Ricoh Malaysia on its ‘do or die’ transformation
By Goh Thean Eu August 25, 2015
- Aspires to become a total solutions provider by 2020
- Expects new businesses to be larger than traditional copier business
RICOH (Malaysia) Sdn Bhd managing director Peter Wee (pic above) has reason to smile these days. His company, a mainstay of the copier machine business, is starting to retool itself into a total solutions provider.
Over the past few years, it has expanded its products and services. It is now offering interactive whiteboards, unified communications systems, 3D printers, document management solutions, IT services … an entire gamut.
“We want to be a services-led company. This means, we want to shy away from solely selling hardware,” Wee told Digital News Asia (DNA) at his office in Shah Alam recently.
“We hope to become a total solutions provider by 2020,” he added.
Currently, Ricoh Malaysia’s offerings are divided into three pillars: Products (which include copiers); IT services and solutions; and surveillance services and solutions. For now, more than 50% of the company’s revenue still comes from its copier business.
“We believe that within three years, IT and surveillance services combined will capture a larger share of revenue and surpass the product quadrant,” said Wee.
Transformation a necessity
Tokyo-based The Ricoh Company Ltd was founded in 1936, becoming one of the most recognisable imaging and electronics brands in the world by the second half of the 20th century. But in 2011, it announced it was cutting 10,000 jobs worldwide, and would move 15,000 workers to areas with more growth potential.
Wee said that Ricoh Malaysia’s transformation journey began more than four years ago, just slightly before he joined the company from consulting firm PricewaterhouseCoopers.
The idea behind the transformation agenda was simple: To reduce its dependency on its traditional copier business, and to be sustainable in the long-term.
“If Ricoh was just doing the copier business, it wouldn’t survive,” he said.
“This is because if you look at the copier side, it’s becoming commoditised. When it’s a commoditised product, it becomes price-sensitive.
“So we had to change, and we have been changing over the past four to five years,” he added.
However, Wee admitted that this transformation journey, which is still ongoing, wasn’t easy in the early days – there was some resistance within the company when the idea was first mooted.
“Initially, people were resistant to change. They asked, ‘Why change when the company is already so successful? Why do we fix something that’s not broken?’
“The hardest part was to convince them that if the company didn’t change and continued doing what it was doing, it would become obsolete.
“We had to show them trends, case studies, and share with them what Ricoh was experiencing in other parts of the world,” he said.
Wee said that the company also started hiring people from outside the copier industry.
“Sometimes, you have to inject new blood. This way, the longer-serving employees can see how the new blood is making a positive impact.
“For the old force, we retrained them. We tried to give them the confidence [to change]. It’s like telling them, ‘Don’t worry about going into the deep end, we will give you a float’,” he added.
While it was hard during the early days, Wee is adamant that the strategy has yielded positive results.
“In the past, [my team] could probably only talk about copiers or a few products. Today, they can talk about unified communication systems, connected projectors, interactive whiteboards, and all sorts of services,” he said.
For Wee and his team at Ricoh Malaysia, the transformation into a services-led organisation is also about better serving small and medium enterprises (SMEs).
“If you look at our products, you have all these devices like copiers, printers, production printers and industrial printers,” he said, adding that SMEs constitute a large portion of its business.
The devices are all network-connected, “so it is natural that we provide the connectivity, and manage the connectivity.
“With the recent acquisition of Nassion Systems … we can manage our customers’ bandwidth and infrastructure,” said Wee.
Earlier this year, Ricoh Malaysia acquired ICT managed services and telecommunications solutions provider Nassion Systems for an undisclosed sum, saying that this would boost its range of IT services and solutions, and improve its managed services solutions.
“SMEs … find it very difficult to attract IT talent; because they can’t attract good IT talent, it becomes a bigger imperative for us to better serve our customers,” he said.
The game’s afoot
Wee (pic) also said that Ricoh Malaysia may want to play a bigger role in the data centre space, although these plans have not been finalised.
“This is one area we are still looking at. Perhaps the data centre business will be our fourth pillar; perhaps it will be part of the IT pillar. It’s something we are still studying,” he said.
Ricoh Malaysia also has an ASP (approved service provider) licence, which allows it to offer telecommunications services.
“This is because when we provide managed services, we need to use data lines. In order to provide these data lines, we had to source them from various telcos,” said Wee.
He said an ASP licence-holder is allowed to carry out “a lot of things … it opens up a lot of avenues for us to upsell whatever our clients want,” he added.
Wee also expects 3D printing to become mainstream, as the prices of these printers fall and people see the need for having one.
“So far, we see demand from schools, engineering firms, and such. But I think it will take off. [Previously], people said, ‘Are you mad? Why do you need a printer at home?'
“Today, everyone has one at home,” he said.
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