Our panel of experts this month takes a look at channel evolution. From the likelihood of the paperless office to evolving technologies to where they stand on “adapt or die,” we had some fun with this month’s panel, who as always were full of interesting ideas and insights – oh, and apparently really miss vinyl records.
We’re seeing pretty rough financial numbers coming out of virtually all of the major office equipment OEMs. Do you have any advice for them?
Doug Albregts: I guess … keep delivering bad results? Our business has stayed relatively strong so I would be foolish to give advice! But in recent months, we’ve also seen some negative trends. Although our sales have been flat to slightly growing in document, we’ve grown our market share considerably. I like to see all OEMs do well because it means our industry is flourishing. That’s not happening right now. I think we are headed into some rough waters. I don’t think it’s just a hiccup as we’ve seen in the past. There are some telltale signs of diminishing margins and a bit of panic happening by both dealers and OEMs. I think we are in for some interesting times.
Jim D’Emidio: We have to face up to the fact that our industry is maturing. We will never see the amount of prints and copies that we experienced in the past. Muratec America started out as a facsimile manufacturer in the early 1980s, and we experienced the same type of decline in the fax business in the mid-1990s. In 1994, there were 46 different vendors of facsimile machines in the U.S. market. By 2001 there were less than 10 vendors of fax machines in the U.S. and we transitioned from fax to a copying business to an MFP business. To survive, other companies need to develop adjacency businesses that will generate revenue and profit. Some companies are moving more to services like managed network services, managed document services and managed print services. We are focused on other printing-related businesses including color label presses and packaging printing. We think this is an area of growth for dealers and manufacturers and very similar to the annuity stream copier dealers are familiar with. These are niche businesses. There is a learning curve that dealers must master. However, end-user companies are looking at ways of producing labels and packaging items that can help market and advertise their companies. Dealers and manufacturers have to increase their business scope to add new technologies. Otherwise, they will see their industries decline like the typewriter and fax industries.
Greg Welchans: As you have stated, most manufacturers are facing really challenging times. We are seeing positive trends in “print as a service” and related models. It is easier for planning and budgeting to have steady OPEX spend versus unpredictable CAPEX with big swings. However, while some of these new programs are compelling, it won’t be enough for most of the OEMs to reach their goals. We are now seeing a major shift in how decision makers provide services for their users. Historically, IT managers had to purchase their own dedicated equipment (like in a data center) and staff accordingly to manage that equipment. Now, there are cloud providers, and companies that can get the same capabilities, often for a little less, because the resources providing the service are shared over many customers rather than being dedicated to just one company. Therefore, the cost is less for everyone — less maintenance, staffing requirements, etc. I also think that trying to monetize the “security” aspect of printers is a new avenue of potential profitability that many OEMs are investigating and could provide some competitive advantages in certain verticals such as financial and health care. These trends, combined with the fact that managed print is still growing, are of critical importance for OEMs. If they can achieve the best overall value proposition, combined with a managed print platform that provides the key to a contractual engagement, they can guarantee an OEM consumable will be used.
Is the paperless office going to happen?
Albregts: No. But we will see the smart office continuing to help reduce paper consumption. It’s about managing documents and information instead of simply paper.
D’Emidio: We will never completely get rid of paper. However, the trend is to use technology to limit the amount of paper used in companies, education and government. As the baby boomers retire out of the workforce, they are being replaced by employees that do not depend on paper documents. These new workers are perfectly suited to consume information via their phones, computer screens or tablets. Paper is seen as inefficient and cumbersome. Nevertheless, paper will still have an important role in many companies in the future. However, this role is less and less important to organizations. Therefore, the value they place on the equipment and services that create print are less important and valuable to the organization.
Bill Fraser: No. While the amount of printing and copying has gone down over the last 20 years, a study conducted by Two Sides, a global organization created to promote the responsible production, use and sustainability of print and paper, states that 88 percent of respondents indicated that they understood, retained or used information better when they read print on paper vs. reading on electronic devices. Overall, the survey reported that 81 percent of respondents prefer to read print on paper over electronics. While age does play a role in these preferences, 68 percent of ALL age respondents indicated they print documents because they are easier to read.
Luke Goldberg: Not in the foreseeable future; paper is still too integral to many verticals and it’s too ingrained in many workflows to go away anytime soon. The numbers and research reflect that — there are still over 3 trillion pages printed per year, and although, granted, those pages are declining at approximately 1.5 to 2 percent per year, it’s still a massive amount of pages. In addition, millennials who many believed would be a less paper-intensive generation, are projected to print just as much as prior generations — ESPECIALLY if mobile print is made more convenient, secure, and app driven.
Chris McFarlane: Probably yes, but not in the immediate future. Between now and the paperless office I suspect we will see a continuation of the trend toward the paper-light office. There are still many verticals such as the legal, financial and government sectors that are hard pressed to go completely paperless. While document management has enabled some industries to already go paper-light and others to significantly reduce their print volumes, there are a lot of systems that need to be in place for the paperless office to become a reality.
Unfortunately, it is not simply a matter of adopting a document management solution. Internal processes involving communication and documentation need to be reworked, including considerations for automation, remaining manual processes and what these changes mean for employees within their day-to-day business activities. To truly drive efficiency, any solution a business uses for document management needs to integrate with existing tools such as workflow automation and managed print solutions. If management fails to anticipate these potential obstacles, a solution designed to help them go paperless will create more problems than it solves.
Welchans: I believe we will continue to see a trend downward in office printing and there is plenty of industry research to support that. However, I don’t believe it will ever disappear completely. It seems clear that as the number of “boomers” in the workforce declines, so will office printing; however, interestingly enough, I think printing a document in the future will mean “This is really important … read me.” We are all so flooded with digital media that it’s hard to filter and consume.
What do you consider the biggest challenge in evolving the office right now?
Albregts: The biggest challenge is that discussed in the previous question — a movement away from paper. That means a new business model and a transition of how information is managed and how all of us can make money from this change. And of course, no two customers are alike, so those industry stakeholders that can be the catalyst for change will lead the charge and benefit from this transformation.
D’Emidio: Our industry is being commoditized as companies don’t value the products and services as they once did. Again, the trend is similar to what we saw in the facsimile industry 20 years ago — businesses are retaining their equipment and not upgrading at the same pace they had in the past. I remember end users telling me that they would hold on to equipment longer because it’s “still working” and they are forecasting less demand in the future on that same equipment. Dealers have to stay relevant to their end-user customers. Services is one way to maintain their position within their customers. Dealers must look at other adjacency products that will help maintain their relevancy in the future.
Fraser: There are several interconnected challenges in the evolving office today. The largest is obviously security – security of our data, our systems and who can access that information. Dealers are also challenged in finding talented personnel to support and drive the use of software platforms that power many of our everyday processes. The final challenge is creating new business practices and cost justifying the investment in the software technology so you can remain highly competitive in the marketplace.
Goldberg: It’s always a challenge to get business to embrace change. In many cases change is synonymous with disruption and can only be driven if there is a concrete financial advantage. In our business, successful dealers are becoming more and more valuable in driving evolution as they become more than providers of things — they become trusted advisors. Achieving this mantle of trust sometimes is better achieved in steps; in our business, sometimes the first step is creating better cost productivity with print and devices via Tier 1 MPS. Once trust is gained here you can evolve into looking at users, workflows, etc. From there you can start to consider security, more comprehensive managed networks, etc. The bottom line is that change usually must come incrementally driven by a service provider who, one step at a time, creates a track record that demonstrates consultative value and ultimately cost savings and greater productivity in multiple arenas.
McFarlane: While rapidly changing technologies seems like the most pressing challenge for businesses, I think negotiating the generational and emotional gaps are the larger challenges. Technology is advancing at an exponential rate whether we want it to or not, but the willingness to adopt these technologies is the largest obstacle for businesses looking to grow and succeed during this period of rapid change.
According to several studies, millennials surpassed Generation X to become the largest generation in the U.S. workforce last year. This hyper-connected and technologically savvy generation consists of digital natives who have grown up with computers and the internet. They are quick to adopt new technologies and their agile approach is something that the older generation of founders and entrepreneurs in the dealer, reseller and distributor community will need to incorporate into their business strategies and actions to remain competitive in today’s markets.
Welchans: Keeping up with government over-regulation! Technology has changed how we connect to our work and our lawmakers are penalizing businesses because employees are working extended hours or “off-hours” more than ever. Workforces around the world are transforming. It’s important that we compete on a global scale and not get discouraged from doing so. With that said, I am of the belief that work/life balance is critical for one to truly reach their potential.
In your opinion, what’s the biggest technological advancement that’s occurred in the office space?
Albregts: The personal computer.
D’Emidio: In 2007-2008 customers started using Apple tablets and smartphones as business tools. This trend accelerated in the past 10 years, and information is now consumed differently than it was in the past. Data is transported electronically and consumed electronically. The office worker no longer relies on paper memos, paper documents or paper reports. Many of these mainstays of the business world are now consumed electronically. This has impacted every part of the business, including HR, marketing, finance and operations. Years ago, every employee received a HR binder. Now that is either PDF or available online. Businesses are finding new ways to distribute information without having to print that information. For example, airlines are replacing pilot, flight attendant and engineer handbooks with tablets. Pilots no longer have to carry those bulky big briefcases with charts and manuals. Now all those charts and manuals are in one convenient tablet that can be updated daily from the airline operations center. Just a few years ago that information was mailed to every pilot, flight attendant and engineer. This will save airlines millions of dollars a year and millions of pages a year.
Fraser: The large amount of software integration and business process improvements with multifunction devices connected to the Internet of Things.
McFarlane: The largest technological advancement that has happened in the office space in recent years is the dramatically enhanced capability to automate processes. Thinking back only 10 years, there were users who were faxing their supply orders to distributors, sometimes handwritten. Since then, there has been a steady series of developments in print management software that have incorporated the latest technologies to improve data collection, analysis, reporting and “actioning.”
The first MPS solutions used the then-latest advances in remote technology and cloud computing to simplify deployment and monitoring for users. They answered the Level 1-type questions; [for example] what is the meter read? Since then, MPS solutions have evolved, some now utilizing predictive analytics and leveraging APIs to automate manual processes in the industry. One such example is automated supplies fulfilment, an end-to-end solution that simplifies the ordering process for businesses at every level of the supply chain, including end users, resellers and distributors. From the start, MPS solutions were designed to drive efficiency and cut costs for users, and automation continues to realize these benefits for businesses.
Welchans: While not a new phenomenon, the advancement of the Internet of Things (IoT) in conjunction with smartphones and tablets is still transforming our lives, both personally and professionally. The virtual office has enabled people to work from more places and has lengthened the workday. While people claim they have more freedom because of these advancements, in some cases, the opposite may actually be true as workforces may be deemed available 24/7.
Name a change you’ve had to make in the way you work due to evolving technologies.
Fraser: Investing in infrastructure, talented personnel and training to support all of the software platforms and applications that multifunction devices connected to the Internet of Things use. You can have all of the software in the world to run processes, but if you can’t support those applications with focused, talented people and get scale in the marketplace, your service levels will suffer tremendously. As you get scale, you also need to have the ability to generate recurring revenue.
McFarlane: Perhaps the largest change that we have had to make, and a change we see in every aspect of our lives, is how we communicate. Consider the evolution of the mobile phone. The first version of the mobile phone as we know it was introduced in 1973, made commercially available in the 1980s and has since gone through numerous iterations and generations. Now, we “live” on our smartphones and they are a fundamental part of our daily lives. As the name suggests, smartphones are no longer just phones, but devices that allow us to leverage the connectivity of the Internet to connect with a global audience. While phone and email are still the order of the day for much of business communication, the nature of engagement has changed. The internet has opened doors to different modes of communication via social media, video, online communities and more. Each platform comes with its down set of expectations and assumptions which impact the message.
Welchans: As stated in the previous questions, we are ALL working more and longer hours because technology has enabled it! When I want to spend time with friends and family, I have to put my phone and other connected devices in another room so I am not answering emails or texts at 11 p.m. The balance between work and free time has become very skewed. It will be interesting to observe what happens with the next generations of workers and leaders. I believe there will be many that get burned out far before their time if they don’t change their smartphone habits and lifestyles.
Is there a way for the human element to positively impact the stressors of technological change and if so, how?
Albregts: An interesting query … find a cabin in the woods and check out for a while. That’s what I do. It does help! Humans created technology and we have the ability to run from it when it’s all-consuming.
Fraser: Security training. Training personnel on the security of data and systems is the best way we can impact the massive technological changes that are all around us.
Goldberg: As I stated previously when discussing the evolution of the office equipment dealer into a trusted solution provider, it all starts with their ability to help implement change in a non-disruptive manner to the actual users who must ultimately assimilate changes that are made. in business, “change” is first accepted and adopted at the C level as a cost and efficiency driver. It is then up to the management and workers to adopt something not of their making. In order to create the best buy-in and mitigate stressors I think it’s critical for them to have the right type of training and support at implementation. I believe the workforce must be made to feel part of the process and not just passive implementers. Staff should be aware of change, asked for feedback, and supported and trained by actual humans so they feel part of the process and empowered in its success.
McFarlane: With the automation of processes, there is a pervasive fear that machines will replace people in the office. As machine learning and artificial intelligence (AI) become more advanced, cognitive computing can do more with data, predicting likely outcomes and establishing the best course of action utilizing all available information in a manner not humanly possible. AI can parse and synthesize significantly more data than humans can in a short period of time, making them ideal for identifying and understanding trends in data and executing commands based on this information.
However, one of the limitations of such technologies is intuition. Despite the progress being made in cognitive computing, machines still rely on known, historical data to calculate correct responses and generate actionable information. The “human element” that allows us to react to unknown situations is a valuable and essential skill in all aspects of business. Technology makes our day-to-day lives easier by automating repetitive and time-consuming processes, but these processes are part of a larger, strategic direction that, in spite of the data and analytics available, relies largely on business sense, intuition and the ability to work with unknowns. Technology can make the analysis less stressful so that we can focus on making the best decision.
It is not a matter of machines displacing people, but of people using machines to drive efficiency, generate more valuable insights and work smarter.
Welchans: I think business leaders can set the tone in a positive way for their organizations and I think that can often cascade into the family lives of those within that organization. Tone has always been established by leaders and managers within any environment regardless of the tools and resources available. If those leaders reinforce the positive aspects of any technological change and are respectful of the downstream impact to others, then stress factors can be minimized and the upside can be realized.
Were the dinosaurs wiped out by their failure to evolve or by forces beyond their control?
Albregts: Both. But if I had to pick one, the failure to evolve allowed the forces beyond their control to wipe them out. Sad.
D’Emidio: I’m no paleontologist but dinosaurs were wiped out due to a rapid change in the climate due to a meteor strike on the earth. Therefore, the earth cooled rapidly and the dinosaurs could not adapt to the quickly changing environment. The difference is dealers and manufacturers can adapt to this rapidly changing environment. This is my third industry that has been impacted by changes in technology. You either adapt or disappear!
Fraser: Forces beyond their control. Scientists have widely agreed that dinosaurs were wiped out through a giant collision between Earth and a giant asteroid or comet that struck just off the coast of the Yucatan peninsula approximately 65 million years ago.
Goldberg: Love it, not your typical industry question. There is only one species in the history of life that has had the ability to control their environment in the way that humans have — in some cases to our own detriment as our unique ability has caused populations to explode, resources to be impacted, and the environment to be pushed to the brink. Other species cannot expand beyond the capabilities of their environment to support them as natural selection kills the weak and the old to make sure populations cannot grow at a faster rate than resources can support. Since the dinosaurs didn’t have the capability to control their environment it’s hard to pin their demise on a failure to evolve. Had their die-off been proven to occur due to overconsumption of resources we could blame them for their gluttonous ways. It still isn’t proven what ultimately caused their demise; meteors obliterating them, volcano ash blotting out the sun, climactic shift — we still don’t know for sure. Since we are that rare species that CAN control our own extinction events we should all consider the ramifications of our actions. Just don’t ask us to stop printing or for me to give up my Maserati!
Welchans: I don’t think we will EVER know — none of us were there! Maybe it was the right combination of both.
If there was one thing you could have back that disappeared due to technology, what would it be?
Albregts: The handwritten note.
D’Emidio: I do miss receiving handwritten letters from friends and families traveling. It was always a joy to read a letter from someone traveling overseas about their adventures. I just don’t enjoy as much seeing all these posts on Facebook and Snapchat. Instant messaging and posts have taken the mystery out of travel. There is nothing better than to get a detailed letter of someone’s adventures in a part of the world that you are unfamiliar with. These descriptions help create a vision of what the traveler was experiencing. Now you just see a video post or multiple photographs. No longer a mystery!
Goldberg: Even though it still exists, I would have to say vinyl records. Vinyl now is a cool anachronism for trendoids to show how retro they are. You can never go home again, and vinyl will never be what it was before music got compressed down into the formats it exists in today. When I was 9 or 10 and started to listen to Zeppelin IV, Quadrophenia, the Doors’ first record, Rubber Soul, etc., there was no substitute for the crackle as the needle hit the vinyl and finally the climactic moment when the needle hit the groove and rock and roll pulses through the speakers. There is a scene from the movie “Almost Famous” where the main character’s older sister leaves home and leaves her brother her record collection. There is no such magic in sharing a download. Is it easier to transport my 10,000+ songs on a tiny phone? Yes, but will anything ever replace that sound or the coolness of the album covers such as “Sticky Fingers,” “Wish You Were Here,” “London Calling,” “Physical Graffiti” … I could go on and on.
Welchans: Definitely the vinyl record album — I loved the creativity of the covers and studied them front to back. The double albums with the words to the songs printed on the inside were the BEST!