Thursday, March 16, 2017

Is Seat Based Billing the Next MpS Boondoggle?



boondoggle |ˈbo͞onˌdäɡəl|

...work or activity that is wasteful or pointless but gives the appearance of having value.

In 2007, I traversed the sun drenched thoroughfares of Southern California - from the 'Bu to the Border, Laguna Beach to Victorville.

I was part of a new movement, "Managed Print Services", working for a big VAR, part of HP's flex into the copier niche(sound familiar?) with an MPS program and a new copier-killer, Edgeline.

Like most VARs, we were built on value added services attached to hardware sales. Unlike most, our newly built NOC helped the move to services based revenue streams. In addition to classic T/M contracts, email hosting, backup/disaster/recover, remote management and remediation, and help desk were part and parcel of our value proposition.

At the time, managed print services fit well into our portfolio; the notion was to integrate all services and bill per user, per month.  I didn't consider this a 'good' or 'bad' idea, it was simply the established method.

We folded our per click model into the per user or 'seat' amount and soon ran into challenges -
  • What if we calculated the per seat cost but users printed MORE than we anticipated? 
  • Could we discern between "high-volume" users and provide tiered billing?
  • How do I get EAutomate to bill by user?
There was risk.
“...A good friend of mine(Greg Walters), talked about SBB back in the olden days, and I told him it wasn’t going to work - but when Print Audit and West started bringing in high powered guys like Luke Goldberg, I knew it was going to fly”.
"If dealers don’t jump on this, they should just call their bankruptcy attorney today. "
- Anonymous
Unfortunately, back then, SBB for MPS, found few advocates.  In 2008, industry know-it-alls labeled managed print services a fad; the latest scheme by some to remake the copier industry.  The successful copier dealers could barely spell 'MPS'.

Since then, I've been inside VARs, across the country learning one thing - even if an MpS program is 'out of the box' easy, or well established, most IT providers treat print like 'fly-over' states.  Separate in practice, structure and billing.

Has the time come?  Is per user invoicing the second coming?

Yes and No.


Boon - "Cause your's is the best in the county, isn't it 'mam?"

Billing per user is easier for the client.  No meter reads, or confusing invoices.  When faced with a quote of $9.00/emp/month, prospects find the decision to move forward, easier.

Imagine a business with 150 employees; 75 are knowledge workers.  This account would generate $675.00 each month, no matter how much they print/copy.  (Not sure if that is big or small for you.)

Indeed, as prints decrease, and head count remains constant,  costs fall against steady revenue.

This fits nicely in the true goal of a solid, contemporary managed print services engagement: reducing output.

Boondoggle - "...and you sir, in the yellow shirt, come on up on stage..."

Across industries, the best sales people rarely, if ever, discuss pricing.

Converting cost per image into cost per user and presenting this idea as a 'value-add', reduces(once again) the conversation to price, moving away from business solutions, focusing on cost as a primary motivator.(I know, I know...)

Same race to the bottom, different vehicle.

So what can you do?  More importantly, who do you go to for real world advice?  A sinner.

"Who can lead you off that crooked road?  You need real sinner, people. A sinner of such monumental proportions that all your sins wrapped up in one couldn't possible equal the sins of this King of Sins..."



Listen to A Sinner - "...I have danced with the demon satan..."

How To Implement a Per User Model for MpS

Create SBB in-house

Our industry either builds or subs out services - MpS and Managed IT can be provided by aligning with outsourced programs like Collabrance, Continuum, PrintSolv, and others.  Soon there will be SBB programs sponsored by toner remanufactures.

Is this right for you?  I'm not sure.  I once believed the only way to offer SBB was to rely on distributors.  Only they can spread the perceived risk over large amounts of devices/toner.

But today,  the risk isn't in toner delivery.  Aligning with toner suppliers for SBB my be as counter productive as partnering with transactional copier dealers when designing a print reduction program.  The motivations are diametrically opposed.

So do it in-house.

Work closely with your managed IT services practice. MpS is IT.
Approach through IT, present as a managed program, not "toner and service just like your copiers"(upchuck).  If you're not providing any IT services, stop reading this now and go feed your pet dinosaur.


Sell one more service(IT).  MpS and Trees.
Embed MpS with backup disaster recovery or remote monitoring and management.  Expand your current MpS services to include "remote output monitoring" or something similar, utilizing the full capacity of your data collection agent.  If you don't know what I mean, stop reading this now, and go feed your dinosaur.

Line of business integration? Forget 'bout it.
Of course you want to integrate your even existing CPI billing structure with the new managed IT and SBB programs.  But it isn't easy.  All it takes is a spreadsheet and a separate P/L - your MpS practice has its own P/L, right? Tsk, tsk.

In the end, SBB is a good idea to protect your revenue from the continued reduction in 'clicks'.  But per user billing is a temporary fix - nothing is going to stop the decrease in placements and clicks. 

Not even the Supercharged Grenade Launcher of Love...

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3 comments:

  1. While intrigued with the concept we are seeing print staying steady in our neck of the woods. We are still embracing the CPC model, it's working well.

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  2. SBB is an aid in the alignment of objectives with the customer. It is not a "Field of Dreams". If you are not in IT it make no sense at all, but if your not in IT services and focused on the SMB businesspeople space you are missing about 60% of your opportunity. ...........Just saying

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    Replies
    1. Ed - precisely. We were doing it in 2009 - of course I was with an IT VAR of substantial size, MpS was a small component. So small, they got out of it all together. I blame Edgeline, but that's just me...

      Thank you for reading and commenting!

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