First published in Dealer Support December 2013
With offices across the south west of England, 1stOffice Equipment is one of the leaders when it comes to document management and managed print services. Austin Clark talks to sales and marketing director Andrew Jones to find out more about the company’s growth
First by name, first by nature
Headquartered in Bath with regional offices across the south west, 1st Office Equipment is an independent sales and service provider of print and document management technology that’s enjoying real success in a competitive market. During its 25 years of trading, the business has developed from its original base as an amalgam of smaller office equipment suppliers into a fully integrated £7m turnover dealer, with the structure allowing 1st Office to retain all of the important smaller company values of true customer care, true business ethics and traditional values of excellence, while marrying them with the large company benefits of increased purchasing power, greater levels of staff training and more cost-effective operating costs.
Andrew Jones, the company’s sales and marketing director, joined the company when his first business, Clark Business Product’s in Bath, was merged into 1st Office Equipment in 2005. When asked how the company has developed so quickly, he says: “We’ve gone through a number of strategic acquisitions since, and while there has been an element of organic growth, it’s the acquisitions of dealers of a similar synergy to us that have opened up opportunities, in particular where we’ve been able to introduce a managed print service (MPS) offering.”
MPS is a big part of 1st Office’s work, accounting for 35% of machine sales, a figure that is growing all of the time. Jones explains: “MPS will continue to grow rapidly, but not in the historical MPS sense where you’re providing a solution with a little bit of software and the relevant hardware to facilitate the printing. It’s about taking it to the next level with the IT support and infrastructure around that as well, providing for example the print servers and full back-up service, taking that headache away from the IT department. A lot of larger companies don’t want to get too involved in the actual printing side of business, so the natural progression is to link everything together in one package that includes everything.”
The definition of MPS
While MPS and the definition of it varies from supplier to supplier, 1st Office sees it as an as evolving solution. “Our original definition of it, which is where the market leaders were taking it, involved going in and taking over an existing fleet but very quickly we learnt that route was not a viable option because more often than not you can change the actual printer fleet for brand new equipment and still demonstrate a cost saving,” says Jones. “So, our approach now is to take a total cost of ownership approach, look at what the client actually needs and not try to just to convert print volumes across to MFPs. You have to take a wider view of the whole process and put forward a proposition that shows a cost saving. Then, the secret is to link that into a full MPS service that includes IT support and software, right the way down to full print back-up, presented in an MPS format where the client is buying print at a fixed rate, knowing exactly where they stand.”
Jones says that 1st Office very much prefers a cost-per-page pricing structure. He says: “It’s simple to understand, the client can see the benefits and it doesn’t matter what device is being printed on as it’s the same fixed rate.”
When it comes to brands, 1st Office offers three major names in the shape of Ricoh, Olivetti and Lexmark, with the latter added a couple of years ago to increase a print offering with low running costs. “Ricoh traditionally supplied 1st Office and there’s no reason to look anywhere else as people will always be very brand loyal, but when you go to market it’s always good to have more than one offering,” explains Jones. “With Olivetti you have a different offering – you’ve got specific technical advantages with each range so then it comes down to what each customer needs. By having the different brands you can mix and match the products, rather than being just a one-trick pony. Lexmark, from a running cost perspective, gives us a very competitive option.”
When asked if the market is ready for MPS, Jones unequivocally answers yes. “SMEs are now pretty well educated about what’s available, but if not, they’re aware of the problems caused by lack of controls around colour printing costs,” he says. “Today, colour print costs have come down so much that those worries are unfounded, but historically it was a problem and it’s one that’s remembered. In the commercial market, we can help educate companies by showing who’s printing what, bringing more management into print. That’s where you start to lead into managed document services and not just MPS, looking at the complete document workflow in a business, looking at overall processes. It’s simple things such as asking why people print out an email in colour, and allowing print jobs to be routed through the printers that offer the best value colour printing.”
Decreasing print volumes
Across all print-reliant businesses, decreasing print volumes can be a problem. Does 1st Office see this as an issue and how is it overcoming the problems? Jones explains: “It’s definitely an issue and that’s why it’s vital to look at the wider picture. The buzzwords at the moment are wraparound technology’ which means ensuring the services being offered revolve around the wider IT offering, including hardware and support for laptops, desktops, tablets and so on. Whether we like it or not, as a historic copier company, we are in the IT market, so you’ve got to know what you’re doing across the IT sector. A lot of smaller businesses don’t have an IT department, so being able to offer a full IT service can bring in business. Do this and decreasing print volumes become less of a problem.”
Jones continues: “In many ways it all comes back to something that I believe underpins the success of 1st Office and that is being able to offer clients what they want, rather than being stuck with a product off a price list that you have no option with. With the IT support that we do, it gives us an element of flexibility at all levels. We win business by working with companies to give them the best solution for their needs. For example, a large client of ours originally had 80 printers across five floors and now they’ve got just 16 MFPs and only one printer in reception, which is used for printing visitor ID badges. I think the saving was something like £96,000 over three years but that can only happen through a collaborative approach.”
When it comes to service levels, having engineers located around the South West means 1st Office can respond to client call-outs in next to no time, with the service level agreement offering an incredible maximum of four hours between call-out and being on site. “Having our own engineers, rather than relying on those of the manufacturers means we’re always in control of our own destiny,” says Jones. “IT only goes wrong because it’s being used, so the quicker you can fix it the better as it enhances your relationship with the client when it comes to winning future business.”
To further enhance the regional nature of the business, offices can be found in Bath, Bristol, Barnstaple and Plympton, the latter located in recently opened premises that include a 5,000sq ft regional distribution centre. Another warehouse can be found at Bath, with one in Weston-super-Mare too, strategically placed to be within easy reach of engineers. Toner and spare parts are always held in stock although machines are ordered on a just-in-time basis, reducing the levels of cash tied up in stock and ensuring no technology is sitting on shelves for too long.
Jones adds: “The biggest threat to dealers like 1st Office is from the big manufacturers, who are heavily involved in the MPS market. They have the IT wraparound services in place, so while they’re a threat, our local service, speed of response and client relationship will keep the competition away, but only if we can maintain our levels. That’s why we’ve invested in our new site in Plympton, which puts us exactly where we need to be.”
Moving to its vision of the future, 1st Office is looking to continue to grow through acquisition. “I won’t say the bubble has burst yet with MPS but it will one day because there is a certain level at which MPS becomes unnecessary. If the volumes of print aren’t there, there’s no point going in with a service-led agreement. It is, therefore, true to some extent that there’s a finite number of companies to sell MPS to. That’s why we’re looking to continue to acquire. We’re forecasting quite considerable growth at 1st Office next year and that will mainly be down to acquisition and we’re always looking for companies that have the right synergy.”
Thanks to impeccable service levels, a regional structure that’s hard to beat, plenty of expansion plans and a willingness to adapt to the market and client needs, 1st Office is set for another 25 years of growth.