Why MPS Should Foster Renewed Focus on the Value of Print

24-Jul-2014 6:31 PM | Anonymous member (Administrator)

by Robert Palmer

With technology advancements fueling significant changes to work processes, the office imaging industry needs to continue to work hard to keep printing relevant in the eyes of the knowledge worker. The shift to MPS has helped sustain the office printing business by focusing on issues such as reduced printing costs, device consolidation, elimination of redundancies, and improved service and uptime.

Unfortunately, many of these same variables have served to minimize the value of printing -- not only in the form of reduced hardware and page volumes, but even in a much narrower view of printing as a valuable business function. Once positioned as a differentiator, MPS is now viewed as necessary for any vendor or provider participating in the office imaging market. Actually, MPS is one of the few growth areas remaining in the office printing space.

Machines in the field (MIF) or pages under contract continue to be key metrics for measuring success. In order to drive profits through MPS and push CPP rates lower than those of competitors, providers consistently look for ways to take cost out of the system. In many ways, MPS is evolving into a commodity business differentiated primarily on price.

We are already feeling the effects of commoditization with entry-level MPS engagements that typically involve only basic fleet management services. Within this ultra-competitive environment, there are numerous providers competing on the same premise: optimize the print environment to reduce the customers’ overall printing costs. The result is a challenging market with competitors using similar tools for assessments, auditing, and service delivery while positioning reduced cost as the primary value of MPS.

Why color looms large

Market longevity is predicated on the value associated with the products or services offered, which is why vendors and channel players alike need to shift the MPS conversation from printing costs to service value. The declining need for printed output is forcing vendors and providers to look beyond print and focus on areas such as managed IT services, business process, workflow, and other document-based services. These are certainly important business segments, but our industry could also benefit from a renewed focus on the value of printing itself.

One area where MPS has actually stunted market growth is in the transition to office color. In many MPS engagements today, color is viewed as an opportunity for cost savings -- achieved either by reducing color pages or restricting and/or eliminating access to color devices. Color is certainly an added expense, and there remains a strong concern over the abuse or misuse of color in office environments. Even so, we need to be careful that opportunities for color are not lost in the desire to drive costs lower.

The value of color printing becomes even more demonstrable when you consider the recent advancements in display technologies. Color is exploding all over the corporate environment today through mobile devices, HD screens, laptops, and digital signage. As an industry, we should strive to make sure business users can produce affordable color prints that match the color quality of their digital displays. In other words, color needs to be much more affordable and accessible, even when managed within the structure of an MPS solution.

Advancements in technology are helping to drive down the costs for color printing. Tiered color pricing, page subscription services, and emerging page-wide ink-based technologies could radically alter the cost structure for color in the office. It is important that the industry does not devalue color to the point where improvements in price and performance no longer matter.

Creating a sustainable MPS business

Given the threats that face our industry, it is wise to question the long-term relevancy of print. The transition to mobile devices is certainly impacting how business is conducted, and there is no question that there are fewer reasons to print today than there were just a few years ago.

Historically, printing has been viewed as a necessary but unmeasured business expense. Printing has always been a critical business function but not necessarily an integral business process. The shift to MPS has helped change those perceptions by raising awareness about the costs associated with printing. Still, our industry should work harder to ensure that customers understand the value of printing as a service and the importance that print plays many business functions.

Selling on price is always a difficult proposition. With little market differentiation, the playing field is leveled, and we become vulnerable to competitors willing to push prices even lower and compete away the profits. To create a sustainable business model with repeatable business and solid customer retention, it is best to establish value. Expanding into adjacent markets or services is one way for MPS providers to establish that value, but as a supplier of printing services we must continue to stress the intrinsic value of print itself.

Robert Palmer is chief analyst and a managing partner for BPO Media, which publishes The Imaging Channel and Workflow magazines. He is an independent market analyst and industry consultant with more than 25 years experience in the printing industry covering technology and business sectors for prominent market research firms such as Lyra Research and InfoTrends. In December 2012 he formed Palmer Consulting as an independent consultancy focused on transformation, mobility, MPS, and the entire imaging market. Palmer is a popular speaker and presents regularly at industry conferences and trade events in the U.S., Europe, and Japan. He is also active in a variety of imaging industry forums and currently serves on the board of directors for the Managed Print Services Association (MPSA). Contact him at robert@bpomedia.com. 

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