idea of a remote worker stuck at home having a printer is ridiculous,” said McDonald. “They’re not going to be printing pages so they can share them. Printed pages by their nature are something that is incorporated into a workflow within an organization. We’ve got to stop writing about how we’re going to save the print industry with these A4 printers that we’re putting on everybody’s desks.”
Kevin DeYoung, president of Qualpath in Pompano Beach, Florida, agrees with McDonald, even as his dealership places small devices in office worker’s homes, as well as A3 MFPs during the pandemic.
“I don’t think you’re going to see print volumes displaced to another location,” DeYoung said. “Where we are seeing print volumes fairly uniform is in document-intensive industries that still need to bill such as the legal industry. In some instances, we’ve moved A3 copiers into administrator’s homes. But in other arenas, they’re going, ‘Hey, I already have my little inkjet printer and I’m not printing as much. If I need to print, I can send a PDF to my office and they can print it.’”
DeYoung expects print volumes to continue to decline even after people return to their traditional offices.
“I don’t think there’s any going back,” he said. “We’re going to lose ‘X’ amount of prints forever because of this.”
When the crisis subsides and people leave their homes to go back to work, McDonald also believes the digital workflows people have grown accustomed to while working from home will result in less printing when they return to their offices.
“A lot of the holdups in legal and regulations that have stopped certain pages from disappearing, that’s not going to be the case anymore,” added McDonald. “They’re going to say if this happens again, we need to be ready. It is going to change our industry. This whole idea of a cost-per-page contract is killing us right now. If people aren’t printing pages, you’re not getting revenue.”
Current and Future Definitions of MPS
One of the issues with MPS has been its many iterations, from toner replenishment, to a simple CPP program, to complete management and tracking of devices at a customer’s location or locations.
DeYoung, a former president of the MPSA, has been involved in many discussions with the MPSA board over the years about the definition of MPS. For him, print transcends toner on paper.
“I look at MPS as managing images,” he said. “I always argued that it’s about images, not necessarily toner on paper. This industry was founded on the dissemination of critical information relative to business processes. In the traditional sense of the term, for managed print services or managed image services or managed imprint services to evolve, [dealers] are going to have to get more involved in the security and control aspects of it. How do I know that John Smith working from his home is not printing out critical proprietary information, and how do I know what he printed and when he printed it?”
Because of the security component, DeYoung predicts there will be greater interest in print management solutions that track what people are printing and what devices they are using.
“I wonder how managed print services morphs,” he added. “One of the ways it potentially morphs is by finding solutions to manage at-home workers as it relates to their devices, which is a little bit more complex because of the existing monitoring software out there.”
File sharing is another component that might encompass future definitions of MPS. DeYoung cited the proliferation of Google Drive, Dropbox, and Office 365 in the small business space, while also noting that there are still many small businesses that aren’t involved in file sharing.
“We’ve got to get involved in file sharing, and once again, dissemination of images across the boundaries of an organization,” emphasized DeYoung.
Tawnya Stone, vice president, strategic technology with GreatAmerica Financial Services Corp. and an MPSA board member, feels that in times like this, the concept of MPS needs to be modified.
“The premise of managing a fleet on behalf of your customer is still necessary, but the mechanics of how we will actually be successful going forward will have to shift,” she said. “The current model is probably going to change, but it’s still going to be important for dealers to think about how to manage, and it’s going to be more than just print devices. It’s going to be the whole environment. Looking at MPS more holistically will be key.”
Toshiba America Business Solutions (TABS) Chief Operating Officer Larry White describes MPS as a fantastic tool to bring to a customer, even as it evolves to encompass more than just print.
“With MPS, you are getting additional prints, but you also have the ability to put solutions business into MPS and network services into MPS. You have compelling analytics that tell you what’s in an environment, and you can put whatever you want into an MPS contract. An MPS contract is probably one of the most flexible contracts you can have with a customer. It allows you to change as the customer changes.”
McDonald continues to sound the alarm.
“Print as we know it is going to change dramatically. If you look at the dealers that are weathering this storm right now, the ones doing the best are those that invested in managed services. That part of their business is growing like crazy right now because of all these remote users who don’t know what they’re doing. They need managed services people to help them.”
The acronym MPS may no longer be relevant when this is over and dealers find themselves forced to focus less on print. Maybe MPS will be redefined as Managed Process Services, suggested McDonald.
“The only way dealers are going to make up for that loss of revenue is managed services,” he opined. “It could be VoIP, Zoom, or some other unified communications. Dealers will have to start managing those things because they are not going away once this is finished. These toolsets for us to collaborate remotely will have to be part of their business models.”
What Else is Next?
Mark Hart, executive director of business development and national accounts with ACDI, the distributor of PaperCut print management software, thinks the COVID-19 pandemic will open the eyes of many dealers and customers about the viability of cloud-based print management solutions. ACDI can install PaperCut on behalf of the dealer or OEM, and 99% of those installations are handled remotely.
“This is going to change the way the landscape works with software and software management, and more people will expect cloud-based software technologies, remoting in and giving people access to a network when they traditionally would not have in the past,” said Hart.
He sees more market segments readily embracing these cloud-based print management solutions.
“There are a lot of organizations that weren’t looking at print management in the past such as construction, and all these mobile hospitals and testing sites are popping up now,” noted Hart.
“People are driving up in a car and filling out a form about their health background. What if they had a form they could fill out on their phone while they were in line and print to a printer in that mobile hospital spot? That’s one less touchpoint. There’s a lot of new ideas that will come out of this, which will be a positive for the dealer channel.”
Although the definition of MPS may change, everyone we spoke with is convinced that MPS is not going away.
“Whether it’s a cost-per-page contract, cartridge-based billing, whatever, it is absolutely relevant to today, yesterday, and years in the future,” said Hart.
Toshiba’s White remains optimistic about the future of MPS, particularly in its traditional definition.
“You’ll see much more emphasis on MPS because we’re still in the print business, and that’s still a majority of our revenues, and people are going to be more focused on capturing every possible print they can,” said White. “The business we bill is based on a facilities environment; however, there are solutions that facilitate remote working that you can build into an MPS contract which will help offset some of the loss of that volume that is occurring today and will occur no matter what happens tomorrow and years down the road.”
McDonald hasn’t completely abandoned the traditional concept of and need for MPS either, and he believes it will remain a viable service offering.
“It’s just not going to be the way to grow a business,” he concluded.
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Paying the Bill
As MPS evolves, so will billing models.
“The problem we’ve had is MPS has become stagnant and we haven’t looked at ways of changing it, adapting it, and making it better,” said Mark Hart, executive director of business development and national accounts with ACDI. “A CPC was a race to the bottom, now people are looking at a per user cost.”
When Hart references per-user costs, he’s talking about flat-rate programs and seat-based billing, business models near and dear to the heart of West McDonald, president of the Managed Print Services Association (MPSA).
“I guarantee in the next five to six months you’re going to see more dealers offering flat-rate programs either by device or by user,” said McDonald. “This is one of those bellwether moments that has forced our industry to reevaluate what it does.”
Tawnya Stone, vice president, strategic technology with GreatAmerica Financial Services Corp. and an MPSA board member, also sees more of a shift from a per click billing model to more of a per user, per device, or per “something.”
“People have been mentally trying to get there but this is going to force them to figure it out,” emphasized Stone.
She uses digital signatures as an example. GreatAmerica has had that available to customers for a long time, but it’s been a challenge to convince customers to go that route because they haven’t had to.
“Now that you can’t actually go and get a physical signature, we are implementing it way faster than we ever could have than if we were trying to do a campaign to get people to adopt,” reported Stone.
But not so fast. Toshiba America Business Solutions (TABS) Chief Operating Officer Larry White doesn’t see user-based billing models as the panacea, especially in organizations that have had a huge reduction in their workforce.
“The seat license doesn’t completely solve that problem in my very elementary way of thinking,” said White. “We need to look for another way to figure that out.”
Whatever the solution, he emphasized that based on today’s market, the cost will still be wrapped in a contract with minimums and a basic monthly fee that covers a dealer’s fixed costs.
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Don’t Fear Print Management Software
“We have great fleet management products in the world today, but they can only tell you so much about what is going on in the environment,” said ACDI’s Mark Hart. “They tell you this device sitting in the corner prints 5,000 pages this month—3,000 in color and 2,000 in mono—and here’s your bill. In today’s environment that’s so generic and doesn’t tell users what’s happening in their world.”
Hart recommends taking the data accumulated from print management software such as PaperCut, which identifies where print jobs are coming from, from what applications, and what time of day, to provide a detailed picture of the customer’s print environment.
“In today’s world of COVID-19, we have people sending devices to law firms and lawyers,” he said. “How do we know it is being used for work? MPS traditionally would never help you get that information. You need print management software to tell the whole story.”
Hart acknowledged that some dealers and some of the more solutions-oriented OEMs have made that connection. Others are fearful of print management products.
“They feel they’re going to lose pages, and that it’s going to create a barrier so users can’t print,” opined Hart.
ACDI is on a mission to debunk that myth.
“We don’t see pages go down because of print management software,” said Hart. “There are other outside factors within an organization why people are printing less—digital workflows that come along with document management systems, online forms, email, and fewer paper-based processes.”
What ACDI has found by adding print management software, is that it does the opposite.
“It enables people to print easier and smarter,” said Hart. “Should you be using duplex, or sending a 500-page job to your desktop printer rather than an A3 device that’s centrally managed?”
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