The Friday Interview: Bob Horastead, Xerox Ireland

21 May 2004

If most people dream in black and white, Bob Horastead (pictured) surely dreams in colour. When we caught up with him recently, the newly installed boss of Xerox Ireland was full of excitement about the iGen3, a new colour digital press with a cool three-quarters of a million euro price tag. Xerox in hoping that the iGen3 will lead to new market opportunities and drive revenue growth in its production division, which serves the commercial and in-house bulk printing markets.

It is such enthusiasm for Xerox technology that has kept Horastead loyal to the company for the past 25 years and that now sees the Englishman elevated to the position of general manager of Xerox Ireland, in succession to Joe Browne, who has moved on within the company. In this role, Horastead is responsible for sales in the 32 counties and also for managing the European shared services and support centre in Ballycoolin, Dublin.

Xerox used to be so closely identified with photocopying that the company name became the generic term for that activity. Then the ‘The Copier King’ became ‘The Document Company’, following a successful rebranding effort to broaden the one-dimensional perception of the company. Copiers remain a key product line but printing is the higher-growth and more lucrative market. And where once Xerox made its money from the photocopier working away in monochrome in the corner of the office, the company now sees colour machines as its future cash cow. It is unsurprising, therefore, that, when Horastead talks about the competition, three printing giants – Hewlett-Packard, Ricoh and reprographics specialist Heidelberg – are the first names he mentions.

The continued refinement of digital technology is turning printing from an art form into something that the office junior can handle with a little training. And quality is not in question, according to Horastead. He illustrates the point by tossing over a coffee table book that has been printed using the iGen3. The pictures and graphics in it are rendered perfectly and the type is pin sharp.

Moreover, the emergence of new variable printing technology allows organisations to create different products for different end-users.

“They allow companies to move away from one-size-fits-all marketing to very specific and very targeted campaigns, which will help cut costs and increase productivity,” he notes, adding with a shameless plug that the iGen3 can manage short print-runs just as cost-effectively as long ones – something traditional offset printers could never do.

Such flexibility combined with top quality reproduction will, he maintains, help digital printing products threaten the dominance of offset in the commercial print arena. He also believes the iGen3 will appeal to in-house corporate printing departments that hitherto would have farmed out their specialist printing needs to a third party.

Within the office segment – the second and largest arm of the Xerox business – the big news according to Horastead is the falling price of hardware. This is particularly true in the laser printer segment, where Xerox Ireland has just launched a €699 entry-level colour laser printer, which is not far above inkjet pricing. A couple of years ago, Xerox would have sold the same machine for about €2,000 but the company has been able to pass on lower manufacturing costs to the end user, says Horastead, who predicts that because of their low running costs and faster speeds laser machines will start to compete with inkjets at the small business and SOHO (small office/home office) end of the market.

One of the operational aspects of printing that Xerox is keen to challenge, Horastead says, is the fact that the initial outlay on a printer is likely to be dwarfed by the running costs of printer cartridges, paper and maintenance. In fact, tackling what Horastead calls the “hidden cost of printing” is one of the key calling cards of Xerox’s expanding services business, the third of its three business units. Customers in this area include Dublin City Council, FLS Aerospace, Matheson Ormsby Prentice solicitors and GE.

“For the average organisation, the total document cost is somewhere between seven and 10pc of the total amount spent on document management overall – including the machines and the time spent creating documents,” he points out. “If you get into a room with a chief financial officer it doesn’t take long for you to get their full attention when they realise how much money is going through their hands around documents generally. And that’s a good lead-in to our services proposition, which we see as a big opportunity.”

Horastead estimates that services account for 20pc of Xerox’s revenues across Europe. He sees that figure rising to 30pc or even 40pc in the coming years as more and more organisations sign contracts with Xerox for the management of their ‘fleet’ of printers and copiers.

One of the biggest services opportunities, Horastead notes, lies within the public sector – a traditionally massive user of printers, copiers and other document management hardware.

“The public sector is getting more and more interested in services. A few years ago this was not the case; they tended to be quite traditional about the way they bought technology or anything else. Their attitude was: ‘we’ll buy it the way we’ve always bought it; we’ll just squeeze people harder with the tender process’. But they weren’t necessarily getting all the benefits that they might have done if they took a more helicopter view of their costs.”

This focus on services clearly shows how far Xerox has come since Horastead first joined it a quarter-of-a-century ago. After all, it was not so long ago that a Xerox copier salesman was seen as the computer industry equivalent of a double-glazing rep. Maybe that company tagline could do with a bit of updating. How about: ‘The Document and Value Added Services Company’?

By Brian Skelly

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