The Cannata Report Advisory Board discusses the supply chain, digital transformation, and hiring and retention.
The Cannata Report’s advisory board offers its take on three of the hottest issues confronting office technology dealers today—the supply chain, digital transformation, and hiring and retention. This month’s panel includes AJ Baggott, chief operating officer, RJ Young, Nashville, Tennessee; Deb Dellaposta, president, Doing Better Business, Pittsburgh, Pennsylvania; Patrick Flesch, president, Gordon Flesch Company, Madison, Wisconsin; Jim George, president, Donnellon McCarthy Enterprises, Cincinnati, Ohio; Troy Olson, president, Les Olson Company, Salt Lake City, Utah; and Doug Pitassi, president, POA, Portland, Oregon.
CR: How did supply chain issues impact your dealership in 2022, and how did you work around those issues?
Baggott: Like many others, we were significantly impacted by the supply chain issues, specifically as it relates to A4 devices. Several large upgrades and SLED (state and local government and education) deals that rely highly on A4 devices were significantly delayed in installation and booking. We took several steps to work around these issues, including prioritizing accounts to get larger major accounts upgraded earlier. Additionally, we are very fortunate to own our own leasing company and did several re-leases of A4 devices to go along with upgrading A3s where we could. This helped drive profitability and keep our customers moving forward.
Dellaposta: Supply-chain issues caused us to miss our goal for the year by about $200,000 but the good news is that we expect all those issues to be resolved this year.
Flesch: Supply chain issues had and continue to have a major impact on our business. We have never seen backorder issues like this in the 66 years we have been in business. Ironically, our warehouses are extremely full, and we are running into space issues. We have a pile-up of multiple machine orders and are waiting for a few accessories or a unit or two to arrive so we can deliver, install, train, and bill. In some cases, we are doing partial deliveries if the customer is open to that, simply to make more room for our logistics teams. On the bright side, we are seeing run rates normalize for most of our OEM partners. So, we hope to make great progress on our backlog in the coming months.
George: It was obviously a challenging year for our business with supply chain issues, fuel costs, and the COVID hangover. We worked with our vendors to ensure we knew when our products would arrive, and we over-communicated to our customers to ensure they knew exactly when we would be delivering product. In many cases, we had the inventory to assist and in others, we used air freight to get it to our customers. A4 was very hard to come by and in certain cases, we replaced them with A3 devices or loaner devices. We delivered over 300 loaners in 2022 to ensure our customers were never down.
Olson: Certainly, we experienced challenges as many dealers have. Our best partner manufacturers really worked with us to communicate proactively to stay ahead of it wherever possible. We want to thank Sharp, as they have been amazing to work with through these challenges. Mike Marusic [president and chief executive officer of Sharp] has consistently sent out dealer principal communications, been very transparent with dealers, and even included heat maps on product availability/constraints. We have also increased our inventory to stay ahead of it, as it’s hard to sell if your wagon is empty. We learned to pivot quickly, focusing on models that are available today while communicating proactively with our sales teams and clients. It’s been very important to be open and transparent with everyone involved to make the best purchasing decisions possible. Our procurement team has done an amazing job of finding options for our sales teams to provide solutions for our clients.
Pitassi: Supply chain was a very difficult challenge with getting limited machines, some accessories, and some mainframes, as well as not having all the pieces to a complete configuration, which caused delayed installs. Also, the expectation of paying vendors when you can’t deliver and collect was a challenge. It caused our collections receivable turns to go up, and now because of the decisions we made on buying equipment, our inventories are quite high at this time. The supply chain has now caused an inventory problem, and we need to sell through our inventories.
CR: The theme of our February issue is digital transformation. What’s your definition of digital transformation (DX), and isn’t that something that you’ve been helping customers do for years, even before DX became a buzzword?
Baggott: I consider digital transformation simply the automation of processes and documentation through the use of technology. We are fortunate as an industry that we have been pushing this since well before the pandemic, and before it was a buzzword everyone threw around for everything technology related. In a lot of ways, our industry has pioneered digital transformation by bringing workflow solutions and digitization of documents to our customers. We have established ourselves as experts in the field and can continue to play a critical role in the evolution of digital transformation for our customers.
Flesch: As you point out, we have been in the digital transformation business since the products we were selling converted from analog to digital. Shortly after that conversion, we entered into the enterprise content management [ECM] space. At the time, we called it document management. We began helping customers digitize their data by scanning files into a document repository. This allowed businesses to organize their data and make information easily retrievable and accessible. Today, we continue to help customers with similar projects and have enhanced our services to include implementing workflow processes that help streamline internal processes. We have also recently entered the managed voice space and are providing unified-communication-as-a-service (UCaaS). This solution certainly has a digital transformation element as it allows customers to consolidate all communication within their business—telephony, email, chat, video, etc.—into one simple platform. We are seeing solid traction in this area with the shift to a more mobile and remote workforce.
George: For me, DX, or digital transformation, is rethinking all aspects of our business and our customers’ businesses and how we interact with them. It is streamlining all aspects of the business and encouraging additional interactions with our customers. I believe that we have been doing this for several years now. The COVID-19 pandemic highlighted the need to be able to work remotely. We have set up several clients’ home offices remotely and on-premise. We have moved into e-commerce for office supplies, which has been growing. I believe all of our manufacturers are going to e-commerce as well. The bottom line is that digital transformation is here, and it will cause all of us dealers to change to better meet the needs of our clients.
Olson: Digital transformation is working with technology to improve processes, systems, and solutions for your clients. We certainly have been helping our clients for many years to improve their workflows and processes. An example is EDM [electronic document management]. For over 20 years, LOC IT has been in the document management solution business helping customers protect their data, creating advanced workflows, and eliminating the need to keep paper records. We need to continue to diversify our business to offer DX solutions to our clients so we continue to grow and prosper.
Pitassi: Digital transformation is unique to each customer’s business and their specific applications. Each company’s line of business and initiatives relevant to their industry dictates what their transformation will look like. We’ll facilitate their move as quickly or slowly as they are willing, and our relationship model allows us to be a consultant on this journey.
CR: Looking at DX internally, what steps have you taken recently to transform your dealership digitally?
Baggott: We are constantly looking to work smarter, not harder. The economic pressures of high inflation and looming recession require all of us to look for those opportunities to enhance our teams’ abilities to automate processes and work as efficiently as possible. We have developed a software application that works with Docuware and integrates with eAutomate to streamline the workflow of our order processing and operational processes required to serve our customers. This has made a more seamless process for our sales, operations, and admin teams to work together to serve our customers better.
Dellaposta: Last year, we completely transformed our internal processes with eforms and electronic order approvals.
Flesch: GFC has adopted our own UCaaS platform internally, and now everyone operates on the same system for phone calls, chat, text, etc. We also rely heavily on Microsoft Teams to work together and are exploring ways to integrate that into our UCaaS system. We also use Laserfiche internally, which greatly improves how we get work done and how information flows within our organization.
George: We went to VoIP [voice over internet protocol] telephones and have taken most of our information to the cloud. We have created apps to train our customers better remotely. We are using remote monitoring tools to support our customers. We will be expanding our e-commerce platform this year. We are a Zoom house, and a lot of our meetings are online if requested by the customer.
Olson: At LOC IT, several years ago, we worked to improve internal processes. This included ways to improve our own systems with the technology we sell and bringing in other solutions to improve our daily workflows. We continue to look at all areas of our business to improve digitally wherever possible. A great example is the workflow we built by using a CRM tool. This has helped from creating a digital sales order that the customer okays digitally to moving the paperwork through the credit approval, set up, and installation processes, all without printing any documentation. We see DX as a very important part of our success moving forward.
Pitassi: I’m excited that POA has streamlined our internal contract process with a total document solution agreement. This agreement allows us to add products and services without additional paper. We’ve also invested in our front-end processing portal as we’ve outgrown our current program. We look forward to having customized e-commerce for specific customers to make it even easier for them to do business with us.
CR: Hiring and retention is a challenge that always shows up as one of the top three dealer challenges in our Annual Dealer Survey. How big of an issue is this for your dealership, and have you found creative ways to find and retain good people?
Baggott: This will continue to show up on the Survey as long as there are dealerships in business. A mentor of mine, Mr. Mike Riordan, says it best, “We aren’t in the copier business; we’re in the people business.” While I think recruiting and retaining talent is always a challenge, we are hit hard by the fact that our headquarters is located in Nashville, which is one of the hottest towns and job markets in the country. Amazon, Facebook, and Oracle are all opening offices or headquarters and paying more than premium wages to recruit the best talent in town. However, I learned early in my career working for Deloitte that a good job and adequate pay aren’t enough to attract good talent. Organizations that have a successful track record of attracting and retaining top talent must focus on three key things beyond just compensation:
- Constantly look for opportunities to offer comprehensive and modern benefit packages that differentiate your organization. We have added company paid service/volunteer days and several health-related benefits in recent years and are exploring new ways to help get talent onboard, such as student loan considerations, adoption assistance, etc.
- Develop and promote an organizational culture that aligns with the values of the candidates we’re looking to hire and the talent we are trying to retain. When you enjoy the people you work with and enjoy the work you do, it has a huge impact on your health and your life outside of work. It is hard to put a value on that, and after the impacts of COVID, this is more important than ever.
- You have to show your people that you care about them as humans, not just as employees. I am a much better COO at RJ Young when I can be a successful husband and father at home. No one should have to sacrifice the priorities of family and friends for their job. We want to ensure we are equipping our people to be successful in and out of the workplace with the support and resources they need. That is the expectation set from the top down at RJ Young, and I firmly believe it helps us retain many talented folks we’re blessed to employ.
Dellaposta: It is amazing how many people do not show up for interviews. We have had some success with ZipRecruiter and Indeed. We have partnered with several local colleges and universities for internships and have had some success in hiring interns.
Flesch: Hiring and retention continue to be a top focus for GFC. We are only as good as our people, and we are always trying to build on the great foundation of talent that we already have in place. We are on all the job boards just like everyone else, and we do our best to present open GFC positions as great opportunities for people to build careers. We also have a fairly lucrative internal referral program that allows GFC employees to refer quality people to apply for openings. We have found some really solid new placements through this program. As far as retention goes, we place a heavy influence on putting GFC’s strong family culture at the forefront of everything we do. We are also constantly evaluating our compensation and benefits packages to make sure they are not only competitive but also a differentiator for attracting and retaining talent.
George: Hiring has always been a challenge. The challenge is finding the right person for the right job. With unemployment being so low, we have had to pull out all the stops to find the right people. My biggest thing is recruiting while you are out and about. We use LinkedIn to identify potential candidates and we start the conversation. We use recruiting platforms, and we look for current employee references. The retaining part is also challenging. We strive to create an environment that is fun to work in. We take care of our people as if they were our own family. We have been a “Best Place to Work” for several years running, and it is because of everyone working as a team.
Olson: First, you must create a culture that people want to be a part of. It has to feel special and something they want to be a part of. It begins with treating your people well while providing a positive atmosphere that people want to join. Over the last few years, we have increased benefits for our team members, helped provide employee growth, and promoted within our organization whenever possible. Of course, we continue to be creative and always look to recruit. We have an internal HR team that posts listings on many sites, sends out internal email communications to our co-workers to help us spread the word, and makes sure to position candidates for success in recommending the right position within our organization. We highly recommend that dealers look at an ATS (applicant tracking system) if they are not using one. It helps get your open positions posted on many sites. Lastly, get involved in your community. Give back and pay it forward. It’s amazing what happens with your brand recognition when doing good without expecting anything in return.
Pitassi: We are no different from any other dealer or business related to hiring and retention. We want to pay the market rate and make sure we hire employees that have a growth mindset. We work with local vocational schools to help us with technical staff, IT desk, and engineering support. Our retention is still very good, and I’m very thankful to our core, loyal employees who have carried us through COVID, supply-chain, and labor issues.
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