Letters, feedback, get it off your chest: 7 November 2011
Digitalpress’ own Theo Pettaras kicks off this week’s postbag, calling out to industry players with a view on the MPS boom.
Re: Australian managed print services set to boom
Dear Print21,
I read your article with interest and of course with some concern.
“The Australian MPS will grow to $2.5 billion by 2015” according to Ms Tan at the Xerox sponsored Asia Pacific MPS conference.
The ongoing growth of MPS in Australia is alarming in my opinion as manufacturers are keen to sell to printers digital kits only to later learn the same type of equipment is being installed at their clients to produce print in-house.
It is not hearsay, it is often mentioned amongst our peers.
So whilst Xerox boast a third-quarter profit up 28% (according to the report posted in whattheythink.com) some of their clients are really feeling the negative impact it is having from this strategy.
Whether we like it or not, it will impact those printers with digital equipment and really commoditise our industry whereby “churn and burn” will be the norm.
I say let us printers do the work, give the client the right advice and provide effective print communication that works.
I am keen to hear how others feel about MPS.
Theo Pettaras
Founder of Digitalpress
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RE: Letters - Theo Pettaras on MPS growth
Theo's point is one of the most searing issues in our industry today and deserves intense scrutiny.
While there are no doubt sound cases for MPS in certain situations, I have never been entirely comfortable with the concept of digital press vendors approaching their customers' customers in order to gain the monthly print volumes for themselves.
To me, it appears to be the equivalent of selling someone a lawn-mowing franchise and then sending into their area, your own lawn-mowers to undercut the franchisee.
MIF (Machines In Field) quantity is the holy grail of digital press vendors but this leads to monthly volumes of A4 equivalent 'clicks' - and this is the front line in the battle being fought between the major digital press vendors. Look at any annual report from them and you will see the best profits, and in some instances - growth, is obtained from MPS, Facilities Management, BPO or whatever it might be called.
These companies are all listed and have shareholders demanding higher returns. It's a vexed issue for them. Undermine your print-for-pay loyal customers or leave the door open for an opposition vendor to install a fleet of presses into a utility, major corporate or Government department under an MPS agreement?
If you are a victim of losing business to none other than your press supplier, it might be worth investigating the representations made when you bought the kit - profit projections, TCO etc, and then contrasting this with anti-competitive laws under the ACCC.
Irrespective of the ethics or legality of pinching your customers' customers; I would never buy a digital press without a clause in the contract that states something like: "<Vendor company> agrees that it will under no circumstances make direct approaches to existing or future-acquired customers of <printer's name>, as supplied in annexure #X, with a view to providing the same printing or allied services that <printer's name> supplies, without the written consent of <print's name>."
If you can't get that clause included, buy elsewhere - there are plenty of choices and even no-click options from some vendors.
You might also want to consider GAMAA's laudable code of conduct, if the supplier is a member, which under 'relationships with customers' states:
"The customer is the basis of our business existence. We have a responsibility to our customers and to ourselves to foster a relationship of trust and respect which ensures a long-lasting mutually profitable association. To achieve this goal: We will strive at all times to provide quality products and services. We will advise our customers wisely on the products and services we market and their suitability to our customers' needs. We will not knowingly mislead or misrepresent our products and services in pursuit of competitive advantage."
Andy McCourt