Moving from Products to Services
20 June 2012 05:55 am , Varun Aggarwal
In a conversation with Varun Aggarwal, Vishal Awal, Executive Director, Services, Xerox South Asia talks about the changing approach of Xerox from a products company to a services firm.
How are you trying to drive a services approach at Xerox from the traditional products centric approach?
Xerox is a services led technology driven company. We bought ACS for $8 billion almost two years back. Among the reasons why we acquired ACS was that in India there is a huge opportunity to build a sustainable services business for Xerox Corp. ACS is a IT & BPO outsourcing company (US based – strong player in US, Latin America and Europe, around 8500 employees India’s working for back office jobs for whole lot of contracts that ACA has in the U.S(all IT services). They are big in transportation, Financial Services, HR Systems, they are really well recognized players. This merger between Xerox and ACS has been a game changer and this was hailed by the investor community as well as a huge step in the right direction.
A whole lot of wheel has already turned. This has positioned Xerox corp. firmly as possibly the most potent entity on this globe who has the entire spectrum of business process and document management services. Unlike other players who are offering compartmentalized solutions in different domains of BPO and DMS, Xerox has the capability to take over the whole 9 yards of this business and keep adding sustained business value to an enterprises operations, For e.g. One can start by optimizing the office print infrastructure via MPS, then one can take it one notch above via taking the document supply chain management activities such as marketing, collaterals, brochures , customer on boarding process, loan application processes basically all kind of document related things, this whole can be centralized by Xerox as we provide - Single point of accountability, enterprises core business isn’t managing documents , but documents is essential to manage their core business. Hence they would like to have less issues in this rewinded domain and someone who is the master in this space, to manage their document domain rather than their management leveraging their bandwidth towards managing these transactions, hence it’s a very strong value proposition.
These are the whole services you’re talking about which are already existent in Xerox?
What I talked about so far were already existent in Xerox, now with the combined strengths of the organizational assets of Xerox corp. and erstwhile ACS which is again Xerox now, the capability has become multimode, so you do MPS, DMS, cross media communications services, BPO and IT outsourcing. In a way Xerox is in a unique position to be able to offer a one stop shop solution covering the whole gamut, eventually that is the wanted position. I am not saying that the merger has happened in such a way that we are ready to services the whole spectrum, but that’s where it is heading to.
So basically instead of offering MPS, now it’s servicing the complete IT outsourcing which you can handle?
I would say BPO and DMS outsourcing, that’s the wanted position and that’s where the company is gearing to. We have already taken some big steps in that direction. Xerox was primarily a technology provider a ‘box’ if I may use that word, an equipment provider, that model has changed about a few years back (about 3 years). Now both the box link services and standalone services both of these are being brought and given as an offering to the target market.
- Helps clients to improve business process and significantly enhance ROI
- Ensures cost savings on an average on outsourcing document management needs
- Help them manage customer experience much better
- Brand consistency
- All the services being done by a single point of accountability
- Uniformity in the documents and look and feel factor
- Standardization, Imaging and digitalization of documents
In India mostly MPS is about printing solutions and infrastructure management – Views towards market?
We did a lot of research on the sizing of the market. We got Boston Consulting group to do some work for us, market sizing exercise, on how till 2009 – 2015 the market structure is transforming. The finding was quiet eye popping.
In 2009 overall market size – Xerox addressable market size 3billion US dollars (250$ mn was DMS), $1.7 bn was equipment, 1bn$ was ACS (BPO & ITO + transportation Services))
In 2015 (the $250mn is cut to increase upto $3bn (includes MPS+DMS+CMS), 12 times growth in 6 years, equipment (1.7 – 2.7 bn dollars at 8-9% CAGR whereas the Services CAGR is almost 51%. ACS pie is going from 1bn to 6 bn with 35% CAGR. Hence the market transformation is quiet significant.
Structure of market if transforming from CAPEX to OPEX driven. As part of our rebranding exercise earlier this year, now ACS is Xerox ACS division, it is fully integrated now. Estimated size for Xerox kind of Services business could be 12-15 billion out of which more than 75% of market could be in Services space. This itself could a good data point on why the company’s strategy is to transform at a global level from a Services led technology driven comany. More than half of our revenues are now coming from Services and our vision is to take this progressively higher. The market is right, the organizational assets are aligned and the timing is right. This journey will keep gathering acceleration as we go on.
Xerox has traditionally been an enterprise player, especially in the MPS market. What are doing in the SMB sector?
We want to deliver superior value services to all the segments of enterprises. When it comes to MPS we are consistently appearing as the leaders. ‘Quoted how Xerox has been recognized by leading research companies such as Gartner, IDC & Magic Quadrant’.
We provide solutions to clients which helps them from commercializing to customizing
- Reach out to SMB’s & companies by Channel partners (XPS – Xerox print Services – enable Xerox to service non-Xerox partners – Lower end to top end enterprises all are in our radar)
- Developing Channel partners base (XPPS – Xerox partner print services – standardized, cost efficient manner – recent initiative being rolled out by later half of the year – basically a MPS proposition)
- Positioning of ACS operations & increasing revenue
Xerox GDO provides the benefit of security, cost saving, accessing web, back office, expense system, validation & extraction of consolidated data.
For Xerox, BFSI & Telecom are the key focus verticals presently. Xerox is planning to tap other potential verticals such as Healthcare, consumer goods, retail & manufacturing sectors; government sector is also a big space which cannot be ignored.
What are you plans for the next one year?
Xerox streamlines client’s Document-Intensive Business Processes investment by offering outsourced services and services delivery platform rather than capital intensive procurement; this helps customers to optimize on capital infusion and select pay per services mode as a viable alternative for ROI. We have some of the leading BFSI & Telecom clients in India.
Xerox has major plans for its document management group in the coming years. Our key strategies include right capability to gear towards Services led company; streamline business models; market reach via alliances, channels & go to market strategy and investment in Xerox infrastructure.
CTO’s & CFO’s are an integral part of decision making when it comes to MPS for larger enterprises – In smaller enterprises these decisions are generally taken by the Facility Management divisions. Xerox believes in driving its revenues via driving & accelerating its customers’ success.
What is your opinion on paperless office?
While we do believe that in the near future a lot of documentation would be digitalised, which is a big opportunity area for us. However, paperwork would definitely be an imperative part for enterprises and can never be completely eliminated, at least not in the near future.
Indore has emerged as an attractive investment destination for IT companies which are looking to expand operations amid global economic slowdown. According to industry experts, availability of workforce, incentives by the Madhya Pradesh government and availability of facilities are attracting IT companies to invest in the city, known as financial capital of the state.
