Xerox - From Paper to Pixels: A Reinvention Story

Xerox, synonymous with photocopying, has embarked on a bold transformation to remain relevant in the digital age. From its humble beginnings as a copier manufacturer to its status as a diversified technology services company, Xerox's journey is a testament to its resilience and adaptability. Groundbreaking innovations punctuate Xerox's history. The introduction of the plain paper copier in the 1950s revolutionized document reproduction, and the company's subsequent development of the graphical user interface (GUI) and computer mouse laid the foundation for modern computing. The laser printer, another Xerox invention, further cemented its position as a technology pioneer. However, the rise of digital technology and the decline of traditional printing posed significant challenges to the company.  Xerox began a strategic shift towards IT Services with the 2010 acquisition of Affiliated Computer Services (ACS), rebranded as “Conduent” and spun off as a separate business services division in 2016.  The COVID-19 pandemic accelerated the shift towards remote work and digital document management.  While Xerox saw a decline in traditional office printing, it also identified new opportunities in emerging segments, demonstrating its agility and forward-thinking approach, which should give us all optimism about its future. 

It was my great pleasure to speak with John G. Bruno, Xerox's President and Chief Operating Officer. The conversation covered a broad array of subjects, focusing on Xerox's strategy for Reinvention. 

The traditional office environment has undergone a seismic shift with the rise of remote and hybrid work models. Once synonymous with physical document management, Xerox is adapting to this new reality by strategically balancing the preservation of its core print business with a bold venture into Digital Services and IT Services. While print remains a critical component of Xerox's operations, the company recognizes the growing demand for digital tools. It is investing heavily in technologies that can extract value from documents in a digital format. 

Xerox's foray into digital services is driven by the understanding that information is increasingly digitized. The company is developing services to capture, process, and analyze content from various sources, including physical documents. By doing so, Xerox aims to position itself as a trusted partner for businesses seeking to optimize their document workflows and extract valuable insights from their data. 

Furthermore, Xerox is expanding its service offerings to include IT services, particularly for small and medium-sized businesses. By providing a comprehensive suite of IT services, including managed security and cloud solutions, Xerox is addressing the growing technology needs of this market segment. This strategic move diversifies the company's revenue streams and strengthens client relationships. In essence, Xerox is evolving from a hardware-centric company to a technology-driven organization that empowers businesses to navigate the digital landscape. 

The company's Reinvention strategy is threefold. This three-pronged approach demonstrates Xerox's commitment to preserving its core print business, simplifying its operations to improve the client and employee experience, and capitalizing on the opportunities presented by the digital revolution. 

1. Strengthening the Core Print Business:

Xerox aims to maintain its leadership in the print industry by focusing on efficiency and productivity, reducing costs, and capturing growing segments like home office printing and production print. Despite the rise of digital platforms, print remains a significant market, and Xerox is determined to solidify its position as a leader in this space. As remote work and hybrid work models become the norm, the demand for home printers is expected to rise. Xerox is positioning itself to capitalize on this trend by offering high-quality, user-friendly printers to address the evolving needs of hybrid workers.   On the other end of the spectrum, Xerox also focuses on production print. This segment caters to businesses with high-volume printing needs, such as publishing houses, advertising agencies, and direct mail companies. Xerox aims to increase its market share in this lucrative sector by investing in advanced printing technologies and workflow solutions. 

2. Driving Efficiency and Growth through Global Business Services:

A key component of the Xerox Reinvention is the formation of a new Global Business Services organization. By centralizing internal processes and leveraging shared capabilities, Xerox aims to simplify operations, reduce costs, and improve the overall client and employee experience. This, in turn, frees up resources for investment in growth areas, such as emerging technologies and digital services. As Xerox continues to evolve, the Global Business Services organization will play a pivotal role in ensuring the company's long-term success. 

3. Expanding into Digital Services and IT Services:

Recognizing the digital transformation, Xerox is investing heavily in digital services, including intelligent document processing, content management, and data capture. The company also sees significant potential in IT services, particularly for small and medium-sized businesses. Recognizing the inevitable shift towards digitalization, Xerox is increasingly investing in digital services. At the heart of this strategy is intelligent document processing, which involves extracting valuable information from physical and digital documents. This technology is crucial for businesses looking to automate workflows, improve efficiency, and gain insights from their data. In addition to document processing, Xerox is focusing on customer engagement services, whereby Xerox helps companies utilize proprietary content to more effectively target and communicate with their customers, even designing and implementing omnichannel marketing campaigns. Xerox entered the IT services market to expand its digital footprint, particularly targeting small and medium-sized businesses (SMBs). By offering a range of IT services, including managed security, cloud solutions, and technical support, Xerox aims to become a one-stop shop for SMBs' technology needs. 

Xerox's Strategic Pivot: A Focus on Services

Xerox has significantly evolved from a hardware-focused company to a service-oriented enterprise. The company's foundation, built on the success of products like copiers and printers, is now complemented by a robust service offering. This strategic shift is evident in Xerox's expanding service portfolio. Beyond traditional maintenance and repair, the company is now deeply involved in higher-value services like digital transformation and IT support. This transition has been facilitated by the company's extensive service network, with a vast team of technical service representatives. 

To further enhance its service capabilities, Xerox is investing in software and technology. By integrating platforms like UiPath for automation and focusing on intelligent document processing, Xerox is creating solutions that address the complex needs of businesses in the digital age. The company is also actively seeking partnerships and acquisitions to bolster its service offerings and expand its market reach. A crucial aspect of this transformation is a heightened focus on the client experience. Xerox is redefining its operations to prioritize client needs and build long-term relationships. This client-centric approach, coupled with technological advancements, positions Xerox as a comprehensive services provider rather than a hardware manufacturer. 

Under John Bruno's Guidance: Xerox's Reinvention

John Bruno’s career has been dedicated to corporate turnarounds. These experiences instilled in John the critical importance of a well-defined strategy and its execution. In his words, “effective transformation demands a clear, compelling vision that resonates throughout the organization. It requires a structure aligned with that vision, followed by strategically allocating talent and incentives to drive desired outcomes. Finally, a robust management system is essential to monitor progress and realize the strategy.” 

 He began Xerox's transformational reinvention journey with a series of strategic divestments to focus on core competencies. This was followed by a fundamental restructuring, including creating a centralized growth and enablement function. Decision-making authority was streamlined, and talent was redeployed to support the new strategic direction. A comprehensive compensation overhaul aligned employee incentives with the company's goals. This transformation is not merely about cost reduction but about positioning Xerox for future growth.  

To support the Reinvention, Xerox has undergone a significant organizational overhaul. Key changes include: 

Structural Simplification: The company has streamlined its operations, divesting non-core businesses and focusing on its core competencies. This strategic move allows Xerox to allocate resources more efficiently and concentrate on areas where it can deliver the most value. Xerox has made significant organizational changes to support its transformation, including restructuring its operating model, streamlining decision-making, and aligning incentives with strategic goals. In 2023, Xerox underwent a radical organizational overhaul. The company shifted from a geographically based structure to a centralized model, consolidating product engineering, marketing, and sales functions into a newly formed Growth and Enablement group, including the creation of a new executive role responsible for identifying emerging market trends, developing innovative products and services, and ensuring the effective execution of go-to-market strategies.  This unified approach aimed to streamline decision-making, enhance collaboration, and accelerate market responsiveness. Concurrently, Xerox initiated a significant workforce reduction, targeting redundant leadership roles and functions that hindered agility. This restructuring was designed to flatten the organizational hierarchy, empower frontline teams, and foster a client-centric culture. Xerox aimed to drive product innovation and improve overall business performance by emphasizing client needs and insights. The culmination of these changes centralized functions, including strategy, sales, delivery, and finance functions, to eliminate siloes, improve efficiency, and ensure alignment across the organization.

Partner Ecosystem: A vital element of this overhaul was the creation of new leadership roles focused on strategic growth and channel management. The company appointed a dedicated head of global channels, previously the head of European operations, to oversee the expansion of the indirect sales channel. This strategic move positions Xerox to capitalize on the strengths of its partner network and increase market penetration.

Client Centricity: Xerox has always been a client-centric business, focusing on productivity enhancements and making the workplace more effective for collaboration and productivity. A client-centric approach is a business strategy that prioritizes the needs and preferences of clients in all aspects of a company's operations. This approach enhances client satisfaction, builds long-term relationships, and drives business growth. Xerox has reorganized its teams to prioritize client needs and enhance go-to-market strategies to achieve even more. By placing the client at the center of its operations, Xerox aims to improve client satisfaction and build stronger, long-lasting relationships. 

Talent and Incentives: The company has invested in talent acquisition and development, aligning compensation with strategic goals. By aligning compensation with strategic objectives, Xerox ensures its employees are motivated and equipped to drive the company's transformation. Aligning compensation with strategic objectives has been instrumental in driving desired behaviors. By incentivizing sales of new products and services and expanding the client base, Xerox has motivated employees to contribute to the company's transformation. 

Technology Infrastructure: Xerox is modernizing its technology platforms to support digital services and improve operational efficiency. This modernization effort includes upgrading existing systems and implementing new technologies to serve clients better and streamline internal processes. 

Final Techaisle Take 

Xerox envisions a future where print remains a stable and profitable business alongside a growing digital services and IT services portfolio. The company aims to increase its Digital Services and IT services revenue from less than 10% in 2023 to over 20% in the coming years. Xerox's transformation is a complex and ongoing process. The company faces intense competition, evolving client needs, and rapid technological advancements. However, with a clear strategy, strong leadership, and a focus on innovation, Xerox is well-positioned to succeed in the digital age. This comprehensive organizational overhaul is expected to yield significant results, with a projected increase in revenue from digital and IT services. By diversifying its revenue streams and enhancing operational efficiency, Xerox is positioning itself for long-term success in an evolving marketplace. Xerox is undergoing a significant transformation to adapt to the digital age. The company is focusing on strengthening its core print business and expanding into digital and IT services. Organizational changes, strategic partnerships, and technology investments are key to the company's success. Xerox's journey is a testament to the ability of a legacy company to reinvent itself and thrive in a rapidly changing market. 

Refer to Xerox's press release: Xerox Reinvention and Operating Model Evolution | Xerox Newsroom