Xerox’s 18-month European Plan

1999-10-27

Following the company’s seven billion slump in value caused by its less-than-successful Q3 announcements earlier in October, document company Xerox explained themselves this week.

Despite the company’s huge customer base (with over a million customers in Europe alone), its main problems (so say Xerox) were due to its out of date and badly targeted sales strategy, which was focused on the direct sale (even when dealing with the largest corporate deals) to the detriment of other channels. Also, the company was organised on national lines, with “each country operating its own fiefdom”, according to William Goode, Deputy Managing Director of Xerox Limited.

Xerox have every intention to change this, in fact they have been spending the past eighteen months consolidating its European operations, for example opening call and manufacturing centres in Ireland. The company is also setting up two new organisations: the Industry Solutions Organisation (ISO) will concentrate on major accounts, and will be organised by sector across Europe, whilst the General Marketing Organisation (GMO) will take over the direct channel. Initial sectors for ISO will be Manufacturing, Financial, Graphic Arts and Public Sector; the organisation will also encompass Xerox’s professional services organisation, named ICSI. The showpiece of these efforts is a pan-European SAP implementation which will support all of its back office operations. When it is complete, in eighteen months’ time, it is destined to be the largest single-instance ERP implementation in the world.

For the committed Xerox customer, these developments are likely to be good news as they will result in better account management and more co-ordinated services. For Xerox itself, the company is moving into the IT space from being an office equipment company, and stands to benefit from the opportunities that this offers – not least the marketability of the showpiece SAP implementation. Despite all this, the timescales are still very long and some pieces of the puzzle lack definition, for example the shape of the sales and marketing operation remains unclear. Also, the ongoing changes are likely to impact on the company’s ability to take advantage of any opportunities, at least in the short term. From the customer perspective (and as an ex-customer of Xerox), organisational change is nothing new for Xerox, so customers are likely to keep their counsel until they see real benefits coming through.

All in all, Xerox is still making money and the company is orienting itself to be better positioned for both its markets (which are, more and more, IT related) and its customer accounts. No change was not an option. It is just a shame that it is all taking so long.

(First published 27 October 1999)