The writing has been on the wall for box movers for years.
But as resellers in the daily grind struggle to create an edge in an increasingly consulting-based industry, one vendor is showing how it can be done.
Ricoh, traditionally known for its printing, scanning and document handling hardware, has for the last couple of years created new revenue streams with separate businesses, one to consult clients on office efficiency, and the other to provide overall IT consulting services.
According to Mike Pollok, managing director for NZ, this has been the vendor's best year ever in this country.
"We’re in an industry that is traditionally has been very much driven by providing devices and putting that electronic information into hardcopy, and people want to do that a lot less now," Pollok says. "Now people want to talk to us before the hardware question, about how to better handle information in their organisation, and to become more efficient, to automate business processes and streamline them."
Ricoh in 2011 established its own IT consulting service as a separate division, engaging with end users and consulting through its exclusive dealership channel around the country.
The reseller partners have been rolling out parallel services in their respective markets.
"That transition from hardware-led to consulting-led services is integral to our growth," says Duncan Wallace of Hawkes Bay Technology in Napier. "The fact that we were becoming more consultative in our approach has lead to us having more credibility, which led to being more trusted, which led to us selling a whole lot more equipment and more software."
Wallace has been in business for five years, starting with a staff of three and growing to the current 15. The transition from a pure-play box mover to a trusted consultant is reflected in part by the change in its name: Hawkes Bay Document Technology is in the midst of officially dropping the word 'Document' from its letterhead.
There are around a dozen Ricoh resellers –– "exclusive dealers" in the vendor's parlance –– divvied up by geographic regions. Pollok claims that the company has enjoyed a 43 percent increase in product margin over the last year.
The company provides training and sales support to help its regional partners like Hawkes Bay land the larger opportunities, introducing third-party productivity software into the mix. General IT consulting and office efficiency engagements appear to have grown organically from existing client relations, and from the traditional expertise in document handling.
"Document scanning is one area which is huge now, where people want to scan and text search documents and access them at the touch of a button," says Pollok. "The ability to scan invoices nowadays with a metadata app, we can set up a system where you can scan all your invoices, and that will pick up what the product is and where it should go. It gets scanned and automatically sent to the right place to process it."
Pollok says the vendor is in the "final throes" of acquiring small IT organisations in larger centres. He says the company relies on the exclusive dealers to keep business thrumming in the provinces, and says there may be some opportunities for other regional players to team up with Ricoh dealers on some projects. Meanwhile, Pollok says, the hardware sales remain important.
For those regional players, like Hawkes Bay, the transition from hardware to consulting service has resulted from a "push and pull"
"The push was basically because that we understood the technology was changing and even though that might be generational, we understand that paper will eventually disappear. So there was push that we needed to diversify to mitigate our risk," Wallace says.
"The pull was that our relationships with customers were strong, if not stronger than other providers of IT solutions and they were coming to us to ask what we could do for them. And that was kind of nice."
From Wallace's perspective, it's a symbiotic relationship that works for everyone.
"We form the foundation that supports the customer," he says. "It’s a combination of Hawkes Bay that provides the local service and accountability and understanding of local market, backed by a giant like Ricoh. We can be nimble but we can call on Ricoh resources to deliver the solutions."
