R.J. Stasieczko

The pull-economy is gaining momentum across many industries when will the Imaging Channel be impacted?

Let’s go back in time. Back when copying and print usage was growing. Everybody was printing everything. The information one read was read from paper, back then things just CLICKED away. Customers leased hardware and paid for service by the click. Print Manufactures sold their A-3 through distribution channels made up of independent dealers; some had direct operations as well. A-4, for the most part, didn’t exist except for segment one of course and segment one produced around ten pages a minute. 

Back in this time, A-3 copier manufactures, for the most part, competed strictly against each other. All manufacturers had the same equipment, and most of its distribution partners sold, serviced, and supported it in the same manner.

Channel sales Push the equipment to the end-users. The push economy was good to the Imaging Channel. Local independent dealers competed for market share. Both dealers and direct operations set the stage for how their customers would both acquire the equipment and service it. For the most part, sellers decided the deal structure and pushed the process to the buyer.

When we look back, we would all conclude one important thing. The end-users hardly at all decided on the equipment the equipment was pushed to them. Equipment was sold to the end-users using an in-person salesforce. A sales force which pushed the most beneficial self-serving program to the end-user. We always sold the highest cost equipment and program we could that’s what we were compensated to do.

So how will the past carry to the future as print equipment moves more and more to A-4 and even the A-3 will reduce in cost and require nowhere near the service intensity of its past? Less service intensive, and lower cost, with lower demand or need for products equals an enormous shift from the way things are to the way things will be. Buyers will have more choices to acquire, and the equipment acquisition complexities of the past will disappear.

I recently heard someone say that the imaging channel would not be disrupted by the current players it would only be disrupted by others outside who eliminate the need for the equipment itself. Ok, that is one day. I don’t intend to begin a paperless argument those discussions are distractions to real threats. I will say this the Imaging Channel will be disrupted way before that. The service annuity will continue declining in value, and the end-users will gravitate to the pull-economy these two dynamics will cause pain for some in the channel and reward others who prepared. Leaders of the channel can be the disrupters or can be the disrupted. The challenge will be the time to decide to become the disruptor is running out.

Today more than ever the Imaging Channel must prepare and extract as much profit from the current circumstances as possible. Truly understanding your profit potential takes data, not hype or delusional accounting methods. To prosper in the future, we must capitalize on today’s circumstances and take nothing for granted.

R.J. Stasieczko

For over 25 years BEI Services has been recognized as the world’s largest database of service metrics for the Imaging Channel. With hundreds of organizations, thousands of Technicians, millions of devices and billions of pages on the BEI Platform, the data and statistics we provide to our partners are unprecedented in helping them achieve best in class benchmarks along with increased profits. It is from the knowledge of facts in our Trademarked Worldstats Database which allows BEI partners to improve by accurate measurement eliminating the emotional noise of complacency. https://www.beiservices.com/

I had the honor of speaking at the RemaxWorld Summit held Oct. 12- 14th 2017 in Zhuhai China. In describing the expo size, one could only say huge; some might say, Bigley, this event was incomparable to any Imaging Channel focused event I have ever attended in my 30-year history in the Imaging Channel. There were booths, and when I use the term booth, I don’t mean a table with a colored cloth draped over it. These expo booths some the size of small apartments. Spread across five football fields of space inside the Zhuhai expedition hall. Within these booths, you would find print cartridge manufacturers, Chip Manufacturers, and Print management software developers to name a few. A visitor would believe that the world of Print is as lucrative as it was in 1980.

In front of the expo hall stood one of the most elaborate Sheraton hotels on the planet. I must admit before coming to China. I thought of China as a completely different kind of competitor. Like many, I visualize depressing factories where thousands of unhappy workers drilled holes in used H.P. cartridges and refilled them with toner disregarding any quality standards.

What I was not visualizing were Billion Dollar Corporations with extremely talented executives who have a deep passion for business growth and winning. These leaders are the true definition of an entrepreneur; These leaders are building state of the art manufacturing facilities, employing the best of best practices, and stay commented to constant improvement. China and its business leaders want recognition as a world leader just as other countries in the world do.

Zhuhai, China is the Printer Consumable and Printer Cartridge Chip capital of the world. Zhuhai is a small city a little over two million people. The modernization of Zhuhai is only around twenty years old. Its architecture would rival any city in the world. As I drank a local beer sitting on the patio at the Sheraton under the palm trees watching the valets parking Tesla’s, Mercedes, and even a Bentley well actually two Bentleys. Looking toward the waterway, you could see the many people walking along the state of art walkway which flanks the Pearl River Zhuhai’s roadway to the South China Sea. I thought to myself this modern, sophisticated city is not what I expected as I am sure many first-time visitors to China think.

One thing is clear the Chinese Business Leader does not lack any less desire for success than her or his worldwide competitors. The global world economy was defined more clearly for me during this trip.

The world all cultures share may differ in governments, languages, religions, and each defines their values. However, this global world of commerce we all share has one thing in common, and that’s business. Today all businesses will compete at new levels, some will be fair and some may not. Corporations will argue global competition such as geographic human cost advantages, or arguments of ones’ countries patient laws from another country or manufactures whose arrogance will argue only products manufactured in their country can be superior in quality. These arguments may continue, and some will be resolved. However, throughout the world the real power is in the hands of the consumers, and as the world continues to reduce in size by technology. Governments’ will have to decide what they are willing to modify or what to compromise to ensure their piece of the enormous opportunities the revenue of global trade provides not just to governments their people as well.

Zhuhai opened my eyes to the fact that no one country or hemisphere of countries have a monopoly on the Entrepreneurial spirit or business leadership acumen. As the world’s products end-users have more and more access to technology and the Push Economy continues transitioning faster and faster to the Pull-Economy the world we all live in will be the world we all shop in and is the world we all compete in.

R.J. Stasieczko         

Well if you are in the Imaging Channel you were either bought out or at the least been approached to sell. The acquisition frenzy is the buzz these days. The landscape of the Independent dealer is changing. The large venture-backed dealers are buying up more and more of their competition. Most dealer organizations within the channel have already decided on a Growth Strategy or an Exit Strategy, and some have decided on a Maintain Strategy. Global Imaging Systems a Xerox company defines its acquisition formula on their website as this. “(Adjusted Operating Profit x Multiplier) – Debt + Excess Cash.” “Operating Profit refers to your company’s most recent twelve months of Earnings Before Interest and Taxes. This is also referred to as EBIT” http://www.gisx.com/acquisitions/

Whether you Sell or decide to Grow the first thing you must do is get the balance sheet in order and make sure that the organization's profitability is at the highest level possible. Why is the Imaging Channel believing the non-sense that single or low double-digit EBIT is acceptable? After all, selling your company is a multiple of earnings figure. Oh, there are the stories of the seller who got a five times multiple of revenue and sailed off into the sunset. The bottom line in 2017 a print-centric organization with no other annuity-based service deliverable will not sell for revenue unless of course, they have a 20 percent of revenue of EBIT because in that case, the buyer would pay a five maybe six times multiple of EBIT which by the math would equal or exceed their revenue. 

So the easy thing is getting the EBIT to 20% and doing it by the end of 2018. Those who do this will have the best opportunity to succeed in either that Growth Strategy or the Exit Strategy. If dealers looked deep into their organizations they would find the increase in profit potential is in their Service business; Technicians, Parts, and Supplies. Everyone in the channel knows the sales engine is not where your organization's profit is, and there is very little EBIT contribution from sales departments. I discussed this topic in an earlier article attached in the link below.

https://www.linkedin.com/pulse...wers-ray-stasieczko/

So before you sell, or even Buy a dealership understanding the potential service operational cost savings is extremely important. Think about it for every dollar returned to the EBIT could be worth five maybe six. Why would anyone want to acquire a business without proper due-diligence? Of course, they wouldn’t. However, the definition of proper Due-Diligence has many interpretations. Some will use emotions, and some will use numbers.

“During diligence to understand the facts, emotions can hijack common sense.”

If we all agree that the potential EBIT increase will come from reducing operational service cost here are some questions to create thoughts, and hopefully, if you’re a dealer principle you have the interest to seek the answers backed by real scientific data and do it personally.  

Here are my Questions

How does your organization manage technicians start and end time? What are the average start and end times of the technician staff? What is your percentage of hours worked against hours available for technician staff? How many more machines could your team service if all technicians worked 85% of their hours on service calls? What metrics are used to determine the need for an additional technician? What is the total number of hours you technicians are paid to work? What is the total payroll amount of all un-accounted technician hours over the acceptable 15%? How many sales representatives could you hire with those wasted dollars?

When was the last time a technician was terminated for deficient performance? Do you grade your technician’s performance? If so how many have a C or below? Do you pay technicians a performance bonus? If so, what percentage of technicians earn one?

Does your organization display the results both good and bad of technical staff publicly, in the way sales departs are publicized? If so what do you highlight?

How does your organization coordinate technicians call load, do you have territories? Do you have a computerized mapping system? Who audits technicians service tickets? How do you manage technician travel? What is the average drive time between calls? 

Who decides on car stock? Do you use a proven software management tool which can determine parts needed based on worldstats, or do technicians manage by the “This is what I think I will use system”?

Who in your organization knows exactly how many inventory dollars are in your technician’s car stock, and more importantly what is the dollar amount of the parts in their car stock which has not had usage in 90 days,180 days, more than a year? How often do you inventory car stock? What is the percentage of parts in the warehouse to total in all technicians Car stock?

What is the percentage of callbacks your customer's experience? Do you know the reasons for callbacks? If so what percentage of callbacks are based on technician not having the needed part to complete the call the first time?

What is the cost per copy of technician staff’s W-4 total when divided by your total copies produced? Do you know the monthly output all customer totaled for B/W and color? If so do you track, and how do you use that information?

Who in your organization knows the dollar amount of inventory parts with no usage for over a year, 18 months or longer? If your parts write off is more than 1% of total dollars ordered are there any compensation penalties for those responsible for inventory management. What is the percentage of the dollars in part obsolesces against your total parts purchases? Do you track that Monthly, bi-annually, or annually?

Who in the organization knows the dollar amount of parts in inventory which will become obsolete monthly, what’s the average you write off monthly or does your organization wait until the end of the year? What do you do with the parts you write off?

Does your organization have an accurate list of all obsolete parts in your inventory or do you classify these obsolete parts as non-inventory then stack them against the wall in the back of the warehouse?

How often does your organization look at your top 100 highest cost to service serial numbers? Do you know what percentage of serialized serviced equipment is costing you more than a worldwide average? What is the average cost per copy of parts on your production color units?

When was the last time you reviewed the percentage number of your FCE or First Call Effectiveness? And are you aware of the metrics used and why?

Please visit the attached article for more on the importance of FCE and how it impacts cost.     

https://www.linkedin.com/pulse...-you-ray-stasieczko/

Some questions for the venture capitalist or those dealers growing through acquisitions.

When acquiring a competitive dealer do you install and evaluate the information of any service performance analytics software which answers all the above questions? When buying a common market competitor do you use a mapping tool to effectively determine what percentage of acquired base your organization could absorb into your current staff’s workload?

In an acquisition do you buy the obsolete parts from the seller? If so where do you dispose of the obsolete inventory? Do you define territories for the technicians from the acquired company before you merge or after? What is the average parts inventory turn on acquired companies? What is your goal for inventory turn? How do you determine if the acquired companies service leaders are more qualified than your companies service leaders?

Well, it does not take a Rocket Scientist to figure out the importance of knowledge driven by data. I am confident that if dealer principles or the leaders of V.C. firms would dedicate the time to answer these questions using factual data. They would discover on their own many more questions to ask themselves and their management teams. More importantly, they will have the ability to influence behaviors based on facts, not emotional noise. 

The service departments are the life-blood of the Imaging Channel, and all its leaders need to get involved deeply in the evaluation of the facts around their service cost. It’s the Service Department of your business where your EBIT is feed, disciplined and raised. No one wants their EBIT to remain a pre-teen, everyone wants to raise their EBIT to at least 20 - percent that is, am I right? Returning excess operating cost to the bottom line is what astute business leaders do.

R.J. Stasieczko

For over 25 years BEI Services the world’s largest database of service metrics for the Imaging Channel. With hundreds of organizations, thousands of Technicians, millions of devices and billions of pages on the BEI Platform, the data and statistics we provide to our partners are unprecedented in helping them achieve best in class benchmarks. It is from the knowledge of facts in our Trade Marked Worldstats Database which allow BEI partners to improve by accurate measurement eliminating the emotional noise of complacency. https://www.beiservices.com/so...n_incentive_program/

All service Providers pride themselves on their Service Departments FCE (First Call effectiveness). However many don’t know their FCE percentage and others aren’t sure how to calculate their FCE properly, or worse they are informed by consultants who lower the standards of measurement by including things like courtesy calls, which creates the perception of doing well above average.

In explaining the cost impact of your FCE, I will first define a service call as an activity where a technician is dispatched to a customer location to fix a problem. Virtually any other service call that happens is created by the dealer or technician. If it’s a callback, (tech), Hold for part (dealer), Courtesy calls are dealer created, etc. So, ask yourself this question, if you took your car in for service, you expect it to be fixed the first time correct? If you had to take it back two or three more times to resolve the original complaint, how would that make you feel about the service organization, how would you describe your customer experience, or how eager would you be to refer this service provider?

Dealers who include dealer generated courtesy calls where no parts are used are padding their numbers which deceives their good intentions towards constant FCE management and improvement. Proper FCE is the percentage of time the customer called, and the device was fixed the first time (First Call Efficiencies)

Today service providers cannot operate on what I call DFCE or Delusional First Call Effectiveness; I hope you all agree. 

Here’s why your FCE is important. First, I will say this. A service providers FCE % is a critical component to how their Customers Experience is valued. The highest cost of a poor FCE or DFCE (Delusional First Call Effectiveness) is a lost customer’. Improving the Customer Experience of your deliverable is a constant process. In this fast-innovative world of ever-changing technologies. Service providers must not take customer relationships for granted.

 “You can be the vendor with the greatest relationships, and quickly lose to the new unknown competitor who provides a better Experience.”

So, we all agree that customers appreciate quick solutions to problems, we should also agree that customers value their service providers by the experiences they provide them. Even above the relationships, they have with them, and we should all agree that doing things right the first time is a centuries-old concept which is more important than ever today.

“Today’s Customers do not have time for Products, Processes, or People who do not provide the experience they desire.”

Now let’s talk about the dollar cost to your organization of a poor FCE % rating. It’s simple it’s all about the numbers it’s your payroll dollars. Service Providers largest cost is parts and people. Each employee has an hourly cost. Assuming your hourly burden is $60.00 an hour, and your average service call takes an hour plus travel time of say 30 minutes, your cost is 90.00 in labor per call. So, if your organization is running a 50 % FCE meaning 50 % of your calls require a callback. Here are the numbers.

Let's look at an organization with five Technicians who average four calls a day. This organization would have 20 total calls a day.Ten require a callback or 50 % FCE rating. In dollars, this would be ten calls times your 1.5-hour average call time including on-site and travel or $90.00 per call equals $900.00 per day. Accounting for a 20 day work month our total equals a $18,000 FCE cost.

That is a large amount of wasted spend for a dealership with only four technicians. Most would agree that no service organization could reach a 100% FCE rating, but we must also agree that a 50 % FCE, or not knowing your FCE is unacceptable, and the dealer with an 80 or 90 percent FCE based on inaccurate benchmarking is deceiving.

So, let’s do the math on a 72 % FCE rating. A dealer performing 20 total calls a day with a 72 % FCE rating meaning 14.4 calls were completed on first call leaving only 5.6 callbacks. The cost of 5.6 callbacks times our $90.00 per hour burden rate with an average call on-site repair time of one-hour equals 504.00 a day or 10,080.00 per month.

Result. If an organization with five technicians dispatched to four calls a day increased their FCE % from 50 % to 72 %, they would lower the cost in service hours by $7,920.00 a month, or $95,040.00 a year in Savings, not hype or fantasy real bottom line dollars. It's the math it's the numbers.

Think about this; In this example organization with five technicians, their customer base would produce around 30 Million pages a year. If they decided not to increase their FCE from 50 % to 72 % giving up the $95.000.00 in potential yearly savings. This overspend would translate to .00316 additional per copy cost for every copy this organization’s customers’ produce, 95K divided by 30 million pages equals .00316. Now add the Toner, the parts, and of course the W-2 on all your technicians. It would be hard for this example organization to raise all their customers per copy charge by .003 per copy, or lower all their technicians pay by that 95K in overspend. However, it just takes the discipline of leadership looking at and acting on the best data to get the same financial result.   

An accurate FCE measurement is imperative to understand the hidden cost of service.  All leaders who understand their numbers embrace their numbers. These leaders understand the value in knowing their numbers. They realize very quickly numbers don’t lie, and numbers are unemotional. Dealer Owners most definitely understand it’s in the numbers where their success or failure is determined.

So, what if this example was a dealer who had 30 techs, 40 Techs, 50 or 100 Techs? Knowing the facts and then managing the disciplines to accomplish one’s goals of success takes leadership and Data.    

The FCE is just one of many cost factors involved in truly understanding your service cost, and increasing the value of your end-users Experience. There are many components to the service deliverable, and understanding how all these components impact each other is a must for the Imaging Channel. In my next article, we will discuss the reasons for Callbacks (CB) and how to prepare and prevent those unnecessary callback excuses which effect most importantly your Customers Experience and your FCE percentage rating.

R.J. Stasieczko

For over 25 years BEI Services the worlds largest database of service metrics for the Imaging Channel. With hundreds of organizations and thousands of Technicians on the BEI Platform, the data and statistics we provide to our partners are unprecedented in helping them achieve best in class benchmarks. It is from the knowledge of facts in our Trade Marked Worldstats Database which allow BEI partners to improve by accurate measurement eliminating the emotional noise of complacency. 

BEI Services has been providing service process improvement metrics for decades. BEI’s experience and the vast amounts of data collected from thousands of service professionals and millions of print devices have positioned itself to offer all the information our partners need to run exceptional service organizations. The hundreds of our current customers have saved millions of dollars. Each day BEI continues providing the intellectual tools for service improvement. With today’s advances in technology, we are excited about the future of not only continuously improving our world-class platform but helping our valued partners improve in delivering to both their internal and external customer’s a better experience.

Today there must be even more understanding of service cost as new and different approaches to market become mainstream. Sales strategies like Device Billing or Seat Based Billing will only work profitability if you truly understand your cost. BEI Services is by-far the best in the industry for understanding service cost.

Over the next months, we will be adding more features and benefits to ensure that our partners can continue capitalizing on this most critical component of their deliverable. Everyone in the Imaging Channel understands the importance of the service annuity, the lifeblood which pumps through the heart of our industry. The BEI Services Team is dedicated to the commitment of continuous improvement. We understand that Analytics Equals knowledge which Equals Best in Class. It’s in this group of best in class that our partners find the best possible outcome for profits.

The protection of your businesses profit is more important than ever in a fast-changing deliverables future. Most already know, or should be aware, the future of document output is changing. The equipment, the supplies, the ways of service, the modes of delivery, and yes even the ways of selling print equipment is changing. Remember it doesn’t all have to end to disrupt one’s current circumstances it just must change enough to make the old way painful both for you and your customer. The future of all the components of the print equipment deliverables is threatened. Don’t get emotionally attached to the excited cries of paperless. I will scream again it’s not a paperless argument it’s a change in the components of the deliverable which should motivate all dealers to take seriously the need to explore improvement continuously.

“If we don’t seek out and understand how we can be defeated we are at the mercy of those who plan and execute our defeat.” 

Imaging Channel Resellers must capitalize on their current circumstances. It’s from the fuel, or (PROFIT) of the existing deliverable which will feed the engine of change. However, if you want too long, the fuel truck will be empty. Many industries are seeing shifts and fearing the unknown competitor who sits outside the window of their current circumstances, waiting for technology advances, advances which will eliminate or de-value their current end-users desired outcome. In other words, your end-users find a better way and then desire something different which might include you if you’re not ready. BEI Services has the tools and the expertise to help our partners uncover and capitalize on the benefits of performing as a Best in Class company.

Let’s explore where to find surpluses of cash just waiting to be used for your innovation. It’s safe to say most business owners convince themselves they are 100% focused on protecting their business, they understand the absolute necessity of that. At BEI, we live to help control the operating cost our partner's service and support centers.

Here are some examples of business processes BEI helps maintain within the Imaging Channel.

Territory management, BEI Services has the world’s best in class system for territory management. Our territory management software has reduced millions of callbacks, and this has increased the end-user customer satisfaction. A dealers Customer experience has quickly become much more important than more relationship based as in the past. Customers waiting for parts, or continuously having to call back are not an acceptable experience.    

Ensuring parts and toner inventory turns at least ten times a year. Some dealers had not reevaluated levels and still stock like 1980 when it took four weeks to get something the world has changed it got a lot faster. No dealer in the industry should have 9 or 10 months of stock sitting in their warehouse, no dealer in the industry should have parts or supplies which have not been used in 18 months. Dealers should not be writing off more than 1% of inventories. BEI’s software highlights behaviors which are inconstant to best practices causing profit loss. These alerts and details provide the dealership with information to act on saving our partners millions of dollars.

Many dealers have delegated their inventory and service controls to great, fantastic people; however, many are not trained in business acumen regarding PNL’s. Inventory and service management is just as critical as sales management. No good business leader would allow their sales manager to continue in their role if sales were not growing, had no plan or accountability metrics. However, some dealerships are bleeding much more in losses from inefficient inventory, and service management deficiencies. Fifty percent of the company’s revenue comes from your service department so your service business must be managed by business mentalities, not strictly technician mentalities. Today this is more important than ever.        

However still today, in some cases managers’ excuse away the reports, don’t read the reports or refuse to manage the disciplines the reports outline. BEI understands that Dealer owners must take the lead when core changes are needed we are responding with our Executive Dashboards and Acuity programs.

Today Dealers could easily be circumvented by other means of delivery and service, as manufacturers continue improving equipment thereby eliminating more and more onsite service as this and the lack of reliance on the equipment itself from end-users get closer and closer in-line the industry will experience many challenges. Today independent dealers must look to disrupt themselves into a sustainable future and do it before someone else takes control of their disruption.      

Most dealers would recapture a minimum of 20% of their Service and support operating cost if they managed by the numbers and not the emotional non-sense which attempts to penetrate one’s common sense.

Think about this. Currently 60% of all service calls are created by your technicians or lack of good inventory control. 30% of these calls should never happen. More than likely 70% of your profit comes from services and 30% comes from supplies, Hardware is a wash at best or drains 5-7% of your overall profit. Service departs must be vigilant to continuous improvement

With regards to revenue. Fifty percent of your revenue comes from service, and supplies the other fifty percent comes from hardware sales. A ten-million-dollar dealer with a five-million-dollar service platform running at fifty percent gross margin would have a cost of service of 2.5 Million saving 20% would reduce cost by Five hundred thousand dollars a year, or $46,666 per month. That my friends is a big number and should get your attention. Regardless of your dealerships size maximizing profits, and controlling inventories is mandatory for survival and to the cost of innovation. 

So, here’s the question what could your dealership invest in with an extra half a million dollars a year. And I guess I would say this, “If you think that you’re doing your best, that’s not the same as knowing you’re doing your best.” It is time to re-evaluate your service strategy and begin preparing yourself for the real possibilities that the annuity service platform which feeds the Imaging Channel will cease to bring enough nutrition for continuing our current circumstance.

Most dealers have qualified managers in their ranks. However, they normally don’t have a surplus of change leaders. Focused structural changes must be led, the dealer owner and their senior executives’ must take the lead. Those managing a current process who believe is performing just fine will become emotional and most definitely challenge any new order of things. In all reality, it’s 2017, and the fact is this- if your managers aren’t ripping up the past on their own you need to and BEI is here to help.  

“Business disruptions are the result of innovation improving the customer experience so drastically that the old way becomes a customer nightmare.”

Let BEI Services help you navigate to a more profitable future by providing the metrics, solutions, and knowledge from the world’s largest data base of Print service analytics.

R.J. Stasieczko  

The Typewriter was still clicking away when the Word-Processor was invented; the word processor was a better experience. This better experience caused the collapse of the typewriter sales and service model

The camera was still taking pictures on film when the Digital Camera was invented; the digital camera was a better experience. This better experience caused the collapse of the camera and film sales and service model

The Copier/Printer will still be making copies/prints as its Customers continue printing less and less and reading more and more digitally, and soon the customers’ of this industry will obtain a better experience. This better experience will cause the collapse of the current sales and service model.

The examples above are about Innovation, Disruption, Change, and Destroyed industries. Those reading this article either defend why the industry they represent is safe or they admit their impending doom. Some will recognize the need for change and continue doing the same as they miscalculate the time remaining to continue capitalizing on the old way. 

It seems unbelievable that any logical business person living today would ever question the reality that all products and services are susceptible to obsolescence. Today’s business world lives in both a physical and Digital or Virtual World. We have gone so far past the place where ideas and imaginations were held hostage by the restraints of limited technology and our physical reality, with today’s technology one’s imagination can be fueled and nurtured in the realms of a virtual world and then completely disrupt the physical world.

“Innovative companies understand that Customer Experience lives at the intersection where the digital and physical worlds meet.” 

Organizations who continue making U-turns just before the intersection where the digital and physical worlds meet will soon find the Intersection blocked permanently. Blocked by a new competitor. In the past, the competitor was known today the competitor or disrupter is unknown and unimagined. Competition today hides in the virtual world waiting for the opportunity to catch off guard those who perceive that their physical world is safe and secure in its current circumstances.

Every business must have the capacity to live in the virtual world where they perfect their customers’ experience as they deliver in the physical world. Some organizations like our friends at Uber do quite well in the digital world; some would say they perfected it. However, Uber is struggling in the physical world they have had many collisions at the intersection where their digital and physical worlds meet. Their apparent leadership dilemmas and poor management strategies are well known. When innovators completely disrupt a physical worlds deliverable with an innovative solution from the digital world the disrupted will fight. The problem is they fight with the tools from the physical world they will highlight the benefits of their outdated deliverable by discrediting the innovators' inabilities to compete with them in the old way discounting the fact their customers’ want the new way. Uber is proving an excellent customer experience will win over a poor management experience and the loud complaining of those disrupted. An Innovator can learn how to manage better, but a customer won’t tolerate a bad customer experience. Today you can be the best-managed company in the world and lose to the new unknown competitor with terrible management who delivers a better experience.     

The success at Uber is strictly about their customer’s experience. Back in the early days of Amazon, Jeff Bezos apparently understood the importance of this intersection between digital and physical worlds. Amazon should have taught many that it is at this intersection where Customer Experience lives. Today many companies still believe their relationships of the past are what feeds their businesses. These beliefs will destroy many who think this way. Here’s my explanation. Relationships based on a push economy where for the most part built and maintained by the products' pushers. In this ever growing pull economy customers’ will look for, find and engage with, and trade in all old relationships for a better experience every time. In other words, the customer will form a relationship with an experience, and this experience could be void human interaction. People who like Uber like their APP, their great relationship is with the APP on their phone.

Today the most successful companies in the world live in the digital world, Jim Crammer calls these companies FANG, Facebook, Amazon, Netflix, and Google.

Any organization who believes they can avoid the intersection between the digital and physical world are mistaken and will see their old customers and relationships leaving for the new better experience.

The digital world has created a Pull Economy, the customer experience or a business’s remarkability becomes the most valuable asset the company has, and today more and more consumers will judge a company’s remarkability in the digital world first. What many are ignoring is this fast growing Pull Economy is a result of the continuous advances and capabilities of innovative technologies. How customers interact for commerce and trade will become more and more problematic for those industries created for a Push Economy. The questions are. Will the legacy product and service providers living in the Push Economy innovate themselves to a place where their future customer will pull from?

“Today’s technology allows anyone with a spark of curiosity to create flames of knowledge.”  

That quote applies to both companies and their customers.

In Closing: If you’re the leader that believes your current circumstances of continuing the practice of making U-turns back to the past instead of driving through the intersection where the Digital and the Physical worlds meet soon you will find yourself in the parking lot called obsolescence. 

If you enjoyed this article send me a LinkedIn request and let’s continue the conversation, or e-mail me at raystasieczko@gmail.com

R.J.Stasieczko  

Over the last few months, I have been talking with some Technology Channel leaders regarding my Vision of future Channel Distribution. A Vision I named “The Innovation Channel.” As these discussions take place, I am reminded of how determination lessens in value as some age. This thinking brought me to the creek which ran through the neighborhood I lived in years ago as a child. 

That creek we played in had a Big Rock; this Rock was obstructing the way the creek flowed down to the pond at the bottom of the hill, this Rock would cause the creek to dam. All of us kids knew that in-order for the creek to run free the Rock must be moved. We were all determined this Rock would be moved by summers end

The Rock, was huge, the size of a car and weighted surely as much. It took most of a summer for us kids to pry Big Bertha, free (of course we named the Rock). None of us who took turns digging around it ever considered for one minute our mission would fail. In our minds, we saw the creek flowing uninterrupted we saw Big Bertha rolling down the creek freeing the water. We didn’t think about how heavy the rock was, or how long it had been there buried in the mud of the past, or how many, or if any snakes would be freed to bite us, as the Rock came loose. We didn’t’ care that the older wiser kids would laugh as they watched our determined efforts fail over and over. Well, our determination and fortitude paid off. We had our victory after around seven weeks when the Rock broke loose and found its way down the creek where it sunk to the bottom of the pond, our mission was complete, and our summer was over.

Whether it’s a Rock or a mindset, the flow of water, or the flow of ideas, neither will flow when block. In the physical world it’s easy to remove obstacles, we see them clearly in front of us, and with determination, we move them. However, in the world of one’s mind these dam's, we create of past thoughts and current thinking, block the flow of visionary thinking. We can’t participate in the future when our minds are stuck in the mud of the past, or can’t break free from the prison of the present.

Leaders, we all need to be determined to clear the past from our minds like the Kids in the Creek cleared the Rock. Just because we don’t see what’s ahead doesn’t mean we should not proceed. The highway of business does not have any stop signs in the fast lane to the future. There our yield, and caution signs but never stop signs. Like those physical obstacles we see and move, we must also remove the mental barriers of the past and present.

“When we stop looking for absolutes is when we discover the excitement of the unknown.”

The flow of ideas builds its energy from the collaborating efforts of open minds, minds which have the capability to imagine. It’s from this collaboration that new ideas give birth to something amazing. Nothing is ever created from individualism. Without collaboration, nothing happens. So if your focus is collaborating with like minds, you will build more of the same you may improve something but will never create something entirely new. Relevancy knows when something new is a better solution than improving something which is obsolete or heading there.

Today many with-in the Technology Industries will see seismic shifts in not only technology itself but in the way it’s Used, Purchased, Serviced, and Delivered. End-users of technology will have more ways to absorb the benefits of technology than ever before. Technology is the one sure thing that continuously changes. Today’s biggest challenge for legacy technology reseller is keeping up with what new innovative technology companies reinvent, and how those reinventions will effect technology resellers and their deliverables.

 “Jeff Bezos, did not beat Barns & Nobel because he was richer or bigger he wasn’t, he beat them because he bet they would never focus on the future while they lived in the past, he obviously won. Many organizations could learn from this, of course Jeff, is betting they didn’t.”

More and more we are witnessing the fall of many once great companies and industries. Today most of these failures were a cause of a failed Technology Program. The outdated systems of the past will destroy those who refuse to innovate. Many companies will continue with outdated ERP System, outdated sales tactics, outdated CRM’s and outdated management strategies. These outdated companies will see new competitors. Competitors who find and acquire their customer by utilizing tools and technologies unimaginable to those companies stuck in the past and think their present is the future, companies who refuse to invite imagination to their decision tables. Legacy organizations will continue looking in the same places for new answers while their new unknown and unimagined competitor looks in new places, places where they find these legacy organizations stubbornly stuck in the past and denying the challenges of the present. These new disruptors have the advantage of creativeness an advantage which is compounded by technology like never before. Ironically there are a lot of technology resellers who still believe that technology is about selling things. If these resellers understood that end-users don’t care about the things, they care about the results they need from things, and both things and desired results change at quicker speeds than ever in history. Today’s business landscape is the disrupters’ Playground, and can easily become the legacy players’ Graveyard.

So like the kids in the Creek, get determined and just move the Big Rock, so the water of ideas will run smoothly to the pond of collaboration.

In Closing: as I say repeatedly

 “A company becomes obsolete when they focus on bringing the Past to the Future Instead of bringing The Future to the Present.”

If you like this article send me a LinkedIn Invite or send me, an e-mail raystasieczko@gmail.com Collaboration starts with conversation.

R.J.Stasieczko     

Most in business would say “Of Course We Are a Customer Centric Business.” However with today’s rapid rate of disruption caused by organizations and Industries who continuously out innovate legacy organizations. I would say they are lying to themselves and here are my reasons for saying this.

A company is built to sell a product which solves a problem. What happens when the problem the product solves is not an issue anymore? Or what happens when someone else circumvents your products delivery mechanism? How a company or industry answer those questions will determine if they run a Customer Centric or Product Centric business. If it were a Customer Centric Business, they would respond by abandoning any or all of their deliverables components which caused their irrelevance. They would say it’s time to create another business and solve a different problem, or they would say maybe it’s time to create a new delivery system. Customer Centric Businesses always are in sync to what their customers’ want, how they want it and can change fast as their customers change what they want, and how they want it.

Sadly today we see industries and organizations dying at record speeds. The reason is they were Product Centric. Product Centric Companies, hold on to the belief that customers want their product regardless whether it still solves a problem or not. Product Centric Companies focus more on selling the relevancy to their dying product then selling relevant new products. Their customers’ left when the creative or innovative new way highlighted the old ways irrelevance, causing the old way to be the new problem. A problem the innovator is eager to solve.

The Taxi Industry, an excellent example of being Product focused over Customer focused. Uber, built for the same customer. The difference Uber made the means of the Taxi industry’s deliverable obsolete. UBER focused on bringing a better experience to the Customer and completely blindsided a once lucrative industry.

“The Customers experience is not about products it’s about the intersection where products and their customers meet.”

This intersection is under construction constantly, and most of the time the construction workers are completely unknown to those who originally built the intersection. Those who created this intersection simply thought they only had to maintain maybe re-tar or repainted the lines. Those new unknown road workers came in and ripped up the pavement widened the road and put in sensors for driverless cars, completely reinvented this metaphorical intersection where your customers and your products meet.

Industry and organizations must stop in the belief that their current products are their business forever. Yes, currently they are. However, all products are susceptible to being disrupted and made irrelevant. The struggle in this evolutional processes is the admittance of one's irrelevancy is painful. Yes, businesses get too emotionally attached to their current circumstances. Once the decline begins some will start buying up those who decided on an exit plan rather than a growth plan, many will be forced to lower their products price as demand for their product decreases; many will remain in place do nothing and perish without even being missed.

The easiest way to recognize a Product Centric Company over a Customer Centric Company is simple. Look how they react during the disruption of their industry. Let’s look at the Taxi industry when it became apparent that Uber’s customer experience was the preferred means to their desired outcome. Here are some of the ways the Taxi industry responded. They rallied their unions, they began arguing in court rooms, and they perpetrated as much bad press as possible. Here’s what they didn’t do. They ignored the power of the Smart Phone, they ignored an opportunity to innovate, and they ignored the demands of their customers and focused on their own needs to continue delivering the product of their current circumstances. They still are focused on the way it was, and the outdated product they have. The legacy Taxi industry is most definitely a product centric business model. So the difference between product focused and customer focused is clear within the Taxi industry. What about your Industry, or Organization. Don’t be the company that is so focused on solving yesterday’s pain points that you stop looking to see what is causing pain today, or what could cause pain tomorrow.

I heard a sales pitch recently where the sales representative explains with excitement their differentiator. He bragged his company answers the phone in two rings. I wondered if one day this company would be disrupted by an unknown competitor. A competitor who doesn't even accept phone calls. I thought will this company focus too much on its current product and how it's delivered. Missing the signs of someone else's innovation, an innovation which threatens both their product and their products delivery.

Today many industries will find themselves at the crossroads of irrelevancy. Those organizations who are customer focused, Innovative, and understand the importance of creating a new way before someone else does. And if by chance someone else’s innovation beats them, they respond by reinventing to the new acceptable way. Or creating an even better way. One thing Customer Centric Companies never do is remain loyal to an irrelevant product, service, or delivery system thereby causing their irrelevance.

“How and where your products intersect with your customers determines your customers’ experience and your products relevance.”

Today’s technology is allowing Innovators to recreate the experience of getting products. It’s not just about product obsolescence; it’s also about the means to a product's delivery which is being threatened and changed by innovation. So next time you hear someone say it’s not about Customer experience tell them to talk with Jeff Bezos, the guy who proves daily, delivering a better customer experience can quickly win over, not just customers, it can completely change Industries. Amazon confirmed business obsolescence is not just about products it’s also about a better experience to the means in getting them. Years ago Leonard Riggio, and his brother Steven, of Barnes and Nobel believed that too much focus on perfecting their online book store would cause a distraction from their core brink and mortar business. Back then the Riggio's were too focused on their Products, not their Customer’s, and this proved to be disastrous. Amazon still to this day surprises the unimaginative in their ability to disrupt all industries which are Product Centric over Customer Centric. The difference today, from Amazon's earlier days, they have the resources to drastically speed up the disruption.  

 “You can be the vendor with the greatest relationships and loose to the new unknown competitor who delivers a better experience.” 

In Closing: Customers don’t care about products. Their emotional attachment is to the benefits of products, and today customers have just as much emotion attached in how they benefit acquiring a product as the product itself. So your product might still benefit some or many, but if your delivery method doesn’t benefit your customers, they will leave to the disrupter who delivers a beneficial change.

So, is your organization Product Centric, or Customer Centric?

“Remember Customer Centric Companies look through their current deliverable at what will replace it, and they never stop looking.”

R.J. Stasieczko

I thought I would share a thought or two on the In-Home Tech Business. As many of you know my background is the Imaging Channel, Print/Copy equipment, and services. Obviously, this channel is desperately seeking a broader deliverable. Some in the channel have successfully transitioned. I had the opportunity to help lead the successful reinvention of a legacy print sales and services business, into that of a Managed IT/Security/ Services Firm that experience taught me many things. I look forward to helping others who are ready.

Most in the Imaging Channel still recognize the majority of their revenue from Print. Over the last couple months, I have focused my articles on thoughts of the future about different aspects of the Imaging Channels deliverable. Over the last year, I have talked and consulted with organizations both in and outside the Imaging Channel. I am committed to the realization that the Imaging Channel must transition and quickly define their avenue to replace the every declining annuity of print services. I would add those who believe there is no decline in print I cannot help and should stop reading this article. The rest explore this one opportunity with me and open the door to your imagination. There are many ways to transform it just takes collaborating with those who challenge the relevancy of status Quo.         

A few weeks back Amazon doing what Amazon does best decided to disrupt the In Home Tech Service Business. Today the largest market share goes to the Geek Squad which is owned by Best Buy. Most in the SMB to SMB Tech Services Business dismissed this; they think there’s nothing to worry about don't see a threat. Here’s why all technology service providers from all channels are wrong to dismiss Amazon.

Amazon did not start an In-Home Technology Services Company strictly to sell more T.V.s and Home Theaters. Amazon got into this business because of the increase in the number of home based workers that are not self-employed. It’s not going to go down. Regardless of recent announcements by global organizations. Any new movement which creates bold changes will move both forwards and backwards before gaining momentum. As management practices and advances in technology continue evolving. The work from home model will not only gain in traction it will redefine our work culture.

“Innovation is what you find on the other side of the horizon you find it when you can look past what’s in front of you.”

Amazon wants to be the go to for In-Home Office Workers. Amazon has and continues destroying the Office Products Resellers business model. Now they have their sites on Technology Service Providers. Amazon will provide the service to the Home worker however, Amazon will contract with the corporation that these employees work for. The question is; can the current Imaging Channel, or the Current IT Services Channel beat Amazon to the punch?

Here’s what I would do. Starting tomorrow I would call on all enterprise accounts. Here’s the question for the CEO, not the purchasing Manager. Ask them how many workers do they plan on shifting to a work from home model over the next five years? They most definitely are thinking about this and more than likely have no plan to execute a strategy. Here’s the benefit for either the printer dealer trying to move into IT Services, or the IT Services Provider in an attempt to expand their deliverable. Let’s say the organization has 500 employees and this particular organization wants to shift 10% of their work force to work from home.

OK, we all immediately see why Amazon got excited don’t we? For those who don’t yet see the opportunity. I will explain, fifty at home workers need 50 Computers, 50 Printers, 50 backup solutions, 50 users needing help desk service, 50 users' needing security patches, and 50 users requiring the occasional on-site service. My friends It’s 50 times a lot of stuff use your imagination.

Well, that’s probably too much technology for some to comprehend. Whatever this looks like it doesn’t exist today so quit getting hung up needed absolutes. Stop and imagine what Amazon is imagining and then execute, and continuously improve your In-Home Tech Service for the SMB Home worker. Ask this question of the CEO before you give away your In-Home Service. How much does each employee cost to be in house?  

So know for those of you who can’t get printers out of your mind think of this. Fifty employees in a downtown office Bldg. probably share one MFP maybe two. However, those Fifty at home workers get fifty machines. Yes, you get to ring the bell 50 times instead of once or twice.

So next time you read where the richest man in the world is buying a company or building his own don’t dismiss it learn from it. One more thought. Maybe Jeff Bezos would be interested in contracting with you to provide the In- Home Service in your market. Who knows perhaps a manufacturer already made the call?

My friends from all Channels it’s time to create the Innovation Channel and stop doing the same things, stop looking in the same places, and stop having reunions talking about the past then convincing each other the future is safe. The SMB to SMB Resellers are in the war of their life, and many don’t believe it or, are delusional. Don’t be delusional be creative. The only way to deliver the Future to the Present is first to imagine what the Future is. I have never met Jeff Bezos, but I guarantee you all this. He understands “Those who deliver the Future to the Present, are always delivering relevance, those who don’t are instead temporarily delivering their past relevance.” It is 2017 your past has expired. Those who are ready to collaborate for ways to begin delivering the Future to the Present first like this article then send me an email raystasieczko@gmail.com. Let’s create our Future not become victims of someone else’s future.

R.J.Stasieczko 

Recently I had an opportunity to speak to industry peers at the RT Imaging Summit-Americas in Cancun This article shares my thoughts of the event.

As the Summit in Cancun, Mexico got under way, my mind went to the pier across the road, right off the beach. I began thinking how far down the “pier” the imaging channel has gone over its decades-old life. Just how much longer can we walk the planks of the pier? Using this analogy, the planks are the customers of print. How many new planks, if any, will be added in the future? How many will replace those planks which the winds of change have removed and continue to remove. We find ourselves in the constant storm of technology innovation.

Those attending this second expo and summit in beautiful Cancun are all having to weather change in the print consumables industry. Some are faring better than others, judging by the comments during the vigorous panel discussions.

I was one of the speakers. As I listened to those before me, it became apparent most agree the industry we call home is in transition. However, there are conflicting timeframes for starting the changes needed for survival.

The speakers’ messages were candid as each shared how their particular area of expertise is impacting or being impacted. The most realistic members within the imaging channel do, in fact, believe print is declining, particularly in the lucrative markets of North America and Western Europe. Yet others are convinced the pier continues to expand for them. It’s this thinking in any declining industry which is most dangerous to ending the life of any organization. This thinking will kill their drive to innovate.

“The worst thing about a temporary rise in a dying business model, usually caused by those who evacuate, is the false sense of hope it gives those who hang on.”

Attendees at the summit were mostly from North and South America. The 86 exhibitors, however, came from 24 countries across the globe including Europe, the Americas, India and China. I kept hearing the visitors comment “All the important vendors are here.” To be honest, I was amazed at how many organizations are still being born for the purpose of manufacturing ink and toner cartridges. As I wandered the expo floor, the familiar theme was loud and clear: “a world without toner is not possible.” There was no despair on their faces.

All industries should be confident about their future but also take pride in assessing their relevance. Everyone knows that continued relevance is the enemy of status quo. Continuous relevance is a quest about deconstructing the past as you build the future. Most can’t do this. Which gives a head start to those who can.

The print channel has, and continues to decline: this trend will not change. No one has the power to stop the speeding train of technology advances. Customers buy outcomes, the means to achieving them will always change.

Some in the industry are replacing legacy technologies with innovative technologies. To this end many manufacturers on display at this show are not just supplying parts and components any more, but finished cartridges ready-to-go. Some of these finished products are fully remanufactured and others are new-built. Many remanufacturers have also adjusted their business model and are focusing more on selling imaging products. In this sense, this is an industry in transition.

Both suppliers and buyers have also been obsessed with lower pricing of supplies in order to gain market share. This year I noticed many on the floor shopping for quality too. But is it enough?

A hot topic in the summit and on the floor of the expo was acquisitions. On the surface this strategy seems to be a powerful way for some to disrupt the industry in order to gain market share. There are those who believe that growth through acquisition is a remarkable strategy. However, an instant increase in customers may only be temporary. During an industry decline, growth through acquisitions, without a plan to redefine your deliverable is "delusional growth."

Look at the Sears and Kmart merger in the USA for example. Here were two struggling organizations with the same dysfunctional deliverable. Neither could think, let alone operate, out of their box filled with the way it was. Both will soon find themselves on the list made up of all those companies who spent all their time thinking about how great yesterday was, and never believing tomorrow would come. What if Sears had bought a software company, or merged with a player who was bringing the future to the present. Sears thought if they had a bigger presence from the past they could miraculously make it through to the future.

Organizations who become obsessed with adding revenue by buying customers from their competitors are just positioning themselves for significant loss. Ricoh could have warned all those in the print industry about this. Growth at all cost, with no regard to cost, will cost you dearly. Ricoh had revenues of close to US$19 billion when they determined their business model was a failure and needed drastic change for their continued survival. Time will tell if they responded quickly enough.

“A company becomes obsolete when the focus on bringing the past to the future instead of bringing the future to the present.”

Many in the imaging channel think the same way as Sears and continue walking toward the end of the pier. Some will fall off, some will jump off, and some will temporarily find safety from falling off by gathering with others. We must all remember the pier is built from customers, not from what we manufacture or deliver. The pier was constructed as the means to the customers’ desired outcomes.

“No one has a crystal ball,” as one of the speakers said. However, all of us must evoke our common sense, proceed with caution as our pier shortens, and continuously look for ways to reinvent our deliverable, and no one from any industry either in decline or growth should ever forget this.

This event brought the industry together. It’s a good thing. However, if we all leave and go back to our businesses in any of the scores of countries that attended, with the intention to do business the same way as we did last year, then we have missed the point.

R.J. Stasieczko