It was clear that Xerox has emerged from the doldrums that engulfed it a few years back stronger, wiser and ready for the next stage in its evolution. ‘Copier’ was a word seldom heard, and usually only in the context of how the company started; ‘printer’, similarly, mainly came up with regard to products. The new mantra is ‘smart document management’ – and Xerox is not only taking this message to its more traditional markets, it is also focusing heavily on developing markets to further emphasise it.
Xerox is a name that, even in the dictionary, is synonomous with the process of copying. But the company has come a long way since Chester Carlson invented xerography more than 65 years ago and, as the industry and markets continue to evolve, so too does Xerox.
It is an ongoing process, explains Kaz Herchold, senior VP, Developing Markets Operations (DMO) business groups.
“Xerox made its name as a copier company inventing xerography and the plain paper copier which, in its day, was revolutionary,” Herchold says. “But one thing about this industry is that it is always evolving – and so are we.
“We are no longer a copier company. We are a technology company focused on a number of peripheral devices, as well as solutions that let users work more efficiently with documents.”
There are more documents generated today than ever before and the myth expounded in the 1980s of the paperless office has proven to be just that – a myth.
“The paper medium is still very convincing, I’m old enough to tell you,” Herchold continues. “In the 1990s I was responsible for [Xerox] paper in Europe and every major paper mill came to see me because we were the biggest buyer of cut-fed paper in the world. The mills were scared that paper was going to disappear, but what we got with all the new technology – PCs, PDAs – was the opposite. They in fact generated more paper.
“Today, paper is very hard to find,” he says. “The mills are at full capacity – they are at the edge of their output capacity – and we are generating more paper rather than less.
“The reason for this is that we can do some amazing things with what we put on paper. And that is where we come in. Xerox can put marks on paper more efficiently than anyone else. We are focused on printing in a big way, on output solutions, as well as services to enable customers to manage their information and document workflow.
“Today, we have sales of $16-billion worldwide and our intention, our objective, is to lead with innovative technology and to continue to evolve that technology,” he says.
While developing markets may be the smallest region in terms of revenue contribution (about 11%), it is also the fastest growing (7% growth) and had a greater percentage profit growth than other sectors.
This is one of the reasons for the “rebuilding” of developing markets operations (DMO) and its increased focus on regions like Latin America, Eastern Europe and Africa.
Herchold says these regions have different requirements from Xerox’s more traditional markets and that DMO is well positioned to address these.
“These markets often require smaller products rather than bigger ones and they are very price concious,” he says. “They have entirely different characteristics [to our other markets] with vast geographies, price sensitivity and a requirement for more robust products.
“We look to develop products for these markets from a cost and operation perspective.”
Executives at the conference continually stressed the importance of partners, none more so than channel development manager, DMO Office group, Ken Richard, who stated that his goal is to have 100% of Xerox Office products going through the channel.
Richard says that in today’s industry, the importance of the channel cannot be underestimated.
“Our job is to provide solutions to our customers, not technology, and we need a way to get from here to there. If all that was sold was $500 000 systems then Xerox could continue going direct, but that’s not the case.”
Again, the evolution of the industry has changed the nature of the business. The Internet has brought technology to the user and products that, 20 years ago, were out of reach of most customers are now not only well within their budgets, but rich with more functionality. This has meant a vast increase in customer numbers.
“We can’t reach this huge market with a dicrect sales force,” says Richard. “We need leverage, and the only way to get leverage is through the channel.
“They know the customer’s business, they’ve installed the infrastructure solutions and other technology solutions, and our piece of that is the output solution which needs to accompany the rest of the solution.
“Moving our organisation to more effectively leverage these partners was the mission I was given and my goal is to move 100% of our Office business through the channel.”
Richard says that all direct Office accounts will be transferred to channel partners.
“There is a caveat and that is some of our global services,” he adds. “But excluding that, we’re going to move the product set through the channel.”
He is also broadening the business group’s channel approach with five main categories: integrators at the high-end; VARs at the mid-market level; high volume resellers; SMB centres; and premium partners or concessionaires.
“This is part of the work we’re doing to make sure we reach the right channels,” he says.
Other structural changes within the Office group include direct sales becoming channel sales managers; a change in the service model to allow partners to foster ongoing relationships with customers; and the leveraging of third-party, regional distribution partners.
“We will have in-country distributors in certain regions,” Richard says. “They know how to handle the loyalty aspect of the channel, so we’d rather collaborate with them on this than try and do it ourselves.”
Another key aspect of Richard’s channel strategy is an increased leveraging of the Xerox brand, something that is often neglected in developing markets.
“The value of the brand is often more important in emerging markets than it is in established markets,” Richard explains. “In an established market service is normally no problem. But in an emerging market, the brand often implies a local presence and local support so we’re going to increase the leverage of the Xerox brand.”