What alternative strategy might Xerox have followed in responding to the first signs of declining revenues and profits? Task number one: outsource Xerox’s manufacturing. An often criticized and unpopular move, outsourcing was critical to Xerox’s cost-saving efforts. Burns oversaw the process in a way that preserved quality while achieving the desired cost benefits. With the restricting of manufacturing, Xerox’s workforce dropped from 100,000 employees to 55,000 in just four years. This and other efforts returned Xerox to profitability within a few years.
Xerox renewed its focus on the customer. Xerox had always focused on copier hardware. Before developing new products, Xerox researchers held seemingly endless customer focus groups. Xerox was discovering that understanding customers is just as important as understanding technology. What Xerox learned is that customers didn’t want just copier; they want easier, faster, and less costly ways to share documents and information. The company had to rethink, redefine, and reinvent itself. Xerox created new customer relationships, as well as new competitors.
Instead of selling copiers to equipment purchasing managers, Xerox found itself developing and selling document management systems to high-level information technology managers. Xerox’s revenue and profits, and stock price began to show signs of recovery. But before it could declare its troubles over other challenging environment force arose – the Great Recession. The recession severely depressed Xerox’s core printing and copying equipment and services business, and the company’s sales and stock price tumbled once again.
So in a major move to maintain its transition momentum. The expertise, capabilities and established channels of ACS were just what Xerox needed to take its new business plan to fruition. The synergy between Xerox, ACS and other acquired companies has resulted in a board portfolio of customer-focused products, software, and services that help the company’s customers manage document and information. It now offers digital products and systems ranging from network printers and multifunction devices to color printing and publishing systems, digital presses and “book factories”.
It offers an impressive array of print management consulting and outsourcing services that help businesses develop online document achieves, operate in house print shops or mailrooms, analyze how employees can most efficiently share documents and knowledge, and build internet-based processed for personalizing direct mail, invoices and brochures. These new products have allowed Xerox to supply solutions to client, not just hardware. Error rates have plummeted along with processing time, and that means increases in revenues and customer satisfaction