SUN MICROSYSTEMS AWARDS XEROX MULTI MILLION EURO SERVICES PROJECT

Xerox management of Sun’s European print, copy, fax, and multi-function product fleet, delivers ten per cent cost saving in initial stages

Uxbridge, UK and Ballycoolin, Ireland – 21st October 2004 – Xerox today announces it has been awarded a five year, multi million euro international outsourcing services project, by Sun Microsystems. The project will see Xerox assume total responsibility for the management, maintenance, and streamlining of Sun’s entire fleet of printing, copying, faxing and multi-functional products used by the company’s 11,500 total workforce across 119 sites in 31 European countries as well as South Africa. Sun is using Xerox Office Services to reduce printing costs, improve financial administration and service levels as well as boosting its bottom line right across Europe.

Xerox completed an audit of all devices in Sun’s offices, and proposed a rationalisation plan for how to reduce the quantity of those devices and re-deploy them to ensure Sun maximises utility from each individual device. At the same time, Xerox has also taken on the management of Sun’s different European device manufacturers, consumables suppliers and maintenance contracts, as well as assuming sole responsibility for resolving device queries from all Sun employees through its Xerox Global Services support centre in Ballycoolin, Ireland.

“In effect, the initial benefits we’ve seen already are two-fold,” explains Larry Matarazzi, director, Workplace Resources, Sun Microsystems. “Where financial administration is concerned, we’ve gone from having to process over 3,000 invoices per quarter across Europe from all 27 device, consumables and maintenance suppliers, to just one invoice per country per month from Xerox. Secondly, our employees have reported a dramatic improvement in customer service when it comes to device problem resolution across Europe. We set Xerox a target of resolving 80 per cent of issues immediately, but Xerox is actually resolving close to 99.8 per cent, and Sun has already cut its ongoing European print and document management costs by around ten per cent.”

The next step of the project, which has already begun, is the rationalisation of Sun’s device fleet by Xerox. Xerox will continue to deal with every employee query regarding devices – from how to find a printer driver to how to deal with the IT aspects of moving a Sun office to a new site – but simultaneously work to reduce the number of devices that Sun has. In turn, this will reduce the financial burden of the legacy fleet at Sun. In this phase, Xerox has committed to reduce Sun’s print and document management costs in Europe by 25 per cent.

“We have already received dramatic ‘human’ benefits from Xerox’s work in the form of improved morale and better staff productivity,” continues Matarazzi. “In fact, it’s fair to say we started to see the benefit from day one. For the first time we know exactly how many devices we have in these countries. We’re now looking forward to the financial cost savings that will come from having a device fleet and management set-up that will better suit the needs of our European personnel.” Sun is able to make cost savings through using Xerox’s negotiation and buying power for equipment maintenance and other print consumables, as well as increasing productivity and reducing downtime caused by device failure.

“The first part of the project has gone very well from both companies’ points of view,” says Shaun Pantling, director and general manager, Xerox Global Services, Xerox Europe. “As we continue the rationalisation, we will significantly improve Sun’s asset utilisation by increasing the number of users per device from seven to 17 whilst enhancing functionality to increase productivity.”

-ENDS-

NOTES TO EDITORS

About Xerox Europe
Xerox Europe, the European operations of Xerox Corporation, markets a comprehensive range of Xerox products, solutions and services, as well as associated supplies and software. Its offerings are focused on three main areas: offices from small to large, production print and graphic arts environments, and services that include consulting, systems design and management, and document outsourcing.

Xerox Europe also has manufacturing and logistics operations in Ireland, the UK and Holland and a research and development facility (Xerox Research Centre Europe) in Grenoble, France. For more information, visit www.xerox.com.

Xerox®, The Document Company® and the digital X® are trademarks of Xerox Corporation. All non-Xerox brands and product names are trademarks or registered trademarks of their respective companies.

About Xerox Global Services
Xerox Global Services, one of the three main business units of Xerox, offers a broad portfolio of services including consulting and systems integration, imaging, content management and outsourcing. We work with our clients to improve and manage their document intensive business processes - everyday processes like customer communications, billing, training, or records management.

Xerox®, The Document Company® and the digital X® are trademarks of Xerox Corporation. All non-Xerox brands and product names are trademarks or registered trademarks of their respective companies.

About Sun Microsystems, Inc.
Since its inception in 1982, a singular vision -- "The Network Is The Computer" -- has propelled Sun Microsystems, Inc. (Nasdaq: SUNW) to its position as a leading provider of industrial-strength hardware, software and services that make the Net work. Sun can be found in more than 100 countries and on the World Wide Web at http://sun.com

Sun, Sun Microsystems, the Sun Logo, Solaris, N1 and The Network Is The Computer are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and other countries. All SPARC trademarks are used under license and are trademarks or registered trademarks of SPARC International, Inc. in the United States and other countries. Products bearing SPARC trademarks are based upon an architecture developed by Sun Microsystems, Inc. UNIX is a registered trademark in the United States and other countries, exclusively licensed through X/Open Company, Ltd.

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.