The Disruptive Innovation Promise of MPS

Disruptive innovation can make or break businesses, even entire industries. Think about how the photo film industry vanished due to a technology shift, book stores have fallen prey to the Amazon model and almost overnight, taxis are struggling to compete with Uber. In most cases, these businesses were prepared to battle known competitive threats, only to be destroyed by threats they never saw coming.

Twelve years ago Supplies Network began looking at this new strategy called Print Management. It was like the all-inclusive, price-per-copy programs that copier dealers had been selling for years, except it was for printers. Truthfully, we saw it as a potential threat because the copier programs that bundled supplies into the deal had significantly disrupted our sales of copier supplies. Ultimately, we determined if this print management stuff takes hold, we would need to be involved or risk losing significant revenue. Was Managed Print Services a disruptive innovation that would turn the print world on end?

Meeting with the Guru’s

We had the good fortune of having a client who was one of the innovators in the world of print management, so we took the time to learn what they were doing. “Where there is mystery there is margin” was a phrase I heard often. Mystery is an interesting word choice as I think back to those early days of MPS. Many MPS components such as risk, cost, unexpected expenses, software failures, bad data, and yes margin, all have some degree of mystery associated with them. It was a valid statement then and remains so today, and I can tell you unequivocally that there is margin in mystery. However, it can be either positive or negative, depending on who is mystified!

There were many self-proclaimed experts in the beginning — “It’s all about the data collection”, “It’s all about the back office connection”, “It’s all about leasing”, “It’s all about break/fix”, “It’s all about the right supplies”, “It’s all about the right devices”, “It’s all about the TCO tool” and on and on and on. The funny part is, MPS is about all of these things. The key is how a business puts it all together.

Plenty of industry pundits toss out numbers as to how much print volume has migrated from a transactional engagement to MPS — numbers range from 20 to 60%. Depending on your definition of MPS, either number could easily be true. So, I return to the title of this article, which implies that MPS was to be a disruptive innovation. Contrary to the predictions, MPS has not proven to be the business model that kills the traditional transactional sales model.

The Big Bang Theory

While MPS has not proven to create a new universe in the world of print, is there still reason to believe it could? The answer is a definite maybe! MPS practitioners have twisted MPS for personal gain (well it is capitalism, is it not?), but in doing so, much of the promise of MPS has passed to the wayside. Below are MPS promises and how they have shifted to other behaviors or purposes.

1. Right-sizing the print environment was about having the right mix of devices in the right places. Now it means:
   1. Yank out all the old gear and sell a bunch of new stuff.
   2. Walk in and take over, code for “we won’t change or recommend anything, just own the supplies and break/fix”.
2. Automated supplies fulfillment was about simplifying the feeding of the fleet with just-in-time supplies shipments. Now it means:
   1. Call when you need toner.
   2. Call when you are out of toner.
   3. We just ship whenever we think you are low (regardless of how accurate).
3. Equipment refresh strategy was a process to remove old inefficient legacy devices over a multi-year period while keeping capital expenses in check. Now it means:
   1. License to generate hardware revenue to meet quotas.
   2. License to drop in stock hardware that is not moving.

The list goes on to include finance, break/fix and a multitude of software offerings. You can use your own experience/imagination to complete those categories.

A few years ago much of the disruptive talk in MPS focused on user metrics including rules-based printing, seat-based pricing and workflow tools. These new tools would allow practitioners to visualize workflow so the right balance of productivity, performance and price could be achieved. Unfortunately, the various software tools never really played well with each other and promise of disruption never materialized.

“I’ve got to get me one of these” — A line from the movie Independence Day when Will Smith’s character drives the captured alien fighter craft for the first time.

At least one data collection provider held true to the concept of user metrics as a disruptive innovation by incorporating both user and device metrics in their application. At least one other is working toward that goal as well and will likely find a path to full integration. The real problem is resellers haven’t quite figured out how to turn on the alien fighter craft to make use of its great power. The key to unlock user metrics is for the metrics to be a resident part of your data collection tool. This is disruptive innovation, and it is here now, available for use.

MPS has been disruptive to traditional supplies sales leading to many resellers being contracted out of long-term relationships, but it took nearly 10 years for it to gain enough momentum to create this market havoc. Likewise, it will take years for user metrics integrated with device metrics to have the same impact on traditional MPS. The question is whether or not you are an early adopter or a late follower. The choice is simple — be the disrupter or be disrupted.