"We must stop fearing technology and think about how it brings value to citizens"

By May Ponzo

Founded in 1906 as "The Haloid Photographic Company" by Chester Carlson in New York, Xerox initially focused on photographic products. The company's true transformation occurred in the 1950s when Carlson invented a revolutionary technology known as xerography, which allowed for quick and easy document reproduction. Consequently, in 1959, the company changed its name to Xerox Corporation, and its first successful commercial product was the Xerox 914 photocopier, a milestone in the history of document reproduction.

In recent years, Xerox has faced challenges in a changing business environment, especially with the transition to paperless office environments. In an exclusive interview with Xerox CEO, Steve Bandrowczak, for MIT Technology Review in Spanish, conducted during the Executive Leadership Meeting of the Management Excellence Club, where Xerox is a Founding Partner, we explore how the printing and office solutions company has turned the challenge into an opportunity for reinvention."

As CEO of Xerox, you have emphasized the importance of fostering a culture of innovation within the company. Could you give us some examples of how Xerox is introducing innovation into its internal workflows, as well as into consumer-facing products?

Xerox has always been a leading company in driving innovation, but today it is doing so at an unprecedented pace. A key initiative is reinventing the service industry. Traditionally, solving product-related problems involved calling a helpdesk, creating a ticket, and dispatching a technician, which posed challenges such as an aging workforce, delays, and environmental issues. To overcome this, we embarked on a journey to innovate in this sector.

Now, millions of connected devices transmit failures to a central data lake, where artificial intelligence (AI) and robotic process automation (RPA) analyze the information. The failures are then sent to our call center in Saint John's (Canada). Technicians receive real-time error information, along with three suggested solutions based on historical data and R&D notes. Customers receive a link to an augmented and virtual reality session for self-service, resulting in a remarkable 50% of call center tickets being resolved remotely with a 95% success rate in 17 minutes.

This revolutionary approach not only ensures faster customer recovery but also has a positive environmental impact by reducing vehicle mileage and emissions. Additionally, recorded self-service sessions allow technicians to receive guidance before arriving, minimizing diagnostic time. For more complex issues, technicians can participate in augmented virtual reality sessions to receive third and fourth-level support, eliminating the need for repeat visits. Artificial intelligence further streamlines the process by suggesting the most likely parts for repair, reducing calls, improving availability, and addressing the challenge of an aging workforce.

As we hire new technicians, we focus on creating digital natives proficient in augmented reality, AI, and machine learning, transforming our approach to workforce development. This innovative model exemplifies our commitment to driving change and efficiency in the technology sector.

The changing labor landscape, especially with the post-pandemic hybrid and digital workplace, has offered Xerox an opportunity to reinvent itself and transition from a paper-centric company to a software company driven by data and AI. How is Xerox leveraging its expertise in office work solutions to guide companies in their digital transformations, and how is the ongoing need for paper and printing balanced with this transition to new business models?

The first myth is that printing is dead. But the truth is that there is still a lot of printing, both in physical and digital formats, such as PDF documents. Every month, our infrastructure processes billions of pages, highlighting that printing is an important source of data. Just as AI and ChatGPT rely on data, printing holds immense value as it provides the foundation for these technologies. Xerox has long been involved in data management and security, ensuring that data is correctly placed with the appropriate attributes across various industries.

Xerox has traditionally operated in the physical world, but the reality is that we are more than a printing company. With a chip, a screen, and an operating system integrated into each client's environment, we have the ability to leverage technology in innovative ways. For example, we can use RPA and AI to scan invoices and integrate them seamlessly into the accounts payable process. Similarly, we can streamline hiring processes by automatically processing resumes. In the legal realm, we can effectively locate specific clauses in contracts and notify clients of legal or data privacy changes, saving countless hours of manual work.

We focus on creating specific solutions tailored to different sectors based on our deep understanding of their processes and pain points. Furthermore, in the face of challenges such as inflation, labor shortages, and rising capital costs, our goal is to help small businesses by offering them RPA, security, and AI services. This allows them to access advanced technologies without significant upfront investments and ultimately helps them navigate current industry headwinds and increase productivity.

From a consumer perspective, how is Xerox transforming the public perception of itself, primarily known as a printing company, to one recognized for its software solutions?

Xerox is an incredible global brand, and we are trusted. Our devices operate securely behind firewalls, a testament to our FedRAMP certification and the trust placed in us by the U.S. government with sensitive data. This trust allows us to introduce cutting-edge technologies like AI, RPA, and IoT services to our customers, who know we are committed for the long term.

The importance of our brand lies in our deep customer relationships and the challenge of conveying our capabilities in RPA, AI, IoT, and digital services. We are already integrated into their environments, familiar with their processes, and now the focus is on effective communication. Beyond being a renowned printing company, Xerox has a significant IT services and digital services business. We actively support CMOs with marketing strategies, seamlessly integrating physical and digital environments.

How does Xerox differentiate itself from market competitors undergoing similar changes, and what key elements do you believe contribute to Xerox's unique value proposition?

We have an extraordinary legacy of innovation, resilience, and industry redefinition. My primary concern for Xerox lies in our execution and the ability to improve speed. Rather than focusing on the competition, I focus on creating agile speedboats instead of battleships. The key question is: how can we deliver value to our customers quickly and bring our partners, who constitute 25% of our business, along on this transformative journey?

In this era of rapid technological evolution, my emphasis is on emulating the consumer world, observing the ease and speed that prevail in interactions with devices like iPhones and Galaxy. The absorption of technologies, including AI, is happening at an unprecedented pace. Having been a CIO for over 30 years, I have witnessed a remarkable acceleration in technology adoption. Before, concerns about change management and absorption rates dominated discussions, but I advocate for further accelerating the pace of change.

The COVID-19 pandemic serves as a compelling example of our ability to rapidly absorb technology. Within days, organizations worldwide transitioned to remote work, deploying new network infrastructures and adopting videoconferencing tools. The experience demonstrated that we can drive technology adoption at a pace previously thought impossible. Even governments, traditionally slow to change, are now adapting rapidly, influenced by multimedia and public demands.

In this dynamic landscape, the consumer plays a pivotal role in driving and absorbing technologies, shaping opinions on how we work. When we hire young professionals, we emphasize digital technology and innovation, which are at the core of our operations, to inspire them to join a dynamic technological powerhouse.

In its latest third-quarter results, the company announced a reinvention to drive sustainable profit improvement and revenue growth. Can you elaborate on the key components of this reinvention strategy and how Xerox plans to achieve the projected improvement in adjusted operating income of at least $300 million by 2026?

Xerox's reinvention involves several key components. Initially, when I joined Xerox in June 2018, our goal was to consolidate and integrate with Hewlett, but external challenges like the impact of Covid and supply chain disruptions led us to focus on survival for about 30 months. Recently, we announced three fundamental changes.

First, a radical review of end-to-end processes, with the goal of simplifying, eliminating waste, and extensive automation. This involves leveraging technology to accelerate hiring, training, and service responsiveness. For example, we have reduced the time required to train someone in our helpdesk from seven months to five weeks, and we aim to reduce it to five days. We are embracing technology, adopting a "Career Augmented Virtual Reality" product to streamline our internal processes and disrupt the service industry.

Second, we are strategically shifting our revenue sources beyond printing by driving IT and digital services. Our goal is to have approximately 30% of revenue from non-printing sources within three years. This involves capitalizing on high-growth areas such as IT services, security as a service, RPA, and AI. We aim for our customers to easily access these technologies as services, sparing them heavy capital investments and allowing them to benefit from Xerox innovation.

Finally, our interest in innovation goes beyond technology itself. We are interested in reinventing sectors such as healthcare and law firms. We engage in meaningful conversations with clients, such as law firms exploring the role of ChatGPT in generating opinions. In the public sector, we recognize the concern that AI raises, but we emphasize integration, regulation, and bringing value to citizens. We must stop fearing technology and think about how it brings value to citizens.