Reducing office costs and improving business infrastructure is a pressing need for just about any company you care to name.
Managed Printing Solutions (MPS) is business model that has been utilized in the printing world for over two decades to help companies cut their overheads and boost efficiency. The MPS first contracts were aimed at meeting the needs of corporate enterprise clients who wanted better support for their printing infrastructure.
The problem is, MPS is easy to sell yet difficult to deliver properly. Most agree that the key is to create a true three-way win-win-win scenario that benefits all parties: the customer, reseller and original equipment manufacturer (OEM). Ideally, an MPS package should support resellers’ attempts to grow their business and boost long-term profits.
In most cases, many have discovered, this is easier said than done.
What Is MPS?
At its most basic form, MPS is a means of managing print hardware, supplies, service, support and finance needs based on cost-per-page. In its more advanced form, MPS can involve monitoring and even reducing print volumes, environmental impact and costs – as well as improving workflows.
There is a lot of competition in the print market and it is often the case that different types of reseller end up targeting the same customer, meaning that one enterprise may have more than one MPS provider.
Copier dealers, for example, may vie to manage existing A3 fleets, IT resellers could manage A4 fleets, while supplies specialists may manage supply replenishment. Some customers even have a provider that deal with ad hoc issues when office hardware errors occur.
The result, for many resellers (and some customers), is confusion and competition. Quocirca, in its recent Channel to MPS in Europe report, explains “the top concern for the channel today is competition from other resellers, noted by 56 percent of resellers.“
What Is Wrong with Traditional MPS Services?
The simple answer is that many MPS providers simply fail to provide customers what they need.
The Quocirca report authors note, “Many companies have begun offering MPS services, but sadly many of these services simply fail to meet the needs of their customers, leaving IT admins to rue the money they have spent on services they did not really need, and a failure to make noticeable savings.”
The fact of the matter is quality MPS services are hard to come by, and resellers who want to enter this fast-growing market are confronted with a myriad of challenges.
Traditional OEMs have been partnering with channels to provide their customers with MPS offerings. Unfortunately, however, the direct, traditional MPS approach has been pushed in the direction of the channel, as OEMs look to secure their revenue and profits under the same commercial terms they use for direct business.
Why do Partners Lose Out with Ineffective MPS Deals?
The upshot of pushing everything to the channel in this way has meant that configuring, pricing, contracting and delivering MPS agreement ends up being costly. It also often results in loss-making deals for partners.
Some businesses have learned to deal with the complexity of having multiple MPS providers, but find themselves paying the cost in terms of extra resources and infrastructure, all of which ultimately reduces profit margins.
To add to the difficulties, many OEMs look to maintain direct profit control over their MPS channel by setting buy-in prices for partners at cost-per-page rates.
While this reduces partner risk in terms of supplies usage and maintenance issues, partners cannot get much benefit out of deals like this. They find themselves only able to add small margins to deals, or end up resorting to bid pricing – as they cannot flex toner coverage, service costs or the partner’s own infrastructure in their MPS offerings.
Where Does That Leave MPS?
All in all, MPS for the channel has been only partially successful, due to the factors listed above – and partners often bear the brunt of this limited success.
While clients have nonetheless embraced the benefits and cost reductions of the MPS options available, many partners have been left deeply unsatisfied with complex, unprofitable business models – and many OEM’s apparent indifference to their problems.
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