Reclaiming Lost Ground

What do the Karnataka High Court, Bangalore Telecom District (BGTD)–a basic

service provider, Standard & Chartered Bank, and Indian School of Business (ISB)

have in common? Not much perhaps, except that each one of them has their unique

document management needs and have been relying on Xerox to manage it.

While the Xerox Digipath on workstations and webserver with a Xerox 4090

high-end laser printing system is being used for judgment scanning, indexing,

and archiving at an on-site facility at the Karnataka High Court, the BGTD has

deployed the 4890 system to reduce cycle time and print better

quality-personalized bills. Similarly, Standard & Chartered has deployed the

4090 and 4235 printing systems at Bangalore, together with a host of analog and

digital systems, for concurrent printing, copying, and faxing. The document

management solution also helps the bank securely print personalized statements,

internal reports, letters, office documents and presentation much faster. The

ISB, on the other hand, has installed the Xerox DocuTech 6135 production and

publishing system to meet its print-on-demand needs for courseware, as well as

document needs of students.

	“Our main focus for this year is to convert the existing high-volume black and white transactional documents to high-value color documents”
Marcus Childs MD, Xerox Modicorp

An hour-long meeting with Marcus Childs, Managing Director of Xerox Modicorp

Ltd, who has been heading the Indian operations of Xerox Corporation since

September last year and there are lots of numbers to talk about–90% of a

company’s communication with a customer is through documents; the US alone

produces 1.3 trillion of them every year, enough to wallpaper the Taj Mahal tens

of thousands of times; 60% of white-color time is spent with documents; 40% of

labor cost goes into document; and last but not the least, 95% of revenues comes

from presenting documents. Childs is not talking these numbers unnecessarily–club

these facts with the deployments as mentioned above and many more such examples

and the numbers start looking like the massive opportunity that he intends to

tap. But that is exactly where Xerox’s problem begins.

Mouth the word Xerox in India, and the first thing that comes to mind is a

photocopier. And while the company was struggling to shed the photocopying

image, the likes of Canon, and Sharp not only entered the Indian market with

their document management solutions, they also managed to create and gobble a

sizeable chunk of the market. There were other challengers too–from HP to

Ricoh, Samsung, Panasonic and Lexmark. Childs agrees on the image issue and so

does the parent Xerox Corp, which has been facing the same problem globally–how

to change the Xerox image from photo copier company to digital document

management company.

In the year 2000, Xerox Corporation made a rather bold move to achieve this

repositioning and decided to sell off all its non-core assets. The idea was to

concentrate on building its business and image as the new age digital document

company. The strategy worked out quite well, and the company has been regaining

lost ground across Europe and US. India, however, still continued to look at

Xerox as a predominantly black-and-white, light-lens copier company. In line

with Xerox worldwide, Xerox Modicorp–the joint venture company that runs the

show in India–decided to go in for an image change beginning its transition

from a traditional ‘give me a Xerox copy’ image to a digital document

company. To achieve this business and perception repositioning, the company also

brought in Childs–the man responsible for nearly doubling the company’s

color market share in UK as well as Xerox’s European success in graphics arts.

Roadmap for the future



While Childs agrees that the company has been slow to respond to the

changing market needs, he is leaving no stone unturned in his bid to hasten up

the process and catch up with lost time. To begin with, Xerox Modicorp has

segmented the market based on the geography, the verticals, and potential of the

segment. Accordingly, the company has been restructured to form three main

business divisions–production services group (PSG), office systems group (OSG)

and channels and supplies (C&S). The focus on multi channel network is aimed

at flanking all possible target segments, which Childs hopes, will help Xerox

reach more customers at a lower cost, with products that reflect market needs.

Nevertheless, the company also plans to expand its commercial printing and

publishing segment besides strengthening its corporate and channel business.

"Xerox will continue with the government and key corporates having large

in-house presses," says Child adding that, "Our main focus for this

year is also to convert existing high volume black and white transactional

documents to high value color documents."

In fact, India is the second country after Russia, where Xerox has taken the

channels route as one of its go-to-market strategy. "This is because there

is lot similarity in the two markets," Childs explain. But he still does

not want to leave anything to chance and hence the company has also sent in

German Gennadi as the new marketing director whose mandate is to replicate his

channel success in Russia. As the head of the sales and marketing, Gennadi is

credited with successfully implementing a quicker, more responsive way to market

for the channels business. "Establishing a partnership with over 5,000

resellers meant we expanded our contact with the market enormously. Today Xerox

has 20% of the personal laser printer market there and that is what we want to

achieve in India too," Childs says.

The company has also charted out a three-pronged strategy clearly focused at

increasing both revenue and the market share. First and foremost, maintain

leadership in the office segment. Second, drive the new business of printing.

Third, expand the services business. In order to maintain its leadership

position in the office, as also to convert its existing wide base of analog and

light lens client, the company plans to continue with its existing range of

light lens products. This is unlike its global approach, where Xerox has quit

the segment. Explains Childs, "Its important to nurture our existing

businesses if we have to expand our market for digital, multi-function devices

in this segment. We cannot leave them, rather our attempt will be to create

awareness about our digital product and migrate this base to it."

"Xerox is well entrenched in the office and we have a competitive advantage

in this segment which is growing the fastest. The focus on channels business is

certainly going to help us grow our market share of MFD’s and laser

printers," he adds.

But what is the company doing to communicate this transformation to the

market? Ask Childs and he says that the company has substantially increased its

budget for ‘campaigns’. Besides educating the target audience about the

advantages of digital printing, the possible applications and incentive schemes

for and with the channel partners, the new Xerox campaign would also leverage

the company’s global leadership position and talk about its wide range of

products. The company is also going into offensive by creating a more effective

and focused industries solutions group (ISO) direct sales force which would be

supported by tele-marketing and e-Business. It is also working on expanding the

network of general marketing organization–concessionaire, agent, system

integrator and corporate reseller partners–as well as a massive reseller and

retailer channel. Childs also expects that constant introduction of products and

services, training and demand creation programs will help the channels grow

revenue while increasing sales productivity.

SHUBHENDU PARTH in New Delhi