The New Momentum of Printing

With workflow the focal point of Drupa 2004, held in Germany two months ago, Anne M. Mulcahy sees great opportunity in fostering the growth of open standards.

"In Düsseldorf, our focus was on workflow as being the path to get the pages to the technology," she relates. "That's really what businesses need. It's great to have the technology outputting at 100 pages per minute, but not if you're spending 21/2 hours on set-up and off-line finishing.

"To capitalize on technology, you have to address the entire value chain, from document creation to actual finished output. By the way, most customers don't want to talk about what workflow is, but rather how to use it."

She adds, "We're not really looking for something that's completely dedicated from a Xerox perspective. We want to work with anyone who wants to work with us in creating linkages to partners, and having standards within the marketplace. It doesn't necessarily have to be a Xerox environment for Xerox workflow to add value."

Mulcahy continues, "One of our latest offerings was with our partner Creo, designed to enable an integrated workflow between offset and digital printing. So in the typical shop where you make choices every day about what goes to digital and what goes to offset, to be able to have a workflow path that allows you to make that decision in an automated fashion is a huge productivity saver. Workflow thus really is the page path.

"If you're driving applications to technology, then not addressing workflow is very shortsighted. We believe that we have a role to play in making the workflow enable the technology to deliver value, and get the customer a good return on investment."

She notes that studies show there's $18 billion worth of transferable offset printing that digital printing could take today.

"That huge $18 billion market is all-new revenue for Xerox," says Mulcahy. "We think the opportunity in the transfer from offset to digital is one of our best, and we're going to continue to invest in making it easy for customers to make that technology transfer. There's clearly a core business of offset that we'll collaborate with; that's why we're developing workflows that actually can integrate applications for jobs between offset and digital."

Though technology transitions are difficult, says Mulcahy, Xerox's focus on the digital transition has been a real asset for the company.

"To get into the digital printing business is a huge investment challenge," Mulcahy states. "We spent a billion dollars bringing our DocuColor iGen3 to market, and another $400 million on the new Nuvera black-and-white line. We spend a billion dollars every year on research and development, and another half-billion on R&D with Fuji-Xerox.

"Our older technologies are really paying off now. They always generate more cash, they've been amortized, and they're very attractive to hold onto. But if we don't reinvest in that next wave of technology, we'll bleed to death. And that's the story of lots of technology companies that are no longer here today."

Indeed, having a sound business strategy is critical to the survival of any company, says the executive.

"Talking to customers recently, our whole discussion revolved around the future. But a colleague said, 'You know, Anne, I think our customers would like to hear about our turnaround as a company.' I was struck by that, as we're so focused on growth in the future. But we did talk about it, and they asked me where the magic was in the Xerox corporate turnaround.

"They wanted to know how in 31/2 years we cut our debt in half, became a great generator of cash, and grew our equipment sales revenue. We've been profitable for two years now; 50% of our revenue is coming from technologies that we brought to market in the last two years."

She explains, "If there was magic, it was Xerox people aligning themselves with this turnaround. Our people care about the company with a passion for the business. And if you can get a big company moving in one direction, you can make a lot of progress. It's not wholly about good ideas and good strategies; it's about people executing the ideas and strategies consistently."

At the On Demand event in New York City in March, Mulcahy kicked off the conference and exhibition by delivering the keynote address to a crowd of over 2,000 people. There, she spoke about IT (information technology) and the Xerox concept of "Big I, Little T," specifically, how information is increasingly trumping technology as the critical element in today's business world.

At Drupa, Mulcahy furthered that notion as it relates to the building of customer relationships.

"More and more, the relationships that we build at Xerox start with 'I' versus 'T,' " she explains. "Interestingly, even our Graphic Arts Partners, who purchase technology assets and serve their customers with them, are asking for more help on the consulting and process side. In fact, we devoted a large part of our booth at Drupa to business development tools and workflow, all of which are about solving business problems, not about actual output and engine technologies.

"Increasingly, our relationships with customers begin as services-led discussions based upon a business issue that has an integrated solution associated with it. That unquestionably will be the biggest source of growth we have in business. By the way, that model happens to carry a lot of technology with it."

Speaking of technology, Mulcahy notes, "We have great performance from our color technologies like iGen3, and in fact, about 23% of our revenues are from color pages. But actually that represents only about 4% of the pages printed on Xerox devices. So the vast majority of the digital printing world is still within the black-and-white realm: 96% of the pages printed on Xerox devices are still black-and-white.

"This indicates that color printing is an enormous opportunity, but it also shows us that a large part of the world still has legitimate black-and-white printing needs that must be served. Rather than not refresh the technology, we've invested a great deal of time and money in our Nuvera offering to come forward with the best in black-and-white output technology."

Looking ahead to Drupa 2008, Mulcahy sees personalized print and information management as becoming far more commonplace.

"Our bet is not only on digital printing, but on customer value," she asserts. "It's moving from the world of transactions to value creation. And that's not just digital; it's what digital enables, which is personalization.

"We've just begun to tap the opportunities of 1-to-1 personalized messaging. Four years ago, we talked about our DocuColor iGen3 as a concept. Today we're talking about personalization at a stage where it's still in the early-adoption phase. I think that effective content management and personalization will come to life and become far more mainstream by the time Drupa 2008 takes place. It's going to be the way we communicate.

"I also believe that quality and economics are going to get better in color output, that the shift from black-and-white to color will be a very exciting part of the transition from offset to digital. We saw that shift at Drupa. More and more, we're seeing digital front-ends on offset equipment, and we think that's going to be a bigger piece of the action as we move forward.

"Finally, I think we'll do more and more in multimedia, with content and output melding together. It'll sometimes be hard copy, oftentimes Web, but it certainly will be distributed and printed versus printed and distributed."