yourmpsa.org - Managed Print Services Association

Jim Fitzpatrick, President of the Managed Print Services Association
Defining Best Practices for our Industry:

There has been quite a bit of discussion in the Managed Print Services (MPS) industry regarding if you should charge for assessments, with members firmly taking sides based upon how they currently do business and what works best in their business case. To help you make an educated business decision the Managed Print Services Association (MPSA) has developed the following document to help you determine which route is best for your business.

Not all Assessments are Created Equally:

The first aspect you need to consider is which type of assessment(s) you are providing, and what your actual embedded costs are to perform the assessment. Normally, assessments performed fall into three different categories:

Category 1: Quick Initial Optimization & Cost Reduction

There assessments are normally based upon a USB key scan (or Remote Monitoring) of the prospective customer’s fleet. The information gathered is used to come up with a quick analysis on the current costs, proposed costs and potential savings. These results are than presented to the customer in the hopes of optimizing the customer’s environment.

These assessments are the most popular for prospective customer’s that are just starting into the world of MPS, and need a quick read on the potential benefits. They are also very popular with MPS providers since they only involved 2 – 10 hours of effort depending on your level of automation.

Category 2: Optimization and Ergonomics Study

The second category includes the monitoring of the fleet found in category 1 assessments, but now it also includes more labor intensive activities such as mapping the current assets to the floor plan, performing employee and departmental interviews, gathering actual financial information and digging deeper to understand the customer’s pain points and how to resolve these pains.

These assessments are much more labor intensive and require several on-site visits to perform the asset mapping and meetings with the departmental financial and business owners. Also, the amount of data that you need to analyze to produce the final recommendations is much more intense.

Category 3: Optimization and Document Workflow

The final category combines everything from the first two studies and adds your ability to gain information, understand and improve the actual document workflow processes within the prospective customer’s environment. These assessments are a serious undertaking and consume your resources in following the document paths, understanding why they currently exist, the history of why they currently are in this form, and may include possible interviews at each touch point along the way.

Many prospective (1^st time MPS) customers are not ready for this type of assessment as a first step, and as a result these assessments are normally done later in the customer engagement cycle.

MPSA Best Practice: The MPSA believes that any MPS Provider, who is serious about your business, should ideally need to be able to offer all three of these different types of assessments. This will allow you to match the customer’s need to the type of assessment you’ll perform.

Assessment Cost vs. Customer Value

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Getting back to the core message of this document, your ability to charge the customer is of course directly related to the value that you provide in your final findings. If the customer understands that you were only on-site for a few hours (stage 1) and developed a quick analysis of their savings. It may be difficult to charge for that assessment. Therefore, the following table gives you some guidelines on the value vs. costs from both your and the customer’s standpoint.

* Hours based upon a typical customer size of 500 Employees

Therefore, you need to first consider the value that your assessment is bringing to the customer and the amount of time and effort you place into the assessment. Also consider if you provided all assessments for free and you have a close ratio (60% for good MPS Providers) can you justify writing off all of the internal costs for the assessments that you don’t win?

Problems with Charging for an Assessment:

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Based upon what we have already discussed your most likely thinking that you are ready to start charging for assessments in category 2 and 3. So, let’s cover some issues that you need to consider when charging for the assessment, and how best to work around these issues.

Issue #1: Who owns the final Recommendations?

You’ve just finished the most perfect assessment, you’ve shown considerable savings to the customer and you’ve spend 20 hours to finish a category 2 assessment. You have invoiced the customer $1,500 (20 hours @ $75 hr.). Now the customer takes your recommendations and sends them out to your competitors, or for an RFP.

MPSA Best Practice: Protect yourself – Include an upfront agreement that gives you exclusive rights to the results, and blocks the customer from sharing the results. See the appendix at the end of this document for some example language that could be used.

Issue #2: Additional Sales Cycle

If you’re going to change for your assessments be ready for the sales cycle of selling the assessment before your actually start the real sales cycle. For many untrained Sales Representatives that creates a problem. So, be prepared for this additional sales cycle with the following presales tools.

MPSA Best Practice: Make sure you have a defined set of prepared documents that help you close this presales cycle quickly. Think about the following turn-key documents and templates for each member of your sales force.

• Assessment Security & Compliancy Document (for IT)
• Assessment Statement of Work (for IT)
• Past Case Studies (Customers, Average Savings etc.)
• Assessment Legal Agreement (if you decide to protect your results)

Issue 3: Assessment Cost applied to the Solution

Many MPS Providers choose to include the cost of the assessment as a deduction in the final solution price. While this is considered a win from the customer’s side, and provides another reason for the customer to select your solution. We have seen way too many agreements that don’t truly define the extent of this agreement. And in some cases customers have bought the minimum requirement from the organization that provided the assessment, and used someone else for the entire solution.

MPSA Best Practice: Clearly spell out in the agreement (Issue #1), that defines that your discount applies to the total solution only.

Issue 4: Free assessments vs. your competition

Finally, to bring this back to the start of our discussion, you may have competition that is offering a free assessment and the customer is wondering why you are charging for an assessment. We highly recommend that your statement of work that you defined (issue 2) answers the question of why your assessment provides the detailed level of detail and results that the customer is seeking.

In Summary: The MPSA believes that our industry has the ability to charge for any assessment that brings value to the customer, and to do anything else devalues our industry and puts you at risk of losing internal costs on accounts that you never close. Rather than fighting the cost vs. free scenario spend your time developing your value add within the assessment process, and be able to document your “best practices” and “leadership” to the customer.

If you are able to understand and work through the above, you can share in what I have learned outside of the MPSA. Most of my wins have come from customers who have already had two – three assessments, where the customer felt that the results were weak and were only provided a hardware commercial to rip and replace.

Appendix:

Possible Language to protect the results of your assessment

Intellectual Property Rights and Usage License

 a)         The Software, specifications, designs, processes, techniques, concepts, improvements, discoveries, ideas, inventions, documented results, and reports used, made or arising in connection with the Consulting Services and all patents, copyrights, trade secrets and other intellectual property rights related thereto, will be the sole and exclusive property of Consultant and/or its representatives, subcontractors and suppliers.

b)         Neither party will gain by virtue of this Agreement any rights of ownership of copyrights, patents, trade secrets, trademarks or any other intellectual property rights owned by the other party.

c)         Upon payment by Customer of all fees for the Consulting Services, Consultant grants Customer a perpetual right and license to use the Deliverables for its internal purposes only and, if applicable, make copies of the Deliverables as may be necessary for such internal use.

Last Updated on Sunday, 01 August 2010 11:15