From rock star to folk hero

This, of course, changes my opinion. More like a folk singer than a rock star, Rob Abraham remembers his roots. Like either variety, he offers me a cigarette, and we talk.

Xerox set up shop in South Africa as Rank Xerox in 1964. After selling the company to Fintech in 1987, it withdrew all contact with the country in 1991. It returned in 1997, forming a joint venture with Fintech, which retained management control and was bought, in 2001, by Bytes Technology Group.

In a parallel Bytes universe, Abraham left MediSwitch, helped get Uskotec off the ground, and supported its integration into Bytes Software, before joining Xerox as MD.

Xerox has many joint ventures in developing market territories [Africa, South America, etc]. “It saw an opportunity in South Africa early on, especially since many local clients are multinationals,” Abraham says. “But because it takes a different kind of approach to succeed here, it has chosen a partnership model.”

Storeman to boss man

Xerox SA has been good at heeding local employment equity and empowerment dictates. Abraham manages to incorporate this into company philosophy and has tangible examples of the company`s will to assist in upliftment.

“Employment equity need not centre on the kinds of concept that frighten white males,” he says. “It reaches far beyond that into areas of equal opportunity on every level, making the company a place that helps all people excel.”

Not one to kowtow to formulaic precepts of anything, Abraham`s sentiments on the issue are self-formulated. He speaks with pride of the successes of Koerikai Xerox and Ithuba Lethu: joint venture companies that will eventually be bought outright by their black shareholders. “I`m really proud of this next one,” he adds. “Mike Chonko started as a storeman at Xerox. He now owns 100 percent of Pambili, a Xerox reseller, and they`re doing very well.”

There are no silver bullets for doing business in SA, continues Abraham. “Keeping inventory low and improving collection days [a necessity owing to currency volatility] has helped us compete in the areas where we focus.”

Xerox does not compete aggressively in the fax, stand alone, light lens copier or low-end desktop page printer markets, says Mehmet Sezer, the marketing director. “In the markets where we do compete, specifically the high-end production printing environment [wide-format printers], networked office printing and document production and management services, we are first or second.”

Sezer names the education and financial sectors, as well as large corporates and printing houses, as focus areas. In the Document Centre product line [multi-functional digital devices of up to 90 pages per minute], Xerox SA has 60 percent market share. In the DocuTech-DocuPrint product line [faster, high-end devices, where unit sales are low but revenue is huge], Xerox also leads, with 53 percent, according to the 2002 South African report by research house InfoSource.

“The worldwide market share is quite close to that,” says Abraham.

In the colour variety of these devices, Xerox SA expects to be first with 28 percent market share in 2002. From the medium to high-end market, Xerox`s multi-function technology cascades down into Internet-capable units for the workgroup.

The sales trails

The company uses a well-orchestrated mix of direct and channel strategies.

With a staff complement of 941, it serves the large metropolitan areas itself, but restricts itself to large corporates. In rural areas, or those not covered by this geographical map [such as southern Africa, Madagascar and the Seychelles], it uses dealers in the classic reseller channel. Concessionaires are appointed in urban areas to sell and service in smaller city accounts. In addition, Xerox uses Square One as distributor in a different channel, for smaller printers and consumables, and ACT for consumables only.

Abraham`s energy is palpable when he discusses dealer certification and related issues of skills transfer. Xerox SA has been selected as a competency centre for training all technical staff from territories such as Russia, Turkey, the Middle East, Africa and India. This recognition of local competence is something he is especially proud of.

It is all very well to call oneself a document company, but what does it mean?

“First of all, we`re not in the inkjet business,” says Abraham. “Consumables make this technology too expensive in high-production environs. We manage the entire document trail in high-volume printing environments, from the creation and production of documents, to auditing print output and cost, to providing outsourced laser facilities, on and off site.”

A large manufacturer of fine paper is one client whose printing costs have been cut by a third through comprehensive auditing, equipment buy-back and outsourced printing contract. Service level agreements guarantee cost savings.

Row of ducks

Document centres, in Xerox parlance, are 24x7 online digital printing bureaux, where thousands of printouts flow from enterprise systems in mission critical situations, such as month-end statement printing, leaving little room for error.

“Our document centre [Xerox SA`s customer off-site facility] puts out 16 million documents per month,” Abraham says. “The outsourcing business has grown exponentially in the past three years,” he continues.

A breakdown of the company`s revenue reveals that hardware contributes a high but falling 25 percent, supplies 19 percent, customer services 24 percent and document services 32 percent.

Xerox Corporation internationally lost ground somewhat in years past. It was notoriously sloppy in protecting its intellectual property, earning the distinction of having invented more things for other companies than anyone else. However, Abraham points out South Africa never felt the pain as much as the American counterparts.

In the document management space, Xerox now seems to have its ducks in a row, focusing on high volume, wide format markets. The market for print-on-demand is in its infancy – expect Xerox to eye this sector next.