Underrated Solutions: Dealers Share Success Stories of Non-MFP Gems

We generally view ancillary products as those being outside the main technology core, likely supplemental and less expensive, and possibly having a direct correlation to a cornerstone offering. Quite often they’re used as an enticement to convince clients to sign off on a much larger deal. In the office technology space, this can take the form of print or document management software.

Still, not every ancillary product needs to ride the long, flowing train of the MFP queen. Dealers have at their disposal a menu of products and services wholly distinctive and separate from the garden variety A3 unit. They often provide wonderful opportunities to yield monthly recurring revenue as part of a technology bundled contract (which may or may not include MFPs) or stand-alone agreement.

It would be a grave disservice to term many of these products as ancillary. We prefer the term hidden gem; “hidden” for the notion that it’s not a cornerstone offering and “gem” as a tip of the cap to the potentially lucrative boost it can give to top- and bottom-line revenue. In the end, the hidden gems provide another reason for customers to want to conduct business with you. After all, clients don’t care about dealer sales strategies and product hierarchies—they just want to know how you can save them money, improve an operational process, perhaps eliminate or reduce redundant or low-value functions and, most of all, enable them to focus on their core business.

This month’s State of the Industry report on hidden gems examines the motivations behind dealers entering a given product or service discipline. They’ll offer examples of a real-world installation, the challenges a client previously faced and how the offering has provided a tangible improvement.

Trust the Process

The best account representatives all share one thing in common: they understand that if they talk less and listen intently enough, clients and prospects alike will directly or indirectly tell them exactly what they need. We say indirectly because a customer may just be discussing a challenge they’ve been facing, which trigger’s a bell in the minds of account reps. It’s a cry for help—your help.

And so it began roughly three years ago that many SMB and enterprise clients of Spectrum Technologies were telegraphing a common issue: they were grappling with inefficient processes stemming from broken workflows. Kyle Elliott, president of the El Paso, Texas-based dealer, knew a significant market opportunity for business process optimization (BPO) was presenting itself.

One of the core missions for Spectrum Technologies is its quest to ensure end-user clients and their employees thrive. The dealer’s benchmark is to free up a client’s time by 20%, time that can be better spent on professional and skill development.

Three-plus years later, Spectrum Technologies has automated its seek-and-address strategy for BPO. A specialized team meticulously analyzes and documents existing processes within a client’s operations. That enables them to identify which aspects of the workflow are crying out for help. The inefficiencies take many forms, from outdated practices to a lack of modern technology to disconnected systems that fail to communicate effectively.

“Imagine transforming your daily operations, eliminating bottlenecks and creating a seamless workflow that empowers your team to excel,” Elliott noted. “It’s about unlocking potential, fostering innovation and driving our customers’ businesses toward unprecedented success.”

Imagine transforming your daily operations, eliminating bottlenecks and creating a seamless workflow that empowers your team to excel. It’s about unlocking potential, fostering innovation and driving our customers’ businesses toward unprecedented success.

– Kyle Elliott, Spectrum Technologies

A prime example of this is a non-profit client that takes in donations and resells them to help fund community programs. This regional branch was still processing donations via paper forms, which made generating reports for oversight departments a process nightmare. When these spreadsheet reports were sent to corporate, it required manually pulling numbers from the reports and inputting them into their accounting system. This method was as cumbersome as it was error-prone.

Spectrum Technologies delivered with an end-to-end workflow using Microsoft 365 PowerApps, which was seamlessly integrated into the nonprofit’s existing systems. Front-line workers could now receive donations on digital tablets, which provided a drastic operational boost.

“Errors were significantly reduced, and while reducing headcount is never our goal, the new efficiencies enabled regional managers to oversee three times as many stores,” Elliott said. “This transformation not only streamlined their workflow but also enhanced overall productivity and effectiveness.”

Spectrum’s BPO growth strategy is leveraged through its existing account base, with most opportunities yielded through quarterly business reviews. While addressing business goals, the client’s objective is generally spurring growth, reducing operational expenses or both. When Spectrum offers a viable path toward achieving those ends, the excitement is palpable for the client.

“Unlike a copier or a managed IT agreement, streamlining processes and leveraging technology for a competitive advantage actually can move the needle,” Elliott remarked. “By streamlining workflows and integrating modern technology, we help clients unlock new efficiencies and capabilities, driving their growth and reducing costs. Interestingly, we have active engagements in varied groups—from small nonprofits to 2,000-employee companies. The vertical doesn’t matter—all organizations have issues, and what we’ve found is sometimes the bigger the organization, the more broken their processes and compounded the issues are.”

Wild Card

Manufacturers have long been partnering or piggybacking off software solutions provided by Microsoft. It’s a no-brainer proposition, considering the wide range of MS365 users nationwide. In 2023, when Microsoft added increased security, management and collaboration features to its 365 Business Premium bundle, St. Cloud, Minnesota-based Marco saw an opportunity to help clients secure and enhance new and evolving services.

The new offering, ACE365, is designed to increase security and support for MS365 services and can help SMBs with some of the MS365 features they already employ.

According to Adam Ramberg, director of IT consulting for Marco, ACE365 offers a more focused version of managed IT for the tools that many clients use daily. “For us, it lets us work with more clients at a reasonable price while still providing something valuable and different,” Ramberg noted. “It’s a tailored fit for many SMB customers that cannot justify fully outsourced managed IT but can still benefit from augmenting their existing IT staff and some technology-related areas.”

As with many new Marco solutions, the original inspiration for ACE365 came from a client. In this case, a client that used Microsoft 365 Business Premium was in the initial stages of testing Microsoft Defender as an EDR (endpoint detection and response) solution that could replace its current endpoint protection product. The client was also exploring Intune to yield more IT policy and management functions for its remote workforce, as the local group policy was no longer meeting its needs.

The main issue confronting the client was the inability of the IT team to dedicate the necessary time toward becoming proficient with the advanced Microsoft solutions. It would’ve also been burdensome to effectively manage and fine-tune these tools over time.

[ACE365 is] a tailored fit for many SMB customers that cannot justify fully outsourced managed IT but can still benefit from augmenting their existing IT staff and some technology-related areas.

– Adam Ramberg, Marco

“We stepped in to provide strategic recommendations and guidance for that client to successfully pivot away from ‘the way things have always been’ to the way the industry is moving,” Ramberg said. “With ACE365, the client had confidence in the initial migrations, along with a continued support team to help them manage their Microsoft 365 technologies moving forward.”

Ultimately, ACE365’s objective is to meet clients where they are in their Microsoft 365 journey. In its simplest form, ACE365 can protect a client’s data in Exchange Online, SharePoint Online, Teams, or OneDrive. From a macro standpoint, the dealer can advise and help migrate clients to take full advantage of their advanced security and compliance licensing.

“Our goal is to protect every single customer who comes to Marco to purchase their Microsoft 365 subscriptions,” Ramberg said. “So now, every Microsoft 365 quote has information about ACE365 basic protection services attached to it. By showing our value in protecting our customers’ data in Microsoft 365, we earn their trust to offer more fully managed and strategic ACE365 services.”

Sticky Business

“Can you handle [fill in the blank]?” It’s a question often heard by account representatives, product specialists and the heads of managed service departments, delivered by existing clients who are constantly seeking one vendor to handle all their needs. In the case of Stargel Office Solutions, the item in question is the thermal printer, and it seemed that every time the dealer’s managed print services division was calling on a client, the demand for the label printers became louder and louder.

A relatively newer offering, label printers are quickly garnering momentum for the Houston-based dealer, noted T.J. DeBello, vice president of sales. Initially, the company took the same approach as it would with an MFP by offering a warranty on the machines, but it soon became clear that the thermal printers were a somewhat disposable commodity. It was the labels that were the true profit generators, and Stargel was able to devise a cost-per-label (CPL) program that has proven lucrative.

The dealer initially offered only Toshiba label printers but saw an opportunity to augment those placements with the Zebra line. Growth has already exceeded the previous year by a 4X factor, and the CPL formula has resonated with clients. If the client exceeds the agreed-upon threshold early, the volume parameters and CPL are revisited.

We got more requests, and we started asking more about how they source their thermal labels. That yielded the low-hanging fruit.

– T.J. DeBello, Stargel Office Solutions

In addition to Zebra and the existing Toshiba line, Stargel has partnered with Ward-Kraft and Distribution Management for label procurement. The dealer enjoys a 40%-50% margin on the labels.

“Every time we were out in the field, we noted that one client may have 10 Zebra printers and another would have 30,” DeBello said. “Also, we capture a lot of that information through FMAudit, anyway. We got more requests, and we started asking more about how they source their thermal labels. That yielded the low-hanging fruit.”

Oftentimes, an opportunity can create itself when one or more customers merge together in a given line of business. A family medical practice with four facilities, which had a need for printing prescription labels and other health care-related materials, sought to centralize its efforts. The facilities had merged, then were acquired by two of the primary care physicians. Previously, oversight fell to multiple people, and the offices used different sources for label supplies—there was no uniformity.

Stargel was able to sew the facilities together with 12 new Zebra printers and devise a monthly payment that didn’t break the bank. The deal was completed two months ago, thus there isn’t any meaningful trailing data/performance to evaluate. Regardless, the customer was pleased with centralizing its processes.

“We had copiers placed with both sets of offices that came together,” DeBello noted. “This was the first time we had installed [label printers] in multiple locations, all within Houston. We feel like we’re getting better with the label program and have a firm grasp on it so we don’t lose money in the process.”

The deal that really set Stargel on its success path with labels involved a client that transports chemicals. Federal and state regulations mandate the type of labels that can be used and the methods of transportation. Again, it was a matter of centralizing the purchasing and putting the client on a single plan for its four locations.

The client has 20 Zebra printers, and the output results in $50,000 a year in labels, with the aforementioned 40%-50% margin. This included specialized labels that can withstand the sun and elements for at least a year. Stargel is working with Toshiba on certification-related labeling that could employ larger, 8½x11” labels.

DeBello feels Stargel is just scratching the surface of the label opportunity among its base, which includes 7,000 customers in the Houston area. According to reports he’s run, DeBello estimates the opportunity for labels is roughly $1.3 million—strong from an ancillary standpoint. Its MPS group is now Zebra-certified for RFID labels, which should open the door to further growth.

Advanced Security

To hear Dave Moorman talk, one would assume he’s incredibly fluent in the world of IT, especially cybersecurity. He’s that rare breed of part executive, part tech nerd in his dual role of president and CISO for Nashville, Tennessee-based Novatech.

For 35 of his 55 years, he’s been immersed in the world of tech; a network engineer by trade who’s fluent in cybersecurity, the cloud and, of course, all things network. He formerly owned DynaSis, which was later acquired by Novatech. In the interim, he’s become well-versed in marketing, sales finance and operations. Thus, from the 30,000-foot perspective to knee-deep in the tech weeds, Moorman can pivot the conversation as needed.

Advanced security in the IT realm—not to mention print security—is a topic Moorman feels will dominate dealer-client conversations about A3 and A4 devices for the next 10 years. He notes that it will be driven by the fact that many mature devices aren’t built for modern cybersecurity technologies.

What we’ve seen from a cybersecurity perspective in the industry is a lot of the cyber terrorists are hiding in the MFP devices because they’re not being secured properly. There’s been neglect in securing print devices, even among the manufacturers, who are behind the times.

– Dave Moorman, Novatech

It’s not enough to assess a fleet on the print side or the IT and all the devices that are attached to the network. It also requires advanced breach detection. Novatech’s offering, for example, includes 65 built-in alerts that are on the lookout for “nefarious behavior,” according to Moorman.

“What we’ve seen from a cybersecurity perspective in the industry is a lot of the cyber terrorists are hiding in the MFP devices because they’re not being secured properly,” he noted. “There’s been neglect in securing print devices, even among the manufacturers, who are behind the times.”

One exception is Sharp, which worked with Moorman and his team the previous 10 months to assist in developing a cloud-based product that enables end-users to cover the five key security phases: assess, protect, detect, respond and recover. The product, Synappx Manage, adds more functionality to Sharp’s offering. That Novatech took such an active role in its development underscores its commitment to protecting end-users from bad actors, and it’s a significant point of differentiation.

Timing was everything in the case of a large auto dealership with about 40 locations. Novatech deployed its security solution approximately 18 months ago, and it’s already withstood a major hack. In June, CDK Global—which provides software to about 15,000 North American car dealers—suffered a pair of cyberattacks that pushed its system offline for days. BlackSuit, a hacking group, claimed responsibility for the attacks that paralyzed auto sales and service for users of CDK, which is one of only a few dealership management platforms on the market.

The Novatech client, however, was wholly protected. The full managed security offering, which took about 30 days to completely implement, included end-point security through managed detection and response (MDR) software. Moorman noted the software is a modernized MDR solution that employs next-generation AI and machine learning. Also included was ProofPoint advanced threat protection, and privileged access management, which removes admin rights from users on the network.

There’s a host of other solutions incorporated into the full managed security offering, but the proof positive was its ability to absorb the hack attempt. “When the breach came out a week ago, they were fully protected,” he noted. “It didn’t even affect them, but it hurt a lot of other dealerships.”

Best of all, the solution is managed by Novatech’s security operations center 24/7/365. The dealer also has à la carte offerings for those clients with varying levels of IT departments.

The security conversation—which includes a complimentary level-one penetration testing on the IT side—stands apart from MFPs and other offerings and is the go-to lead topic. “I think most providers know that, sooner or later, they’re going to need to offer print security,” Moorman said. “The offering truly elevates us.”