The Conduent team rang the bell at the New York Stock Exchange on Jan. 3, 2017.

Xerox Spinoff Conduent Poised for Growth, CIO Says

4 minute read
David Roe avatar

Conduent may be the biggest company you've never heard about. 

The Basking Ridge, N.J.-based business process outsourcing company — a Xerox spinoff — started life this month with approximately $6.7 billion in annual revenue and a wide portfolio of differentiated offerings. 

Conduent already wields clout that most players in the market can only dream about. With 93,000 employees in 40 countries, is already a specialist in transaction-intensive processing, analytics and automation.

From Xerox to Conduent

Norfolk, Conn.-based Xerox announced a plan to split into two distinct companies in early 2016. In June, the company announced that the document management business would retain the name Xerox and the new business services company would be named Conduent. 

The split took effect early this month, culminating months of reorganization, board shake-ups and tough financial decisions, including thousands of layoffs.

Ashok Vemuri, CEO of Conduent, said the company is already laying the groundwork for growth through "sharpened go-to-market capabilities and greater consistency" in automation, analytics, innovation and expertise. He emphasized Conduent is developing its substantial technology base as well as undergoing further transformation.

Carol Kline
Carol Kline

In an interview with CMSWire, Conduent Chief Information Officer (CIO) Carol Kline said Conduent is proceeding cautiously.

“The first year we will really be saying what we do and doing what we say. We haven’t set huge growth targets. What we have said is that we will drive better margins. We will do that through better execution and better deployment of technology,” Kline said.

“We are going to focus on the customer base we have, continue to build those relationships and push through offering that we have but that we don’t sell to that customer yet.”

Growth From Acquisition

Conduent's business process outsourcing offerings came to Xerox through its $6.4 billion acquisition of Affiliated Computer Services (ACS) in 2009. ACS provided information technology services to industries including telecommunications, retail, financial services and education. It was also the largest provider of managed services to government with over 1,700 federal, state, county and local government contracts on its books at the time. 

ACS was supposed to move Xerox away from a dependency on its traditional hardware business. But it never met expectations.

In December 2014, Xerox sold the IT outsourcing business for $1 billion, largely because of slow growth, Kline said.

Today, “Xerox is a manufacturing company and Conduent is a services company. We originally thought that by bringing these two together there would be greater synergy. I think we came to the realization that we are two different businesses. How we do marketing is different, how we interact with our customers is different, our offerings are different, how we interact with our customers is different, how we deal with our customers and how we integrate them into our business is different. We concluded that we would be more successful separate than we would be together.

Learning Opportunities

“So now we are our own company with our own agenda, we understand what our opportunities are wherever they are so we really need to focus and deliver for our clients."

Conduent's Future

Conduent steps forward with some of the research and innovation capabilities Xerox built up over the years.

According to Kline, Conduent will be building innovation hubs worldwide to develop technologies to enable the automation and outsourcing of business processes, as well as the development of mobile and cloud-based technologies.

Conduent already claims a customer base that includes 76 of the Fortune 100 businesses and more than 500 government entities and the top 20 managed US healthcare plans and nine of top 10 pharma/life science companies. It also manages more than 2.5 million contact center interactions daily for some of the world’s top brands and services 8.9 million people who pass through managed toll systems, representing 46 percent of all U.S. toll collections.

Kline said the company has strong existing customer relationships. "We don’t need to go out and find 1000 more customers," she said.

Product Roadmap

Technology-wise, Kline said the focus will be on analytics, mobile and a new generation of infrastructure.

“We are going to focus on a modernization of our infrastructure and consolidating the number of locations we have today from a technology footprint perspective. We will also be collapsing the number of providers and really transforming that infrastructure into next generation,” she said.

There is also a whole focus on digital. "Clearly if the consumer wants to be contacted in the way they want to be contacted we must provide for that. There must be a focus on whole multichannel approach. Analytics is critically important because there is so much data now," she said.

“We will focus on the analytics space, the mobile space, machine learning and so own. We are building innovation centers and focusing on research."