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Even though many customers shelve IT projects indefinitely, overall business good

Office technology companies adapt to new economy

JACKSON — More advice, please.

That’s what metro-area office tech businesses are fielding requests for these days, as decision makers deliberate longer on high-tech purchases.

“There’s more scrutiny on big IT projects,” said David Traxler, president of Ridgeland-based Venture SystemSource (VSS), an information technology company specializing in data services, Internet services, e-commerce, network hardware and wiring, and other IT solutions. VSS is IBM’s top industry remarketer of hardware, software and services in the Southeast and the No. 5 IBM industry remarketer in the U.S

“Projects have been delayed and I’ve seen a slowdown in decisions being made,” Traxler said. “After the Sept. 11 event, many items — unless critical to the business — have been deferred. But even before that day, we’d already seen a lot of projects cut throughout the course of the year. But when that occurred, items we thought had been rekindled for the fourth quarter were pushed back.”

Two years ago, four or five vendors were involved in every transaction. Today, only one or two vendors are usually included in a sale, Traxler said.

“Our numbers, as an industry segment, are declining,” he said. “Even the IBM’s of the world are telling us that if you’re not growing at the rate we need to grow our business, we’re going to look for bigger, better partners. The small guys without certifications are being weeded out because it’s becoming more difficult for them to do business. Now they’re finding they don’t have the dollars to reinvest to get those certifications and that’s creating a spiral effect.”

Two years ago, office tech companies could sell on emotion because the economy was good and companies were asking for the newest, most advanced IT products, said Tom Wolf of Jackson-based Total Office Solutions, one of the largest locally owned original equipment consumable supply company in Mississippi.

“Now, we sell savings,” Wolf said. “The marketplace is much more consultant driven now instead of simply moving a box.”

A customer unwilling to purchase a six-digit upgrade on technology equipment is absolutely willing to consider making a purchase if a significant ROI (return on investment) can be demonstrated, Traxler said.

“A tangible ROI is the difference maker in closing business right now in this economy,” he said.

Michael Coker, president and CEO of CopyTek-tronics of Jackson, has seen an increased demand for networked equipment instead of stand-alone products.

“We don’t really sell ‘copiers’ any more,” Coker said. “They’ve become connected devices dropped onto the network. We have a huge market in color units that produces 15 to 25 pages a minute in both the PC and Mac environment.”

Many IT consulting firms have hired additional employees to keep pace with increased business.

“Because we’re a solution provider, our business has increased,” said Jack Ridgway, vice president of technology for Consultrix Technologies in Jackson. The company is hiring two or three new employees every 45 days.

“Companies have placed more emphasis on finding a provider that’s stable and that will be around for a while,” he said. “In the past, companies might have looked for the least cost, which is not always truly the least cost.”

Last month, Todd Gooden, president and CEO of Consultrix Technologies, met with executives from one of the state’s top privately held companies to determine whether or not technological upgrades were needed to run a more efficient operation.

“We found that fax machines and paper documents ran their company quite effectively,” Gooden said. “We couldn’t determine any serious technology changes they should make. That was different for them because they’d talked to different companies in town that tried to sell them a lot of equipment, but when you really dug deep into their business — they were in the timber industry — they didn’t require a lot of technology.”

VSS, which employs approximately 60 IT specialists, recently hired four people to fill new positions.

“We’ve had no layoffs or cutbacks,” Traxler said. “In the local IT market, a lot of companies are under financial pressure. We’ve been fortunate to have the right types of skills and certifications, especially in areas that are lacking elsewhere.”

Wolf said Total Office Solutions’ last two quarters have bested the previous six.

“There’s been very little price reduction in the industry in the last couple of years,” Wolf said. “We chose the products we sell because we think they’re the best — they’ve earned product of the year for five consecutive years — but the truth of the matter is the top manufacturers are pretty much all the same. It’s whether or not you have an experienced staff that knows how to work on them.”

Coker said CopyTek-tronics reported record-breaking sales in the last two months.

“The economic situation hasn’t really affected us and I haven’t heard too many others in the business say anything about it affecting them,” Coker said.

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.


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