As a business, Konica Minolta is looking to simplify what it does to add more concentrated value to its partners and end-users, Michelle Ryder caught up with Chief Revenue Officer Mark Ash, to find out more about the firm’s SimplyFY22 strategy
Michelle Ryder (MR): In June last year, Konica Minolta announced a number of appointments to the UK leadership team led by CEO Rob Ferris, as a new board what have you been focusing on?
Mark Ash (MA): The formation of the new board translated into a change in strategy for the UK business. The key thing for us now as an executive board is to ensure that we’re aligned to Europe and our parent company, so that we can leverage the economies of scale that alignment brings. But at the same time, we have the autonomy to work for local markets, that way you get the best of both worlds.
But before I move onto our strategy, it helps to put things into context. I’ve served on four boards now and each year the format is the same, you plan for the next fiscal year and the operating paradigm is largely the same as the year before. However, if you look at what this new board has been through – every single event is a once in a lifetime event. We’ve had COVID, Brexit, supply chain challenges, a factory explosion, and now the conflict in Ukraine. The sheer amount of change meant all bets were off – so actually, the strategy was quite simple. It was that we would harvest our core print business and invest into our other business lines including production/ industrial print and IT services.
MR: Konica Minolta has been transforming from a predominant provider of print technologies into a digital IT services company, are you looking to leverage existing relationships within the print side to cross and upsell IT services and solutions?
MA: Our core business is within office print, and we’ve also been very successful in light production print, and print remains an integral part of our business strategy. However, we’ve all had to adopt new ways of working and that plays to our strengths.
Our strategy for this year is to simplify the products and solutions that we offer to our customers – we called it SimplyFY22. We had a huge amount of choice, which is great up to a point. But when you look to scale the business and leverage the customer base we already have, we have to simplify our offering. We’re looking to grow the percentage of IT services and solutions in our business, and we’re well positioned to do that through our acquisition of ProcessFlows, what we will do now is reduce the spectrum of products that we’ve got, and then in future years, we can amplify and grow them.
If you look at the B2B print market, the thing is that you have a contract with a customer which means you have to deliver value for them throughout the three or five year term. That builds a relationship and trust and provides a platform to build in other service agreements, whether that’s production printing, intelligent video security (a capability earned through the acquisition of Mobitix), content creation and workflow solutions, or outsourced services. Essentially all of the services sit underneath a master services agreement where you look at the lifetime value of a customer as opposed to looking at the customer purely as an office print customer.
MR: You’ve been successful within the light production print sector, is this a growth area for the business?
MA: We have a strong heritage within the large enterprise and public sector space, but customers in those sectors aren’t typically going to invest in high-end laser cutting devices for example. So, we are investing heavily in the production/industrial printing business, we have brought in a market segmentation specialist to support our goal to move up the value chain and grow share within the high-end inkjet press, label printing and packaging markets. That will run in parallel with the growth of the IT services business.
MR: Are you also investing in your channel, enabling partners to leverage growth opportunities with IT services?
MA: The answer to that is yes. Historically, Konica Minolta has under invested in its channel business, and we have seen some decline. One of the reasons why I think I was successful in obtaining this role is my previous experience with Samsung, running a 100 per cent partner business.
We’ve addressed and arrested the decline, and we’re now growing our partner business both in terms of market share, but also in terms of the share of our UK business. So, it’s now a greater percentage than it’s been in the last three or four years. There will be two things we do with regards to IT services. We will have a small number of packaged offerings that we will make available to our existing partners, they can either procure the product, service or solution direct or we will offer it as an outsourced service, which we will deliver via our outsourced business in Sofia.
With that, we’re offering real flexibility – after an initial 90-days, we have a 60-day termination policy, what this means is that customers will have the ability to scale up or down with minimum investment and maximum impact. They can also outsource non-core job roles and some back-office functions which will reduce their cost to serve.
MR: Will you be looking outside of the print channel too?
MA: Yes. We’re also working on engaging with new partners, traditionally non-print customers i.e., VARs. We’ll be looking at that marketplace because there’s a number of different products, services and solutions that we can deliver there. We can either sell them as a component that fits into their ecosystem that they can resell, or we can sell it to them as-a-service. For example, if you look at intelligent video, we have a solution for every vertical market – from education to retail to healthcare. Our approach is to help partners identify and understand which models lend themselves to delivering profitability for their businesses as well as value to their customers.
Additionally, we are working with a number of select partners on building strategic alliances. That model means we will collaborate to serve the market together. It could be that larger channel partners become a delivery mechanism, or we work together on a partnership based approach to go and service the market together. Essentially that means we have three routes to market – direct, indirect and this hybrid model, which leverages the value from both the OEM and the partner to deliver value to the end customer – it’s an approach that I’ve had success with in the past and we’re excited to move this forward.
The challenge as always, in any business like this is that it’s very easy to align sales and marketing – we can do that very quickly. But you need to get to grips with finance operations and the technology that enables you to jointly design, build, support and manage contracts. You need to have the systems and the processes in place to do that. And, again, if you’re selling IT services, it’s a very different business than selling office hardware.
We’ve got the experience we need on our board, and Mike Faiers, our CTO will play a crucial role in this. We’re focused on how we work together and overlap to design, build and support solutions with the customer in the middle. We’ve recently appointed three new heads of design, build and support and we’ve implemented a multi-faceted matrix management structure. We are now a very, very agile organisation and we’re breaking down the silos so that our teams benefit from the technical knowledge and the skills that exist in the IT services organisation in Europe, but they also get to sit on the UK management team alongside heads of marketing, sales and service so they can deploy our services at a local level. Ultimately that model will also drive and enhance our employee experience.
We have a strong go-to-market strategy now – we have local services, which we do in the UK, or via our team in Sofia. We then have central services things like data centres, security centres or network operating centres which give us the scale that I referenced earlier, they typically sit in Europe; and then we have global services as well that will be typically run out of the States or another entity.
So in summary, the key things are that we are looking to simplify what we do, to break down product and solution silos and drive multi-channel engagement in the three key markets of our core business. We’ve got a really simple moral compass about adding value to our customers, improving the customer experience and the employee experience. It’s really quite important – if you can have an inclusive place that’s nice to work that develops people skills and capabilities, then that will translate to growth.