Last September, Xerox launched a very expensive campaign to rebrand itself as a document management heavyweight. This week, Xerox's MFP rival, Ricoh (news, site), has just announced that it will be investing US$ 300 million over three years to “aggressively” accelerate its shift into the managed document services or outsourced document management space.

Using its core hardware and software technologies, the shift will see Ricoh focusing not just on the provision of hardware and software, but offering entire document management services from capture to printing.

At a press briefing held in New York, London and Tokyo earlier this week that underlined the global nature of the business shift, Ricoh said the US$ 300 million would be invested in its managed document services infrastructure with a revenue target of US$ 3.3 billion by 2013.

Document Management Market Shift

So, what is all this about? It seems simple enough -- Ricoh has identified shifts in the document management market that are focused on better enterprise returns based on more efficient document management.

No surprise there. However, what is surprising, is that Ricoh believes the shift is so profound that it is investing this amount of money in re-aligning its business.

Ricoh recognizes that global workforce trends, new technologies and the economy are transforming the way our customers must approach document management . . .Therefore, we are making additional investments to help lead our customers in the implementation of secure information infrastructure solutions that help them to become more agile, responsive and productive,” Mr. Shiro Kondo, President and Ricoh CEO said.

What this means is that Ricoh aims to set itself up so that enterprises can focus on their business activities, while Ricoch focuses on managing and optimizing their workflows.

Three Target Areas

There will be three key areas that will benefit from the US$ 300m spend. They include:

  • Development of global change management services that will focus on identifying and changing bad costly document-related behaviors, as well as extending the IT services management framework ITIL.
  • Accelerated delivery of cloud-like tools for the management of device and print management, as well as improving vendor-neutral information, infrastructure and process management across the enterprise
  • Standardizing sales and services -- training globally to ensure consistent services and sales support.

Returns on Investment?

To justify the huge amount of money being invested in the project, Ricoh sponsored IDC (news, site) to carry out research on how much revenue inefficient document management is costing enterprises.

According to their findings, a company with annual revenues of US$ 250 million will save more than US$ 6 million annually through effective document management.

This includes savings of observed costs -- such as printing -- as well as unobserved costs connected to IT support, documents and records management, environmental, regulatory compliance and end-user productivity.

Ricoh also presented research from a series of global focus groups and surveys with C-suite executives and senior IT managers, which showed that while businesses are aware that they need to gain more insight into their information and document workflows, they still don’t know exactly how much this is worth to their business, or how much it will cost if not done efficiently.

In addition, there is low awareness among executives of the positive impact a document management strategy could have on the business, including how much could be saved and the overall impact on the bottom line.

If anyone doubts the value in services and outsourcing, they might take a look at the end of year figures published by IBM this week that revealed the number of outsourcing and services contracts were up by 24% on the last quarter alone.

Ricoh is playing in a different field, but the bottom line is still the same -- services and outsourcing are big business and Ricoh, with this shift of focus and investment, aims to make sure it’s not missing any boats.