Xerox’s Services
Business
To many business people, Xerox has great
brand recognition, but its positioning remains “copier.”
About ten years ago, Xerox spent a lot of energy (and money),
repositioning itself as “the Document Company.”
That seemed to mean copiers, printers, and some document
management, notably a server-based document sharing and
collaboration product, DocuShare.
More recently, Xerox has placed more
emphasis on providing businesses with a variety of services related
to documents, everything from analyzing the best way to design,
select, implement, and manage copiers and printers for your
organization, to on-site and off-site document management, and
specialty services.
These service offerings are much less
well known, but are beginning to contribute significantly to
Xerox’s bottom line. For
example, in 2002, services were about 20% of Xerox revenue.
The goal is to get to 25 to 30% in the 2005 time frame and
eventually to 50%. Also,
while the service engagements themselves were only about $225
million last year, they pulled more than that in outsourced or
managed business, so the total contribution is even more important.
An important focus for Xerox has been
the development of several document processing centers (two are in
Warm Spring, Arkansas and Calgary, Canada), where customers send
documents in (typically daily via air courier), to be scanned,
entered as data onto the customers’ remote machines at their own
data centers, and treated as part of the customers’ own business
processes. The paper
documents – from industries like car rental, building
construction, finance and others – can then be stored or returned
to the customer for archiving.
Days and dollars can be carved off the customer business
process.
Tom Dolan, Xerox’s Senior Vice
President and manager for the Services business told us that some
customers love the idea but are very reluctant to give up control of
their documents – lawyers, for example.
In that case, Xerox can segment the service, doing the
scanning on the customer premises, but they clearly can offer more
efficiency and better technology on their own specially designed
sites. Under consideration is the idea of providing regional or
local centers for this type of business that requires more local
control.
Xerox makes it clear that they are using
their expertise in documents to be specialists.
They look at document processing, not at the entire business
process, but partner with other consultants and systems integrators
for larger, broader projects.
Freed of the financial difficulties that
troubled Xerox in the past, we expect to see Xerox place increasing
emphasis on using its technology as the basis of providing expert
services to a customer base that like IT customers is more
interested in buying services that connect to their core
competencies than in doing everything themselves.
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