XEROX, the document company, was a multinational corporation serving the global document processing and financial services markets.
From 1946-1973 their annual sales growth exceeded 25% while the annual growth of earnings exceeded 35%.
In 1959, the company introduced the revolutionary 914 plain paper copier. This generation of equipment motivated the explosion in the copying business from 20 mn copies made annually in 1957 to 9.5 bn copies in 1965. in 1990 the world copy business was over 900 bn copies.
Their original patent for the plain paper copier expired in 1970, sending an invitation to potential competitors –US firms( IBM & KODAK) and Japanese firms ( Canon, Minolta & others).
In 1956, XEROX entered into 50/50 JV with the Rank organization PLC forming Rank Xerox Ltd.
In 1962, Xerox formed a partnership with Fuji photo film company in Japan to create Fuji Xerox leading to an impressive growth thereby attracting more customers.
Due to serious competitive problems, Xerox’s market share fell from 96% to 45%.
Under the leadership of David Kearns after 1982 Xerox developed a corporate revitalization plan called “leadership through quality (LTQ)”, improving its MIS and standardized reporting formats to address many of the problems.
Document processing achieved the following demonstrable results under Paul Allaire:
Customer satisfaction levels increased in the market.
Revenues rose by 9% to record $ 13.6 bn.
Profits increased by 23% to $ 599 mn.
Return on assets improved by over 2 pts to 14.6%.
$1.1 bn in cash was generated .
The emphasis was on 9 business divisions, supported by 3 geographic customers operations divisions.
The primary focus was the mgt of Xerox was the business mgt level, which promoted more effective linkages between markets and technologies.
They were responsible for Xerox offerings – research and technology, development, manufacturing, marketing, sales, services, administration all work together seamlessly to ‘put it together’ better and faster for the customers.
THE FINANCE AND CONTROL FUNCTION
The need for improvement in the finance operations lead to the evolution of Financial Executive council (FEC) in 1980.
The new Xerox LTQ culture demanded an involved and proactive finance group.
The FEC actively promoted the building of trust in the Xerox finance community.
This community engineered the finance and accounting changes as the organization and business practices changed drastically in 1980s.
US customer operations
Rank Xerox Limited
Americas customer operations
Development & manufacturing
Each of the operating units within a business division or customer operations division developed it’s annual and long range plans. These plans were consolidated into the business and customer operations division plans.
With LTQ, management utilized operational measures, such as market share, customer satisfaction and various quality statistics as a major part of their measurement scheme.
Management linked growth and profit measures to the units business economy with operational measures linked to world class benchmarking performance.
The FEC discussed the time and costs/ the information value of global monthly financial results. They determined that monthly financial results in full detail were not necessary.
For corporate reporting only a quarterly full financial close of the books was necessary.
Evolution of informal reporting system led to open and honest communication thereby reinforcing the controller’s dotted line connection to corporate.