It’s difficult enough for office technology dealers to successfully transition into managed print services, but once you add network and IT services to the mix, that combination has the potential to be lethal to a dealer’s existing business. However, even more lethal is not transitioning into services. That’s one of the reasons why Gary Stevens launched Agiliant, a master managed services organization based in Kirkland, Washington.
The heart of soul of the Agiliant offering is the MITOS (Managed Information Technology & Output Services) suite of managed services that enables organizations to manage all aspects of their IT systems, assets, and operations. MITOS integrates managed network services and managed print services, what Stevens describes as two traditionally disparate business disciplines.
While the official rollout of Agiliant is currently underway, the company has been working with a network of dealer affiliates since early January even though they’ve been laying the foundation for the program long before that. The Agiliant Affiliate network is a community of regional managed services providers (right now BTA dealers). What dealers in the Agiliant Affiliate network receive from Agiliant is a partner who created a template that allows them to get into the managed network services and MPS game with minimal pain.
“We’re taking dealers to a business model that they all have to go to at some point in time,” says Stevens, Agiliant’s president and CEO.
Prior to contacting dealers for the Agiliant Affiliate network Stevens and company spent three years researching and working behind the scenes with MPS and networking companies to learn how to put together a viable business and services model that could be customized for the dealer channel. The key was gaining an understanding the network services business, concentrating on how they go to market, where the value proposition is, and aligning it with an MPS strategy.
Once they realized this was a viable offering it was a matter of testing the waters by approaching dealers with this concept even though the program was not yet fully formulated. The key question Stevens posed to dealers was, “Do you agree this is a change or die conversation?”
“Once they agreed it was change or die, we asked if they wanted to become part of a foundation of affiliates,” reports Stevens.
The key when looking for the original affiliates was to have the right partners. In any given market, he focused on the top three dealers—those with minimum revenues of about $10 million. Stevens concedes that there were quite a few dealers that didn’t get what he was doing or have an understanding of where the market is going.
“Frankly, there were dealers out there who didn’t see the need to change or frankly couldn’t change.”
By the end of January 2011, Agiliant had five dealer affiliates who have been marketing MITOS ever since. Coincidentally, two of those are The Week in Imaging 2011 Elite Dealers, DPOE in Chicago and Kelley’s in Seattle.
“I got lucky and acquired some pretty good partners,” says Stevens.
To date Stevens has been careful about affiliate expansion, ensuring that the program was all he hoped it would be. As luck would have it, it is.
“We are exactly where we want to be in 2011,” says Stevens. “We’re supporting the whole sales process so that’s it is scalable and less about the rep and more about the process.”
Asked which component of MITOS are dealers most interested in Stevens replies, “Survival. It’s the integration of network services and MPS together and that’s what we call MITOS, managed IT and output services—the integration of those two together and being able to go to the customer with one value proposition at the C-level.”
Stevens has spoken with plenty of dealers who are finding it difficult to add new customers in an increasingly commoditized marketplace where everybody is is talking about the same thing and there is little differentiation. Plus it’s still difficult for most dealers and sales reps to get in front of the right decision makers.
“No CEO or CFO is going to pick up a phone call about on ramps and off ramps on the network or output and scanning devices because you can cut their costs,” contends Stevens. “That conversation is widely pushed down multiple levels within an organization and becomes almost a procurement conversation.”
The focus is on the network and auditing that network as well as providing backup and security and ensuring that everything is operational, avoiding issues that could potentially cripple a business or put them out of business.
Stevens has found is that most dealers who get what he’s doing are extremely interested in learning how to get in front of the customer, what they should be presenting to that customer, and how to explain the value proposition. That’s what Agiliant brings to the table.
“Soup to nuts is a lot of what we provide,” says Stevens.
It’s not like dealers, including some of Agiliant’s affiliates, haven’t delved into network services before. Some have even acquired network services companies. The problem is they haven’t quite figured out how to integrate them into their business model as well as leverage network services with managed print.
For the average dealer there are two options for transitioning into a services model that combines network services and MPS.
“There’s only two choices, you hire Agiliant or you build it on your own,” states Stevens.
Building it on one’s own is not an option for most dealers and even if it is, it’s not easy, and it’s certainly not quick.
“One of our partners who just joined us had a network services offering for 4½ years and it’s cost him $1.8 million to date just to get it off the ground and it’s not that successful,” says Stevens. “One of the reasons they joined us was to take it to the next level.”
He adds that those dealers who decide to build it on their own can count on a 2-3 year time frame and an investment in the mid seven figures to get it off the ground.
“And most dealers haven’t even launched MPS successfully,” he says.
What does Agiliant do to ensure dealers are on the right path to success and survival once they start working with Agiliant versus what they were doing before when they were stumbling and fumbling?
“We have a super solid go-to-market strategy that’s been tested in front of hundreds of clients,” responds Stevens. “The first thing a dealer has to do is get it to market.”
With Agiliant dealers don’t have to do it alone. They are vested in the dealer’s success and proactive in ensuring that the dealer is sticking to what Stevens feels is a proven program.
“We help them be successful and they pay us well to help them do this, but we have to constantly remind them that this is a change,” says Stevens. “We are in their face, ‘These are the things you need to do’ and it’s tough sometimes because it’s their business.
When they’re not executing well, Stevens is on the phone with the principle.
“We’re connected to every part of their organization whether it’s operationally, service wise or on the sales side. We’re not hand holding or showing them the path, we’re dragging them.”
Agiliant is involved in every sales presentation, albeit remotely. That approach benefits both Agiliant and the dealership.
“We know what happened on the presentation, if it was a good customer and if the sales re followed the presentation we laid out,” says Stevens. “If they don’t my VP of sales is on the phone with their VP of sales and saying, ‘Joe Blow isn’t following the sales process that we’ve proven to be successful.’ If their VP of sales doesn’t react or change, I’ll go to the principle and say, ‘You’re paying me a lot of money, here’s what’s going on below and where you need to focus.’”
Another area that Agiliant can help a dealership is with their bottom line. They can provide a financial comparative analysis on every aspect of the dealer’s business, identifying where the dealer is are compared to others and what they need to do improve.
“We’re not just trying to help them change their business to a services offering we’re helping them improve their business,” says Stevens. “What we found in this channel is most dealers do not run a real well-oiled sales machine. They may think they do, but they don’t.”
Agiliant will review the dealer’s sales and services operations, identifying the waste and if they have reps where they shouldn’t be. They were able to improve one affiliate’s service operational issues by five cents on the dollar, which amounted to a half a million dollars in savings.
“That’s multiple times more than what we charge,” says Stevens.
All affiliates receive in the Agiliant base package—a go-to-market strategy that can help place them in front of the C-level executives, that in many cases they’ve never been in front of before.
“This is almost a utility model to get into a different business model that if you didn’t have you’d have to hire staff,” says Stevens. “If they agree to make the change, we’ll show them what kind of infrastructure they’d have to put in place to make that change, and frankly we cost a fraction of that.”
Right now Agiliant is focusing on BTA dealers but will be integrating some VARs into the model that fit their criteria because in certain markets where there’s not a good choice for them on the BTA side.
Although a dealer with revenues of more than $10 million is the target affiliate, Stevens has one affiliate that is smaller than that.
“Another criteria is they’re profitable because we want a viable dealer,” he says. “We want that forward thinking entrepreneur who will drive this.”
At this point he doesn’t see any competitors to what he’s doing. He cites All Covered, the managed networked services company acquired by Konica Minolta earlier this year, but to date Konica Minolta hasn’t combined the MPS part of their business with the network services side even though they expect each portion of the company to drive business in the other’s direction.
“They’re trying to access an account base, but they’re not at this point to market with one value prop,” says Stevens. “I don’t see any viable competition right now and I think we’re a couple of years away from anyone really giving any of our affiliates a run for their money. At that point we’re going to be in another 50 markets across the U.S. and it’s going to be hard to stop us.”
With the Affiliate Network poised for growth we asked Stevens how is he measuring Agiliant’s success so far?
“We measure our success on how successful we make the dealerships on the conversion standpoint and how often we can get them in front of a customer and convert it to revenue. Secondly, how much operational improvement can we show the dealership. Making our affiliates as successful as possible is our success metric.”
Looking ahead to the coming year, Agiliant is focusing on the top 24 markets in the U.S. The intent is to add two new affiliates a month.
“We have no desire to scale more than two a month due to the work we have to do to get the dealerships ready, on board, and successful,” he says.
In the short term expect to hear some big news in the next 60 days. Although Stevens is short on specifics, look for announcements related to new additions to the affiliate network as well as strategic partnerships.
(Editor’s note: If you are interested in learning more about Agiliant, check out www.agiliant.com.)
