Xerox reveals ambitious reinvention plans
October 26, 2023
Xerox’s vision is its evolution into a services-led, software-enabled provider of avant-garde workplace solutions.
In the latest earnings call on 24th October, Xerox’s top brass, CEO Steve Bandrowczak and EVP & CFO Xavier Heiss unveiled their detailed plans for the company’s significant transformation, referred to as “Reinvention”.
This transformation marks a strategic repositioning for Xerox, aiming to harness emerging macro trends, especially the digitalisation of document workflows powered by AI, without side lining their core print business. Instead of abandoning their print heritage, Xerox sees “Reinvention” as building new capabilities on a solid print foundation.
The core of the reinvention focuses on geographic optimisation: by focusing their presence in selected markets, considering a shift from direct operations to a partner-led distribution model. Although this could decrease revenue initially, the approach aims to lay a more robust foundation for future growth.
Along with the geographic optimisation the next focus is on margin growth, or product and pricing refinement. Xerox plans to fine-tune its product offerings to magnify profitability. By streamlining products and introducing a more consumer-like touchless experience, the company aims to enhance client satisfaction. Simultaneously, simplified pricing models are being introduced to expedite decision-making in new business and renewals.
Cost cutting, aka Operational Efficiencies where Xerox anticipates an organisational simplification across IT, business support, and supply chain operations.
However, this isn’t merely a cost-cutting venture. Central to Xerox’s vision is its evolution into a services-led, software-enabled provider of avant-garde workplace solutions. This transition would necessitate organic and inorganic growth investments, targeting burgeoning markets such as managed IT services for SMBs and digital services.
By 2026, Xerox projects a rise in operating income by at least $300 million (€285 million), reverting to double-digit adjusted operating income margins. This optimistic projection includes investments geared towards diversifying revenue sources, emphasising high-growth markets.
CEO Bandrowczak stressed Xerox’s potential for growth within its existing territories, noting its services and product differentiation as pivotal. He elucidated that while there are opportunities in the Asian market, the required capital for logistics and supply chain establishment makes it less feasible than fortifying their existing foothold in the Americas and EMEA.
Heiss, meanwhile, spotlighted the financial trajectory of their Reinvention strategy. A substantial part of the anticipated benefits is expected from operational expenses (OpEx) optimisations, especially in areas like go-to-market strategies.
Will this “Reinvention” work? Xerox’s vision to evolve beyond its print legacy while emphasising a digital, service-focused future. The company’s leadership remains confident in its transformational journey, assuring investors sustainable growth and lucrative returns.
Categories : World Focus
Tags : Business Earnings Plans Reinvention Xerox
