At Convergence 2012 Dealer Show, Ricoh Puts “Services-Led” Plans on ICE
With Ricoh’s unofficial introduction of ICE (Integrated Cloud Environment) technology, the big news at its most recent dealer conference was that the newest generation of Web-enabled MFPs (and its new digital mobile projection device) will offer gateways to the cloud, with cloud scanning/printing uploading and downloading from any mobile device (including smart phones, tablets, iPhones, etc.). As a demonstration of its commitment to mobile applications, Ricoh also provided conference attendees at Convergence 2012, held June 10 to13 at the Wynn Hotel in Las Vegas, with a downloadable conference app for their smart phones that contained information on scheduled events.
According to Ricoh Americas CEO Martin Brodigan, addressing the general session held the first day, “Our new services-led architecture is the gateway to the cloud and the world of managed document services.”
“Services-led” was the main buzzword at the show, with seminars, presentations and numerous booths set up in the Technology Expo room to showcase Ricoh’s push to help its dealers transform their business models from box-based to services-led strategies. Going forward, Ricoh says it will offer services-led products that focus on usability, commonality and security, with mobile printing apps, integrated cloud solutions and integration of the A4 product line with Ricoh’s managed document services.
Dave Greene, senior vice president of sales, told attendees at the general session that Ricoh’s main strategy this year is to help its dealers become a “one-stop shop” for all their customers’ product needs, from mobile solutions to customized business solutions. He said that this strategy not only helps them close the sale, but also keeps customers loyal, and can even result in referrals to other prospects.
Ricoh announced that strategically it intends to transform to a services-led business model, with a core shift in its business model to emphasize its services portfolio through its Business Information Services framework, as well as channel deployment, via Ricoh’s ChaMPS program, for service resources direct to dealers, which gives them the tools and services they need to provide whatever clients need (such as service assessments, consultants, etc.). The shift in strategy affects the traditional business model in numerous ways; for example, instead of a contract length being tied to the life of a particular box (product-led), the services-led contract life is driven by the customer’s need for the entire solution (such as managed print services). According to Mike Dane, vice president of marketing for Ricoh Americas Corporation, Ricoh is capable of delivering a complete workflow consulting and design solution, including cloud-based, on-premise and hybrid solutions that can cover everything from IT services to technical support and on-site resources.
New 31-PPM MFPs Showcase New Control Panel Design
Ricoh announced two new 31-ppm MFPs at the show: the color MP C305 series and the monochromeMP 301SPF. These MFPs include the new Ricoh control panel, which is tiltable and offers a customizable image area (which could display a company logo, for example); numerous pre-programmed shortcut icons; user preferences based on who is using the MFP; and drag-and-drop customization allowing users to rearrange icons to suit their needs.
The new control panel will have a similar layout across the entire Ricoh product line going forward. All will include an eco-friendly indicator that displays company printing policy and clearly explains how much paper could be saved by, for example, selecting duplex instead of simplex when copying, which could prompt users to change their settings to the most environmentally-friendly choices. Going forward, new Ricoh MFPs will also offer the ability to print Web pages directly from the control panel, standard IOS Air Print mobile hotspot and enterprise hotspot capability and optional Web browsing with ICE compatibility (as soon as ICE is available).
The MP C305 is also, according to Ricoh, the most energy-efficient imaging product in the company’s history as well as in the 21- to 35-ppm segment of the A3/A4 market, with a TEC value of 1.2, a rated 10-second recovery time from sleep mode and a rated 23-second recovery time from power-off mode.
Other new MFPs that include the new style of control panel are the MPC300/400 series and the SP5200/5210 series, which were previously announced and were also showcased at the Technology Expo.
The Technology Expo
In its Technology Expo showroom, Ricoh displayed a sampling of its complete product line, ranging from gel-based inkjet printers with MSRPs starting under $300 (the SG 3100SNw and SG3110SFNw) that use what Ricoh says is fourth-generation, “instant-dry ink” as well as a bi-directional flushing system that makes maintenance easier, up to production-level devices like the MP C751.
In addition, a booth was dedicated to Ricoh’s vertical market support (with dedicated state contract managers with the U.S. Communities Government Purchasing Alliance available to provide account strategy and bid support, as well as government programs available on InfoCenter) and support for other vertical markets including healthcare, real estate and churches (with special pricing via the National Church Purchasing Group). According to Ricoh, they can provide support, collateral and training, and also have dealer billing and leasing programs to help dealers expand into vertical markets they may not be familiar with.
Ricoh also dedicated booths at the Technology Expo to its ChaMPS program, as well as to its own solutions such as PCS Director (a print, copy and scan assessment and cost recovery solution); Print Audit Facilities Manager for Ricoh dealers; Ricoh University and its dealer training programs; and its new mobile digital projector/signage system.
Other vendors represented at the show included NSi with AutoStore 6; ITC Systems with customizable print control software solutions; ESP Energy Intelligence with an array of surge protectors and energy-related hardware, plus an energy management solution and what the company claims is the industry’s first cloud-based protection solution (Next Gen PCS Remote Control center); Digital Gateway Inc. showing e-automate dealer management software; Westbrook Technologies Inc. with FortisBlue document management software and the FortisBlue SharePoint Connector; and RFIDeas, showcasing a single-badge identification solution including proximity and contactless card readers.
Earthquake, Tsunami Contributed to Soggy Bottom Line
At the general session, Martin Brodigan, CEO of Ricoh Americas as of May 1 (he was formerly COO of the company) said, only half-jokingly, “I’ve been the chairman now for 45 days, and I feel every one of them.” He noted, “We’ve had many internal issues to deal with resulting from the IKON acquisition. We’ve put most of them behind us and I am confident we can focus all of our energy on our customers and our dealers.”
Brodigan displayed a new organizational chart for Ricoh Americas Corporation and noted, “This is the first time in the history of Ricoh U.S. that we have a totally local leadership team focused on the needs of our global customers.” The intention of the reorganization, he said, was to create a group that was able to respond to changing customer needs more quickly and efficiently.
He said that in fiscal year 2011, Ricoh’s global operating profits were $671 million before accounting for extraordinary items including earthquake and flood impact ($183 million), impairment ($451 million) and net restructuring charges ($256 million). The effects of all these factors combined to create a net operating income loss of $220 million as of March, 2012, a figure Brodigan termed “unacceptable.”
He noted that despite such “extraordinary circumstances” faced by Ricoh last year, the company did not cut back on research and development. “In fact, we increased our investment in R&D by $102 million. That’s our commitment to the future. A bad year is a bad year, but we’re not going to let one bad year hold back our future.”
There were still bright spots to be reported from the last fiscal year. Brodigan said that Ricoh retained its Number One position worldwide among MFP manufacturers, with a 22% global market share and a 22% U.S. market share. Plus, according to Jim Corridi, vice president of Ricoh Americas’ dealer division, “our dealer revenue still showed growth year over year.” He said that dealer sales of MFP units were up 8 percent over the previous year, and production units sold by dealers were up “an amazing” 35 percent.
Growing Dealer Sales Volume
At the general session, Corridi was clear that Ricoh’s acquisition spree of the last few years is over and that the absorption of IKON is just about finished. “Our primary strategy for growing the dealer business is not to add more dealers,” he said. “Our primary strategy is to grow the dealers we have.”
Corridi stressed that reorganization of Ricoh’s sales channels have put the dealers “at the heart of Ricoh’s corporate business plan.” He reported that in fiscal year 2011, dealer sales volume grew from 30 percent to 32 percent, and that Ricoh’s ultimate goal is to grow the portion of dealer sales to 40 percent of total sales volume. He said that dealers will be able to offer services including managed document services, production, IT, commercial imaging and professional services with a minimal investment via the Ricoh ChaMPS program.
As Dave Greene explained at a later analyst briefing, Ricoh’s direct sales channels will primarily focus on big businesses (at least 150 employees), and that the dealer sales channel will have access to the same pricing and services available to the “big boys” via the cafeteria-style menu of services offered by ChaMPS.
According to Greene, Ricoh dealers “no longer need a specialized sales force” to sell products such as high-end production printers because Ricoh can arrange a complete menu of services from needs assessment to product marketing teams that have “made it easy for any of our dealers to get into the production market.”
Unofficially, word among dealers was favorable. BLI spoke to a number of dealers at the event. We did not run across any dealers who felt threatened by competition from the Ricoh direct channel, so Ricoh’s published rules of engagement are apparently working. We also spoke with dealers who had utilized the ChaMPS program successfully to help gain new business, and one noted that services such as the ChaMPS needs assessment was only billed if the account was actually won.
Seminars Focused on Services and Growth
The second day’s general conference speaker was Roy Spence, chairman and CEO of GSD&M Idea City, the marketing communications and ad agency and creative power behind brands such as Southwest Airlines, Walmart, Chili’s, Pampers and BMW. Spence also wrote a book called, It’s Not What You Sell, It’s What You Stand For (Why Every Extraordinary Business Is Driven By Purpose) and shared his philosophy on what he calls “Purpose-based Branding™.” Spence was also on-hand to give a seminar called (not surprisingly) “Fueling Your Business with Purpose.”
Three other seminars were offered throughout the conference, including “The Power of Ricoh’s Resources…Grow Your Business Now!,” “Leveraging Ricoh’s New Technology Platform to Increase Business,” and a dealer panel discussion called “Transforming to a Services-Led Dealership.”