Managed Print Services is not the door to Managed IT Services - it is the peep hole.

by Ray Stasieczko May 03, 2016

Over the last few years, print and copier service providers have begun entering the Managed IT Services space. The organizations which have had success are realizing their history as print/copier providers does not, for the most part, offer them any real value toward their success in Managed IT Services.

Let me explain: say one day a particular taxi service company realized that over 90% of their passengers took rides to restaurants, would it make sense for the taxi company to open a restaurant? The two business models are completely different. I don’t believe the taxi company’s fleet manager would necessarily make a good Maître d'.

Managed Print is not a conduit to Managed Services. It never was, and it never will be - as a profitable strategy. OK, a lot of Managed Print Providers are getting mad. I am not saying that certain well-run companies can’t make the transition to Managed Services. I think some can, and I know that some have. Although, the majority will not understand my Taxi analogy and will make a total mess out of their transition.

Think about the word Transition; nowhere in its definition does it lead one to an understanding of having the same meaning as the word addition, which is what most Print service providers do. They see Managed IT Services as an addition to their model. They like to say they have transitioned into an IT company, but I would say they simply added a deliverable of computers, or sold someone a server. All successful Managed Services providers know - that is not Managed Services.

Here are some facts: if any Managed Services provider looked at the numbers around print recurring revenue, they would realize quickly that it represents less than 2% of the total recurring Managed Services revenue. For example, if an organization with 25 users was engaged in a complete Managed Services agreement from end to end, the recurring services contract would be at minimum $4,000.00 a month or $160.00 per seat. This same customer would have a copier and maybe a couple printers. They would generate five thousand pages a month in print @ .015 per page. This would equate to a whopping $75.00 a month, which represents 1.8% of the Managed Services contract. I am convinced this explains why the larger, more successful Managed Service providers never attempted to transition the other way, into Managed Print.

OK, again I can hear the loud cries from some of the print providers reading this, saying that four thousand dollars a month is crazy, and in their market the customers would never pay that. I guess the answer to that objection is – you’re right, your customers will never pay you that. I say this based on your thinking, and the type of customer you seek. Anyone with a heartbeat is a copier prospect. In Managed Services, the provider must be selective or they will doom themselves to failure. When your Print/Copier company mentality changes or Transforms, you will understand the value and the real cost in providing end to end Managed Services. After all, isn’t the real reason of Transforming from Managed Print to Managed Services is to prevent your business from a premature demise, as print and copy volumes continue to decline?

A few suggestions for the transformation to Managed Services

First suggestion: stop believing Managed Print Service is a door of opportunity, opening into the world of Managed IT Services. Managed Print is merely the peep hole on the door; you can look through it, but that does not mean you can open it.

Second: stop believing that your large base of print customers makes you a candidate for delivering Managed Services successfully to those Managed Print customers.

Third: stop listening to consultants who tell you the opposite of my first two suggestions.

My fourth suggestion is this: always remember that Managed Print is simply the lowest hanging fruit on the Technology tree, and in saying that, it’s also the least valuable. Your success in Managed Service will only come from a Transition. If you believe it is merely an additional service offering, the rewards will not come.

“You can’t walk a new path forward if you allow the old path to continually get under your feet.” RJS

When your transformation is successful, you will have to determine that the efforts around delivering Managed Print will have no value to your Managed Service deliverable. This will allow your legacy Print services business model to expire painlessly when determined by the market.

So, if your organization really believes in Transforming, instead of using Managed Services as an addition like in my Taxi scenario, don’t let your fleet manager be your Maître d'.

R.J. Stasieczko

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