Ricoh to Invest $300 Million in Managed Document Services Infrastructure

Ricoh billboardAt a New York press conference this morning attended by Wirth Consulting, Ricoh Corporation announced it will invest $300 million over the next three years in a global Managed Document Services (MDS) infrastructure. With the program, Ricoh’s ultimately seeking to achieve an annual MDS revenue target of $3.3 billion by 2013, but it will also be competing with other MDS providers such as Hewlett-Packard and Xerox with its ACS acquisition.

How is Managed Document Services different from the more well-known Managed Print Services (MPS)?  Generally, MPS strategies focus on a company’s printer and MFP fleets—locating and re-assigning, for instance, under-utilized printers and MFPs to departments and users where volume is higher—with the aim to reduce print costs, including consumables and IT expenses.  In contrast, Ricoh says its MDS approach is an extension of MPS, but it also aims to streamline the entire business process, not just printing.  Solutions can be simple—for instance, by scanning and digitizing documents and storing them in a searchable electronic archive for much easier retrieval—to more complex, such as incorporating enterprise content management systems.

Based on its own research and research conducted by International Data Corporation, Ricoh says companies continue to consider their document costs “insignificant” and underestimate them.  It contends that a company with annual revenue of $250 million could save more than $6 million annually through more efficient document management.  This includes printing costs, as well as IT support costs, documents and records management costs, environmental costs, and costs related to regulatory compliance and end-user productivity. Overall, Ricoh says businesses continue to have “little understanding” of the specific amount of money spent in this area, due in large part to lack of consolidation and fragmented distribution of these costs across different departments.

Ricoh says it will invest in these key areas:

  • Development of its global change-management professional services, which are based upon Prosci’s ADKAR change-management methodology.  ADKAR’s change-management methodology is designed to “help employees permanently change costly document-related behaviors”—for instance, by using duplex versus simplex printing, or a lower cost-per-page printer or MFP.  Ricoh says it’s also adopted an ITIL service-delivery framework that it says is the “most widely used approach to IT services management,” and is increasing the number of service teams certified in the ITIL and ADKAR methodologies.
  • Ricoh will continue with its vendor-agnostic approach, so that it’ll be able to manage a customer’s entire print/MFP fleet regardless of the manufacturer.  It’ll also use cloud-based tools to manage devices.
  • The company will expand its global MDS workforce and globally standardize its training for sales and services, with the goal to provide a consistent approach regardless of location. Currently the company’s direct-sales and services organizations numbers some 30,000 employees.
  • Last, Ricoh will use the services of some outside partners to incorporate new technologies or proprietary applications.

At the press conference, Ricoh highlighted the potential of MDS with a presentation from the President and CEO of ChildNet, a non-profit agency created to manage the child welfare system in Broward County, Florida, and which is swamped with paperwork, with caseworkers spending about 40-50 percent of their day processing files.  Ricoh services professionals designed a better document-management strategy, scanning three million hardcopy documents and training the scan system to recognize 415 different forms.  The system was then able to index the documents, making document retrieval faster and easier—eliminating caseworkers having to search for hours for specific documents.  Another benefit was that the Ricoh system provided better security, eliminating misplacement of documents, and complying with HIPAA privacy standards.

Ricoh’s Prospects

Overall, Ricoh has some natural advantages going into MDS.  It has a broad product line of hardware and solutions.  RBS (Ricoh Direct) branches along with recently acquired IKON dealers have some discipline in solutions implementation and integration.  So overall, Ricoh should be very well positioned in the MDS market for small to large companies.

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