Xerox CEO to CIOs: We'll take your mess and make it beautiful

Top exec Ursula Burns outlines Xerox's widening portfolio of IT, business process and document outsourcing services.

Sometimes it takes an outsider to drive a storied tech company through a major transformation. Not so when it comes to Xerox Corp. Xerox CEO Ursula Burns is steeped in the history and culture of the 107-year-old company, having joined Xerox as a mechanical engineering intern in the summer of 1980 then working her way up through a variety of roles.

Xerox CEO Ursula Burns
Xerox CEO Ursula Burns

But make no mistake about the transformation part. Burns isn't abandoning Xerox's well-established position in printing and copying. Instead, she's rapidly steering the company into a leading position as a provider of business process, IT and document outsourcing services -- a set of offerings that already account for more than half the company's almost $23 billion in revenue.

In this installment of the IDG Enterprise CEO Interview Series, Burns talks talks with Chief Content Officer John Gallant about what differentiates Xerox from the very big names that already play in outsourcing and explains how Xerox isn't just about devices today.

Q: Xerox has embarked on a new strategy of becoming a leading business services company. Explain what that means and why that's so important for customers and for the company.

A: It is our strategy to continue to transform the company into a services provider focusing on three areas. One is business process outsourcing (BPO), the second is IT outsourcing (ITO), and the third is what we call document outsourcing. We're going to do that while we remain tightly connected to technology -- technology in how we deploy and operate and enable our services lines, but also to stay focused on the fact that there are still [technology] needs.

There are still needs in the printing business that technology is the foundation of. The transformation is to hold onto and stay engaged in the areas of technology that are growing and that are transforming, and to grow a set of services in poorly penetrated areas or areas that are a priority for us and for our clients.

The question: Why would we do it? The most important reason is our clients asked us to do it. Years ago, even before we bought ACS [Affiliated Computer Services, Inc.], we were engaged with clients who asked us to do more and more around their infrastructures. We always proposed solutions from a document infrastructure, but they approached us with a broader set of questions.

They said, 'I have a whole bunch of legal stuff that I do, a lot of it is surrounding documents. Can you help me transform my business process around discovery, or my business process around how we do drug delivery, how we deal with mortgages?' We responded from our standpoint: 'We can help you automate your copying and printing and filing.' And they said, 'No, no, no, can you do more than that? Can you actually take over the entire business process for us?'

When we finally tuned our ears up and listened, we [set out] on two paths. One is: can we grow this set of solutions ourselves? Can we become smart about legal, smart about BPO, and tie in our document expertise and our imaging expertise with that? We did some of that. We grew some businesses by ourselves. What we found was that there were so many different areas that needed this business process outsourcing infrastructure layer developed around it that we would have to buy -- and it was so disaggregated that we would have to continue buying forever before we got any scale and any expertise.

Then we ran into ACS and bought it, not because it was big or because it was particularly sexy, but because it had done what we were planning to do, which was to buy many different lines of business with a common core set of practices and infrastructure that we can actually leverage. So we went there because our clients kept saying, 'I understand you do copying and printing. But we want copying and printing as part of a solution to a business process problem, not as the solution that you're selling and me getting other people involved.'

Q: You have aggressive goals for how much of revenue will come from these services in the future. Where do you stand on this road today, and where do you hope to get to?

A: Our services business is a little bit more than half our revenue, 52% of our revenue at the last counting. It will be a significantly larger portion -- in five years or so, it will be two-thirds of our revenue or higher. How will we get there, besides just wishing for it? There are three major reasons.

One is that we will bring this BPO/ITO business around the world. Our services business, which is $13 billion or so, plus or minus, is primarily a U.S. revenue-generating business. We have operations around the world. We have factories around the world that service our clients. But the vast majority of our clients are U.S. clients. Some solutions we provide are specific to the United States -- we're a big Medicaid provider, for example -- but we are a big HR outsourcing provider. We're a pretty big actuarial service. We're big in transportation. We're big in customer care, financial accounting. But most of our clients are still U.S., so one of the things that we're going to do is bring the services business global, number one.

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