LEX’s CEO-PAPER TIGER THAT WON’T LIE DOWN
LEX’s CEO-PAPER TIGER THAT WON’T LIE DOWN
2006-10-06 at 11:19:00 am #16574
Paper tiger that won’t lie down
world according to Paul Curlander
IF the head of any printing company has printer’s ink for blood, it would have to be Lexmark chairman and chief executive Paul Curlander.
Paul CurlanderEven before Lexmark split from IBM in 1991, Dr Curlander was firmly grounded in the company’s printing operations, having joined Big Blue’s office products division in 1979 and worked his way up to printer products director by 1989.When Lexmark spun off, Curlander followed, taking on a number of senior positions before being appointed chairman and chief executive in 1999.Since then, he has taken the company through the digital photography printing boom while its business printing operations encouraged businesses to print less.Are there still traces of the IBM culture at Lexmark?It has been 15 years since we spun out of IBM, which was and still is a terrific company.There are some tremendous things about IBM that I think we have brought into Lexmark.As we began to form our own culture, we took the best we had seen at IBM and tried to infuse it into our business.IBM was terrific at managing people and paid a lot of attention to developing people.IBM was a huge company that tried to do everything with every customer set, but we needed to be selective about our customer set and segments within that set.Those of us who came from IBM were all back-office and research and development guys, so we had to get a lot closer to the customer, something we were not able to do at IBM. We tried to take a culture from one of the world’s largest IT companies and use it in one of the world’s smallest IT companies.is it an advantage for Lexmark to be narrowly focused on printing?We think it is a huge help. Lexmark is a focused provider of distributed imaging and printing, but even so it has $4 billion in revenue, is a Fortune 500 company, has 13,000 employees worldwide and is doing business in 150 countries through 30 sales subsidiaries.So it’s kind of a mix between being small in focus but still a globally significant company.We think customers look for experts in specific things and we see ourselves as experts in workflow processing.Do you think printing and document management gets the attention it warrants from management and chief information officers?No. Over the past six years, we have been engaging our enterprise customers on their print, copy, fax and scan environments.We have found that this is largely unmanaged space for large enterprises and government agencies.In general, they don’t know how many devices they have, how many pages they generate, and they don’t know how much it costs them to run and support the devices they have.When we go to look at these enterprises, we find 30 per cent to 50 per cent of their devices are underused and they haven’t really done anything to attack the paper processes, even though they have a very advanced networking capability.We have found that huge amounts of money can be saved and we have even found customers that have more than one device for every employee.What role do multifunction devices play in reducing the print and paper load?Use of these devices is growing rapidly. People are paying more attention to consolidating devices, but even when consolidating to multifunction devices, companies are only doing what they are familiar with, such as copying and faxing, rather than scanning.Scanning to a network or to email is not as easy to do as the other tasks. Scanners are in all of these office devices but are not being used to do what they should be used for: to reduce the paper load.It is an education and technology problem in that we have to make it easy for people to use, because we won’t be able to educate them in a complex process.Will companies ever outsource document management and printing to managed and bureau services?We’re starting to see it. I don’t think it’s a well-publicised thing, but we are managing distributed output for many customers.It is a way to right-size the fleet and get savings, which we’ve been talking about. We can help customers configure their devices in a way that is productive.We also engage them in a continuing service to manage that environment and to track these devices and their use, because things don’t stay the same and organisations tend to grow or shrink and move people around.It is still relatively new in terms of seeing enterprises and governments doing it, but we are seeing it pick up.
Lexmark wants this side of the business to grow.
By monitoring and managing the environment we can buy these things in a different way. We don’t necessarily have to buy the devices from one company, and supplies and service from someone else.Now, we can roll it all up in one pay-as-you-go per-page click charge. We have invested a lot in the infrastructure to help enterprise customers achieve that.The cost of printing ink is a bugbear for many people. How do you defend ink prices and will we see the cost go down?I think it is a simple concept, but misunderstood. The focus needs to be not the cost of ink, but the total cost of ownership of the device over its life.If you look at an inkjet device five years ago and a similar device today, the total cost of ownership is about half what it was. What is interesting is that consumers tend to value the lower hardware price initially and make decisions based on on the price of that, so the model that has evolved is that companies are more aggressive about cutting the hardware cost as against the ink cost.The consumer is choosing to take their half reduction in the total cost of ownership up front. That’s not a bad choice, depending on how many pages they are going to print.If the consumer is going to print only occasionally, it’s a good choice. Conversely, if the consumer is going to print a lot, they need to consider that the cost of consumables is likely to be less for a device that costs more. That’s not well understood by the consumer base.Printing, more than most areas of technology, faces environmental criticisms to do with ink and paper. What steps is Lexmark taking to be environmentally responsible?We have a very strong environmental focus. We began focusing very many years ago on the collection of cartridges. Sure, we sell printers, but over the lifetime of the printer you are generating a lot more supplies like cartridges and things that end up in landfills.So we started very early collecting cartridges. We are very aggressive about that in Australia. We have a very successful cartridge collection program.The thing I think is unique is that we’re focused on helping customers to print less. I have yet to hear any of our competitors say print less.As we sit and talk to our enterprise customers about what they have in their distributed fleets, we are always quick to tell them that they probably have way too much equipment — if we went to study it, probably 30 to 50 per cent of what they have deployed would be under-used. They bought too much stuff and they print too much.We are focused on helping them to downsize and rightsize their fleet and to print less.
Will we ever see a paperless office?
I think no. It was a common myth that started 20-plus years ago, and there was a lot of insight to the comment at the time, but the vision was slightly wrong. The role of paper 20 years ago was to transport and store information.When people talked about the paperless office, what they were thinking about was the movement of information and the storage of information on paper, which can be done electronically.What they missed was the important role of paper in personal productivity.In many cases, it is more productive to use paper, in meetings or collaborations for example it can be easier to pull out a document and flip through it than try to share it electronically. In the enterprise today, paper should be there because it makes people, the most important asset, more productive.What you don’t want to do, if you have a paper document and you want to share it, is to make a paper copy of it or fax it.That can be done electronically, and if the recipient wants to print it to help their productivity, they can .What about such developing technologies as e-ink and e-paper? Do you see them as a threat or an opportunity?We don’t see it as a threat or an opportunity per se, it’s a display technology. To be honest, I view it as a way for people to display things in another way.That is a different business, that’s not a business we’re in. What we are focused on, if you look at the whole market out there, is the huge amount of paper-based information that is not declining, even with all the e-business and internet infrastructure that has been installed.Our focus is on how, when someone does have paper-based information, they can move it back in so it can be displayed on devices such as PCs and tablets or, in the future, e-paper.