by Greg Walters | 12/8/14
I'm writing this three weeks after the Executive Connection Summit and I’m still feeling the effects. Intel, SAP, Cisco — foundational members of the technology industry, stalwart believers in all things connected, came to speak here in our backyard. To be sure, it stands as the best show in the industry, with superior content. As Gavin Williams said, “The goal was really to educate as much of the industry as possible about the innovation available today.” The bar is officially higher, but there’s something more recondite just under the surface.
I comment about the players at center stage, but I’ve always enjoyed getting a feel for what the attendees find attractive - the dialogue between the talks. That’s the gold.
I thought of the Internet of Things conversations, how independent dealers are capitalizing on the technology not only in implementing but offering those same services to clients. It wasn’t until I remembered an onstage conversation when things started to click. After one panelist on stage lamented the challenges of converting to a new accounting system, I chatted with a few people about moving to different CRMs and the difficulty around data conversion. One company decided to operate both the old and the new systems in parallel as legacy data is weaned over to the new system. Another is hiring a staff of “keypunch operators” to input all existing contracts and customer information into Forza.
The underlining tension, the Wookie in the Room, was simple: People know a better accounting system is out there, but getting to it is difficult because of our old school investments. Time and again, I spoke with people who recognized the need to switch but anticipated huge costs in labor and time with the transitional project of moving to a new CRM/accounting system. The tension was palpable.
Imagine needing to have an leg broken and reset because the original setting was primitive. At one time, healing a broken limb was as easy as tying the bone together with tree branches and twine. Years later, walking is painful but you’ve adapted to living with the torment.
One day, you start to hear about better reparative methods and professionals are recommending a new process - one that will relieve your pain. Although you're looking forward to walking without agony, the thought of re-breaking your leg is daunting.
We’ve got to break the bone, reset, then heal.
Monopolistic Oligopoly This Ain’t
The definition of an oligopoly is "a state of limited competition, in which a market is shared by a small number of producers or sellers.” If you look at our industry and the available CRM systems, it has moved from an oligopoly toward a monopoly. Choices are nearly nonexistent. What is more, the cost of staying with the old way is growing, but the mental battle is uphill.
This is the undercurrent I was feeling: the times are changing, the attitudes and visions are evolving, the “need" to boldly go has matured into a “want” to get out there and “do” — but the old structures are making it more difficult when they should be invisibly supporting our new vision quest.
Consider this: managing an inventory of copiers and supplies is pretty straightforward. Managing cost per copy billing and service contracts is unique to the imaging industry, but today, everyone is doing it. The rub is this: a 40-year-old business model is not good enough, so why are our software programs stuck in that world?
Here is the crux of the situation - The existing copier-based accounting systems do not support IT service agreements, dispatch or ticketing process. The existing managed (IT) services CRMs do not handle cost per image billing programs. Interfacing between the two, typically involves dumping spreadsheets or monthly journal entries - this is not integration. So we do what we always do: find a bigger hammer, bang the systems together, close the door, brush off the toner and move on.
The show underlined the blaring challenge we all face: we’ve got to change our business models, in order to do that, we need infrastructure that will easily support this new business model. Selling is easy, managing and reducing costs directly impact our sustainability. Changing the model is useless when the infrastructure doesn’t support growth into new directions.
The engine room of every dealership, MPS practice, VAR and managed services provider is its accounting system. For the last 30 or 40 years, our industry has maintained some of the most ghastly and cumbersome accounting systems in existence. How many ex-IKONrs remember the great transformation to Oracle and the whirlpool of suck known as OnTarget? Today, these foundations of sand still exist.
The world is moving on, business is changing, a new way of work is on its way. Our systems must help make this jump, and we must be willing to let go of the old ways. We’ve got to see that little choice is no choice.
The hierarchy in imaging channel accounting systems has shifted from an oligopoly to a monopolistic medley of inflexible, service-parts centric systems, stitched together over time. Many dealer systems are so big, the only way for further expansion is to initiate a bare-metal rebuild.
This is the tone I detected at the executive summit - we’re going to switch into this new realm of business intelligence, it is going to be painful, but we’re still going to do it.