On July 2, Konica Minolta Business Solutions U.S.A. announced the acquisition of MWA Intelligence (MWA)—a provider of enterprise resource planning (ERP) software for the imaging channel. Scottsdale, Arizona-based MWA offers the FORZA ERP solution, which is built on SAP Business One.
The platform provides visibility and control over a variety of business operations, including accounting and finance, sales and customer management, inventory and distribution, purchasing and operations, service and mobility, and reporting and administration. It has an open architecture, and can be customized by dealers for various functions and industries.
MWA employees will join All Covered, Konica Minolta’s IT services division.
Acquisition in context
ERP software helps businesses manage their core business processes, often in real-time and with the goal of operating more efficiently and effectively. The global ERP market is valued at approximately $34 billion; market leaders include companies like SAP, Oracle, Microsoft, and NetSuite.
Of course, the imaging channel represents just a fraction of this opportunity. Within the United States, for instance, about 2,200 office equipment dealerships are in operation—including about 600 with branch locations.
These dealers often use ERPs like Compass Sherpa and E-Automate, or internal systems, to manage their business. Considering that declining profit margins are considered a top threat to indirect office equipment vendors (dealers and resellers included) in both the United States and Western Europe, it is clear that an ERP can provide valuable insight into opportunities for operational improvement.
What are the three biggest threats to your business based on shifts in the industry?
Source: Office Channels Survey (Keypoint Intelligence-InfoTrends, 2017)
Benefits of the acquisition to Konica Minolta and its dealers
In February 2015, Konica Minolta Business Solutions U.S.A. announced a strategic alliance with MWA for its FORZA solution. At the time, it said the solution contains “unprecedented” channel infrastructure and “big-data improvements,” providing the ability to drive growth in expanding sectors like managed services.
It added that the system’s power combined with Konica Minolta’s expert IT infrastructure can quicken the SAP integration and system readiness for its dealer community. The fact it was designed specifically for imaging channel dealers was also cited as a reason for the partnership.
Most likely, the benefits acknowledged previously still apply. By actually owning MWA, Konica Minolta has greater control over the ongoing development of the product. It can perhaps also better incorporate features desired by its dealers, as well as track the use of the software.
One also wonders if its FORZA asset may serve as a draw for non-Konica Minolta dealers who aren’t entirely satisfied with their current OEM partner. It may be one more reason for them to switch brands.
Potential challenges associated with acquisition
One of the first questions that arises is how non-Konica Minolta dealers using FORZA will feel about and react to the acquisition. For instance, OKI Data Americas partnered with MWA Intelligence to integrate FORZA with its MFPs (in an effort to serve its resellers and dealers); we also know the Sharp MICAS (Machine Intelligence Call Assistance System) cloud-based device management application was melded with FORZA solutions.
MWA President and CEO Mike Stramaglio also recently noted that Canon, Kyocera, and other non-Konica Minolta dealers have been pursued by MWA to adopt FORZA; this will continue with the new ownership. Whether these dealers will feel their business data is adequately protected with the new arrangement remains to be seen. Stramaglio did indicate that BTA General Counsel Bob Goldberg has been working with Konica Minolta and MWA to create a contract addressing data and client security.
Another potential challenge may be action by competing OEMs to encourage their dealers to switch over to alternative solutions. They could offer incentives for use of a brand-agnostic solution, or one of their own solutions if it exists.
Keypoint Intelligence-InfoTrends opinion
Konica Minolta’s acquisition of MWA isn’t entirely surprising, given the partnership between the two organizations the last three years. It appears that the integration of MWA’s FORZA ERP solution with All Covered’s ERP capabilities could result in an even more robust offering that caters to Konica Minolta’s network of dealers. That said, it does appear that the new arrangement could pose challenges when it comes to MWA’s non-Konica Minolta dealer clients. While it is possible some of these clients may switch over to other ERP systems, the benefit to Konica Minolta and its channel may outweigh this impact.