Managed print services (MPS), a proven approach for reducing the cost and lowering the IT burden of managing print environments, is gradually moving from the domain of large enterprises to SMBs.
MPS comes in many flavours and is scalable across smaller and larger businesses, from basic print services (BPS) to fully outsourced services.
SMBs, like larger enterprises, depend on printing for a variety of business activities. Even the smallest office needs a fast, reliable, cost-effective printer capable of professional output.
Although SMBs often outsource large print jobs – for example sales and marketing material – to external print service providers, more are embracing colour printing in-house as the price and capabilities of office MFPs has improved.
A recent Quocirca SMB study covering the UK, France and Germany revealed printing to be important to almost two thirds of SMBs, with almost half experiencing an increase in colour print volumes.
Despite this reliance on printing, most SMBs are faced with limited resources and expertise when it comes to the common tasks of dealing with printer problems and ordering supplies.
Today, the vast majority of SMBs purchase their print devices separately from consumables such as ink and toner, which are bought on a more ad hoc basis.
Consequently, SMBs not only sink significant resources into day-to-day printer support and administration, but also the ordering and stocking of supplies.
This drain on staff time is compounded by spiralling print costs as a result of having poor visibility into printing.
Fortunately, the emergence of BPS through channel partners could help SMBs to ensure their print infrastructure runs smoothly and cost effectively, while enabling staff to focus on more strategic activities.
BPS combines hardware, service and supplies into a single contract.
The hardware may be leased and supplies ordering is either enabled through a centralised web portal or triggered through remote monitoring capabilities.
Data reports and service records may also be available through the web portal. Contracts are based on a cost per page, which may or may not require minimum volumes.
There is certainly an SMB appetite for purchasing "printing" rather than "printers", with a contract. While fewer than 20 per cent of SMBs currently purchase or lease printers as part of an MPS contract, 40 per cent indicated to us that they are planning to move to some form of MPS in the next two years.
This is good news for printer manufacturers and their channel partners looking to expand revenue in an increasingly commoditised hardware market.
Today most manufacturers have some form of MPS offering for their channel partners, many of which are scalable, depending on the MPS maturity of the reseller.
Lexmark recently launched a service called Page Plus Business (PPB), which aims to get more IT resellers interested in entering the MPS market, by providing an easy way to shift from a transactional hardware to contractual sales approach.
PPB is a simple, entry-level service, wrapping consumables and service support into an annual contract with flexible monthly payment options.
PPB is aimed particularly at IT resellers that may have no experience of MPS, and it does not require the reseller to get involved in the extended auditing or management typical of more advanced MPS.
Lexmark already offers that to its copier channel through its Business Solutions Dealer (BSD) programme.
With regards to PPB, the reseller is responsible for selling the MPS contract with Lexmark responsible for print usage analysis and forecasting that determines the margin payable.
Lexmark pays margin on consumables revenue on three to five-year contracts up front. Some MPS contracts pay the consumables revenue only on a quarterly basis.
From the end-user point of view, rather than stipulating minimum volumes, PPB is pay as you go. For SMBs with less predictable monthly output, this avoids the excess charges that can be incurred when exceeding volume commitments – which may be stipulated with MPS.
PPB also offers end users a services portal for ordering supplies and requesting a service call.
IT resellers are an important target group, and Lexmark recognises they need extensive training to understand and sell MPS. Lexmark provides such training and resources through its Advantage Academy.
Lexmark sees its PPB programme as a stepping stone to help resellers sell extended services and a range of industry-specific services for MFPs.
Quocirca research has shown that SMBs are becoming more interested in entry-level MPS programmes that help them predict their expenses, minimise their IT burden, and improve service levels.
While an entry-level MPS contract such as Lexmark's PPB is a step in the right direction, a full MPS approach such as Lexmark's BSD offering delivers wider benefits through the assessment, optimisation and ongoing management of the print environment.
The vendor already has strong credentials as an established MPS provider in the enterprise space. With a large reseller channel, it is well placed to expand its offerings to the SMB market.
The PPB programme certainly provides a simple way to help resellers capture ongoing services revenue through a contractual sales approach.
As with any channel MPS programme, though, the key to success for Lexmark will be engaging its IT reseller partners to make this transition, providing the sales tools, training and resources needed.
Ultimately, MPS provides the channel with a golden opportunity to educate SMB customers on the cost and productivity benefits of MPS, and add value by being the trusted adviser on which businesses can rely.
Louella Fernandes is principal analyst at Quocirca
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