Ricoh’s Tim Vellek took time out of his busy schedule to discuss the impact of the company’s reorganization last year and its emphasis on vertical specialties, “the new world of work” and information mobility.
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Reorganization Focuses on Vertical Specialties
Last year saw a lot of big changes at Ricoh, with a company-wide reorganization. It affected not just field sales, but the way Ricoh markets its products and even its internal human resources department, with a stress on creating structures supporting specialists in both the horizontal and vertical markets. The company reshuffled its resource deck, with many executives getting new assignments and learning new internal processes. Territory allocations were redefined as well.
“I can’t stress enough how deeply we’ve gone in terms of reorganizing the company to address the services-led initiative in order to better solve customer challenges,” Vellek said. “This was the year that we did all that. So when we changed everything in 2015, there was some distraction. With that behind us, we really are seeing some great traction and momentum. Now that things have stabilized with all our internal changes, we are very well poised for a lot of growth.
“We reorganized our entire company to align more closely with a vertical strategy and we’ve seen some great things come out of that—some very exciting things,” he continued. “We had a lot of verticalization within Ricoh Americas Corporation, but it was just not formalized.”
Ricoh’s new structure created vertical focus areas with specialized organizations in:
Healthcare
Higher Education
Legal
Government (with a subset for state and local governments)
Global Accounts
Financial Services
Banking
Insurance
Pharmaceutical
Energy
Retail
Mid-market
Production Printing
CHAMPS (Channel MPS)
“For example,” he explained, “for the production market, Ricoh has a team of unique solution engineers who specialize in production as opposed to the office. This team understands the workflows and processes important to the production customer. Additionally, if a dealer is just getting into selling production, he or she may not have the resources to invest in a specialist and would be supported through our CHAMPS program. Until they’ve built up enough to cost justify their own dedicated person, we will provide a production printing solution engineer. Once they get up to speed, they’re free to hire their own or continue using our person, it’s up to them.”
“So when we changed everything in 2015, there was some distraction. With that behind us, we really are seeing some great traction and momentum. Now that things have stabilized with all our internal changes, we are very well poised for a lot of growth.” –Tim Vellek
Vellek told BLI, “The vertical strategy is working. We have a very large customer base and we will continue to expand our vertical strategy going forward. For example, we have sales specialists in not-for-profit organizations, but we haven’t created the same infrastructure in marketing and in other areas to support not-for-profits yet. Retail is another vertical where we already have industry knowledge and specialists, and we’re further developing our go-to-market strategies.” He said that Ricoh will continue to expand on its vertical expertise strategy in additional areas as well.
“We also created a group dedicated to dealers,” he said. “We added six people who wake up every morning thinking about dealers from a marketing perspective. They’re focused on providing tools to help dealers be more effective, more efficient, differentiated in their marketplace, etc.”
So far the new strategy looks like a success. “We recently had our national dealer council meeting and the feedback was extremely positive,” Vellek said. “We’re unlocking the strength of Ricoh in terms of all of our resources, making them available to our dealers. We’ve also increased our dealer voice back to Japan for influencing product and design decisions. In fact, we use some of our dealers as test sites for things that we don’t even put into customer sites for testing. We know they’re going to give us a very frank and candid thumbs-up or thumbs-down. There are certain types of products where we want the dealers’ voice very early in the process.”
Services Proving a Growth Area for Ricoh
In addition to vertical markets and services, Vellek told BLI that horizontal services are also proving a strong growth area for Ricoh, with double-digit growth in standalone (non-box-related) services last year and continued strength going forward.
“There are two kinds of services in our business: Those that are associated with placing a box, or security around the box, and those that aren’t tied to the box, which may be managed print services, accounts receivable services, patient registration in healthcare, or student onboarding in higher education, to name a few,” he explained. A big part of student onboarding, for example, is getting a student set up with an ID badge, an intelligent mailbox, giving them access and setting up accounts so that they can print, and teaching them how to do all these different things. Each is an area of opportunity for Ricoh and its dealers.
Vellek says that Ricoh’s strong services portfolio “allows us to have different conversations with the customer. Instead of talking about product specifications, we’re having a discussion about solving real business problems. We find out what keeps the customer up at night–what their pain points are. And addressing those business challenges may or may not include our core products.”
Leveraging Ricoh CHAMPS to Expand Dealer Business
While many dealers have gotten involved with MFP services on their own, Ricoh is working to help them close large deals and bring in new types of business by providing as-needed technical and workflow experts who can help shepherd deals through to completion.
“Originally, CHAMPS was conceived to provide MPS services to dealers who were not in the managed print business,” said Vellek. “It has evolved into a more comprehensive infrastructure that we make available to our dealers.”
Vellek said that as dealers grow, “they might have solution engineers, but since they’re growing so fast they may require more resources. So our program has morphed to enable even small dealers to use our resources, which are pretty vast, to suit their individual needs. Another example would be in our ESD, or enterprise services delivery. There may be expertise needed for something a dealer doesn’t come across every day, and therefore they’re not geared up for it completely. We provide the enterprise solution engineer or whatever resource is needed. There may be other occasions when they need a span-breaker (a short-term expert who can provide highly technical support in a peak workload time) or to deliver a specific solution that we’re familiar with and they’re not.
“Ricoh understands the importance of making our resources available to our dealer partners on a pay-as-you-go basis, so they can minimize their investment until they’re ready,” he continued. “They can grab specific expertise that may not be resident in their company yet. “That’s all with the mindset of making sure that, first, we leverage the strength of Ricoh for our dealer partners, and second, it’s done in a way they know that the specialists are focused on the dealer exclusively—so there’s no channel conflict.”
The program was launched about three years ago. “As you would imagine, a couple of dealers tried it out and then everybody else was watching to see how it worked out,” Vellek said. “And it worked well. So it’s growing quite dramatically, and we’re doing a lot of engagements with our dealer partners in a lot of areas. Their needs are varied. We provide the span-breaker, and we provide expertise that they may only need once every six months. That allows us to assist our dealer partners in terms of differentiating in their markets, and providing robust solutions to their customers.” Vellek added, “We’re pretty excited about that.”
Services and Training for the Next Steps
Ricoh recently restructured its service delivery portion of the company as well, according to Vellek. “We acquired mindSHIFT, which is an IT services company,” he said. “We’ve found it useful to leverage their business model and expand upon it. Part of what mindSHIFT really brings to the table is world-class cloud expertise. We had a lot of cloud expertise already, but it helped expand our thinking into other areas. Having mindSHIFT challenges our thinking and the status quo, which is really taking us into some interesting places.”
“We find out what keeps the customer up at night—what their pain points are. And addressing those business challenges may or may not include our core products.” –Tim Vellek
He added, “If you train your salespeople on our capabilities, and train them to ask business questions (rather than the speeds and feeds questions) and most importantly, train them to learn what the customers’ true pain points are, that results in a pretty interesting discussion. Ultimately, you will have a very compelling proposal that speaks to solving the customer’s true business issues.”
Ricoh has an extensive network for keeping dealers up to date on new developments and strategies. “Vertical training is done in boot camps, webinars, and there’s a lot of supporting material on our intranet, so we use a number of different training methodologies, because the content for training is so vast,” Vellek explained.
Ricoh Embraces "The New World of Work”
Ricoh is also moving forward with helping businesses create “the new world of work,” with the focus on huddle rooms and collaboration space. “We have a portfolio of products and services around ‘the new world of work,’” said Vellek, “with interactive whiteboards that provide collaboration, unified communications systems, voice over IP and projector systems. Ricoh offers a number of audio and visual communications products and tools; we are helping customers collaborate and be more efficient.”
He gave an example: “I was at a customer recently where we’re assisting them with collaborative tools. They’ve gone to ‘the new world of work’ concept already and they’re seeing an immediate 20 percent drop in their email traffic thanks to the open office design, as one example of the increased collaboration. That’s huge. Ricoh plays an important role by providing collaboration tools, which can be key whether you’re down the hall or across the country.”
Information mobility is also an important aspect of Ricoh’s current marketing strategy. “If you think about any standard office, there’s all kinds of information in all kinds of formats,” said Vellek, “be it faded fax copies in a file drawer somewhere, other hard copy, some on floppy disk, DVD, CD…there’s information in all kinds of different formats and it’s not always readily accessible. So we’ve really developed our strategy around information mobility, having access to information you need, anytime, anywhere, and in any format. Part of that is product, like scanning capabilities on an MFP, but part of that is looking at how you can render things usable in an environment where everybody wants to bring their own device.”
He explained, “I want to be able to pull up information before I make a sales call, or when I’m having a meeting that may be on my laptop, my tablet, or my mobile phone. I need a usable way to access it. That doesn’t just require technology, but it requires services and people and infrastructure to accomplish those things. So we’re spending a lot of time looking at things through the eyes of our customers, examining opportunities and challenges that result from generational differences, and practicalities of people moving around and using multiple kinds of devices. We’re focusing on helping people have more mobility with their information, in any format, at any place, at any time.”
What to Look for in 2016 and Beyond
Looking at the year ahead, “We have a lot of new products coming out this year,” he said. “If you look across our entire portfolio of products, we probably launch an average of 35 to 40 products a year through all our different groups (including MFPs, production printers, scanners, digital whiteboards and cameras), and that’s not slowing down. That’s not including partner solution launches. In any given year we have a lot of launches, and 2016 will be no different. Expect to see some exciting products in the production space, exciting products in the A3/A4 space, and also some very exciting products in the visual communications space.”
Whiteboards will be a key focus for Ricoh in the coming year. “I don’t think it’s a secret that our interactive white boards will be launching,” Vellek said. “We have a huge opportunity in expanding our visual communications offerings because they’re so relevant today.” He added that Ricoh’s interactive whiteboards will be released in more sizes, “22-, 55-, 65-, 84-inch, etc., so we’re going to be more broad in a couple of areas than we have been, speaking specifically about visual communications. With production, and A3-A4 MFP spaces, we have a pretty broad portfolio already and it’s just a matter of managing product life cycles and bringing out the newer products on a timely basis, to keep the product life cycles fresh. That said, we have some exciting innovations in the traditional product space coming out this year.”
That’s not to say Ricoh intends to rest on its laurels. “We have a dominant position with office A3/A4 MFPs,” Vellek said. “The challenge when you’re the market leader is, don’t look over your shoulder, just keep looking forward and don’t let anybody catch you. We see great growth and expansion opportunity in Latin America and we consider that an emerging market. We have a very large footprint in the region and see a lot of opportunity. In production, we are one of the top tier players now, which we’re very proud of (including the BLI award-winning 7100, 9100 family). We have some products that are pretty unique right now.”
“We’ve really developed our strategy around information mobility—having access to information you need, anytime, anywhere, and in any format.” –Tim Vellek
“The other area where we have both challenges and opportunities is the general services offering further away from the box,” he said. “That’s complex. So, developing those services and that expertise requires a lot of effort, focus and smart people. That’s an area where we feel like we’re starting to hit our stride, but it’s also an area where we’ll continue putting a lot of focus.”
Despite Ricoh’s strong growth in services, Vellek said, “In no way have we lost sight of our core business, and in no way have we lost sight of our multi-channel strategy. We have a defined objective in the dealer channel to be the number one dealer provider in the United States. We’ve got some really outstanding dealers that are a critical part of our strategy, and we’re seeing tremendous growth there.
“Our leadership in Japan is good at giving us really high targets that one could argue are unachievable—especially in the dealer channel,” he continued. “We’ve achieved our business plan four years in a row and the dealer channel is growing very nicely. All indications are that our relationships with the dealers improve year over year. We have strong products, technologies, services, people, and a solid channel and vertical strategy—we are poised for growth in the new fiscal year.”
