Jacqui Hendriks, Research and Consulting Manager at IDC, provides her take on the state of play, outlining the challenging times ahead for print market players
IDC predicts that by 2021, 40 per cent of companies in developed regions will have experienced a double-digit decline in office based printing due to the ability to intelligently mine data and automate the extraction of business intelligence*. This is not the paperless office scenario, but it is significantly less paper.
We are already using 3rd Platform (big data analytics, cloud, mobile and social business) technologies in our everyday lives. They are being used to enhance the business services provided to us as well as enabling self-service, without being overly aware of the technology behind these services.
Increasingly, big data analytics and innovation accelerators such as cognitive systems and robotic process automation are behind advancements in document and content management. They provide the ability to not only ‘search and find’ information but to intelligently leverage information in a way that is valuable to the business due to powerful analytics capability and process automation. This functionality will be in high demand in three key areas:
For high-volume processes that are essential but not revenue-generating e.g. compliance
For customer-centric processes that inﬂuence customer satisfaction and retention
For processes that help to reduce the invoice-to-revenue cycles Contrary to popular belief, just as technology development accelerates, the pace of print volume decline will also accelerate, although there will continue to be a role for office print.
The changing print market landscape
Printer vendors and channel partners are already experiencing falling service revenues – revenues that are intrinsically linked to printed pages in the office. Some market players are mainly or solely focused on squeezing print revenues as hard as possible. For many, this will mean trying to turn transactional print business into contractual business – from a simple supplies replenishment contract over a few years to a contract offering more in the way of print management and even document management – anything to change transactional business into a recurring revenue stream.
Others are way above the curve. They are also looking at expanding their capabilities and services in a bid to replace these falling office page volumes and associated revenues. However, such once lucrative revenues are difficult to replace and market players who do not already have a strategy in place to develop additional business, will find themselves in trouble.
An aggressively competitive environment becomes even more so if you consider the fast pace of technological change. As a result, although market players strive to differentiate their product, solutions and services offerings, new announcements today for launch in the next six months may very well be met with other similar product enhancements by market rivals at launch.
Speed to market is critical. A number of manufacturers have more recently been wholly or partially acquired by investors, who may also be market players – the key benefit for them has been the ability to leverage this investment to accelerate time-to-market – think of particularly Apex/Lexmark, Foxconn/Sharp and now Fujiflm/Xerox.
In exploring additional market opportunities, vendors are deploying various tactics. The main three scenarios are:
Developing an IT services business:
The assumption is that some customers may prefer one IT services provider and it is more likely that print services engagement would be absorbed into a larger managed IT services engagement.
For print vendors to be granted permission-to-play, they need to build IT skills to compete with these IT services providers. Several traditional printer vendors have worked hard to acquire the necessary skills whether through recruitment or acquisition. Changing the perception of a print vendor to an IT services provider is in itself a challenge. IDC will be exploring how successful print vendors have been in changing customer perception of them as credible IT services partners.
Building a managed content or document services business:
Understanding that hard copy processes are liked to be automated, vendors have developed propositions for addressing workﬂow challenges beginning with functional processes – such as accounts payable/receivable and human resources management – and extending into industry specific workﬂows.
General customer onboarding solutions can be adapted and significantly enhanced to address the wider requirements for onboarding banking customers, registering healthcare patients or student administration. Vertical markets provide varying degrees of opportunity depending on current levels of business process management maturity and barriers to market entry.
Leveraging broader vendor portfolios to build new market offerings:
Vendors have the opportunity to complement their print hardware and software portfolios with other products and solutions developed by the wider organisation. Most notably is the ability to address the needs arising from changing working practices with smart office services designed to enhance collaboration across virtual working groups.
The reaction of many channel partners to changing business models is very mixed. Some will embrace it, some will dismiss it and some are waiting for early converters to avoid the pitfalls and leverage best practices. The easier a vendor can make the transition for its channel partner, the better.
What this means for IT
IT will need to bolster its digital capabilities as technology development accelerates. Its understanding of consumer trends will be a significant advantage as increasingly employees expect technology in the consumer world to be readily available in the business world (the hyper consumerisation of IT). Relevant skills will be scarcer. Turning to an innovative services partner to address the challenge is an attractive option.
More collaboration will be required between IT, the line of business and a Chief Technology Officer or Digital Transformation Offcer if there is one. It is important not only to identify which challenges to prioritise but also not to restrict considerations within a special project team – the technology adoption must consider company-wide information management requirements.
Management buy-in is essential. There is a requirement to develop clear rationale for technology adoption and specific benefits. And place specific emphasis on customer-centric processes to improve response times and easier resolution of customer issues. However, print will still play a major role in delivering content to customers, as they become bombarded with electronic communications.
Of course, print security is a whole other issue and is bigger than the scope of this particular article.
What this means for end-customers
Partner with print and document services provider who can support your digital transformation – they need to be innovative and demonstrate that they are investing the right technologies to support your business through their project roadmap, as well as advise on which technologies will provide the greatest benefit to your organisation.
Deploy a change management process, as technology adoption results in a fundamental reconstruction in how companies do business and provides a clear understanding of what skills are required in future.
SMBs should not assume these technologies are for larger enterprises only. It is an opportunity to easily trial and adopt new technologies, while larger organisations face longer timescales for assessment, approval and implementation.
What this means for market players
Vendors need to evolve to survive and they need to ensure they have the right partners to take the journey with them. Not all of them will be willing and not all will qualify. Vendors need to assess their current partnerships to identify their appetite for change.
In building out adjacent services, vendors and partners need to identify the skills gap and opt to recruit or acquire skills.
Channel partners are at a crossroads. They need to decide where business is for them, how long they can survive as they are – and is that enough until they plan to retire, and if opting for building the business, how they plan to achieve this.
Jacqui Hendriks heads up IDC’s European Managed Print Services and Document Solutions research and consulting practice. Hendriks has almost 25 years’ experience of working in the output and information management market, working in industry for both Ricoh and Océ (acquired by Canon), as a research program manager for Gartner Group and also various European consulting roles at IDC. Her experience enables her to provide strategic planners and marketers, within technology companies, with market and customer insight, analysis, tactical advice, forecasting and marketing intelligence to senior management teams at local, regional and worldwide levels.
Hendriks is leveraging her knowledge of the market and significant experience of managing cross-technology custom projects to support providers of basic and managed print services and solutions, monitoring the evolution from print services to broader support for business process optimisation. This includes experience gained from industry specific business process projects and the development of sales and marketing content for tactical market implementation including rich media content development, moderating executive events and involvement in client workshops.