April 2007 Office Technology

01OT0407 3/31/07 8:51 AM Page 1

BEI ad 3/20/07 4:06 PM Page 1

FM Audit Apr 07 3/20/07 11:24 AM Page 1

A Taxing Problem

Consider the implications

of your generosityby Robert C. GoldbergBTA General CounselGifts given by employers have tax

consequences for the giver as well as the recipient.

4 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7

CONTENTS

6

8

30

Executive Director’s Page

BTA President’s Message

Advertiser Index

Development Platforms

Providing a new level

of productivityby Brent HoskinsOffice Technology MagazineHow can the MFP provide a

new level of productivity, ma-

king workers even more effi-

cient? The answer, it appears,

lies in open development platforms, allowing ISVs,

dealers and MFP manufacturers to provide a custom

interface at the MFP control panel to virtually any soft-

ware application.

D E P A R T M E N T S

Volume 13 � No. 10

16 Close-up: DocuWorld ’07

DocuWare Corp. hosts

annual partner meetingby Brent HoskinsOffice Technology MagazineProviding an opportunity to thank

its dealers, introduce the latest ver-

sion of its product and share insight into the solution

selling business, DocuWare Corp. hosted its annual

partner meeting March 5 in Orlando, Fla.

10

18

F E A T U R E A R T I C L E S

The Solutions Game

Becoming a total networked

solutions providerby Layton GetsingerCopyPro Inc.Unless the dealer channel adapts to

and adopts a networked solutions

strategy soon, many will inevitably go the way of the

margins — down the tubes. This article explains one way

to make the transition into the world of solution selling.

Employee Evaluations

The key to success is to

formalize a plan & stick to itby Jim KahrsProsperity Plus Management Consulting Inc.Make your yearly review process a

successful and productive management tool.

25

C O U R T S & C A P I T O L S

P R I N C I P A L I S S U E S

24

Recruiting Tenured Reps

How to attract success &

experience to your sales forceby Jamie SchorrCezanne Resources, LLCThe industry needs a scouting pro-

gram to bring its top players back to the team.

29

20 Competing in a Digital World

Moving from a TCO

to a TVO strategyBy Randall DazoInfoTrendsAs competition in today’s digital

world becomes more complex, deal-

ers need to move from a Total Cost of Ownership strategy

to a Total Value of Ownership strategy, because it offers a

superior method for assessing the benefits of IT projects.

S E L L I N G S O L U T I O N SWinning State Contracts

There are several

things to keep in mindby Art SchwartzImage Systems GroupLearn about state contract procedures and how to

enhance your chances of winning a state contract.

28

Business Technology Association� May Education Calendar23

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EXECUTIVE DIRECTOR’S PAGE

For the past few

months, the Bus-

iness Technology

Association and Inter-

national Communica-

tion Research have

been preparing the

2007 Business Equip-

ment Quota Index (BEQI). It will serve as an

outstanding resource for dealers and manu-

facturers to forecast sales, evaluate territo-

ries, measure sales potential, establish sales

quotas and measure sales performance.

How does the BEQI work? Simply stated,

it provides product indices at the state,

county, ZIP code and MSA (metropolitan

statistical area) level for 15 specific product

categories. A formula included in the BEQI

uses the indices and unit placement projec-

tions for each of the 15 product categories

from one or more of the industry’s leading

market research firms. The formula pro-

vides the user with the market potential

(product demand) for the product cate-

gories for each geographic level — state,

county, ZIP and MSA — in the U.S. market.

The indices themselves were determined,

in part, through surveys conducted with

Am erican companies regarding th eir

current office technology products use and

their expectations for future acquisitions.

Surveys were conducted with companies in

12 major industry groups, such as: manu-

facturing; f inance, insurance and real

estate; health care and social assistance;

and educational services.

The most recent BEQI, produced in 2004,

had only eight product categories, including

the general, separate categories of “copy

machines” and “multifunction devices.” Cer-

tainly, since that time, the nature of the

industry has changed. For example, today

there is a particular interest in selling color-

enabled MFPs. That reality, coupled with the

fact that the industry’s products are gener-

ally categorized by speed, led to several key

changes for the 2007 BEQI, reflected in its

15 product categories. They are:

� Monochrome MFPs: All monochrome

MFPs; 11-30 ppm (Segments 1 & 2); 31-69 ppm

(Segments 3 & 4); and 70+ (Segments 5 & 6)

� Color MFPs: All color MFPs; 11-30 ppm

(Segments 1 & 2); 31-69 ppm (Segments 3 &

4); and 70+ (Segments 5 & 6)

� All monochrome and color MFPs

� Single-function color laser printers: All

single-function color laser printers; 11-30

ppm (Segments 1 & 2); 31-69 ppm (Seg-

ments 3 & 4); and 70+ (Segments 5 & 6)

� All single-function monochrome laser

printers

� Facsimile machines

Another change for the 2007 BEQI is the

pricing. Rather than dealers purchasing

geographic indices they do not necessarily

need in order to receive the ones they desire,

dealers can buy indices by state and MSA.

The following dealer pricing will apply:

� $150 per state, includes state index

and separate indices for each ZIP and

county in that state. (Non-member: $300)

� $125 per MSA, includes MSA index

and separate indices for each ZIP in that

MSA. (Non-member: $250)

The BEQI is scheduled to be completed

in May. An order form will be posted on BTA’s

Web site (www.bta.org). For BTA vendor and

service associate member pricing, e-mail me

at [email protected]. Special thanks to our spon-

sors: Hewlett-Packard, Kyocera Mita America

and Toshiba America Business Solutions Inc.

— Brent Hoskins

New & Improved ‘07BEQI Available Soon

Executive Director/BTAEditor/Office Technology

Brent [email protected]

(816) 303-4040

Associate EditorElizabeth Marvel

[email protected](816) 303-4060

Contributing WritersRandall Dazo, InfoTrends

www.infotrends.com

Layton Getsinger, CopyPro Inc.www.copypro.net

Robert C. Goldberg, General CounselBusiness Technology Association

Jim Kahrs, Prosperity Plus Management Consulting Inc.www.prosperityplus.com

Jamie Schorr, Cezanne Resources, LLCwww.cezanneresources.com

Art Schwartz, Image Systems Groupwww.imagesysgroup.com

Business Technology Association12411 Wornall Road

Kansas City, MO 64145(816) 941-3100

www.bta.org

Member Services: (800) 505-2821BTA Legal Hotline: (800) 869-6688

Valerie BrisenoMembership Marketing Manager

[email protected]

Cathy KentonMembership Sales Representative

[email protected]

Gary HedbergAccounting Manager

[email protected]

Mary HopkinsAccounting [email protected]

©2007 by the Business Technology Association. All RightsReserved. No part of this publication may be reproduced by anymeans without the written permission of the publisher. Everyeffort is made to ensure the accuracy of published material.However, the publisher assumes no liability for errors in articlesnor are opinions expressed necessarily those of the publisher.


®

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13OT0406 3/9/06 9:21 AM Page 1

BTA PRESIDENT’S MESSAGE

Held March 21-22

in Las Vegas,

the 2007 ITEX

Show proved to be an

ideal venue for educa-

tion, networking and

learning about the prod-

ucts and services of the

many vendors in the exhibit hall. It was a

great event for the Business Technology Asso-

ciation and the office technology industry. If

you were not there, you missed an ideal

opportunity to gain new insight into ways to

further advance your dealership.

Certainly, the industry needs this type of

an event. The OEM dealer meetings serve

their purpose. However, it appears that the

BTA Channel continues to value a venue in

which to convene that does not focus on a

single manufacturer. During the show, I saw

a number of our industry’s leaders from

both the dealer side and the vendor side.

Certainly, for those two days, ITEX became

the focal point of our industry.

We were particularly excited at the ITEX

Show to present several awards to both

manufacturers and dealerships. On March

21, BTA presented its 2007 Channel’s Choice

Awards. Our top winner, receiving the Supe-

rior Performance Award, Primary Product

Line, was Toshiba America Business Solu-

t ions Inc. (TAB S). Th e company al so

received the Channel’s Choice in three addi-

tional performance categories — Corporate

Support, Marketing Distribution and Digital

Product Line. In addition, Muratec America

Inc. was presented with a 2007 Channel’s

Choice Award for Outstanding Perfor-

mance, Secondary Product Line.

Channel’s Choice Award recipients are

determined every year based on the results of

a survey distributed to independent office

technology dealers, designed to recognize the

best suppliers in several different perform-

ance categories. We congratulate this year’s

winners and express our sincere thanks for

their exceptional support of the BTA Channel.

In addition, on March 22, we presented the

BTA 2007 Dealer of the Year awards in three

revenue categories. This year’s winners are:

Hagan Business Machines of Meadville Inc.,

Meadville, Pa. (less than $3 million in annual

revenues); Copy & Camera Technologies,

Lafayette, La. ($3-$10 million in annual rev-

enues); and NovaCopy Inc., Nashville, Tenn.

(more than $10 million in annual revenues).

The companies were among a number of

nominees evaluated in four key perform-

ance categories — finance, operations,

v i sion and community and industr y

involvement. BTA congratulates these three

dealerships, each of which have distin-

guished themselves among the association’s

office technology dealership members.

And finally, during the ITEX Show, the

members of the BTA Board of Directors had

the opportunity to meet twice with the leader-

ship of Japan’s Nippon Office Machine Dealers

Association (NOMDA) — Chairman Akira

Akutsu, Vice Chairman Ryotaro Matsumoto

and Managing Director Takashi Uetake. These

meetings presented us with a great opportu-

nity to understand the nature of the dealer

channel in Japan and to answer their ques-

tions about dealer distribution in the U.S.

market. We made a commitment for BTA and

NOMDA to work with one another in the

months to come, exchanging information, etc.

Watch for more coverage of the 2007

ITEX Show in the May issue of Office Tech-

nology magazine.

— Dan Hayes

ITEX Show a GreatEvent for Association

®

2006-2007 Board of Directors

PresidentDan Hayes

Purcell’s Business Products222 E. 1st St.

Campbellsville, KY [email protected]

President-ElectShannon Oliver

25 Wheaton CircleGreensboro, NC [email protected]

Vice PresidentRonelle Ingram

Steven Enterprises Inc.17952 Sky Park Circle

Ste. EIrvine, CA 92614

[email protected]

BTA EastThomas Chin

Accolade Technologies LLC604 Hampshire Road

Mamaroneck, NY [email protected]

BTA Mid-AmericaMike Blake

Corporate Business Systems LLC2018 S. Stoughton Road

Madison, WI [email protected]

BTA SoutheastBill James

WJS Enterprises Inc.3315 Ridgelake Drive

P.O. Box 6620Metairie, LA 70009

[email protected]

BTA WestRock Janecek

Burtronics Business Systems Inc.216 S. Arrowhead Ave.

P.O. Box 1170San Bernardino, CA [email protected]

Ex-Officio/General CounselRobert C. Goldberg

Schoenberg Finkle Newman & Rosenberg Ltd.222 S. Riverside Plaza

Ste. 2100Chicago, IL 60606

[email protected]


08OT0407 4/3/07 12:12 PM Page 8

MKG Apr 07 3/9/07 8:47 AM Page 1


by: Brent Hoskins, Office Technology Magazine

Development PlatformsProviding a new level of productivity

First there was the transition

from analog to digital , fol-

lowed by the rise of connec-

tivity and the use of the MFP as a

printer. Next, scanning emerged as a

primary area of emphasis. Mean-

while, software-based solutions

from independent software vendors

(ISVs) and hardware manufacturers

became prevalent. It’s no longer just

the office copier.

What’s next? How can the MFP

provide a new level of productivity,

making workers even more effi-

cient? The answer, it appears, lies

in open development platforms,

allowing ISVs, dealers and MFP manufacturers to provide a

custom interface at the MFP control panel to virtually any

software application.

Today, a growing number of MFP manufacturers are

offering this capability. Ricoh Americas Corp., for example,

introduced its Ricoh Developer Program (RiDP) in 2004. “For

three years now we’ve been working with developers and pro-

viding various SDKs (software development kits) allowing

them to create applications that run on our platform,” says Joe

Gormley, senior manager of RiDP. “We have in excess of 40

developers right now, all working on solutions that allow

them to integrate their products directly into our devices.

This, of course, benefits end-users in that they have a device

that is capable of doing so much more than just scanning,

printing and copying.”

Gormley describes a typical embedded application. “As an

example, law firms are very interested in cost recovery because

they want the ability to charge clients for everything that comes

through the device,” he explains. “When an employee of the firm

uses the Ricoh MFP, the application developer’s name and,

perhaps, logo will appear on the MFP’s

control panel. The first field the appli-

cation may require is a client number;

immediately, the system knows which

account the copies are going to be

charged to. Our embedded software

architecture allows the developer to

completely customize the control

panel, which leads to a more user-

friendly experience.”

For many, the first recollection of

a development platform may be

Canon U.S.A. Inc.’s Multifunctional

Embedded Application Platform,

commonly known as MEAP. Several

years ago, says Dennis Amorosano,

director and general manager of Canon’s Solutions Business

Development Division, Canon leadership recognized a need.

“We started to see some things happen in the marketplace

that led us to believe that down the road we would start to

see customers utilizing the MFP as much more than a

peripheral in the office environment,” he explains. “We envi-

sioned a time when the MFP would become a very central

part of a very specific application workflow in the office.”

That was the genesis for the MEAP concept, which Canon

ultimately brought to market in 2003. Amorosano acknowl-

edges that the acceptance of MEAP was slow in coming. “I

will certainly be the first to admit that our entry into the mar-

ketplace was probably an entry that was well in advance of

the readiness of the marketplace to migrate in this direction,”

he says. “But, I think it has given us an opportunity to gain a

lot of experience and market knowledge. We’re becoming very

effective at not only driving development activity, but we are

more knowledgeable about how customers want to utilize the

platform itself and integrate applications.”

Currently, says Amorosano, Canon has approximately

10OT0407 4/3/07 2:47 PM Page 10

Duplo Mar 07 3/1/07 4:01 PM Page 1

10 development partners that have either

delivered MEAP-enabled applications to

market or are in the development process.

In addition, Canon itself currently has

three specific MEAP applications and is

developing or has delivered a number of

custom applications for specific cus-

tomers. “Customers are becoming more

and more aware of the fact that we can

modify the device to fit within their given

environment, whether it is from a workflow perspective or in

support of a specific IT environment,” he says.

Anyone attending the Sharp Document Solutions

Company of America National Dealer Meeting in February

saw a significant emphasis on Sharp’s development platform

— Sharp Open Systems Architecture, known as the Sharp

OSA platform. In fact, the meeting’s opening General

Session featured Sharp OSA demonstrations from Google,

Microsoft and Yahoo! A representative of Google, for

example, showed how a Sharp OSA-

enabled MFP could be integrated with

the Google Search Appliance to create

enterprise search solutions from the

MFP’s control panel.

While Google and the other two in-

dustry giants simply demonstrated the

potential of the open systems architec-

ture, a number of Sharp OSA-enabled

applications are already in use. In fact,

says Vince Jannelli, associate director of applications and

partners for the Product Management Group at Sharp,

today the manufacturer has approximately 70 development

partners, with around 30 Sharp OSA-enabled applications

currently available on the market. Interest in the Sharp OSA

platform has grown substantially in a short amount of time.

The Sharp OSA platform was formally introduced at the

AIIM/On Demand Show in May 2006. At the time, there were

only 10 development partners.

Today, the Sharp OSA-enabled applications on the market

are being heartily embraced by users, given the added value

they bring to the MFP, says Jannelli. “Think of it not only as

connecting an MFP to an application but as providing the

capability to extend the functionality of the device,” he says.

“By extending the functionality of the device, I mean adding

a feature that the MFP doesn’t offer.”

Jannelli cites the example of Wasabi, a Bates numbering

application from Xpert Image, now available to end users

with accessibility through the Sharp MFP control panel.

“That’s a feature that is not standard on our MFPs,” he says.

“So, now somebody who wants to be able to provide that

functionality on the MFP can buy an applet from Xpert

Image and directly apply the Bates stamp when a document

is scanned on the MFP.”

Is the Xpert Image software, then, embedded in the MFP? In

the case of Sharp OSA-enabled MFPs, it is not, given that

Sharp uses Web Services architecture. “In the case of Sharp’s

implementation, we just point to an application that sits on a

server or PC,” says Jannelli. “We act, essentially, as a portal that

allows the user to interact with the application. A big benefit is

that the resources are network resources, meaning the pro-

cessing power is less expensive and there is more memory.”

Actually, within the realm of development platforms there

are two leading environments — Web Services and Java.

“The reason we chose the Web Services architecture is

because it is the de facto standard for application-to-appli-

cation communication,” says Jannelli. “So, since applications


“... We can modifythe device to fit withintheir given environment,whether it is from a workflow perspectiveor in support of a specific IT environment.”

12OT0407 4/3/07 2:53 PM Page 1

The BPCA was founded in 1963 with the vision of

forming a best practices organization that unites

leaders of independently-owned office equipment

dealers. The concept is quite simple - bring the

leaders of these companies together so that they

can share ideas, learn from each other, and take

their businesses to the next level.

Our members will attest that it’s well worth the

investment by making each of them better leaders

and bringing more value to their dealerships.

Feel like there’s something missing from your

organization? Let BPCA bring together all the

pieces of the puzzle.

Piecing Ideas Together.

If you’d like more information about our

organization and how to join, please send

us an email or give us a call.

Phone: 800.897.0250

Email: [email protected]

Website:

www.businessproductscouncil.org

Membership Director BPCA

c/o BTA

12411 Wornall Road

Kansas City, MO 64145

“Better Dealers Through

Learning and Idea

Exchange.”

31OT0107 12/18/06 2:51 PM Page 1


are already ‘speaking’ this way, we chose

to integrate that way. In addition, using

the Web Services integration, you can

program in any language, such as C#,

C+, .Net or Java . Also, the time-to-

market is really advantageous.”

In contrast, Canon’s MEAP is Java-

based. “When you go back to the time at

which we launched, there wasn’t a lot

else out there that would have given us

the opportunity to provide as granular level of control as

what the Java development environment has provided us,”

says Amorosano. “It met our needs from the standpoint of

being a standard development environment as well as giving

us the flexibility to provide a developer with a detailed level

of control of the device, which is consistent with being able

to manage and support all of the functions that the device is

capable of delivering within a MEAP-developed application.

One of the benefits Java offers is that we can run completely

inside the device, without the need for additional server

components that sit outside the MFP.”

Like Canon’s MEAP, Ricoh’s RiDP also functions in the

Java environment. “One of the reasons is that Java has really

become dominant in the enterprise world,” says Greg

Anderson, senior engineering manager at Ricoh. “So, using

Java in the machine allows us to leverage the skills of the

network enterprise engineers in the field. The other reason

that we chose Java is that this language is very strongly sup-

ported by Sun Microsystems, which puts a lot of work into

making sure that the language remains vibrant, is developed

and has good community support.”

Whether they choose Web Services or Java, MFP manu-

facturers are working diligently to establish relationships

with developers. “Most of the developers have contacted us,”

says Jannelli. “But, we’ve reached out to others, based upon

the opportunities that have come along.”

Sharp’s developers must complete an application process

and an agreement is signed by both parties. “We then assign

a Sharp representative to every single developer, who acts as

the developer’s champion within the Sharp organization,”

says Jannelli. “That helps the developer to get started and to

orientate them to the program — ‘What can I do? What can

I not do? How does Sharp work?’

“Once a developer is accepted into the program they get

access to a dedicated developer extranet,” he says. “One ‘side’

of the extranet supports them during the development

phase and the other ‘side’ supports them in the marketing

engagement stage.”

The nature of the relationship bet-

ween Sharp and its developers and the

benefits and support they receive is akin

to what Canon and Ricoh offer their

developers. However, what does appear

to separate the Sharp program is its sig-

nificant emphasis on office technology

dealerships as developers. Jannelli esti-

mates that 40 to 45 percent of its approxi-

mately 70 developers are dealerships. In contrast, at Ricoh,

dealers “represent only a very, very small percentage” of the

developers, says Gormley. Similarly, Canon’s Amorosano

states: “We have been working with dealers on occasion

where they have requested access to the SDK for specific

development reasons. We have a couple of dealers who are, in

fact, developing specific applications for their customers.”

Amorosano emphasizes the specific discipline that a

company needs to develop a MEAP-enabled application.

“My only hesitation with dealers in my discussions with

them about development is really around making sure that

they are very much aware and cognizant of the commitment

and resources it takes, not just to build an application, but

to maintain it and support it in the marketplace,” he says.

“It’s one thing to build an application; there are a lot of

people who can do that. It’s another thing to maintain it

from a versioning perspective, bug-fix perspective and then

support that on a long-term basis.”

Of course, the value of MEAP, RiDP and Sharp OSA extends

well beyond the benefits to any dealership that has become

an application developer. Instead, dealerships can reap the

rewards of the applications developed by others. So, while

there are dealerships that may decide to develop their own

applications, many dealers are very excited “because they

have realized that they can leverage the work of other people

and meet a broader set of customer needs,” says Jannelli.

He notes that the benefit to the dealership is three-fold.

“First, you are going to place more MFPs in a competitive

marketplace because you are able to differentiate yourself

from competitors,” he says. “Second, because you are able to

differentiate yourself to meet customer requirements you are

going to place MFPs at a higher GP. And third, you are going

to be more tightly integrated into the way the customer does

business. At the end of the day, because you are providing

higher value and have become more important to that

account, it is more difficult for a competitor to replace you.”

Amorosano also emphasizes the value of the tighter

“We then assign aSharp representative toevery single developer... That helps thedeveloper to get startedand to orientate them to the program ... ”

14OT0407 4/3/07 4:23 PM Page 1

integration with the customer. “Dealers

are in a great position to take advantage

of these development efforts, driving

additional revenue and profit and the best

part is, once you get these types of appli-

cations into a customer environment, it

gets awfully difficult for them to push you

out,” he says. “So, dealers will find that

they have a much greater capability to

lock-in customers for the long term.”

Some may ask: Are end users, in fact, receptive to

accessing an application from the MFP’s control panel?

Aren’t they more comfortable accessing applications from a

desktop PC? Manufacturers acknowledge that the intent is

not to replace the use of a PC to access document-related

applications. “Quite honestly, based upon our experience,

we have learned and have certainly come to the conclusion

that this is not where this type of capability is going to

evolve,” says Amorosano. “Customers are still going to want

to use their personal computers as their

primary interface for accessing informa-

tion and delivering output. But, I think

what we will find is that, in the context

of a very specific type of business appli-

cation, the user interface at the MFP

control pan el b ecom es important

because it simplifies the process.

“Within Canon, we have a vision that

in the future we will find that the MFP

will become a much more personalized resource for users,”

he continues. “My interface at the control panel may look

completely different than yours, just based on the way that I

happen to use the technology.” �

Brent Hoskins, executive director

of the Business Technology Association,

is editor of Office Technology

magazine. He can be reached

at [email protected].

A p r i l 2 0 0 7 |w w w . o f f i c e t e c h n o l o g y m a g . c o m | 15

v i s i t u s a t w w w . d o c s t a r . c o m

o r c a l l 8 0 0 . 3 6 7 . 5 9 0 6

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© 2006 docSTAR, 2165 Technology Drive, Schenectady, NY 12308. All trademarks are the property of their respective owners. Specifications subject to change without notice.

Easy to Sell, Fast Increaseof Gross Margins and a Smart Total

Solution for your customers.

docSTAR CP:

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“Customers are stillgoing to want to usetheir personal computers as theirprimary interface foraccessing informationand delivering output.”

15OT0407 4/3/07 12:33 PM Page 1


by: Brent Hoskins, Office Technology Magazine

Close-up: DocuWorld ‘07DocuWare Corp. hosts annual partner meeting

Providing an opportunity to thank its

dealers, introduce the latest version

of its product and share insight into

the solution selling business, DocuWare

Corp., an integrated document manage-

ment company, hosted its annual partner

meeting March 5 in Orlando, Fla. The 14th

annual “DocuWorld,” as it is called, drew

160 attendees, including 124 dealers.

“By meeting face-to-face with key

players in the imaging industr y, our

authorized DocuWare partners had the

opportunity to gain knowledge about inte-

gration opportunities,” said DocuWare

Corp. President Greg Schloemer, fol-

lowing the meeting. “I’m excited that we

were able to provide our partners with

the kind of networking opportunities that

will really benefit their business.”

During the meeting, Thomas Schneck,

president of sales and marketing for parent

company DocuWare AG, based in Ger-

mering, Germany, reported on DocuWare’s

performance. In 2006, he said, the com-

pany generated about $12 mil lion in

license revenues and had a total of 715 new

system installations through its partners.

Schneck also commented on the results of a recent AIIM

study, which was based on a survey on the topic of docu-

ment management, completed by 1,200 end users world-

wide. Among the questions and results he cited:

� “How important is the handling of documents for the

strategic goal of your organization?” 58 percent indicated

“extremely important” and 31 percent indicted “important.”

� “How has the importance of documents changed over

the last two years?” 70 percent indicated documents are

“more important,” while 28 percent indicated they are

“equally important.”

� “What are the main applications/departments/docu-

ment types you would like to handle with a document man-

agement system?” Number one in the U.S. market: “ac-

counting”; number two, “e-mail”; and number three, “cus-

tomer service.”

“What does this all mean for us?” Schneck asked atten-

dees. “We are in a booming market. The growth rate for

Clockwise from top left: Thomas Schneck, president of sales and marketing,

DocuWare AG; Greg Schloemer, president of DocuWare Corp. (U.S.); the Technolo-

gy Pavilion, which featured 13 exhibiting companies, such as eCopy and Kodak.

16OT0407 4/2/07 11:56 AM Page 10

document management is very, very

optimistic for the next years to come. It

is the obligation of all of us in the room

to get as much marketshare as possible.”

Schneck also expressed his apprecia-

tion to DocuWare’s partners. “We know

that you have been working extremely

hard for DocuWare for a long time,” he

said. “We know we are only successful

because of your hard work. We also want

to thank you for your loyalty. Many of you have been with

DocuWare for five to ten years or even longer. We know that

in today’s times, that is something that is not very common.”

The DocuWorld meeting provided several educational

opportunities as well, with Jon Reardon, group director for

Office Document Technology Solutions at InfoTrends,

serving as the keynote speaker. Reardon noted that the doc-

ument solutions category served by DocuWare, “Workgroup

Document Management,” was a $209 million market in the

United States last year. “We’re forecasting that to grow to

$587 million by 2010,” he said. “That represents about a 35

percent compound annual growth.”

Reardon also specifically stressed the importance of

selling software-based solutions, not just hardware. “By the

end of 2008, for office equipment dealers who are not

playing in the solution space, the size of the playing field will

have been reduced by 50 percent,” he explained. “So, 50

percent of the hardware being placed on the market by the

end of 2008 will have been placed there

by a solutions sale.”

To provide its partners with insight

into greater success in selling solutions,

the DocuWorld meeting also featured a

presentation by Darrell Amy, president of

Dealer Marketing Systems. He referred to

the book “Crossing the Chasm,” by Geof-

frey Moore, focusing on Moore’s defini-

tion of the various prospect types. Amy

specifically focused on “pragmatists,” describing them as

practical managers, seeking incremental, measurable

growth, who are particularly concerned about service and

references. Approximately 70 percent of the DocuWare

market opportunity involves the pragmatic buyer, he said.

“If we are not successful in unlocking the hearts and

minds of the pragmatic buyer, we are not going to be suc-

cessful in bringing document management to the main-

stream,” said Amy, noting that the key to success is helping

the pragmatist solve business problems. “There is nobody

more qualified or competent to have the discussion about

business products than the sales rep. Do you realize that the

sales force of non-technical people that you thought could

not even sell this stuff may be the key to you experiencing

explosive growth in the next 12 months?” �

Brent Hoskins, executive director

of the Business Technology Association and editor

of Office Technology, can be reached at [email protected].

w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7 | 17

“If we are not successfulin unlocking the ... mindsof the pragmatic buyer,we are not going to besuccessful in bringing document managementto the mainstream.”

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17OT0407 4/2/07 11:57 AM Page 1


by: Layton Getsinger, CopyPro Inc.

The Solutions GameBecoming a total networked solutions provider

We have been in the “year of

solutions” for several years

now. Many keep hoping

and waiting for this to be a passing

fancy and hope to get back to the busi-

ness of selling boxes.

Unfortunately, box selling continues,

but at significantly reduced margins.

Early on, dealers merely dropped the

price on MFPs to write orders and maintain the margins on the

back end. With time, both the hardware and aftermarket

margins have slowly ebbed away. Unless the dealer channel

adapts to and adopts a networked solutions strategy soon,

many will inevitably go the way of the margins — down the

tubes. No one will benefit from this scenario — especially the

consumer. This article explains one way to make the transition

into the world of solution selling.

The first and harshest reality is there is no checklist or

guidelines for the dealer to follow. There is no “one size fits

all” panacea either. One must sit down and analyze his (or

her) dealership’s current state of being; determine where it is

on the industry continuum; decide where he wants his deal-

ership to go; and determine if it can get there based on

current configuration. If not, then it is time to re-engineer the

company and chart a course for success. There are no short-

cuts. It is best to start with baby steps.

The skill sets that proved successful in the analog world

seldom work in today’s solutions arena. It is no longer about

feeds and speeds or price and monthly payment. It is now

about shaping the customer’s buying criteria while solving

customer problems and helping your customer solve its cus-

tomer’s problems. It is the mother of all paradigm shifts.

The next step is to determine talent within the sales

team. This would include, but is not limited to: product

knowledge (hardware and software), sales/customer skills,

attitudes, strengths and weaknesses and technical aptitude.

When all the data has been gathered

and analyzed, do you have the right

horses to run the solutions race? If

you are like many dealerships, you

will have one or two top-producing

reps who will attempt to sabotage

any efforts to depart from the status

quo. They are most willing to ransom

the company’s future to stay in their

comfort zone. Can you afford to lose them? If not, can you

afford to lose your company? Personal experience has proven

that with the loss of every top-producing salesperson or sales

manager, revenues and profits go to new all-time highs. No

one wants to risk losing a top producer, but nor should they

risk losing their business. It’s really more about risk manage-

ment than risk-taking.

When one compares the differences between analog and

digital equipment, it is plainly obvious that our world has

changed without our permission. It was not long ago that we

were fighting connectivity and color. Today, if a dealership is

not leading with color and connecting a minimum of 50

percent of its placements, there is undoubtedly a loss of

market share and the concomitant aftermarket and profes-

sional services profitability.

The most significant change in the transition from analog to

digital has been the life cycle of hardware. It has gone from

three to five years to today’s digital life cycle of 18 to 24 months.

By the time a rep has reached a level of competency with the

current product line, it has been superseded by a new release.

These realities are compounded for multi-line dealers. Due to

the technical intricacies of digital hardware and related

firmware, software reps could easily spend much of each day in

the classroom instead of selling solutions.

Now that we have a pretty good understanding of the many

obstacles that stand between us and success as solution

sellers, how do we overcome them? It probably will not be via

18OT0407 4/3/07 12:39 PM Page 10

the vendors, for they suffer from OEM-

created market share myopia, which

further clouds their vision of the critical

nature of solution selling to their survival

and the survival of dealers.

Instead of investing in dealer channel

development, some vendors are com-

pounding the dealer’s dilemma by cre-

ating addit ional direct outlets —

re-branding equipment for off-brand

marketing and usurping the dealer’s base while the dealer

struggles to find new and innovative ways to meet this

market share mandate. The irony is that we are eating our

young with increased brand competition. It is extremely

naïve to believe that the direct channel is actually seeking

net new business versus chasing the dealer channel’s base at

reduced cost and margins. It is empty rhetoric and smacks

of a complete disdain for the dealer channel. The only

winner here is the end user.

It was the dealer channel that saturated the marketplace

with analog copiers and it was the dealer channel that tran-

sitioned the marketplace to digital MFPs. It is only fair that

the vendor seek to protect its benefactor versus destroying it

via a comprehensive solutions distribution strategy.

The latter, coupled with the fact that there are few, if any,

former dealership principals working at the vendor level,

creates an intellectual and operational chasm. When one

has not “walked a mile in another’s moccasins,” it is physi-

cally impossible to feel or fix the pain.

Meanwhile, back at the successful dealerships, those that

have made the transition to solution sales are enjoying

record high margins on hardware, software, professional

services and aftermarket. Most have done so by reinventing

themselves and creating a new business model.

So, if the problem is to be fixed, it rests on our shoulders as it

always has. It is once again time to take responsibility for our

destiny and begin the process of re-establishing dealer channel

dominance in the marketplace. It will require an unrelenting and

irrevocable commitment by the dealer to enter and succeed in

this new world of networked solutions. After all, it was the

dealer’s principles and winning attitude that prevailed in the

analog days and must prevail again.

The good news is there is no need to hire all new staff to

create a new business model. Actually, it would be cost pro-

hibitive and most likely unsuccessful. However, hiring a

couple of software specialists with engaging personalities is

a must to compliment your sales team’s skills. There are

more of these individuals on the market

than one realizes and typically they are

more affordable and competent than

one might surmise. If you do not cur-

rently have an IT team, then contract

with one until one can be developed.

Professional services should be a profit

center, not an expense line item in your

service department. The new ‘value-

add’ after remodeling will be the synergy

resulting from the combined intellectual capital of your soft-

ware specialists, sales reps and IT team.

If the principal is not the right person to lead this trans-

formation, then identify someone on staff who has the

respect, aptitude and tenacity to make it happen. This may

be one place the dealer needs to go outside for help.

There are a multitude of software vendors in the market

today. Many of the hardware vendors have strategic relation-

ships with one or more software companies or have their

own proprietary software. A few vendors have software

teams, but none are currently positioned to train the dealer

channel on how to successfully integrate the solution’s

model into their lineup.

The one inviolable tenet to which a beginning solutions

dealer must adhere to is to go slowly. Pick one or two software

packages and maybe an electronic archival and retrieval soft-

ware that is server-based, totally compatible with your hard-

ware and scalable in nature. Have the software vendor come

to your dealership to launch the software, teach the concep-

tual selling process and identify the top five problems the

software addresses. The vendor rep should also make field

calls with the software specialists, sales reps and the IT team

to demonstrate the proper selling techniques, document

assessments, proposal formulation and how to close the deal.

Now, you have a strategy for profitably competing for new

business, upgrading your base profitability and going where the

industry giants fear to tread with a result of profits you never

realized you could have. �

Layton Getsinger is COO of Copypro Inc., based in Greenville,

N.C. He has worked in the copier industry for more than seven

years, and now manages the day-to-day operations of the

company. Copypro has been the top solutions

dealer at the Gold level for Konica Minolta for

the past two years, and is currently the top

mover of Documall for the Ricoh Family Group.

He can be reached at [email protected].

Visit www.copypro.net.


It is once again time to take responsibility for our destiny andbegin the process of re-establishing dealerchannel dominance in the marketplace.

19OT0407 4/3/07 12:42 PM Page 1


by: Randall Dazo, InfoTrends

Competing in a Digital WorldMoving from a TCO to a TVO strategy

For BTA dealers, competition in today’s digital world is

becoming more complex as we see not only pressures

from large distributors and OEMs establishing direct

channels, but we also see the lines being blurred — there are

now more competitive pressures between IT dealers and BTA

dealers competing in the same space. There are definite

advantages that BTA dealers have capitalized on and

strengthened over the years — strengths like customer inti-

macy and knowledge have been strong attributes that have

kept customer relationships in place. But as we see cus-

tomers looking at cost-cutting and Total Cost of Ownership

(TCO) more seriously, price pressures may supplant the rela-

tionship advantage. That is why dealers need to move from a

TCO strategy to a TVO (Total Value of Ownership) strategy.

While TCO has received much attention in recent years,

TVO offers a superior method for assessing the benefits of

IT projects. Using a total value approach, companies con-

sider benefits not just from cost cutting, but from improved

business processes based on new technology. TCO should

not be disregarded either, as it gets the attention of C-level

executives, but usually only satisfies their requirements for

total value within the organization. Total value must be

seen throughout the organization and be a harmonized

strategy with all groups in order to see the greatest benefits

and results.

The key to securing your position with your customers is

by providing them with unprecedented total value that is

difficult to replace and will make it difficult for competitors

to break into. Using the word SECURE, InfoTrends has

derived an acronym to help dealers remember how to create

this unique value:

Solutions — Provide solutions that benefit all aspects of

the organization.

Engagements — A close relationship with the customer

is an important aspect in moving to a TVO sale.

Customized — Use a consultative approach to create

customized solutions that are difficult to replace.

User — Be sure to consider all users within the organization.

Requirements — Understand all users’ pain points and

what could make them happier and more productive at

their jobs.

Efficiency — Efficiency = more productivity = more revenue

The Evolution of ValueIf we look at the evolution of the copier industry, we can

understand this concept of unprecedented value even

better. Originally, the industry started with standalone

20OT0407 3/30/07 8:30 AM Page 10

hardware that was differentiated by

adding unique features that solved

simple customer problems. The more

unique features that added value to an

organization, the more customers were

wil ling to pay. When these copiers

becam e digital devices , and th en

network devices, higher value was

appreciated because they could now be

shared in a digital print environment.

But as the hardware features became more ubiquitous, with

very little tangible customer differentiation, prices fell and

hardware became more of a commodity. The next phase

was to differentiate with applications. At first, software

bundling allowed for further differentiation because users

could control multifunction devices with their PCs. But

these original applications, like scanning to PC or scanning

to storage, were still too generic and it was difficult for users

to understand the connection of their workflow to these

applications. So, generic software bundling only added

small incremental value.

As applications matured for specific industry verticals,

customers were able to see more value because they solved

specific pain points of that vertical market. This is when we

really started seeing the first iteration of a solution. But

these solutions were not realized until there was an engage-

ment with the customer to understand their pain points and

dealers were able to customize a solution to fit their exact

needs. This customer-consulting engagement, under-

standing of their pain points and delivering a customized

solution has become the strongest differentiator among

dealer competitors. InfoTrends has defined a “solution” as a

set of software and services often accompanied by hardware

that solves a business problem, improves a process or

creates a new business opportunity for a customer. That is

something customers are willing to pay for.

The next phase of the value chain to achieve TVO or

unprecedented value is to create customized customer solu-

tions that are realized throughout the entire organization.

Value has to be seen throughout the entire company, from

C-level executives to mid-level managers to the users that

the solution affects directly in their everyday workflows.

That is why only introducing a TCO reduction strategy can,

in some cases, backfire. Although it gets the attention of C-

level executives, changing an end-user’s everyday workflow

activities by implementing cost-reduction initiatives like

sharing devices or redirecting output, may actually hinder

productivity for an individual or depart-

ment. This can affect overall efficiencies

that can actually negate the original

goal of cost savings. TCO reduction

should not be ignored, as it is actually a

strategy to get a toehold into a TVO

strategy. But customer engagement

must go beyond the C-level executive.

The Value of Document SolutionsIf we break this down further, we can see how certain solu-

tions fit into various parts of the organization. InfoTrends

looks at software solutions in four categories:

Input — Scanning or creation

Output — Printing or storage

Workflow — Movement of the electronic document

Device Management — Control or device relationship

management of all devices

C-level executives look at the management of devices, the

control and reporting of the costs and in some cases, that

the workflow is attributing to efficiencies at the high level.

In general, they will touch device management solutions.

Mid-level managers look to improve efficiencies by

improving processes and workflows and, at a higher level,

making sure the activities of their employees are being opti-

mized. In general, they touch workflow solutions.

End-users’ daily workflow activities typically center

around the actual MFP device. Improving the efficiency of

their activities can be realized through input and output

solutions that surround the device.

The Value of the AssessmentAs mentioned, it is difficult to ignore TCO when putting

together your TVO strategy. A TCO study or print assess-

ment identifies your customers’ printing requirements and

offers them a hardware, software and service solution that

benefits the customers’ overall business requirements. A

typical benefit of performing a print assessment is to find out

what their actual print spending is, to identify efficiencies,

control spending and, in the end, lower their total cost of

ownership. In fact, according to a past InfoTrends report, 90

percent of companies do not know what they are spending

on internal printing and, typically, 30 to 50 percent of a

company’s internal assessments are incorrect. What is even

more interesting is that typical businesses spend 6 percent of

their annual revenues on the document and cannot account

for it. Print assessments can reduce a company’s spending by


As applications maturedfor specific industry verticals, customerswere able to see morevalue because theysolved specific painpoints of that ... market.

21OT0407 4/3/07 12:46 PM Page 1

30 to 40 percent, and that is something

worth investigating.

At the same time, a workflow assess-

ment should be performed in order to

understand other areas of improvement

that solutions can provide. While per-

forming this assessment, dealers should

study and survey the internal customers

in the organization and see their work-

flow habits as they relate to their docu-

ments. This is where customized workflow and on- and

off-ramp solutions can be identified and presented to man-

agement to further enhance the company’s efficiencies for

growth. Areas that can also be investigated are mailing costs

like overnight shipping and manual faxing, because those

expenses can be significantly reduced by implementing

technologies to streamline those processes.

As with many skeptics of new technologies, change of work-

flows and work patterns can lead to inefficiencies and non-

acceptance of these new processes. Part of the strategy should

allow each of the users to be a part of the change and you

should engage with them throughout the process so they feel

as if they have ownership and are contributing to the change.

Measuring Value Within the OrganizationAlthough it is difficult to put a price tag on efficiencies

that can bring future growth or opportunities to an organi-

zation, understanding a customer’s total value of ownership

can be measured. It is also difficult to pinpoint the value tied

to a specific solution because value is a customer-specific

goal, often measured by future revenue opportunities and

sometimes by emotional gratification. There are, however,

correlations to the “value of an implemented solution” and

the “increase in efficiencies, uniqueness and competitive

advantages” that they bring. Also, the higher the value quo-

tient, from a customer’s perspective, the more difficult it is

to replace. Here are some questions to ask each group in

order to determine the value quotient:

C-Level Executives:

� Does this solution provide new opportunities or

revenue for growth?

� Does this solution reduce costs and improve efficien-

cies within the company?

� Does this solution give my company an advantage over

the competition?

� Will I see gratification from all employees because of

the implementation of these solutions?

Mid-Level Managers:

� Does my group run more efficiently

with these solutions?

� Have workflows been improved and

can I measure the progress of the improve-

ments that have already been made?

� Are my employees happy with the

improvements made to streamline their

job functions?

End Users:

�Do my job functions seem to be less complex and easier

because of the solutions implemented?

� Am I able to be more productive because of the solutions

implemented and can they be measured?

� Am I happier with my job because technology or solu-

tions cut down my stress level?

By rating these questions from one to 10 — one being

“strongly disagree” and 10 being “strongly agree” — you will have

a measurement tool for TVO throughout the organization. An

overall score between 80 and 100 can be seen as providing strong

value to an organization. A score of 50 to 80 may need minor

tweaking to understand areas that need improvement and a

score below 50 means there is an imbalance of overall value

within the organization. Of course, striving toward 100 will give

you the security of a sound TVO strategy and should con-

stantly be measured for continuous improvement initiatives.

At the end of the day, your solution, which is a combina-

tion of software, professional services and hardware, will

improve your staying power within an organization and

allow you to reap the benefits of continued recurring

revenue as well as allow your customers to view you as a

partner that will help both of your organizations grow.

Unprecedented value, irreplaceable solutions and pro-

found engagements throughout the organization are the

new propositions you should be striving for in creating a

TVO partner strategy for your customers. It will make you

much more competitive and secure your relationship with

your customers for years to come. �Randall Dazo is director for InfoTrends’ Network Document

Solutions Service. With nearly two decades of experience,

Dazo leads InfoTrends’ continuous information service

practice in this area on a global basis.

Prior to joining InfoTrends, Dazo was

senior manager of output solutions

for Ricoh Corp. He can be reached at

[email protected] or

(781) 616-2100. Visit www.infotrends.com.

... Your solution, whichis a combination of software, professionalservices and hardware,will improve your staying power within an organization ...


22OT0407 4/3/07 12:49 PM Page 1

EDUCATION CALENDAR

w w w . o f f i c e t e c h n o l o g y m a g . c o m | A p r i l 2 0 0 7 | 2 3

BUSINESS TECHNOLOGY ASSOCIATION • April 2007

EDUCATION CALENDARMay2-4 Sales Management Workshop Ft. Lauderdale, FL

This three-day workshop, presented by MOTIVE8S Inc., is designed for the office tech-nology sales organization — specifically for owners and sales managers, executives, vicepresidents and supervisors. Workshop focus areas include leadership, situational man-agement and team culture. For information, call MOTIVE8S at (515) 210-2136.

5-6 FIX: Cost Management for Service Workshop Austin, TXLearn proven service management and customer service strategies to use in yourcompany. Costing out the service hour, effective and profitable maintenance agree-ments, efficient vehicle operations, reducing personnel turnover, competitive compen-sation plans and identifying profit-making opportunities through the service operationare issues that are critical for success.

8-9 Service Management Workshop Kansas City, MOThis two-day workshop, presented by MOTIVE8S Inc., will provide office technologydealership service managers with improved management techniques and enhancedteam productivity. The goal of the program is to help service managers improve con-sistency, accounting and productivity through the development of new mind-sets,strategies, processes and tactics. For information, call MOTIVE8S at (515) 210-2136.

15-16 BTA ProFinance Chicago, ILAnalyze current business practices and evaluate strengths and weaknesses. Participantswill explore important issues surrounding profitability benchmarks, asset management,expense controls and employee productivity. They will leave with a clear set of bench-marks and proven strategies for successful implementation.

18-19 BTA Southeast Conference Nashville, TNBTA Southeast will host its Nashville Conference at the Union Station Wyndham Resort Hotel.The schedule includes a reception Friday evening, education sessions on Saturday morningand a dinner cruise aboard the General Jackson Riverboat. The BTA Southeast memberprice is $105. For more information, visit www.btasoutheast.com or call (800) 234-8996.

For additional information on BTA and other industry events or to register for courses visit www.bta.org orcall (800) 843-5059. BTA offers dealer members a $250 discount coupon toward FIX and ProFinance.

Members may use their $150 discount coupons for the MOTIVE8S workshops.

23OT0407 4/3/07 12:51 PM Page 25

As a frequent seminar presenter, I

always enjoy the opportunity to

observe others doing the same.

One of the most effective messages I

have ever experienced was by an excel-

lent presenter, Wayne Outlaw. The

program was in Las Vegas and the venue

alone can motivate an audience. Wayne

encouraged audience participation, and

each “volunteer” was rewarded with a

one-dollar chip from the casino. After

fifteen minutes or so, the rewards

ceased and so did the level of participation. Wayne asked why. One

attendee stated that Wayne had stopped giving out chips, and his

response was: “How do you think your sales team reacts when you

stop offering spiffs, rewards and bonuses?” His point was made.

Manufacturers also recognize the value of promotions and often

provide the opportunity to “win” a trip if you purchase enough of

their product. Contests, promotions and incentives are great moti-

vators, but the shine can quickly fade if they result in an increase in

your income and increased tax liability.

No doubt, most everyday employee income tax issues have

been resolved with the receipt of their W-2. An issue that is often

not properly handled is “gifts” that an employer or manufacturer

gives to employees or dealers. With only a few exceptions, which I

will address, these tokens of appreciation have tax consequences

for the employer and manufacturer as well as the recipient.

The most common reward and probably the most appreciated

is cash. This is always considered taxable and thereby subject to

income and employment tax withholding provisions. Similarly,

items that can be converted to cash like gift certificates, stocks,

dinners-for-two or vacations are all addressed in the tax code and

result in income to the recipient and withholding obligations to

the employer. Manufacturers are not responsible for withholding

if you are not an employee, but are required to issue a Form 1099

for miscellaneous income. Therefore, what may seem like a gen-

erous gift may, in fact, not be so valuable.

Is the IRS totally void of feeling and unmoved by the notion of

gifting? Pretty much! There are exceptions, however, in the realm

of tangible gifts. These items, like the “retirement watch,” pin or

tray for years of service may be given without tax consequences.

The IRS does insist that some type of

“ceremonious observance” accom-

pany the gift. This need not be a testi-

monial dinner, but this requirement

ensures that the reward be for service,

not as a disguised bonus. The sim-

plest way to meet this requirement is

to call together a small group, say a

few words, and present the gift. These

items cannot, in fact, be distributed in

conjunction with a salary increase or

additional benefit. When tangible

objects are presented as a bonus or as some other form of

compensation, the employer must determine a cash value of

the gift and assess tax liability accordingly.

A final category to consider where the IRS doesn’t get involved

are items deemed “de minimus.” In other words, gifts too small to

be worth the paperwork. You may bring cookies, snacks and even

holiday turkeys or hams to employees with impunity. You can

send flowers, fruit, candy and the like to celebrate an employee’s

special event or mourn their loss. You may even bring in lunch to

celebrate the arrival of spring without inviting the IRS.

The income tax exposure is not the only concern employers

must consider when making “gifts.” Gifts to employees that

qualify as compensation may have Fair Labor Standards Act

(overtime) repercussions for the employer. Gifts given to

employees as prizes for quality, quantity or efficiency in per-

formance of their work have to be included in regular pay cal-

culations for overtime purposes. Thus, if you were rewarding

your delivery personnel for not having any accidents in a

quarter, the amount of that reward would have to be added to

their base pay when calculating overtime compensation.

Generosity is an excellent tool to motivate employees.

However, your generosity requires consideration of the tax

implications for both the giver and the receiver. Unfortunately,

that dollar chip Wayne threw me has to be

included in my gross income. Next time I may

not participate! �

Robert C. Goldberg is general counsel for the

Business Technology Association. He can be

reached at [email protected].

by: Robert C. Goldberg, General Counsel for the Business Technology Association

COURTS & CAPITOLS

A Taxing ProblemConsider the implications of your generosity


24OT0407 4/3/07 2:06 PM Page 26

It’s that time again. Time for the

dreaded annual review with one of

your key staff members. For some

companies, this is such an arduous

process that they simply stop doing it.

I’ve had many dealers tell me that they

believe it is a waste of time. “All the

employees want to know is how much

of a raise they are going to get. They

aren’t interested in having their per-

formance reviewed.” So, how do you

turn the review process into the pro-

ductive management tool that it should be? In this article, I

will outline a process that has proven to be very successful.

The Basics of Annual ReviewsThe first thing to cover is the overall purpose and the ele-

ments of the annual performance review. The first purpose is

to review the employee’s performance over the last year. In

order to do this properly, it is important that you keep a file for

each staff member who reports to you. The folder should

include the good and bad things that have happened during

the year. Start with a sheet of notes. When you notice some-

thing or have a situation to handle, make notes on the sheet.

For example, let’s say you had to talk to the employee about

being consistently late. Write the date and details of the dis-

cussion on your note sheet. Be sure to add good things as well.

You should also keep copies of important memos, etc., in the

folder. This folder will be very helpful when you sit down to

write up the employee’s review.

The second and most important part of the annual review is

future planning. As you go through the employee’s strengths

and weaknesses, you want to outline what he (or she) should

focus on for the coming year. These are turned into a game

plan with specific goals. Of course, these goals need to be

written up and put into the folder from the previous step.

The last part of the review process is to address the

employee’s compensation for the coming year. For many

employees, this is the part of the review they are most inter-

ested in. It is critical that you handle this properly. Too often

employees are given an annual raise even if they have not

earned one. This is addressed in the

Hubbard Management System in a

policy letter dealing with penalties and

rewards. In the policy letter, Hubbard

states: “When you reward down statis-

tics and penalize up statistics you get

down statistics.” The statistics Hub-

bard is speaking of are the production

measurements of the employee. When

you give a raise to someone who has

not earned it through increased pro-

duction, you are actually rewarding

down statistics and will get future down statistics and con-

tinued low production. All increases to compensation must be

tied to increased production.

A Successful Plan for Annual ReviewsI have helped quite a few dealers implement the plan that is

outlined here. It has proven to be a successful method for han-

dling the annual review process and for creating employee

compensation plans.

Step 1: Create a Review Calendar — One of the cardinal

rules of annual reviews is that they should be done on time.

When you forget about the review or miss the employee’s

anniversary date, you send a message that he is not important

to you. Of course, your employees are your most valuable and

important resource. Create a calendar for annual reviews. The

calendar should list all employees and their anniversary dates.

Use something like Outlook to create a simple reminder

system that will alert you when an anniversary is coming up.

Step 2: Distribute Review Materials — You need to have a

formal document to use for the review. Annual review docu-

ments are available from a number of sources. A good docu-

ment allows you to rate the employee on a graduated scale in

all areas of his job. The scale should have ratings like out-

standing, very good, good, needs improvement, unacceptable,

etc., and should rate areas like knowledge of work, quantity of

work, quality of work, reliability, initiative, etc. Approximately

one week before the employee’s anniversary date, the manager

should be given two copies of the review form. The manager is

to give one to the employee with a memo informing him of the

Employee EvaluationsThe key to success is to formalize a plan & stick to it

by: Jim Kahrs, Prosperity Plus Management Consulting Inc.

PRINCIPAL ISSUES


25OT0407 4/3/07 11:01 AM Page 26

review date and asking that he fill out the

form as a self-evaluation.

Step 3: Manager Review Write-Up —

At this point, the manager fills out the

review form for the employee’s perform-

ance. The employee’s folder is referred to

as a tool for remembering what happened

during the year. Once the write-up is com-

plete, the manager must go over it with his

(or her) supervisor. The purpose of this is

to allow for help and direction and to provide a sounding

board. The manager and supervisor can also discuss compen-

sation strategies at this time.

Step 4: The Review Meeting — When the review date

arrives, the manager and employee should meet in a quiet area

where they will not be disturbed. It is better to do the review in

the office but if you do not have a quiet spot, you can have the

meeting off-site. As the manager, the first thing you do is go

through the employee’s self-evaluation. Have the employee

take you through the entire document. It is important to listen

to what he has to say without rebuttal. Right now, you are

getting his viewpoint. If you want to outline plans for improve-

ment, you need to understand the employee’s viewpoint.

Once the employee has taken you through his write-up, go

through yours. Go through each item and

discuss why you rated the items as you

did . If th ere i s a major di screpancy

between your rating and the employee’s,

you may want to sp end a l itt le t im e

explaining why you see it differently. Be

sure to outline areas that need improve-

ment. The review should be a balance of

past performance and future goals.

Step 5: The Compensation Element —

I strongly recommend that you do not discuss compensation

during the initial review meeting. Make it clear to the

employee up front that the purpose of this meeting is to go

through the review and that a follow-up meeting will be sched-

uled to discuss compensation. The plan that works best for com-

pensation allows for employees to receive an annual raise up to the

Social Security Administration cost-of-living adjustment referred

to as the COLA. Go to http://www.ssa.gov/cola/index.htm to see

annual COLA rates. If an employee’s performance and produc-

tion over the past year was excellent, he could be given a raise

based on the full amount of the annual COLA. If his perform-

ance and production was good, but not great, he might get a

portion of the annual COLA. However, if his performance and

production do not warrant it, you should not give any raise.

Additional income potential beyond the COLA should be

offered in the form of production incentives that are tied

directly to the employee’s position.

Once you have decided how you are going to adjust the

compensation, schedule a follow-up meeting to go over this

with the employee. Be prepared to handle any questions or

objections he might have.

The key to success is to formalize a plan and stick to it.

Once you do, the process of conducting annual reviews

becomes much easier and more fruitful. The entire staff knows

what to expect and can now focus on the process. You no

longer have the two opposite viewpoints mentioned at the

opening of this article.

If you need a review form or would like a copy of the policy

we use with our clients, just drop me an e-mail. I would be glad

to send along copies to help you get started on your way to

making the review process the management tool it can be. �

Jim Kahrs is the founder and president of Prosperity Plus

Management Consulting Inc. PPMC

works with office technology companies

in building revenue and profitability.

Kahrs can be reached at

[email protected] or (631) 382-7762.

Visit www.prosperityplus.com.

It is important to listen to what he has to say without rebuttal ... If youwant to outline plans forimprovement, you needto understand theemployee’s viewpoint.

Scholarships for use at colleges or accredited vocational trade schools are available to the sons

and daughters of BTA retail dealer and reseller members and the sons and daughters of their full-

time employees. Scholarship recipients are chosen byan impartial and independent evaluator. Completedapplications must be received at BTA by May 1. To

obtain a scholarship application form, contact MaryHopkins at [email protected] or (816) 303-4031 or

write to: BTA Scholarship Foundation, 12411Wornall Road, Kansas City, MO 64145.

HHaavviinngg ttrroouubbllee ffiinnddiinnggmmoonneeyy ffoorr yyoouurr

cchhiilldd’’ss eedduuccaattiioonn??

BBTTAA CCaann HHeellpp..

®


26OT0407 4/4/07 12:49 PM Page 1

15OT0107 12/29/06 4:51 PM Page 1

Igot my first state contract 19 years ago.

Today, state contracts represent more

than one third of my business. One of

the main benefits of getting a state contract

is that you also get to work with quasi-state

agencies, like school districts, that provide

the main benefit of getting a state contract.

Even when budgets are defeated, school dis-

tricts don’t go out of business. No matter

what, they continue to make copies and use

tremendous amounts of toner and paper.

In my state (and probably your state, too), without a state

contract, you are locked out of this monster market. If you are

considering getting a state contract, there are several things

that you should keep in mind.

There will probably be a bid every two or three years. To get

on the bid list, contact your state’s Department of Treasury’s

Division of Purchase and Property. Then, to submit a bid, you

must agree to offer the same pricing to state and quasi-state

agencies. However, you must also meet requirements that are

beyond price. For example, you may have to commit to a four-

hour service response to the entire state’s geography. Com-

plaints about lagging service response can cost you your place

on the contract. You must also meet requirements regarding the

financial stability of your company, and as a dealer, you will also

probably need a letter from your manufacturer stating that you

have their approval to bid on the state contract. The state wants

to make sure that you will be able to meet its need for machines,

parts and supplies in a timely manner.

When there is an opportunity to bid on a contract, you could be

notified of a preliminary pre-bidders conference. This mandatory

conference is where the terms of the contract will be reviewed.

There are two key pieces of advice I can give about the con-

ference. First, be quiet. The people from the state do not do

copiers for a living, and some things in the contract might not

make sense to you. Despite this, don’t argue over an issue,

especially if the state is adamant about it. I have witnessed

representatives from large manufacturers argue vehemently

with the state. Large manufacturers might get their way by

arguing, and frankly, their argument might also help you

answer your questions. As a dealer, just submit your bid and

let others argue the issues.

Second, pay attention because the con-

tract’s specs may change. Make sure that

your bid meets the updated specs, not the

preliminary specs. For example, the con-

tract may require a minimum of four paper

drawers with 1,000 sheets of total paper

capacity. However, during the conference,

the state may change this to three paper

trays with fewer sheets. If you miss this

change, you could submit your bid based on the old specs and

price yourself higher than necessary. Although the state will

probably issue an addendum stating the new specification, it is

not unusual for the addendum to come out the day before the

bid is due, which is not enough time for you to make the adjust-

ments in your bid.

There are two things that you can do to greatly enhance your

chances of getting a state contract. First, have some sizable clien-

tele that you have supplied machines to. My company had been

the primary fax machine supplier to one of the world’s leading

pharmaceutical companies. This added to my company’s credi-

bility and demonstrated that we could meet the needs and

requirements of a large organization.

Second, be a reputable dealer. Unfortunately, in our business, it

is difficult to demonstrate credibility. Good news about your

company travels slowly, but one bad service incident is quickly

broadcasted by every one of your competitors. Therefore, I would

highly recommend doing everything possible to avoid that situa-

tion. Sometimes a machine may have inherent problems. Still, it

is our responsibility to keep that machine working, regardless of

our parts and labor expense. An occasional financial loss on a

client’s maintenance agreement will be greatly overshadowed by

the continued business our good reputation brings.

Getting on a government contract is not easy. It takes a com-

mitment to provide a certain level of service and it requires a will-

ingness to deal with bureaucracy. However, the

resulting stability in your business can make the

effort worthwhile. �

Art Schwartz is president of Image Systems

Group, based in Middlesex, N.J. He can be

reached at [email protected].

Winning State ContractsThere are several things to keep in mind

by: Art Schwartz, Image Systems Group

SELLING SOLUTIONS

An occasional financialloss on a client’s maintenance agreementwill be greatly overshadowed by thecontinued business ourgood reputation brings.


28OT0407 4/3/07 3:11 PM Page 29

Imagine if it were

possible to read the

rookie card s of

some of the nation’s

top sales and business

professionals. The stats

w ould include th e

detai l s of th eir ver y

first job. Despite the

stale, 20-year-old wad

of gum, you would have

an amazing piece of

sales nostalgia.

Would you be sur-

prised if “copier sales”

was listed as their first

position in the lineup? You should not be surprised at all. The

copier sales industry was literally the farm team for organizations

that recognized exceptional sales and prospecting skills; skills

that even the pharmaceutical industry considered worthy of their

roster. They routinely called up copier salespeople and turned

them into pharmaceutical representative “superstars,” complete

with salary cap and all. Countless other industries seized copier

salespeople for their clubs, too; perhaps in some way it was a

compliment to our organizations’ training programs.

As the copier industry evolves into the “document imaging

age,” imagine how competitive your company would be if you

had those accomplished professionals back on your staff. The

following is how the industry should develop and maintain a

scouting program to bring our top players back to our team —

the home team.

Years ago, selling a box was easy and applications were

straightforward, making this industry perfect for entry-level

people. As the industry evolved from selling boxes to selling

solutions, the sale became much more complex. Strong analyt-

ical skills, an understanding of how a variety of businesses

operate and the credibility to influence clients to consider

process improvements became critical.

Your top salespeople are the ones selling solutions. Your

entry-level, “go-getter” type of rookie lacks the experience and

credibility to influence decision-makers. Rookies fall back on

the only instinct they

have developed —

selling on price. Their

comfort zone is in

dealing with lower

level , non-decision-

makers. They have yet

to develop the skills to

qualify leads. The

result, usually before

the end of spring

training, is a burnt-out

rookie (read: turnover).

In the process, the

dealer is out time and

money while your pros-

pect-almost-customer is frustrated by the whole game. Fortu-

nately, there is a better way.

Your experienced account representatives have the credi-

bility to comfortably interact with senior executives. These

pros understand business applications and how documents

are and should be used within their customers’ organizations.

They have strong relationships with their customers and

prospects and are constantly adding value to clients with their

seasoned decisions and solutions. Selling equipment is only

the beginning of their solution sale. Like their major league

colleagues, their earnings are superior as well. While the

choice of hiring a rookie versus hiring an experienced profes-

sional seems obvious, most dealers choose the rookie, train

the rookie and hope the rookie will stick around. In today’s

world, these youngsters are not as loyal as our generation.

These rookies bounce around, costing the employer more time

and money.

Frank Pacetta, southwest Ohio’s marketplace president for

ComDoc, fully understands this “document imaging age.” “I am

not open-minded to wasting our time and resources trying to

reach those right out of college or anyone without sales experi-

ence,” he says. “The effort required, combined with the likeli-

hood of success ... makes this a terrible investment.”

Pacetta will indeed hire a few rookies; however, the recruiting

process will be as selective as AA or AAA ball. Unfortunately,

Recruiting Tenured RepsHow to attract success & experience to your sales force

by: Jamie Schorr, Cezanne Resources, LLC

SELLING SOLUTIONS


29OT0407 4/3/07 11:21 AM Page 26

most dealers’ recruiting is not as structured

as in the Cactus League. So, how are com-

panies recruiting? Sadly, what is left is

word-of-mouth and advertising to the

general population. Do we really think that

experienced and successful salespeople are

reading that advertisement?

In order to attract successful and experi-

enced sales professionals, a company needs

to have both a targeted recruitment strategy

and competitive compensation plans. The first step to a targeted

recruitment plan is to make good use of professional recruiting

partners. Recruitment firms specialize in obtaining experienced

personnel; you continue working on what you do best — selling.

The right professional recruiter should take the time to reach out

to experienced and successful sales executives that meet the quali-

fications of the solution-selling role, delivering you the cream of

the crop.

Likewise, your compensation plan for these pros needs to be

acutely different from that of a rookie. Paul Hanna, president of

Blue Technologies, and his team made dramatic changes to

their compensation plans this year in order to attract more

accomplished and qualified candidates. Blue Technologies is

also using a targeted recruitment plan executed by an in-house

recruiter. In addition, the company uses guidance from profes-

sional outside recruiters.

Finally, dealers today will need retention strategies that

cause successful tenured representatives

to feel valued. Training and education

must be frequent and creative. Having

your top players sit in front of a PC to pas-

sively view a seminar is not enough.

Training needs to be hands-on and con-

tinuous. If a dealer is not large enough to

have comprehensive training internally,

they should consider outsourcing the

training. The result will be a renewed

focus and energy on their core business.

While the industry today is different from 10 years ago,

there still exists an opportunity for an independent dealer to

reach unparalleled levels of growth and prosperity. Like the

old saying goes, “We are only as good as the people we sur-

round ourselves with.” Having a proactive strategy to attract,

develop and retain successful salespeople will continue to be

crucial. Or, you can just forget about post-season play. �Jamie Schorr is the owner and founder of Cezanne Resources,

LLC. The company operates MRI Network of Beachwood, Ohio.

MRI Network is part of Management Recruiters International, the

largest recruiter of impact players in the nation.

Prior to establishing his own business, Schorr

spent 22 years with ComDoc Inc. as vice presi-

dent of sales. Schorr can be reached at (216) 464-

8440 x102 or [email protected].

Visit www.cezanneresources.com.

... To attract successfuland experienced sales professionals, a companyneeds to have both a targeted recruitmentstrategy and competitivecompensation plans.

ADVERTISER INDEX12 • Ames Supply Company

(800) 323-3856 / (630) 964-2440 / www.amessupply.com

2 • BEI Services

(307) 587-8446 / www.beiservices.com

13 • Business Products Council Association

(800) 897-0250 / www.businessproductscouncil.org

26 • BTA Scholarships

(816) 303-4031 / www.bta.org

15 • docSTAR

(800) 367-5906 / www.docstar.com

7 • DocuWare Corp.

(888) 565-5907 / www.docuware.com

11 • Duplo U.S.A. Corp.

(800) 255-1933 / (949) 752-8222 / www.duplousa.com

3 • FMAudit LLC

(573) 632-2461 / www.fmaudit.com

27 • Imaging Industry.com

(800) 621-0623 / www.imagingindustry.com

32 • Kodak

(800) 944-6171 / www.kodak.com/go/ScanStationResellerOTM

9 • MKG Imaging Solutions Inc.

(800) 881-7545 / (905) 564-9218 / www.mkg.org

17 • Niche Equipment

(877) 446-4243 / www.nichee.net

31 • Panasonic Digital Document Company

(800) 742-8086 / www.panasonic.com

5 • Print Audit

(877) 412-8348 / (403) 685-4932 / www.printaudit.com


30OT0407 4/3/07 11:26 AM Page 1

You probably know by now that

Panasonic copiers are turning

some heads. Look what we’re

up to now! Introducing the new

C3 Color Series from Panasonic.

All of the innovative features

of our C3 are now available in

four simply brilliant colors to suit

virtually any offi ce personality.

It’s eye candy for the offi ce!

And that’s not all. Panasonic

was recently ranked “#1 Copier

in Overall Customer Satisfaction

Among Business Users.”

For more information visit

panasonic.com/notblah or

call us at 1-800-742-8086.

IT’S NOT BLAH.

Panasonic received the highest numerical score in the proprietary J.D. Power and Associates 2006 Business Copier Customer Satisfaction StudySM.Study was based on a total of 1,524 responses, measuring 10 manufacturers and measures opinions of business customers at small, medium, large businesses who purchased or leased a new copier in the previous 21 months. Proprietary study results are based on experiences and perceptions of those surveyed from January 2005 - September 2006. Your experiences may vary. For J.D. Power and Associates award information, www.jdpower.com.

Panasonic Apr 07 3/16/07 8:43 AM Page 1

PRSRT STDU.S. Postage PaidEaston, PA 18042

Permit #31 Office Technology MagazineBusiness Technology Association 12411 Wornall RoadKansas City, MO 64145(816) 941-3100www.officetechnologymag.comwww.bta.org

32OT0407 3/27/07 8:35 AM Page 1

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