Ricoh’s EMEA Industry Analyst Summit 2014

David Stabel, Deborah Hawkins and Ralf Schlozer
Jan 16, 2015

On December 11-12, 2014, Ricoh Europe invited European industry analysts to a summit in Lisbon, Portugal, to provide an update on its corporate strategy and goals of its 18th mid-term plan (MTP) starting in 2015. This event follows a global industry analyst summit held in Japan, earlier this year. David Mills, CEO of Ricoh Europe Plc. and Corporate Vice President of Ricoh Company Ltd., together with his executive management team presented their growth plans for its Imaging & Solutions business. Ricoh’s new strategy can be summarized by an acceleration of a transition to services, a rekindled effort to grow through geographical expansion, a focus on new market opportunities.

Growth Strategy

Ricoh’s goals are a mixture of growing its core business by increasing the global MIF by 2%, and near future core goals which pertain to geographical markets where Ricoh would like to double the current business plus extension of range including increasing size of service related net sales by 30%. If these targets are achieved, Ricoh will have an operating income of more than Yen200bn in FY2017 and an operating margin of more than 8%.

In the EMEA region, Ricoh will specifically look to grow in the Middle East, Turkey, Russia and South Africa. In addition, growth will come through acquisition following the current path to add expertise in integrated services and solutions for example in enhanced workflow solutions. With previous acquisitions of ADA Germany (June 2012), Aventia AC Consulting in Spain (July 2013), Npo Sistemi in Italy (October 2014) Ricoh claims to now be able to cover a range of IT services across the main markets in Europe.

With a focus on how customers do business, Ricoh is looking in particular at improving business processes by becoming a leader in workstyle innovation. For this purpose, Ricoh Europe is planning to increase its share of services revenues (excl. break/fix and maintenance revenues) from a current 22% to a 30+% in 2018. These eight services are:

  • Managed Document Services
  • Production Printing Services
  • Business Process Services
  • Application Services
  • Sustainability Management Services
  • Communication Services
  • Workplace Services
  • IT Services.

Another pillar of Ricoh’s growth strategy is a focus on new market opportunities in adjacent markets such as 3D printing which Ricoh calls additive manufacturing. Ricoh is already a producer of print heads for 3D printing. .

Office Solutions

Ricoh has an impressive range of multifunctional output devices for the office environment. The introductions of the past 3 years have resulted in a doubling of the A4 range. Overtime Ricoh has graduated to standard engine platforms all coupled with smart operation panels and smart SDKs. Ricoh now partners with 78 Independent Software Vendors (ISV) to complete its own range of software. The current commercial strategy for office solutions shows that Ricoh Europe has made the step from being a box seller to becoming a solutions provider. By focussing on the customer’s needs, their channel partners are looking more to up selling in the sales process, a focus away from new customers to expanding the total wallet that a current customer spends with Ricoh. We also heard how the Ricoh Managed Document Services (MDS) model is an adaptive model which has evolved from a fleet management model with focus on in- & output to a centralized management model (outsourcing) to now also comprise Business Process Services.

Production Print

Ricoh subsumes all production hardware, software and solution activities under Production Printing Services and is investing heavily in growth. Ricoh’s recent new product launches in the production market (Ricoh VC60000, Ricoh Pro C7100X Series, Ricoh Pro C9100 Series, Ricoh TotalFlow BatchBuilder, and Ricoh TotalFlow Path) are examples of this and proves Ricoh’s dedication to expand its share in the graphic communications market. A detailed analysis on Ricoh’s strategy for the production market is available in InfoTrends’ Report Store (see here).

Workstyle Innovation

Ricoh demonstrated how new technologies and services can be integrated into customised solutions. Ricoh presented examples in healthcare, educational, financial, and governmental vertical markets.  In the healthcare vertical market, Ricoh demonstrated the challenges of creating, storing, retrieving, and searching for patient’s files and records using a patient workflow management solution. All data about a patient is digitalized and made available instantly (anytime and anywhere) to medical staff. Another area that was demonstrated is the management of patient’s appointments. the appointment letter is scanned through Ricoh’s MFP’s and the patient is automatically registered and, a wristband is printed containing a unique barcode that identifies the patient and the details of his appointment.

Demonstration of Ricoh's Healthcare Solutions

In the educational vertical market, Ricoh aims to enable a richer learning experience for students and teachers in higher education. One suggested approach is Ricoh’s mobile classroom concept. Students would be able to access learning materials directly on their mobile devices and interact with Ricoh’s interactive whiteboards remotely. Information and notes can be shared instantly between teachers and students.

Finally, in the financial and governmental vertical markets, Ricoh demonstrated some of its workplace services. According to Ricoh, workspace utilization is a hidden cost factor within organizations. Through its workspace services, Ricoh can identify and improve unneeded and unproductive workspace using wireless sensors and data mining.

InfoTrends Opinion

Ricoh Europe presented a professional and cohesive strategy to bring the analyst community up to speed on direction and achievements. It clearly showed that Ricoh is taking the next step in the transformation from a product-oriented company to a services-oriented company while being aware that their hardware business will continue to be of importance. The range of case studies provided real life examples of Ricoh’s success.

 

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