July 9, 2013
James Firestone, president, corporate operations group at Xerox Corporation, spoke to Swati Garg on the firm’s plans to embrace digitisation
In an increasingly digital world, what are the challenges for a firm manufacturing and servicing printing equipment?
We are already doing two things to deal with the digital onslaught — First, bearing in mind that not all print is equally valuable, we want to participate more fully in valuable print. We have the technology to focus on colour and personalisation with software. Second, in areas that are less valuable — data centre printing, bank statements and HR communication — and, therefore, more likely to go electronic, we need to help companies go digital. The idea is to first be present wherever print is valuable and second to help companies become more digital, help them look at their business processes and take advantage of technology.
But when you help firms go digital, aren’t you doing so at the cost of your services business?
If you are in a bank, you print every statement. But in future you will print nothing. For this to happen, you need to have a document repository, where statements are stored and updated on a monthly basis. We offer that as a service to our customers. We offer both print and electronic solutions and if a customer wants a copy, we can either print it or make the repository available to him.
What is the size of a printing services contract?br/>
On average, a contract varies between $10 million and $100 million, but this is a tough one to talk about with specifics. Some of our business process contracts are large. For example, in transportation, we process transactions for large toll systems. Here, the annual contract could be $100 million.
What is the ratio between your services and hardware businesses? And, did the focus on services change after the ACS acquisition?
Services is a little over 50 per cent. We used to sell printers and provide ongoing support for equipment — managing supplies, paper jams and other issues with the device itself. Before the acquisition, it was $3 billion in size — 15 to 20 per cent of the company. With the acquisition of ACS (Affiliated Computer Services), services expanded dramatically, and since then it has grown rapidly. In December 2012, the fourth quarter, at least 52 per cent of our revenues came from services, that is $12 billion.
How will services fare vis-a-vis manufacturing?
We are looking at growth in terms of signing up customers and in terms of quarterly revenues.