Founded in 1906 as “The Haloid Photographic Company” according to Chester Carlson In New York, Xerox initially focused on photographic products. The real transformation of the company came in the 1950s, when Carlson invented a revolutionary technology known as xerography, which made it possible to quickly and easily reproduce documents. Therefore, in 1959 the company changed its name to Xerox Corporation and its first successful commercial product was the Xerox 914 copier, a milestone in the history of document reproduction.
In recent years, Xerox has faced challenges in the changing business environment, particularly with the transition to a paperless office environment. In an exclusive interview with the company’s CEO Xerox, Steve Bandrowczakfor MIT Technology Review in Spanishduring the Management Excellence Club executive meeting, where Xerox is a founding partner, we explored how the printing and office solutions company turned this challenge into an opportunity to reinvent itself.
As CEO of Xerox, he championed the importance of fostering a culture of innovation. How does Xerox incorporate this into its internal workflows and consumer products?
Xerox has always been a stellar company when it comes to fostering innovation, but today it’s doing so at a pace we’ve never seen before. A key initiative is the reinvention of the service sector. Solving product issues has traditionally meant calling the help desk, setting up a ticket, and sending out a technician, which brought challenges like an aging workforce, delays, and environmental concerns. To overcome this, we embarked on a journey of innovation in the industry.
Now, millions of connected devices transmit fault data to a data lake central, where artificial intelligence (AI) and robotic process automation (RPA) analyze information. Faults are sent to our call center in Canada and technicians receive real-time fault information along with three suggested solutions based on historical data and R&D notes. Customers are provided with a link to an augmented and virtual reality session for self-service purposes, resulting in a 50% remote resolution tickets from the call center in 17 minutes with a 95% success rate.
This revolutionary approach not only ensures a faster solution for the customer, but also positively affects the environment by reducing the distance traveled and vehicle emissions. Additionally, recorded self-service sessions allow technicians to receive instructions prior to arrival, minimizing diagnostic time. AI further streamlines the process by suggesting parts for repair, reducing calls, improving availability and addressing the issue of an aging workforce. When hiring new engineers, we focus on making digital natives competent in augmented reality, artificial intelligence and machine learning.
The changing workforce landscape presented an opportunity for Xerox to transform itself from a paper-centric company to a software-driven company based on data and artificial intelligence. How is Xerox leveraging its expertise in office solutions to lead businesses in their digital transformation and balance the continued need for paper and print with this transition to new business models?
The first myth is that print is dead. There is still a lot of printing going on, both in physical and digital formats. Every month our infrastructure processes billions of pages, so print is a significant source of data. Just as AI and ChatGPT rely on data, print has immense value in providing the foundation for these technologies. Xerox has a long history of managing and securing data, ensuring that it is properly positioned with the right attributes across industries.
Xerox has traditionally operated in the physical world, but the reality is that we are more than a printing company. With the chip, display and operating system integrated into every customer environment, we have the ability to use technology in innovative ways. For example, we can use RPA and AI to scan invoices and easily integrate them into the billing process. Similarly, we can streamline recruitment by automating resume processing. In the legal environment, we can effectively find specific clauses in contracts and alert clients to legal or personal data protection changes.
We focus on creating specific solutions tailored to different industries based on our deep understanding of their processes and pain points. Additionally, as we face challenges such as inflation, labor shortages, and rising capital costs, we strive to help small businesses with RPA, security, and INTIA services. This gives them access to advanced technologies without significant investment, helping them navigate the current industry and increase productivity.
From a consumer perspective, how is the public perception of Xerox changing from primarily a printing company to one recognized for its software solutions?
Our devices operate securely behind firewalls, a testament to our FedRAMP certification and the trust the US government places in us with sensitive data. This trust allows us to introduce state-of-the-art technology to our clients, who know that we are committed to the long term.
The significance of our brand lies in our deep relationships with clients and the challenge to convey our capabilities in RPA, AI, IoT and digital services. We are already integrated into their environment, familiar with their processes and now focus on effective communication. Apart from being a renowned printing company, Xerox has a significant IT and digital services business. We actively support CMOs with strategies and seamlessly integrate physical and digital environments.
How does Xerox differentiate itself from competitors in a market undergoing similar changes, and what are the key elements that contribute to Xerox’s unique value proposition?
We boast an extraordinary legacy of innovation, resilience and industry redefinition. My main interest in Xerox is the ability to improve speed. I focus on making fast boats instead of battleships without focusing on the competition. The key question is: how can we quickly deliver value to our customers and take our partners, who make up 25% of our business, on this transformational journey?
In this era of rapid technological development, we strive to emulate the consumer world, observing the ease and speed prevalent in interactions with devices such as iPhones and smart phones. The adoption of technology, including artificial intelligence, is happening at an unprecedented pace. As a CIO for over 30 years, I have witnessed a remarkable acceleration in technology adoption. In the past, concerns about change management have dominated the discussion, but I’m in favor of accelerating the pace of change even more.
The COVID-19 pandemic serves as an example of our ability to rapidly adopt technology. Within days, global organizations moved to remote work setups, deployed new network infrastructures, and adopted video conferencing tools. Experience has shown that we can drive technology adoption at a pace previously thought impossible. Even governments that are traditionally slow to change are adapting quickly, influenced by media and public demands.
The consumer plays a key role in driving and adopting technology. By hiring professionals early in their careers, we emphasize digital technology and innovation at the core of our operations and inspire them to join a dynamic technology giant.
In its latest third-quarter results, the company announced a reinvention to achieve sustainable profit improvement and revenue growth. Can you provide more detail on the key components of this turnaround strategy and how Xerox plans to achieve a targeted improvement in adjusted operating income of at least $300 million by 2026?
We recently announced three major changes. First, a radical redesign of end-to-end processes to simplify, eliminate waste and automate. That means leveraging technology to speed up hiring, training and help desk response. For example, we have reduced our help desk training time from seven months to five weeks, and we aim to reduce it even further.
Second, we are strategically shifting our revenue streams beyond print by supporting IT and digital services. Our goal is to have approximately 30% of revenue from non-print sources within three years. This includes leveraging fast-growing areas such as IT services, security as a service, RPA and AI. We strive to make these technologies readily available as a service to our customers, saving them significant capital investment and enabling them to benefit from Xerox innovation.
Finally, our focus on innovation goes beyond technology itself. We are eager to reinvent industries such as healthcare and legal. We engage in meaningful conversations with clients such as law firms who are exploring the role of ChatGPT. Regarding the government sector, we acknowledge the concerns about AI, but emphasize its implementation and regulation. We need to stop fearing technology and think about how it brings value to citizens.