Managing Global Information Strategy: Xerox, Ltd.

MANAGING GLOBAL INFORMATION

STRATEGY: XEROX, LTD.

Philip Seltsikas

Department of Information Systems and Computing

Brunel University

United Kingdom

Abstract

The diversity of information management (IM) issues and problems that a large multinational company may face are illustrated by showing how Xerox Ltd. managed its IM strategy over a ten-year period. The case study details the IM developments and shows how the Xerox IM team managed by focusing on a six-pronged strategy: business processes, data and information, applications, technology, organization, and human resources. The problems that Xerox faced in each of these areas are discussed and management's approach to resolving them is described. In essence, Xerox's move to managing-by-process required matching changes in IM capability to support it. Xerox's earlier approach, which entailed a decentralized IS model, became inadequate for supporting the dynamic process model, and ultimately customer needs. The case then shows how the process model became heavily reliant on the capabilities offered by IM. As business processes and information systems became increasingly intertwined, Xerox aligned the development of both models and effectively brought their management and coordination together. A centralization strategy was key to bringing these latter changes about.

BACKGROUND

Xerox was founded in Rochester, New York, in 1906 as The Haloid Company. Chester Carlson made the first xerographic image in 1938 and then spent years trying to convince business executives to take up his invention. They didn't believe that there was a market for even a single copier. The Haloid company took up Carlson's invention and became the Xerox Corporation in 1961. Since then it has grown to a dominant global company with 92,700 employees and revenues of $19.4 billion (Xerox 2000).

Xerox is well known for producing photocopiers but its product portfolio includes printers, facsimile machines, multifunction products (printer, fax, copier), computer software, and document consultancy. The focus of this case study is the part of Xerox that is known as the European Solutions Group. Publicly, this is known as Xerox Ltd. And until 1997 was known as Rank Xerox Ltd. This group manufactures and markets Xerox products across Europe, Africa, and the Middle East. It comprises four manufacturing sites, two major research laboratories, and multiple customer business units across more than 24 European countries. The Xerox Ltd. company employs 19,500 people.

Until the 1980s, Xerox enjoyed unprecedented growth. Its products embodied sophisticated technologies that Xerox safely guarded behind a wall of patents. As these patents expired, fierce competition developed and by 1982 Xerox's share of global profits had been halved. Most of this competition was from Japanese firms (Jacobson and illkirk 1986). As many Xerox technologies were now being copied, Xerox looked for organizational efficiencies to succeed.

This began when Dr. Fred Hewitt became the sponsor of Xerox's Inventory Management and Logistics (IM&L) process. This is the business process that makes sure that the right things get to the right place at the right time. Hewitt had been the director of distribution and technical services for Rank Xerox, and lead the way in developing multinational systems for optimizing inventory levels among European operating units.

The executive team was known as the Multinational Inventory Optimization Council (MIOC). It was originally composed of senior managers who were important stakeholders in the change efforts that would follow. These senior managers came from different parts of Xerox. Their job was to look for cross-functional, cross-unit opportunities. Effectively, these managers were an advisory council to Xerox President Paul Allaire and the top five senior executive vice presidents. They gave feedback on the organizational and system changes that were required. In 1988, Hewitt was appointed as Vice President of Central Logistics and Asset Management to address the implementation of these changes.

The business process reengineering that Hewitt led saved Xerox millions of dollars. Following their example, Xerox management in other process areas implemented changes and a major organizational restructuring took place. In essence, Xerox was "forced" to abandon the functionally oriented organizational form simply in order to survive (Watts 1994). Xerox's management delineated the essential business processes through which it operates and reorganized to focus on these (see Figure 1). The traditional