Novatech CEO Dan Cooper continues his conversation with CJ Cannata and Scott Cullen of The Cannata Report, this time focusing on Novatech’s year-to-date performance, its strategy for growing managed IT, diversification, hiring and retention challenges, and a new much-needed company initiative. The interview has been edited for length and clarity. Click here to read part one where Cooper discusses Novatech’s acquisitions strategy.
As we heard towards the end of May, how is the year for looking for Novatech so far?
Cooper: We’re up big in both our managed print services business and our managed IT business. We call ourselves a managed office provider. To us, managed office means everything that can be remotely monitored, managed, and supported. There are four pillars in our managed office—managed print, managed IT, software, and security. Inside of managed print is traditional A3 and A4, and obviously, many services. We got into managed IT about four years ago after an acquisition. We have tripled the size of that business.
We look at software around employee productivity. We do some of the normal Office 365 that people would do around the manage IT space and software around document management and rules-based printing. Security is a big focus for us, making sure everything we do is locked down with the client from a security perspective. As we sit here four months through the year, we’re up in all four pillars.
The aftermarket continues to inch forward. When we look at our aftermarket, we still see growth from people returning all the way to the office.
What’s Novatech’s strategy for growing its managed IT business?
Cooper: We rank our customers in one of three categories. Category one is enterprise. We’re less focused on trying to sell managed IT there. But it’s important for those customers to know we do it and that we understand the network. Category two is the primary focus. Those are companies with 10 to 200 employees that have no IT or have partial IT support. We’re focused on cross-selling to those customers. Category three are companies with less than 10 employees that probably aren’t going to buy anything [outside of traditional office print technology], but they’re still important customers. When you acquire, you get some of those.
For managed IT, about 65% of our business comes from cross selling. The rest is net new where we are out prospecting, and the customer says, “I’m not interested in an MFP, but I need help on the IT side.”
Is Novatech considering adding any other products or services to your existing offerings?
Cooper: Not today. We want to stay very focused on the four pillars and continue to build out the strategy around those four pillars. We’ve got a lot of runway, and learning and development is a big thing for us. We are training and developing not just our sales organization, but our services organization to understand how to support our managed office portfolio, taking a traditional technician and giving them the ability to do last-mile support on the managed IT side, for example. And giving, we call them BTAs, Business Technology Advisors, a better understanding and skillset on how to sell it.
For us, it’d be very hard to jump into a bunch of different businesses when there’s still a tremendous learning curve and [the need to develop] talent in our company. As an example, some of our manufacturers have displays. When you go into the display business, you’ve got to be prepared to have a different type of vehicle. You need ladders, electrical capability, and you need to understand how to pull cable. It all looks good on paper until you get a deal, and then you have figure it out.
How is Novatech doing with hiring and retention?
Cooper: The development of people and the retention and hiring of people is going to be the number one business challenge that everybody has in perpetuity. Let’s face it, more of us are retiring than are entering the work environment.
Our industry has to do a better job of positioning itself so that it [isn’t viewed as] the copier or printer business. A copier today is really a computer. It’s a multifunctional device that does a lot of different things.
That’s why from a retaining standpoint, we’re cross-training all of our employees, so all of our employees understand the managed office. They understand the future of the company and where we’re heading. They understand that our revenues are growing. They understand that print is not going away. It still serves a huge purpose for our company, but we’re going to continue to cross-sell and develop [those skills], which helps with retention.
We’re very focused on recruiting. We have our own recruiting teams that focus on sales and service. And then we have onboarding. Learning and development are spread throughout Novatech for coaching the careers and the development of our employees. We have a kind of live anywhere, work anywhere approach as long as the job fit can work for us. We have employees working in states where we don’t have operations today.
Because we’re using the most modern technology tools, we’re confident that we can operate our company with employees in different markets. We have a new person on our bid team who works in South Dakota. We don’t have anything in South Dakota. We don’t have any desire to go to South Dakota, but she’s a talented individual, and we’ll go anywhere for talent.
Any initiatives going on that have you and the Novatech team excited about the rest of the year?
Cooper: One of the complaints of sales is, “I’m not able to spend enough time in front of my clients.” It’s very burdensome in our industry because data comes from so many different places. What we sought to do is to simplify our sales force’s world with the quoting tool from Keypoint Intelligence. We’re now using it. There are a lot of tools out there but the advantage that Keypoint has is their configuration. They built the configurator for Konica Minolta. They built Sharp’s configurator.
When a rep goes to Konica Minolta’s site and says, “How do I piece together this big production [print deal?], all they’re doing is taking a screenshot and asking, “Now where do I go? Why do I need another data point?”
Why can’t we just put it all in this comprehensive package? That’s what’s important to me as we continue to go forward. Novatech uses about 50 software packages to operate this company, but somehow, we’ve got to bring those tools together. We’re spending a lot of time in what we would call our data warehouse, being able to have that data speak to us and answer our questions so we can either do better with our customers or provide better information to our reps and our leadership. And that’s all kind of been spun by the quoting tool from Keypoint Intelligence, bringing all the data we use to operate this company together to place it at our fingertips.
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