The right tools are critical to getting the job done. Today, businesses are more and more reliant on the Internet as well as software and hardware technologies to complete all the routine tasks that underpin larger business processes. Launching new products, processing orders, supporting customers, handling employee relations, and driving innovation all require numerous emails, collaboration on strategy, telephone calls, access to databases and a myriad of other technical resources. The multi-function peripheral plays an important role in these, but is now just one of many components in the systems used to conduct business. Every business, regardless of size, now depends on its information technology infrastructure.
As a provider of copy, scan and print technologies, you provide key technologies to enable business processes for your clients. Additionally, document management, enterprise content management and collaboration solutions bring additional value to your clients. Of course, all of these technologies are running on top of the local network and the Internet connections. Being able to deliver IT services is a natural extension of the business solutions you already provide. But which solutions provide the highest value to your clients? What are the options for moving to add those services? What are the costs and barriers to entry? Are there ways to accelerate market entry and mitigate risks? Understanding your options and knowing the answers to these questions can make all the difference in your efforts to grow your business by offering IT services.
Why add IT services?
Have you ever been in the middle of something important when the computer systems became unavailable? We all have. In the extreme case, downed computer systems have caused flight cancellations, trading miscues and clinical errors, but even small examples, such as the inability to process a single credit card transaction, can prove embarrassing and create customer satisfaction issues. Many of today’s businesses simply do not have manual processes in place to keep commerce flowing when email, phone and payment systems are down. Everything is riding on their IT infrastructure.
Sadly though, many smaller businesses have found that their IT needs quickly outpace the abilities of their IT resources. Many companies learn to get by with what they have or ask an employee to perform tasks themselves, such as updating software or installing a printer, but this often backfires. As a trusted business partner, it makes sense for business equipment companies to span the gap to fill the IT needs of your clients. The truth of the matter is that businesses use someone to help address their IT needs, so finding a way to capture that revenue for your company is well worth investigating.
Types of IT Services
There are plenty of IT services providers out there offering even more types of services. The important question to ask is how can you add value for your clients? This will make the conversation with them easier. Nobody wants to attempt to force a sale. Picking the right mix of services is a good place to start.
Network Operations Management – this is the care and feeding of the network, ensuring that servers, firewalls, routers, switches, and other components are up, running and communicating the way they should be. Typically, monitoring software is used to collect information from network devices and convey that information to a centralized management console. Messages are categorized based on severity and emergency, or preventative actions can be taken based on this data. The goal is to keep networks and servers up and running and to proactively address items that could cause disruption.
Help Desk Support – the goal of the help desk is to answer the age old question, “Who do I call for support?” A good help desk provider uses industry certified engineers and technicians to offer support for operating systems, productivity applications such as Office, Excel and e-mail, network connectivity, printer support and remote access. With the familiarity we all develop for technology, many companies make the erroneous assumption that users can take care of things themselves, but studies show that time is often wasted when people troubleshoot their own desktop and laptop computers. The goal of a good help desk is to accelerate problem resolution so that users can focus on things that matter, not their computer issues.
IT Projects – many companies have a single IT resource or an employee handling IT amongst other job duties. Often, due to time or training constraints, there are high value technologies that simply don’t get deployed. Server virtualization, productivity tools, collaboration solutions, and many other technologies get left off the schedule when they could be used to make everyone’s job easier. Outsourcing these projects to a competent provider is a great way to improve productivity. A trusted resource to perform these tasks, much like a trusted auto mechanic, is someone you’ll turn to again and again.
Cloud Computing – cloud solutions don’t magically appear and many companies don’t know how best to leverage the cloud for their unique needs. A good cloud computing partner can help any business gain greater IT efficiencies by leveraging the power of high-density, secure cloud computing solutions.
Build it, Buy it or Partner?
As with any business expansion, there are typically three ways to enter the market: build it, buy it or leverage a partner. Each has its advantages and disadvantages.
Build it – building your own IT services practice shows your true commitment to this part of your business. This can be reassuring to your clients, but it comes at a cost. The cost of hiring the right personnel, training them and keeping them busy on revenue-generating services can be challenging. Additionally, it takes time to build an organization capable of providing quality services. And yet, because you have to provide a consistent level of service, you must maintain staffing levels to support the technologies you service.
Buy it – there are countless small IT service providers in the market today and there has been significant consolidation in this space. Buying a company with the skills you need to enter this market is a quick way to get the trained talent you need with the proven methods of delivering IT services your clients expect. Of course, buying a company is a significant investment and comes with no guarantees that the most valuable resources, the employees that you’ve just acquired, will stick around for the long haul.
Partner – partnering with a trusted IT delivery organization can help mitigate the risks of building or buying your way into this market. A partner will have a track record of providing the various types of managed IT services and, due to their size and scale, they will find it easier to hire and retain valuable technical resources. A partner can eliminate the risks you would face in staffing and training technical resources and can help you train your sales resources, as well as assist with marketing and promotions. A partner can also help by offering a full range of tested and documented technology solutions from many vendors so that you won’t have to manage each vendor relationship individually. Of course, these benefits come at a cost. The managed IT partner will need to add adequate margin on their services to cover their profit, but due to their size and resources there should be room for both of you to succeed.
The Value to Your Business
Since IT services are typically sold on a monthly basis, a well-structured agreement can provide a revenue stream for your business that nicely augments your office equipment sales. Let’s take an example of a 25 user organization with 2 multi-function peripherals. The equipment sales and services over a five year period would look something like this:
- 2 MFPs @ $7,000 each
- $250 each, monthly service contract
- Total hardware: $14,000
- Total annual services: $6,000
- 5 Year revenue: $44,000
Now let’s add Managed IT services to this customer:
- Client with 25 PCs @ $1,000 each
- $100 each, monthly IT service contract
- $350 per month Network and Server contract
- Total hardware: $25,000
- Total annual services: $2,850/month x 12 months = $34,200
- 5 Year revenue: $196,000
This shows a revenue stream from IT that is more than four times the amount from MFP sales. In fact, this 25 person customer has now generated close to $250,000 in revenue for you over five years, if you capture both the MFP and IT spending. Moreover, this example shows just the monetary value of a single IT solution to this customer. There would likely be additional IT projects such as cloud computing backup or email solutions as well. The goal is to create recurring value to your clients that become recurring revenue for your business.
Many office productivity businesses have already seen the tremendous value and the natural synergies that exist between office equipment and IT services. For many, the speed of entering the market that comes with partnering with a professional IT services provider, as well as the benefits of reduced risks, offers an attractive path forward. The right decision for your business will depend on your circumstances and goals. However, the biggest risk is probably in ignoring the IT services arena, as many of your competitors will surely not.
