Harris Technologies: Succeeding in a Dying Industry against Larger Competitors, by Applying a 20-year-old Solution
The Managed Print Service model was introduced in 1998 by HP and Xerox as a strategy to fight commoditization. The popular strategy was to standardize the customer environment on one brand of product, increase placement of large MFPs, and drive high-cost color page volume. In conference rooms across the country, PowerPoint presentations portrayed manufacturers as embracing the shift from products to services, a strategy successfully introduced years earlier by IBM. Customers eventually could tell the difference between a new services business versus just a marketing campaign. OEM sales teams were still compensated on moving hardware, so no matter how nice the idea of outsourcing was, it came with the strings of ripping and replacing all of the gear. Whatever the outward appearance, the business model that mixed product sales with services has begun to crack as manufacturers struggle to maintain profitability in a declining industry.
“Manufacturers have reacted to lower profits by pulling back services,” says Ben Harris, President and Founder of Harris Technologies. “The industry is in turmoil right now. HP and Xerox have spun off their print businesses. Lexmark sold to a large Chinese toner conglomerate, and Ricoh just laid off thousands of salespeople. Customers are coming to us now more than ever asking for help creating some distance between their users and this chaos.”
"The seat based cost model accelerates the time to value, delivering results starting in the first month because the customer and vendor share a common goal of reducing pages and spend"
So how has Harris Technologies succeeded in standing out in the MPS crowd? Why do organizations see Harris as an innovative alternative? The answer is simpler than you think.
Innovative Company Structure
“We started by focusing on the company we were building, rather than the product we were selling,” says Harris. “The compensation and benefits had to be right out of Silicon Valley. The ambition and work ethic were crafted from a college football locker room and the compassion and community involvement had to give the feel of a non-profit.
‘If you want to build a ship, don't drum up the men to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea.’”
Once you build a great company, that has attracted great people, you give them a great mission. For Harris, the mission was to champion the customer’s agenda and eliminate print from business.
Innovative Go-to-Market Strategy
The concept of the paperless office had been a promise for decades. The industry offering the cure, however, was making money off the sickness.
Organizations seeking Managed Print Services hired hardware manufacturers and software companies. The printer and copier manufacturers promised cost savings by selling new “more efficient” hardware. Software companies offered expensive tools that enabled organizations to police their own environment. How can organizations have success when the industry professionals they hire don’t make money when they print less?
Harris Technologies adopted an innovative channel strategy of selling through IT integrators, service providers, and business consulting firms. “Trying to build a sales organization that competes directly with multi-billion dollar OEMs is a losing battle,” states Jim Heffernan, VP of Strategic Accounts at Harris. “A better channel strategy was to leverage the existing relationships of service providers and to offer MPS as an add-on to an existing contract. Organizations rely on a partner they already trust and can hold accountable. That partner has a specialist on the team who is hyper-focused on results in a single area of their IT environment.”
We started by focusing on the company we were building, rather than the product we were selling
So Harris Technologies took an old concept and is selling it in a new way. As a vendor neutral services provider, there is no hardware to buy, and no software license with which to commit. Companies outsource the strategy, policies, fulfillment, and results to a specialist who knows all the tricks of the trade. Harris structures a contract so that both the client and Harris make money when page volume goes down.
Harris has developed an internal team supported by external partners that enables them to deliver MPS at a local or massive deployment. “Most companies our size play in their backyards because they don’t have a solution that is scalable. We go after deals with 100 machines as well as those with 100,000.”
Innovative Financial Model
How organizations use technology has changed.
To the CIO, cost-per-page (CPP) is meaningless as a tool. CPP puts the customer and the vendor on different sides of the table with opposing objectives. The CIO wants to drive down cost while the vendor wants to increase page volumes.
“Cost-per-page and aggressive discounts on big MFPs are lost leaders popular with the heavy weights in our industry,” says Tony Grasso, V.P. of Sales at Harris Technologies. “They are used to lure customers in, knowing they will spend more once in the door. Harris has taken a different approach focusing on total cost of ownership and the continual delivery that results from collaboration with focus on a common goal.”
Harris Technologies introduces to organizations seat based billing for print, similar to the preferred model for acquisition of IT services. The focus shifts from upfront crazy deals to measurable outcomes and lower total cost of ownership. Seat Based Billing (SBB) is a relevant metric for budgeting and cost control.
“We recognize that organizations understand the SBB model but need time to migrate from one of the more traditional pricing methods,” says Mark Pilkenton, V.P. of Managed Services at Harris. “Our flexibility allows us to do that in years 2 or 3, for example.” During quarterly business reviews, Harris will report the TCO and divide it by the number of print users to establish SBB as a KPI and for charge backs. Harris will suggest adding an overage rate for allocating costs to abusers and high-volume areas.
“We believe in sharing the risk with our customers,” says Harris. “The seat based cost model accelerates the time to value, delivering results starting in the first month because the customer and vendor share a common goal of reducing pages and spend.”
To commercial and government organizations across the United States, Harris Technologies has represented an innovative alternative to past MPS programs that failed to deliver promised results. With the introduction through a trusted IT partner, the conversation is immediately different with a brand-neutral perspective and a focus on the customer’s agenda and goals. Seat based financial models ensure a shared risk and common focus on reducing costs by spending less on hardware and by reducing print volume. Created as a print services organization from the ground up, Harris Technologies is proving to be a disruptive player in a print industry that despite the headlines, is far from dead.