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How to manage MPS in a VUCA world 5/5

By Jean-Louis de la Salle

Interestingly, as we come to the last post, this series ends with letter A.

A = Ambiguity. The haziness of reality, the potential for misreads, and the mixed meanings of conditions; cause-and-effect confusion. 

 

This is a very interesting part of the difficult task of managing modern organisations. Due to lack of reliable data, unstable business models and technology complexity as we have seen in the former posts, it is very difficult to send a black and white message to the stakeholders. Every message has a number of shades of grey that vary, influenced by moment, time scales that expand and contract, as well as external and internal influences.

We see it constantly in our industry where it seems the favourite motto is “do MPS but of course do not forget to push the hardware NOW!
So all the intelligent balancing efforts that could be realized are suddenly wasted in a single sentence too often repeated.
The instant misread is “Why change as anyway my management does not mean it?
The confusion is as instant:  Do I privilege a relationship with a client with a short-term view (push kit at the risk of depreciating my price and value) or try to win him over the long term?

I see an important factor playing a role here and also significant differences between the Copier channel and the IT channel.
I believe a major problem in many organisations is a combination of analytical accounting and measurement, or rather the lack thereof. There is no properly measured allocation of resources in the Sales cycle necessary to win long-term contracts. Sales expenses are itemized over the current quarter and not against a one or two year period. This means that the expense of acquiring an MPS contract is not properly understood. It can be inadvertently wasted and a bad decision goes with without real consequence to the culprit.

There are not enough serious reviews of the cycle in terms of project checkpoints and goals, expenses incurred and objectives achieved. It is done in other industries like aviation technology, or nearer to us in large outsourcing contracts where the current turnover is one thing and the order book is another. Both come in audited, accountable form.  So there are ways of balancing short and longer-term strategies.

 

MPS remains for these teams a very complicated concept with excessive pre sales time.

When it comes to channel, the IT channel has been always very good at distributing fast moving products based on appealing features and price. High efficiency and low margins guarantee a quick access to market. Sarcastic casual onlookers could call it a fire and forget culture. The reality is that the Sales’ incentive is to achieve fast deals and they do not consider customer nurturing as a substantial bookable value. MPS remains for these teams a very complicated concept with excessive pre sales time.

The Copier channel is almost the opposite. Its owners have a very good understanding of how to create wealth for their companies though contracts. Revenue booked in advance has allowed them to create solid companies with recurring revenues.

MPS to them is a different challenge. Why spend money on Investment when the current business could, they hope, go as is another few years.

What is the benefit of this new investment in terms of additional revenues and margins? Their struggle is to sell these services and that very IT Centric activity is not so familiar to them.

So will the winner be some sort of ideal third party joining the feast? A dealer with an IT outsourcing culture (contracts, recurring revenues, who knows how to sell PS time, technology savvy, etc…).
Our industry has a big challenge to convince this “new” channel to play the game (level of investment vs. return, technical complexity of printing, issues around supplies and parts logistics, etc…)
And all this has to be done without hurting the feelings of its current partners.
Did I hear you say Ambiguity?

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This article was written on 03 Jul 2014, and is filled under Managed Print Systems, VUCA.

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