The Office Printing Industry in transition

Today, many businesses across many industries are in an accelerated transition of change. This appetite to change is driven by their need to survive and prosper in a rapidly changing marketplace. This is no more evident than what is occurring across the Office Printing Industry globally.

 

One of the many challenges or some would say legacies, that this industry has and continues to face, is that of its wonderful success globally over the past 30 odd years. From the office equipment manufacturers (OEM’s) through to every player and provider that operates as part of the channels to market. They have been a wonderfully successful sales and marketing driven business.

 

The business model that was driven via the OEM brands and many of the resellers and dealers provided the impetus to virtually saturate an ever-growing market. This lies the challenge.

 

A manufacturing based business must be fed. When products are in demand and markets are growing, manufacturing is built to support output levels including peaks. The same strategy doesn’t usually apply when the direction of growth in going in the opposite direction. Typically, when manufacturing volumes decline, you either invest in better automation to bring down costs, pressure partners for lower input materials, cut back on costs through labour reduction (staff cut backs, redundancies etc.), reduce or lean out the supply chain that reduces inventory levels or you reduce overall manufacturing volumes. Or alternately a combination of some or all the above may apply.

 

However, the impact of such changes, more so related to reducing manufacturing volumes is that the unit costs of manufacture go up. At some stage, there is a tipping point. If the tipping point occurs this will increase unit price and this will be most likely shared across regions and the globe.

 

Although in the past it was possible when one region was in either a flat or declining market, other regions could or would support the total manufacturing unit number. Therefore, provide a level of support to protect the global unit manufacturing costs. This is less likely to occur in the future with falling unit and print volumes from most major markets occurring in the last 2 to 3 years. Even with growth coming out of new geographical regions it will still not be able to underpin the impending impacts of the forthcoming decline.

 

The Butterfly Effect:

 

When manufacturing, costs increase, they are often passed on through the channel and ultimately to the end customer. When this occurs, market demand can further decline as pricing is not as favourable in comparison to other brands. Providers (direct sales teams, dealers and resellers) that distribute, market and sell the higher cost product feel the effect as well.

 

Customers ultimately have the choice. When customers struggle to see the value or difference between one brand or the other, they will usually fall back to price.

 

Ultimately what occurs is the ripple effect (butterfly effect). We have had these effects in the office printing industry in the past but the ripple has always been so lightly felt. However, this is changing in a very dramatic way.

 

As print volumes continue to decline globally due to increasing digitisation and coupled with increasing device consolidation, the office print industry globally is on the tail-end of market maturity.

 

The impact will be that brands (OEM’s), print providers, dealers, resellers and co will be squeezed through tighter margins. Resellers and dealers may be the first to change or be impacted as many are on the front line and feel the effects first.

 

Some of the smarter businesses are doing just that – they are changing and they are being assisted by able business partners. However, the majority are still holding out and believing the bath water is still warm. By the time these organisations recognise the temperature has gone cold. It will be all too late.

 

So, we now know why this is happening, but what is the larger impact to the industry?

 

Well the impact is this; the industry is currently feeling the effects of a shortening business model or manufacturing-based lifecycle. Instead of having a product (or product-set) having a manufacturing life-span of 20, 30 or 40 years like many manufactured based plants in the past. The office printing industry is now on the verge of a sharp fall. The product-set is running out of runway and I’m not referring to a new piece of hardware (kit) released every 5 years or a retooling the plant.

 

Obviously redesigning manufacturing plants to manage lower production cycles is an option, but it’s not going to be the strategy of all the remaining players. Maybe the last one or two within the industry sector can play this game. The others must take a different path, deploy a different strategy.

 

The Market Maturity tail is shortening:

 

Although the Rogers Bell Curve (fig 1.0) is about the technology adoption lifecycle it is equally useful to illustrate the focus on innovation. The reason why innovation has become increasingly important is more related to the shortening of products in market at the back end of the cycle. If you have a shortening cycle or your product matures quicker the focus and attention must be on renewing or innovating faster. Many industries and the office printing industry is one of them, is now seeing the full effects of a shortening or decreasing market-life-span.

 

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This is not to say that (office printing industry) will disappear anytime soon, because it won’t. It will continue to be exist, but not the way it has done in the past. We are now in one of the latter phases of a flattening market (short market tail). We are and will continue to see brands (manufacturers) consolidate.

 

Today in fact, we are witnessing some of the most successful global brands pivoting and refocusing their direction on a new future. They are either exiting the office print industry altogether, merging or being acquired by another office printing brand. Some are choosing to split parts of their business to either refocus their attention to new adjacent markets or create a new play in a new market.

 

Some have also recognised that breaking the business up helps to create and make transparent a new asset value (class) that was previously was trapped in a somewhat slowing decaying carcass. Maybe this is more of a push to satisfy shareholders or to take advantage of available investment funds.

 

Whatever the reason the office printing is presenting at an inflection point.

 

Where to from here?

 

Well, the playing field is certainly changing, innovation has sped up. In fact, it has accelerated at phenomenal rates due to the realisation that businesses can no longer launch an innovative product (or business) in market and watch it have a 30 plus year (tail) run. It is more likely that it will be obsolete, redundant or disrupted within 5,10 or 15 years.

 

Due to the shorter life, organisations are looking at innovative (and some disruptive innovation) to sustain their growth. Incremental innovation (e.g. a faster more powerful processor or better process improvement) won’t be enough. The focus must be on leap-frog innovation – innovation that takes a “design thinking” perspective rather than looking at today’s environment requirements only.

 

Parallel to this changing dynamic is the increasing emphasis on aligning businesses to a customer centric view, or businesses focused on the future industries that are evolving such as the “customer immersion industry” or the “customer experience industry”.

 

We are seeing many clients, customers and consumers around the world, continue to be educated and conditioned around the benefits of such permeating technologies led by an assortment of technology players who provide solutions and experiences in the areas of mobility, big data, cloud, virtual reality, augment reality, analytics, IoT, 3D, Drones, AI and the list goes on.

 

This accelerated appetite of innovation takes advantage of technology infrastructures, platforms and applications that are driven and leveraged by a variety of existing and new technologies and customer centric business models.

 

Additionally, the ability to compete and gain access to low cost technology is changing the way both new and old businesses compete. Green field businesses are now disrupting older, well entrenched businesses of the past. Business that have been successful in the past are now being eroded by new entrants that are using technology and low cost models to outcompete the competition.

 

Businesses that have built a successful business on decades of experience and infrastructure are being challenged by businesses that don’t carry dedicated workforces or don’t carry legacy infrastructure to operate. They scale, their agile and deploy quickly. They are becoming the new norm.

 

They operate on an agile business model and are changing the way they engage their customers. These new business models are shaped around being more customer centric, engaging at an individual level, they can respond at a faster rate and at a deeper level through predicative analytics.

 

Therefore, the question that now remains is how is your business going to adapt going forward? How are you going to drive leap-frog innovation, not just incremental change? The way you have always done things in the past, does not mean or guarantee you success in the future.

 

As someone was said to me “if nothing changes, nothing changes”

 

 

 

Digitisation-as-a-Service: Is this the new offering for the Manage Print Services Industry?

Watch out Managed Print Services (MPS), here comes Digitisation-as-a-Service (DaaS).

 

I know, I know, is there such a thing as DaaS? Are we reusing or spinning an old story to create a new one? What about Printing-as-a-Service (PaaS), isn’t this more related to MPS? Or is Printing-as-a-Service still too heavily focused on the physical world of print output and page counts?

 

Also don’t we have ample “as-a-service” models now.

 

Yes, to many out there we do, but most are very appropriate as they can deliver a better service outcome for customers that are both cost effective and resource efficient. There are many well known as-a-service models such as Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), Desktop-as-a-Service (DaaS) and the list goes on and on.

 

The real question therefore is twofold; is there an explicit customer requirement and business need and can providers digitise content on premises or remotely and provide this in or via a cloud based service provision? More importantly adding value to the customer in the process.

 

Or are these just services-orientated marketing fads or is there more to this than we realise for the office printing industry?

 

Yes – it could be more of the same, just another evolution or merger of Managed Print Services, Content Managed Services, Document Management, Workflow and Process Optimisation and Business Process Services (BPO) all bundled together?

 

Too understand this more. Ask yourself this question. How evolved is your Managed Print Service Provider today? How are they positioning themselves in a world that is printing less than it used too? Has their behaviour changed in how they consult, manage, support and transact with clients? How well are they demonstrating the transition from a paper centric world to a more digitally enabled economy? Are they helping grow their client’s business or just reducing the cost structures that support today’s generic print activities?

 

In response to these questions, we know if we talk to some providers they are certainly changing their shape, direction and their agility to respond. Why are they doing this? Well it’s simple really, they are listening to the customer and adapting. They no longer see the office printing segment as the nirvana it once was. They are addressing the needs of the client, not hiding from them. This is the key difference.

 

Unfortunately, however, the flip side to this is that the majority of print providers around the world including Australia still see print (specifically the hardware devices and print output volumes) as their last bastion and they remain focused on squeezing everything thing out of it as they can. Maybe for some it’s more of an obsession or it’s about the last one standing will win. Ultimately, “this legacy will become their legacy”. But everyone has a choice right?

 

So does Digitalisation-as-a-Service make sense? Who would want this? Is DaaS the next evolution of Managed Print Services or is DaaS a component or segment of MPS? Or are they unrelated?

 

So how real is Digitisation-as-a-Service?

 

Well let’s ask the question. Do customers want to have a service provider come to them and say; hey, how about we help you migrate and manage all your hardcopy physical documents into a digital format? You know those documents that are coming into your business circulating through your business or sitting there as frozen intellectual property (IP), doing nothing.

 

All that IP and content trapped in time and locked up in endless warehouses, filing compactors, boxes and filing cabinets and turn them into a digital and reusable format. Wow maybe we can even help you commercialise the content through a digital based app and drive new revenue streams for your business. Maybe some of that content is an asset after all.

 

Imagine how the client’s customer would feel? They don’t always have to fill out paper based forms, wait days, weeks or months for something to be processed only to find out the form or paperwork has gone missing and how good would it be if the end consumer/client didn’t have to supply the same information over and over again to different departments within the same firm?

 

The speed of a Digital Society:

 

Hey, we know the world is accelerating at pace, the future is a lot closer than we think and today your business as well as your customer’s business must be operating effectively in a digital economy just as much as its operating in any physical sense.

 

So let’s speed up their business.

 

Paper and more importantly paper-based processes may be slowing their business down to a point that their competitors now are acquiring customers and engaging with customers much faster than they can. Don’t forget your customers are dealing with the paper-trail and this may be hurting them.

 

So why are some traditional competitors now outperforming and out-competing your customer? How are new entrants competing against them so effectively?

 

There is a new breed of competition that they may not be able to defend against as easily as they had in the past.

 

Their competitors have become more agile businesses and now have a competitive advantage. Some are born in a digital world. Others have had to refocus and re-innovate their businesses so they can better engage and operate digitally, look at banking as an industry that is currently transforming to connect and transact on digital based platforms specifically mobile based solutions.

 

To be successful in this transition to a digital economy businesses have to change the way they operate, function and leverage resources within and across their business. Many organisations who go through this process have identified that paper and specifically the paper processes make people less efficient which ultimately costs the business money.

 

These businesses recognise that they have to by-pass paper and many of the labour intensive and costly tasks that once supported a paper based process.

 

New providers who are focused around digitisation-as-a-service understand their role is not only digitising hardcopy content, but also working with clients to manage content in its many forms. More and more you will see providers work in areas of digital enablement where content is repurposed, shared and processed across digital platforms such as mobile based app’s.

 

This stage of evolution is potentially where managed print services and document imaging companies are heading. They are integrating their capabilities, skills, experience and core competencies from print output to digitisation services.

 

More importantly they are focusing on working with the business to help change the way the business communicates and interacts not only with its customers, but its employees as well. Most of these providers are using technology as the enabling piece wrapped up within a service led provision that is outcome based. Not brand, not device, not manufacturer led.

 

The first step in this journey is to identify what is essential office printing and what is not. We state this as many customers still require a physical print output requirement. However, at the same time providers should be working to identify where areas of business and staff productivity can be improved and costs can be taken out. The secret however is how you can add to your customer top line revenue growth – now this changes the proposition totally doesn’t it.

 

Most providers who have competence in assisting the client to move from an “As Is” to a “To Be” state, would have a sound and robust methodology to manage this engagement. This is really about reducing risk for the client.

 

With this in mind we would expect new age and leading services providers to clearly map some of the preliminary but critical aspects and paths required in the process of digitisation. This would include; auditing and weighting content value, assessing documents life-cycle, measuring and analysing the workflow processes that occurs in supporting communications both internally and externally and this includes understanding existing digital workflows etc.

 

Although each industry and to some extent each business has its nuances, much of the paper related processes that exist today are becoming more and more redundant and therefore becoming much easier to identify and extract for businesses in general.

 

With this said, what type of service provider are you becoming and how are you aligning to your customer’s new business requirements and needs?

 

“Innovation is not a one off occurrence”

 

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The polarising world of Managed Print Services (MPS)

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It’s not about clipping the ticket on the hardware (box) or the service
 
I feel empowered when my clients tell me they want to print less. As an independent industry consultant and advisor to end clients, I sit in a unique position. I don’t make an income from devices or their toner supplies and their service volumes that they generate.
 
Therefore in my role as a trusted advisor I can be totally agnostic to the solution design, based on the client’s business requirements and objectives. I have no preconceived solution (product, brand or service), no wheelbarrow to push. I can be fluid and as agile as the client needs and requires.
 
In this day and age you have to be outcome focused and aligned to what the customer is trying to achieve both in the short and long term. Some customers today have a goal to eradicate print totally while others want to reduce print volumes and the assets that produce print over a reasonable period.
 
However in both cases what they (the customers) are trying to avoid is the conflict of interest they see from many Managed Print Service (MPS) providers. The issue boils down to this – “the provider has a conflict”. The conflict is that you may be impacting their interests if you want to reduce or limit printing in the office.
 
Ask yourself these questions – how successful has the current managed print services contract been to reduce print volumes and devices? How much focus have you seen from your provider in helping you take initiatives to reduce print volumes? Have they worked with you to help set targets to reduce printing?
 
Who is assisting you with your internal Digital Transformation?
 
Now coinciding with managed print services strategy, customers should be seeing or at least having the conversation around how to better integrate and leverage the digital transformation taking place within the customer’s environment as well as how the customer engages with the marketplace.
 
As a simple example how is your provider engaging with your business today around production or commercial printing (i.e. external printing), mail room digitisation or digital communications (such as emailing policy renewal documents to end customers) or helping you manage your digital assets? These services extend out to how you manage your systems of engagement such as your content management systems (CMS), document management systems (DMS), records management, and practice management and so on. Other areas such as accounts payables and accounts receivables should be very clearly in the sites of the Managed Print Service providers as this in most cases is a no-brainer as both the payback period is very short and the cost savings due to greater efficiencies are very evident.
 
Today, more and more of our engagement with end clients is focused on helping and advising them around the steps in moving from the slow physical paper based world to the faster new mobile based platforms that are quickly being optimised for the digital economy.
 
That means working and transforming old paper based processes and workflows that are now out of step with the digital workflow and processes that move and repurpose digital content at real time speeds. Paper – well that only gets in the road and slows both the business and the workforce down.
 
So having by having this perspective we can better ensure that all leakage points across the digital ecosystem can be captured, while at the same time helping to protect and reduce the risk of the client from providers that don’t necessarily having the same business driver as the client.
 
Know thy provider
The case in point – If you work for a hardware brand or sell hardware, you’ll find your clients becoming more and more suspicious of your sales model. Financing the solution can also be a smoke and mirrors play and customers that have been caught out in the past are the best references to understand the importance of price and contract transparency. This does not mean all financing is bad; on the contrary, financing the asset and services is an effective way to turn the business expense from a capital expenditure into an operating expense.
 
When I see providers saying they are independent, I know what they are really trying to say is that they work with a few brands and they are relatively independent based on the client wanting to choose the brands they stock or support.
 
In fairness it is very difficult for a Managed Print Service (MPS) provider (Independent or not) to support all brands (let alone device models, supplies, parts) that are out in the market (in most cases around 16 different brands can exist in most markets). Fortunately both common sense and costs restrict providing support and access to all brands.
 
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The road to digitisation

 
11017519_625765144231998_1414371299216269900_nThe world of digitisation encompasses many spheres. However one thing is clear, digital disruption is constant and in fact many would say it’s yesterday’s news. Why you may ask?
 
Well, now it’s all about digital transformation.
 
Businesses are rushing to digitise across all their realms of business. They clearly understand and recognise that their customers are now engaging with them and consuming their products and services from mobile digital platforms.
 
Products such as the iPhone have accelerated the digital transformation far faster than anyone recognised it would back in 2007. This speed of digital acceptance has translated into phenomenal consumer take-up from all categories of consumers regardless of age, location or gender.
 
The impact of this digital maturity has now caught out virtually all businesses, regardless of their readiness. This includes existing businesses that were built and designed for traditional market engagement models or newer, green field web/digital savvy businesses.
 
Although we are now seeing the impact of business and market disruption across multiple market segments through the likes of Uber, Airbnb, Spotify, Netflix, WhatsApp, Medify and Zara people just to name a few, these businesses have the significant advantage of being born a digital native.
 
The challenge ahead:
 
The challenge for the rest of the business world is how do they catch up, accelerate and potentially re-invent their business to align to customers increasing expectations around customer satisfaction and customer experience. The new digital world has virtually overnight ratcheted up the level customer expectation. Consumers want to consume digitally when, where and how they want.
 
It’s not only about 24 x 7 x 365 anymore. Its 360 (degrees) x 24 x 7 x 365 x AI (Artificial Intelligence) x Predicative analytics (delivering a product or service before we even know we wanted or needed it).
 
Sure that may be a bit out there today – but in the very near future we may be delivering the IBM Watson as a service (WaaS). Now I know that is a bit out there for some, but I’ll leave that one on the table for others to debate.
 
But let’s get back to where we are today. How will a business transition? Where should it start? How does it manage this change and what are some of the simple things it can do around becoming a digital native.
 
The digital value chain:
 
The digital value chain provides a cross sectional view of the digital services or digitisation requirements across the business. For illustration purposes it may start at the customer’s front door – their website. It’s where the connection is made between the customer and the business. The value chain represented in this concept may the web content management system (WCMS). In today’s world a WCMS has to be a website that is truly optimised, not just responsive. It is your front door of customer engagement.
 
Taking this line of thinking further, so we can really understand why each component of your digital value chain has to be scrutinised more now than in the past. Here is one high level example, right at the front door, let alone further through the value chain (or lines of business and processes) of the businesses digital environment.
 
Today you have consumers who may be trying to access information and content from your website. Some of these customers as they search your website trying to find the relevant information they are looking for find the information as PDF attachments. At first glance this may seem like a good thing or idea however this is where the problem starts. Generally, customers do not want to download large PDF files onto their mobile device, currently the most common form of documents compiled on a company’s website when not in HTML5.
 
Not only is there a data download cost associated to this for the individual user, but when they do finally have the document downloaded. They then generally have to scroll through the document searching for the information they require.
 
Again as I mentioned the PDF document may be imaged to the size of the screen (i.e. responsive design) however impossible to read (not even my 10 year old son’s radar eyes can see the minuscule font).
 
In fact today approximately 90% of the worlds estimate 180m websites (www.Swipezy.com) are not optimised for mobile devices.
But I digress. What makes the matter worse for the customer is when they do find the information they discover that the document includes and refers to, references to hyper- links, cross referencing and other documentation.
 
Now as it’s a PDF (i.e. encapsulated image of the whole document), the customer (this also applies to internal customers of the company as well) cannot then press on the associated link. They are forced to come out of the application or website and start again, Google it or in most cases not even bother as it’s all too hard.
 
The take-away from this is that even though we may be operating in a digital world, we are still in many cases applying old ways and processes that are no longer valid for a digital economy.
 
To build a true digital capability you have to start to identify redundant analogue and semi digital connections (that is where both old and new technologies worlds meet) that can potentially slow or impact your business or your customers touch points in a negative way.
 
One of the major elephants in the room today is that many, many businesses still operate at the snail pace of paper based processes. Businesses that can truly digitise their environment will gain the significant productivity and efficiency gains that all businesses have been striving for other the last two to three decades.
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Managed Print Services (MPS) 1.0

MANAGED PRINT SERVICES (MPS) – the baby steps
 
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The question that I am continually asked by end customers, IT resellers and dealers both in Australia or when I speak at conferences overseas is, “What are managed print services really?”
Everyone appears to be looking for that “silver bullet” answer: a word or two, or sentence that says it all.
 
Some salespeople and some customers expect that there should be a line item called MPS in the price book. Some offer, and talk about, MPS as a product-led and product-only based offering to customers. I know this because I have seen it many times in the last four or so years.
 
But saying this I also fully appreciate why this question is being posed. When a business or a person has relied so heavily on buying or selling devices (or boxes) the process becomes very distinct, defined and identifiable as a tangible product offering.
 
We now expect these same end customers, as well as many players from within the industry, to understand how to buy and sell a services-led offering and deliver on that capability through a process of consulting. The business opportunity is no longer as clearly defined around a tangible and consistent product offering as it was in the past when there was only hardware and some software to sell. The overall business problem or business solution may be far broader than the previous hardware based discussion path.
 
As experience and maturity sets in over time, I expect the process of consulting and analysing will become more methodical and definable as part of a services-led offering. In the very near future the scope of the problem or solution will include a set of tangible products including hardware, software applications and a variety of services in a box (pardon the pun), such as document workflow and imaging and content conversion. They may also include ongoing management of the end-to-end capability and ownership of the contract delivery, print or otherwise.
 
More importantly MPS gives sales companies the opportunity to have a wider and deeper conversation about the customer’s business. If you are marketing and selling MPS to your customers, expect your business to change. If you are already successful in MPS then you’re probably already seeing your business stretching or transitioning to something new.
 
MANAGED PRINT SERVICES SHOULD BE SIMPLER, RIGHT?
 
I’m an avid supporter of many people’s view that we should try to make things simpler for all parties involved, especially the end customer. But that is always a little bit more challenging to achieve when an industry such as the OEMs has instilled in its workforce a way of selling and marketing its offering. This business success or business model of the past and present may today be creating a legacy as it attempts to move forward.
 
In fact, the threat and impact of how the industry has operated both locally and across the globe, especially around the growth opportunity of MPS, would certainly be perplexing to the industry OEMs. Strangely enough, MPS is, in many ways, somewhat opposed to the OEM’s previous manufacturing based operational model.
 
Alternately, part of the reason for the complexity may be based around a fear that a push towards simplification could drive the OEM’s businesses, or the industry, closer to becoming commoditised, or MPS may be complex simply because it is different or new to many.
 
Managed print service is still evolving. It is, I believe, now starting to move into a new level of maturity, however that maturity is still only MPS version 1.0. The adoption rates of MPS are increasing.
Managed print services have moved from customers at the enterprise to large businesses and it attention is now focusing on small to medium business that are now seen as more profitable.
 
Managed Print Services 2.0 is now beginning. To learn more about the next evolution of the world of Managed Print Services contact me at mitchell.filby@first-rock.com or purchase Rest In Print: from office printing to THE RISE of MANAGED SERVICES from Amazon.com
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Moving businesses faster than the speed of paper

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Part 1: The Digital Imperative in a mobile world
 
Today we have moved from a world of digital disruption to a world that is now dominated by “digital transformation”. Virtually everyone has become digital natives thanks to technologies such as the smart phone.
 
Only a decade or two ago we were questioning how the digital world would disrupt existing businesses and markets across the globe. Some leaders of industry were unconvinced that digital would disrupt their existing bricks and mortar businesses.
 
Well, we certainly saw the impact on industries and businesses that were slow to adapt or adopt new business models that catered for a digitally inclined society. Sadly we are now coining terms such as the “Kodak moment” to represent when companies do not adjust or adapt quickly enough to the new world.
 
To avoid this, businesses are moving faster to transition their business to a digital platform. No longer are businesses satisfied or willing to just bolt-on digital and mobile application capabilities.
 
The new leaders of industry are building and integrating their business on top of digital and mobile based platforms. They understand very clearly how their customers want to engage and consume the products and services they offer.
 
However, one of the major barriers, challenges and impediments for businesses undertaking this digital transformation, is their ability to migrate away, from an operation that has functioned with and operated through a paper based set of processes and outputs.
 
Today, valuable content, knowledge and data is residing on the millions of millions of pages all lying in paper format. This could be either in relation to what the business uses today to function and operate or what is sitting in its vast repositories of frozen in-time information that has been collected over many years.
 
Incredibly this corporate asset of information still continues to hold enormous value to the business about their customers – however deciding what to keep and what is valuable is still one of the major challenges the business will face without the right strategies in place.
 
Part 2: The digitisation dilemma:
 
Unfortunately for many senior executives and boards all this has done is highlight and expose one of the largest problems or opportunities for businesses as they digitally transform. How do they migrate and build the bridge from a paper based world to a digital economy? More importantly how can they do this at speed?
 
They have recognised the current processes of using and managing paper has not only strangled and suffocated many businesses. It has also driven enormous user and operational inefficiency while increasing costs and wastefulness (e.g. tying up capital resources, office/floor space and offsite storage)
 
Now I’m not going to suggest that we need to implement a paper free or paperless environment. This would be both impractical and foolish for a number of very good reasons. Such as it could be dependent on the business that you’re in or where the business is at present culturally, operationally & financially. However I’ll save these discussion points for another time.
 
But back to the point in hand – a critical area that business are trying to address is meeting the digital natives increasing expectations of real time availability of information, when, where and how they want it. This is not only relevant so businesses can out-compete their competition. More importantly it’s based on businesses recognising that winning new customers and keeping existing customers relies on providing access to their personalised content to their customers when and how they would like to consume it.
 
More and more customers are increasing consuming content through smart phones and this has only accelerated business to transform their business faster. Hence why, mobility, cloud, big data and business intelligence (BI) are so important technology enablers for businesses in the future.
 
In short consumers want to consume information fast, when and where they want. They want to be “one-click-away” from any piece of content or information. They no longer want to trawl through PDF documents, search for the relevant content across corporate multiple platforms. The customers want you to know what they are looking for when they come to your new front door – your website. Sure this may be difficult to fathom, but business intelligence and analytics will support this desired outcome if not already, very soon.
 
But all this comes back to one major point. A business that still operates in the paper based world is at a disadvantage. This disadvantage will only get larger, unless the proper action and partners are put in place.
 
A business that operates in paper or relies on business workflow processes to support the physical paper today needs to adopt a “digitisation transformation” sooner rather than later. 
 
Part 3: Your current business partners may not have the legs:
 
This may be considered a bold statement, but unfortunately there is more truth in this statement than some would like.
 
Many global and national enterprise customers that we deal with at C -level from CEO’s, CFO’s and CIO’s for example wonder why they are faced with such a difficult task in crossing over from paper to a digital world.
 
However one of the major problems is that these customers falsely believe the same partners that go them there, will get them out of it. More specifically customers have a natural reflex to talk to providers who sell office printing equipment (i.e. printers, multifunctional devices). Their expectation is that these providers are proving a digital bridge from paper to digitisation.
 
Sure there is plenty of marketing to suggest they can, will and are doing this – but in truth – they are only doing it to a point. In my view – a limited point. Usually it’s around a ring fenced area such as accounts payables and account receivable. By the way if you haven’t looked at this area – you’re certainly missing a huge cost savings as well as an improved operational efficiency.
 
There are a number of reasons why your office printing provider or partner of choice may have conflict of interest to address the reduction of printed pages being produced within your business.
 
The main reasons are;
1. The conflict of interest is that you as the customer are conflicting with their interests. You are effectively reducing their income streams. They earn revenue and profit based on the devices going in (not out).
 
2. They earn the majority of their profits from the toner that covers the page. If you thought their “black gold” (black toner) was important to them – wait to see their colour toner (approximately 10 times the earner for them)
 
3. Their sales teams unfortunately are still remunerated (paid) by how many devices and how big the devices are going in. So they are incentivised to sell more boxes (devices), not less.
 
Now Managed Print Services (MPS) was supposed to help shift the industry from a transactional or product-led business model to a services-led business model, however it has become apparent this has stop widely short of where some of us expected. Saying this there are however a small minority who are doing a very good job in transitioning, but as I said they are a minority.
 
Business Process Services (or business process outsourcing) is also another candidate where digitalisation from hardcopy (and processes) should be under full swing. However some major concerns from end customers regarding the suppliers/providers ability to meet service level agreements (SLA’s) and execute the customer’s business requirements and objectives has seen clients question the capabilities of many larger equipment providers.
 
In being bought in to review and audit these scopes of works, business requirements, service level agreement it has become apparent that there is a consistency in where they continue to fail.
 
For more information, please do not hesitate to contact First Rock Consulting (www.first-rock.com) for more information about the lessons learned – “Moving businesses faster than the speed of paper”
 
Written by Mitchell Filby
Managing Director
First Rock Consulting

To print or not to print: Is that the question?

A recent article published by Quay Consulting (www.quayconsulting.com.au) from Sydney Australia captured my eye and certainly worthy of a repost.
 
Despite the increasing usage of digital technology in our offices, one question continues to dominate business strategy.
 
In his book titled RIP Rest In Print: From Office Printing to the Rise of Managed Services (First Rock Media 2014) Mitchell Filby poses a very contemporary question “to print or not to print?”
 
Printing paper is a tangible function in most business environments, be it for distributing or storing information. The concept of a paperless office has been a goal for organisations for more than three decades. However the reality is that going paperless is not a simple paper-to-digital conversion exercise.
 
The accountants among us can crunch the numbers and come up with the business case for not printing. The more environmentally conscious will stand side-by-side and champion the environmental benefits of saving the 230kg of paper used on average by each Australian every year. Add in the voices of marketers, content providers and technologists who join in the paper-free chorus of wanting to pass information quickly and as widely as possible by the many digital channels open to them.
 
So if the case for no print is so strong and the technology has been available for quite some time, why are there so few organisations that have fully adopted and implemented the paperless office?
 
The enablers and inhibitors of a paperless reality
Transactions are becoming increasingly paperless as technology and automation become part of the standard workflows in business. The massive uptake of cloud-based solutions and the increasing use of mobile technologies are allowing even the smallest business to leverage applications that support a paperless world – both internally and externally with a connected customer base.
 
Despite the desire of many businesses to forgo paper in favour of a digital-only environment, the ability to transform the business relies on having the right enablers and removing the inhibitors. Despite the take up of digital technologies a significant amount of complexity remains to remove all paper from an end-to-end process due to the complexity of the processes.
 
Take Accounts Payable for an example. We can look at the various workflows and related documents the invoice travels in an organisation. At a glance, accounts payable may generate:
◾A quote request
◾Acceptance of the quote
◾An order confirmation
◾A delivery docket
◾Acceptance certificate
◾Inventory note
◾An accounts payable invoice or tax invoice
 
In order for this process to become paperless, each of these systems and record changes must be able to be generated electronically within a workflow, matched, digitally approved and stored in a format that allows efficient retrieval and audit.
 
Some hybrid-solutions are also in place with OCR scanning maturing allowing paper to be converted to digital. Improvements in how tablet apps and back-office software integrate are also allowing for ‘digital signatures’ and the ‘paper trail’ to become more integrated and transparent at different points in the workflow.
 
Economics, efficiency and effectiveness are providing the impetus for more and more back office processes becoming automated however there is a long way for this to go due to the breadth of the changes required and the complexity.
 
A cultural and behaviour shift
The other major inhibitor to going paperless is user behaviour and cultural change. Despite the significant increase in Australians using multiple devices on a daily basis (PDF, Deloitte Australia, July 2014), there are some productivity challenges that remain in how people work within our businesses.
 
For example, how many meetings have you sat in where people are writing notes in the margin, scribbling their thoughts and key points on the paper in front of them and carrying around print outs of their calendars and notebooks?
 
While many of us use tablets or mobile phones in our daily work environment, academic studies have shown that for most of us, the tangible act of writing down our notes on paper helps most of us retain information more effectively.
 
As Filby notes in his book, research from Scientific American suggests “people often understand and remember text on paper better than on screen. Screens may inhibit comprehension by preventing people from intuitively navigating and mentally mapping long texts. In general screens are also more cognitively and physically taxing than paper”.
 
We also still rely on paper to collaborate, inform and work within business processes. Why?
It’s partly the way we work. Many employees often refer to paper while at the same time as working on a computer for crosschecking or reference.
Many of us still prefer to review the work of others on paper because it’s easier to edit or correct than it is on screen.
We remember more. The act of writing on paper seems to help many of us retain information.
Paper helps with collaboration more effectively than a tablet, particularly in meetings.
◾The perception that paper delivery is more formal and therefore of greater importance.
 
That’s not to say the shift isn’t happening. Cloud-based options, as mentioned above, are fuelling the move towards using less paper and as the global workforce is increasingly on the move, the ability to access, engage, share and communicate in an agile way is driving change.
 
US company Evernote is leading the charge in this regard, with more than 50 million users worldwide adopting the company’s suite of apps that are designed to improve collaboration, reduce reliance on paper and capture ideas.
 
While its business offering is still small, more than 600 Australian companies have taken it on board, allowing for better collaboration between teams, building processes and improving productivity. Being device neutral has been a critical part of its success.
 
A paradigm shift
It’s been said that in digital, a year is like a decade; such is the speed of innovation and change. The number of Australians owning 3 (or more) electronic devices grew from 28% in 2013 to 53% in 2014, typically including a smartphone, a tablet and a laptop (Deloitte Australia, July 2014).
 
But it takes time for that shift to translate into how we work.
 
A paperless paradigm is a significant shift from how we have been taught to function in the workplace. When you consider how long paper has been part of our working lives, it’s understandable that the shift to digital document management systems may meet resistance.
 
There is hope that Generations Y and Z (and those that follow) will continue to forge ahead with the paperless path, given that paperless is what they know and how they are now being taught. It’s the dinosaurs among us that persist with the reliance on paper and its pivotal role in organisations.
 
The shift to digital consumption of information has already shown that Australians are keen to embrace digital technologies, though the way that content is provided is likely to continue to change to meet the needs of tomorrow’s consumers.
 
Infrastructure
Living in a no print world means the consumers – both at home and at work – need to be connected and to be connected they need a device, a network and an application that can all work together to display and consume the digitised content.
 
As broadband rolls out nation-wide, applications are increasingly being accessed as a service in the cloud and can be delivered to any device thus inhibitors currently posed by limited infrastructure will decline significantly.
 
In fact, architecting a paperless transformation requires careful consideration of the core transactions and processes of an organisation at the outset.
 
A slow evolution
We can’t attempt to address all of the enablers and inhibitors in going paperless in this article. That Filby wrote a whole book about it shows that there is plenty more to say.
 
We believe, as does Filby, that by selecting a handful of core processes that lend themselves to digitisation can deliver a significant improvement within the limitations of the current state of printing and sets the pathway to transform.
 
If you would like us to elaborate further on the on going paperless journey please send us a letter. Actually better make that an email.
Again thank you to the team at Quay Consulting – www.quayconsulting.com.au
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Who’s driving the bus?

Yes – I know it’s a silly heading to open up on the topic of Managed Print Services (MPS). However from a customer’s point of view – it’s a very serious question in deed.
 
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The reason – The customer has to drive the bus – it’s a simple as that.
 
Today it’s more important than ever that they have the responsibility and accountability for their managed print services ongoing alignment to their business. They have to know when to put the brakes on or accelerate.
 
In this day and age customers can’t afford to take a back seat and let their services provider take control of the bus. I know many of you have chosen the provider; you have paid the fare, you now want to sit back and relax and be driven around.
 
Well unfortunately this could be a mistake, now hopefully you won’t end up in a Freddy Krueger story anytime soon. But saying that, we have seen and continue to see many horror stories where the customer sat back and they lost control.
 
More specifically the provider didn’t necessarily fall asleep at the wheel – no they knew where they were going, they knew the route, the stops, the endless on-boarding, they continued to charge fares for no perceived new value. Did they get you to where you wanted to go, on time, on budget or was it or is it still an endless ride?
 
In fact are you still on one right now – do you know how to stop the bus or take over the wheel and start to drive again?
 
It’s a strange analogy to use I know, but when you meet as many enterprise c-level customers as we have you kind of get used to the real life scenarios our customers live with everyday.
 
Now we know not all service providers are like our Freddy Krueger and not all are going to drive you off the cliff, we hope.
 
However to avoid those pitfalls we would like to share 4 insights around lessons learned and more importantly some of the questions to really ask of your provider when there trying to ask for the keys of your bus.
 
Lessons Learned;
• Minimum print volume contracts do not drive down print volumes alone
• Print Policies need to be in place to drive down print costs
• Many Managed Print Services (MPS) providers continue to focus on hardware device placements for their ongoing revenue growth
• Businesses that continue to operate at the speed-of-paper will continue to lose one of the single biggest productivity improvement gains
 
To help customers gain control we are continually educating customers around their level of maturity in relation to office printing and their journey and transition to a more agile and efficient digital economy.
 
In fact we have identified that many customers are not clear what the steps are and how they progress through the stages of maturity. We work with client so they better build their competence internally prior to handing over the keys to a provider.
 
As we also say to customers you’d better know what the real problems or challenges are of your business before you ask someone else to come in and try to fix them.
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Taking the print out of Managed (Print) Services

As the name suggests Managed Print Services (MPS) is a managed service and, for the most part, many from our industry would expect MPS to be pertinent when the sales engagement, transaction or service provision is directly attached to the physical devices or the printed output specifically.
 
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But, as we are now starting to see more and more, the future will not always be about the physical printed page. It could be considered, therefore, that managed PRINT services is deceiving from this aspect as it’s suggesting you manage PRINT only – the physical page and or the devices.
 
That raises the question of what a managed print service is. If you would like to understand more about managed print services, the book Rest In Print: from office printing to THE RISE of MANAGED SERVICES will provide you more detail and assist in giving you a more informed view of what MPS is or could be. But all definitions either coming from the Managed Print Services Association (MPSA), Gartner, IDC etc all continually suggest that MPS is about more than just print.
 
For this reason, we need to shift our set of lenses on the broader concept of Managed Services so we can expand the possibilities of where managed print services will evolve to.
 
Firstly the managed services model is not new and the level of maturity of what it is, how it can be shaped and scoped, how it should be managed and what to expect of a services provision is, from a customer’s standpoint, not new. The customer is far more experienced in this space.
 
Based on this understanding, I would like to make the point that, firstly, our industry is new to this game (managed services), and our customers are not. Yes we are transitioning fast, but the industry could be considered somewhat untested, potentially inexperienced and, to some extent, unproven. Therefore perception would see us trailing in this new business services capability model of managed services.
 
Secondly we need to always understand the process is not always about boiling the ocean. Some customers prefer a process of testing, incubation and controlled growth. MPS like most managed services may start as a single point solution in the beginning then expand their scope outward over time.
 
Most medium and large enterprise customers would have at least one form of managed services contract today and many of these would have started from this same starting point.
 
For example, a managed services contract could be as simple as providing a waste paper pick-up service to ensure secure and compliant disposal of information. This may then expand to managing an organisation’s entire internal office printing, the scanning of hardcopy originals into digital or electronic workflow systems for the client’s customer relationship management system or managing their accounts payable system and processes.
 
Most medium to large enterprises are choosing to outsource non-core business functions, processes or departments like human resource administration, help desk and call centres, data centre management, cleaning and maintenance, office supplies, voice and data communications, IT infrastructure and so on. These strategies are usually driven to increase operational efficiencies, improve customer satisfaction and reduce cost.
 
Holistically, most managed services offerings have continued to evolve and change. That said, managed print services should be seen as a process of evolution that integrates the supplier’s business capability with the client’s business needs and requirements, starting with office printing and document imaging as a beachhead. This could be transacted at any stage as a functional requirement, an operational or technical or a service-led capability.
It can be more about how you establish and support the customer in the initial stages as well as how you and your customer adapt and transition with each other over time.
 
Reiterating, MPS may start with device management and may, over time, progress into additional services that are based around what the provider can deliver today or what the client would like it to deliver tomorrow. The reason for this unique change in posture is that, over time, you should have gained a position of trusted partner rather than just a single point service provider. Valued strategic partners have the opportunity to become more integrated into their customer’s business, therefore increasing the value of the relationship and services provided.
 
So in short, don’t define your business by the products or services you sell, but more the contribution and value you provide the customer.

From Office Printing to The Rise of Managed Services

What are the key industry markets that the office printing and document imaging industry is exploring today? Is this the right move and are they attractive markets to move into? Would you consider them blue oceans or are they just more red oceans? Is this the right strategic move for the players and the industry? Will entry into these markets protect them quickly enough or will the transition be too slow and difficult to avoid the inevitable and ever increasing tidal change of the red oceans where they currently operate?
 
Let’s explore just a few of the new market segments the industry leaders are in, or considering moving into.
 
Business Process Services:
 
At present we are seeing a number of the well-known OEM brands either delivering, or in the midst of launching, a business process service (BPS) or business process outsourcing (BPO) service in Australia.
 
One of the principle aims of a BPS or BPO is to provide the end customer with increased organisational flexibility. Behind this are factors such as reducing production and process costs through eliminating the physical labour required to manage manual and labour-intensive functions like processing medical claim forms. In other words: cost efficiencies.
 
Other areas of business improvement can include reducing error rates and re-work, improving operational efficiencies and increasing processing speeds and approval turnarounds. In short: eliminate bottlenecks and increase profits while improving the capabilities of that business function or process.
 
Moreover wider business process services or business process outsourcing can involve the contracting of the operational responsibilities, or specific business process and functions, to an external third party provider.
 
A number of large organisations such as Australia Post, NEC, IBM, Dell, CSC, Cap Gemini, Accenture and Oracle, to name a few, deliver a variety of BPS and BPO services.
 
As BPS and BPO can include a wider provision of services, for the sake of this discussion, I will focus on office printing and document imaging. At the same time this approach appears to be a more natural fit for what the industry is best known for. At the same time I would expect there is a level of end client comfort which would suggest that this is a more effective first point entry for players that are new to this industry segment.
 
From that standpoint, a BPS or BPO provision can be designed to take advantage of the opportunity to transition existing paper-based, back office processes such as mortgage processing, rental bond and tenancy agreements into an integrated digital workflow, data management and processing service.
 
Business process services has, in some respect, been derived from business process outsourcing, which lost some favour due to the negative connotation that an organisation’s labour is effectively outsourced.
 
However, the business process services strategy is not an uncontested market. There are a number of existing major competitors in this market. I think it’s fair to say these OEMs are playing in someone else’s backyard. In that respect I would really question whether this is a blue ocean or if these players are just moving into someone else’s already established red ocean.
 
Maybe the view is that it’s a very big red ocean and on this point it may be a very valid opportunity. According to IDC “the Australia business process outsourcing (BPO) market (alone) by key horizontals for the 2013-2017 forecast period will grow at a five-year compound annual growth rate (CAGR) of 6.1 per cent reaching AUD$10.7 billion in 2017”.
 
I would like to acknowledge that there is a natural synergy in the sense that the office printing and document imaging industry continues to build its business around reproducing, moving and managing the document or image. As early as in the 1990s Xerox’s worldwide slogan was the “Document Company”, and whether the document is paper or electronic, the context does not really change. What changes is where, how and what format the user or owner wants the information to be presented in: hard copy or an electronic version.
 
Business process services is a business model that lends itself to moving to a more paperless world, as ongoing efficiencies and cost minimisation are achieved through the reduction of physical paper-based output and processes. It will be interesting to see how this new BPS adoption process materialises and can be sustained in light of the transitioning of the existing operational and cost model around device hardware sales.
 
From the industry’s perspective the upside of this new business model is that as a BPS or BPO you become more critical to your end customer’s business. You start to own the process and in most cases the access to, availability of, or actual data itself. Your value in the relationship grows and it can become very difficult for the end client to jettison you from the account due to the connectedness, intellectual property and knowledge that you have developed as you integrated your business processes into theirs.
 
I’m not exactly sure who said this first but there is a more common saying today, “that whoever owns the data owns the business”. That statement appears to be holding some truth in today’s world.
 
The biggest challenge I see is how today’s OEMs convince the end clients that they can do more than manage the transition of paper to digital format as a BPS or BPO service. The end game of OEMs in the BPS or BPO space is to move into more integrated business processes and application management services. It will take time for the OEMs culture to adapt. It will also be interesting to see how the competitive marketplace reacts to such players entering its market space domain. Also at what speed will the end client adapt to this offering from the new players.
 
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