Xerox Global Services Makes Sun Shine Brighter

Case study written for Xerox Global Services Europe, October 2004.

When leading IT manufacturer Sun Microsystems wanted to find additional ways to streamline the costs of its document production and management processes, Xerox Global Services rose to the challenge.

Sun Microsystems is renowned globally as a market leader in IT hardware, software, and services. In Europe and South Africa the company operates 119 sites in 31 countries, employing 11,500 people, and had a global revenue of US$11.185 billion in the last fiscal year. Larry Matarazzi, director for Workplace Resources EMEA, Sun Microsystems explains, “Over the last few years Sun has been affected by the global down-turn in the IT sector, with 9/11 and the bursting of the dotcom bubble affecting the technology sector as a whole. Even though there was little ‘new business’ activity at that time, Xerox Global Services approached us proactively with an innovative solution at a time when we needed it most and were already looking to cut costs aggressively. It doesn’t get much better than that.”

Documents represent a huge hidden cost to organisations but they are the lifeblood of business operations, coursing through every PC across every department and across every output device. But research carried out by Xerox Global Services and analyst group IDC indicates that a staggering 90 per cent of European companies cannot even estimate the cost of document processing to their organisation. Xerox Global Services estimates that this figure rests between 5-15 per cent of a company’s annual revenue.

Due to Sun’s understanding of technology, the processes it had in place to deal with managing documents was more advanced than many companies, according to Bernie Gooch, service development manager, Xerox Europe.

“When we first visited Sun and carried out an audit of its document processes, we found that there were seven users per device, which is a lot better than average, but we still found that up to 25 per cent savings could be made,” Gooch explained.

An excess of document processing equipment, such as disparate stand-alone printers, copiers, fax machines and scanners, presents significant maintenance costs and unwanted time burdens on the IT department. These disparate devices can typically be replaced with multifunction devices placed strategically about the office premises. In September 2003, a project commenced to reduce Sun’s total document spend, starting with six key sites across Europe in Camberley, Munich, Dublin, Amersfoort, Berlin and Toulouse. The project was implemented by Xerox Office Services, one of three lines of business within Xerox Global Services.

Across these sites, Xerox Global Services found the following inventory when carrying out its due diligence assessment:

Total Devices 1,744
Suppliers 19
Models 174
Annual Impressions 63.77m

Following its audit, Xerox Global Services proposed a rationalisation plan to reduce the quantity of those devices and reapportion them across the offices to ensure Sun gets the best from each individual device. Xerox Global Services is bound by a service level agreement (SLA) to provide 25 per cent savings on Sun’s print-related costs.

The hidden costs of managing all these devices included warranties and printer disposals, time and material repairs, recycling and unserviceable devices. A lot of devices and consumables were not covered by a service agreement, which presented multiple problems. A solution was needed, as Matarazzi explained.

“We had to decide who would take ownership of the budget as the project fell between IT and facilities management,” he said. Xerox Global Services pitched the project not only to Sun’s IT management and facilities management, but also to Sun’s senior management, and then managed the entire programme from its Ballycoolin site outside Dublin.

The process was guided by Xerox Global Services’ “Lean Six Sigma” techniques for resolving problems. Six Sigma involves five steps to successful project implementation including design of solution, measurement of existing processes, analysis of problem creation, implementation of new solutions and a 12-month period of ‘control’ to assess results.

At the same time, Xerox Global Services has also assumed responsibility for liaising with 27 different European device manufacturers, consumables suppliers, and maintenance contractors whose equipment is still in use at Sun, with the sole responsibility for resolving device queries from all the company’s employees through its Xerox Global Services support centre in Ballycoolin.

The multi million Euro project is already yielding benefits, according to Matarazzi. “In effect, the initial benefits we’ve seen already are two-fold,” he commented. “Where sheer financial administration is concerned, we have gone from having to process over 3,000 invoices per quarter across Europe for all our document or device-related suppliers, to just one invoice per country per month from Xerox Global Services.”

Matarazzi added that Sun’s employees have reported a dramatic impact on customer service when it comes to device problem resolution across Europe. “We set Xerox Global Services a target of resolving 80 per cent of issues immediately, but Xerox Global Services is actually resolving close to 99.8 per cent, and Sun has already cut its ongoing European print costs by around ten per cent,” he said.

Sun has also seen major ‘human’ benefits, such as improved morale and better staff productivity, Matarazzi added. “We are also receiving regular management reports and, again for the first time, are aware exactly how much we are spending on printing documents and maintaining these devices,” he continued. “We’re now looking forward to the financial cost savings that will come from having an optimised fleet and document processes that will better suit the needs of our personnel.”

Xerox Global Services’ aim was to bring the number of users per device up to 17, representing a significant reduction in inventory and releasing office space. As part of the project Xerox Global Services employees are dedicated to assisting Sun, including on site visits to help resolve problems, provide productivity and document consultancy as well as make recommendations. This is in addition to the Xerox Global Services personnel providing technical support at Ballycoolin.

Due to the success – and the gains achieved in the initial stages - of the European project, Sun is now considering using Xerox Global Services to manage its document services globally. Matarazzi concludes: “One of the key reasons why we picked Xerox Global Services for the job in the first place was because it was the only company we felt could deliver in every country we operate in. We’ve had colleagues from the Asia Pacific region on the project team since day one, they are now very interested in using Xerox Global Services in their region too.