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Ricoh's plans for transformation

Ricoh recently held its first industry analyst summit in Tokyo. The event focused on communicating Ricoh’s focus on its services-led business transformation through its 18th Mid-Term Plan.

Ricoh is in the midst of transformation, actively streamlining its company structure to accelerate growth across a number of markets. Like many traditional print hardware companies, it is shifting its focus to services. Its primary focus is on what it calls “workstyle innovation”. Over the past few years, Ricoh has repositioned the company as a services-led organisation – and has greatly enhanced its marketing communications and web presence to shift perception of Ricoh as a company that can support a business’ transformation in today’s evolving and mobile workplace. Ricoh’s services target is to gain 30% growth in revenue globally in 3 years. It plans to achieve this by enhancing its core business as well as expanding its presence in new markets.

Core business enhancement

Ricoh’s core business revolves around office printing, where it has carved out a strong strategy around managed document services (MDS). This established approach has enabled enterprises to tackle the escalating costs associated with an unmanaged print infrastructure. Ricoh has extended this model to encompass all document-centric processes and is effectively increasing its presence in the market on a global basis. In Quocirca’s recent review of the MPS landscape, it is positioned as a global market leader – testament to its global scale, unified service and delivery infrastructure and effective approach to business process automation.

Service expansion

Ricoh’s 18th mid-term plan relates to five key business areas. Its primary business, the office business market, encompasses both hardware technology and services such as MDS, business process services (BPS), IT services and Visual Communication.  Ricoh also operates in the consumer market (as seen in its new THETA 360 camera, a range of projectors and an electronic white board product); the industrial business market (optic devices, thermal media and inkjet heads), commercial printing (production printers) and new business, which includes additive manufacturing.  Ricoh plans a full-scale entry into commercial printing and intends to expand its growth in the industrial market by 50% in the next three years.

Ricoh announced eight new service lines

  • Managed Document Services – leveraging Ricoh’s 5 step adaptive model to help organisations optimise document-centric processes.
  • Production Printing Services – portfolio of integrated services to complement Ricoh’s hardware and solution portfolio for in-house corporate printing or graphic arts and commercial Printing.
  • Business Process Services – streamlining business processes such as human resources, finance and accounting, and front office outsourcing services such as contact center services.
  • Application Services – Integration of applications such as insurance claims processing services
  • Sustainability Management Services – Services to reduce environmental impact such as electricity and paper for Ricoh and non-Ricoh devices.
  • Communication Services – Development, deployment and integration of unified communication solutions including communication/collaboration solutions (such as Video Conferencing, Interactive White Board, Digital Signage, Virtual Help Desk)
  • Workplace Services – Services to maximise efficiency of workplace and effectiveness of workforce, including optimised use of space, smart use of technology and automation of certain office functions.
  • IT Infrastructure Services – Consulting, designing, supplying and implementation of IT infrastructure as well as support and management of full IT Infrastructure by remote and on-site support.

Perhaps the most focus was given to Ricoh’s IT services portfolio which varies by region. Ricoh has made a number of IT services acquisitions across several regions and is seeing strong success in Asia Pacific, Europe and the US.   In The US, the acquisition of MindSHIFT is enabling Ricoh to target small and medium sized businesses. If Ricoh can articulate a strong proposition around IT services, this could be a key differentiator to its traditional competitors over the coming year. However, Ricoh is now operating in a wider IT services market and perhaps its penetration will be limited to its existing customer base looking to extend existing MDS engagements to the IT infrastructure.

Innovation

Ricoh is working on a range of technologies around what it calls the infinite network (TIN) where all people and things will be connected all the time. This is Ricoh’s view of the internet of things (IoT) and also embraces Ricoh’s vision of the need to connect to a rapidly increasing set of sensors in the environment.

Ricoh R&D discussed a range of differentiated technology platforms which aim to address multiple markets, enabling the business units and operating companies to go to market with highly differentiated solutions for the office and for specific large verticals. This includes communication and collaboration, visual search and recognition, digital signage and hetero-integration photonics (optics and image processing).

Perhaps the most relevant to the print industry is its mobile visual search technology which provi des an interactive dimension to the printed page. A simple snap of an image can provide access to digital content such as text, video, purchase options and social networks.  Ricoh has commercialised this through its Clickable Paper product. Based on digital layers, this enables consumers to hover their mobile phone over a magazine advert, for example, and it could generate video or a link to a web site. Ricoh demonstrated an example used by Mazda, which is using the technology in its brochures.

This technology promises to potentially breathe new life into print by connecting print to the digital world.  The market is rapidly evolving market and Ricoh is competing with a range of interactive print/ augmented reality vendors in this space. The only other printer vendor to offer something similar is HP, with its Aurasma technology, which has been available for a number of years.

Quocirca opinion

Ricoh, like its traditional print competitors, needs to drive a dramatic shift to a services business model – its long-term relevance depends on this. While Ricoh has developed a cohesive set of new service offerings, it already has developed a relatively mature set of business process services across areas such as e-invoicing, healthcare, loan applications and so on.  Quocirca believes that this should be a priority for Ricoh going forward with its services strategy.

Indeed, Ricoh has already made strong inroads with its MDS strategy. To drive deeper engagements with larger enterprises needs to further articulate a strong vision around business process automation. Ricoh faces strong competition from Lexmark and Xerox in this space.

Ricoh illustrated that it is innovating across a number of markets and this shows commitment to expanding its presence in non-core markets. Overall, Ricoh is taking the right direction to change perceptions of its brand and develop broader services capabilities.  Ricoh certainly has a broad array of services, but it is now competing in many new markets and should focus on building its credibility in a few core areas and partnering with best of breed providers in others.

Some of the less conventional products, such as Clickable Page, need to be positioned carefully, and Ricoh will need to either ensure that it moves with improvements in the technology and with the increasing use of wearable technology, and even fully understand when such ephemeral approaches have run their time and so pull out of providing any offerings in the space.

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