Ricoh strengthens its office services business to offset the decline in printing.
The impact of COVID-19 in Japan was greatest from April to May, when the emergency declaration was issued by the Japanese government, causing the economy to stagnate. The GDP preliminary figures for the quarter from April to June, announced by the government on August 17, showed a -7.8% growth rate and an annualized rate of -27.8%, significantly worse than the -17.8% rate during the 2009 financial crisis (January to March 2009). This annual rate conversion assumes that similar economic downturns will continue in the future. Even though the Japanese economy has improved since June, the influence of COVID-19 will continue to change everyday life, especially with more people working from home.
Home Work
Ricoh announced its first quarter financial results (April to June) on August 4. Its core office printing business was greatly affected by lockdowns in Europe and the United States, and sales in its office printing business decreased 32.1% year-over-year. Telework, such as working from home, spread during this period, significantly decreasing the number of copies and prints produced in the office. Ricoh expects it will only recover to around 90% of what was previously printed even after COVID-19 calms down.
One strategy Ricoh is taking to offset this decline is to strengthen its office services business—which is doing well in the Japanese market. Since 2017, the company has packaged solutions as a “Scrum Package,” geared toward specific industries, as well as SMBs in the Japanese market. (A scrum is a set of practices used in agile project management that emphasizes daily communication and the flexible reassessment of plans carried out in short, iterative phases of work. It can also be defined as a flexible framework for developing, delivering, and sustaining complex products with an emphasis on software development, although it can also encompass advanced technologies.) In this instance, customers, vendors, and Ricoh form a scrum and propose problem solutions for each industry or business type. A benefit of Ricoh’s approach is that general sales reps rather than specialists can sell the Scrum Package.
Scrum Package sales have been rising since first introduced in 2017, with June 2020 sales 1.7 times the number of sales in June 2019.
“For Ricoh Japan [Ricoh’s sales company in the Japanese market] that is doing well with Scrum Package, the sales of the office service business overtook the office printing business in fiscal year 2019,” reported Yoshinori Yamashita, president of Ricoh Japan.
With the acquisition of DocuWare in 2019, Ricoh is strengthening its office service business in Europe and the United States as well. President Yamashita said, “While customers have different problems in each country and region, we will be expanding DocuWare’s ECM solution, Microsoft’s 365, and the RSI (RICOH Smart Integration) platform as global common solutions.”
Another new initiative is to standardize remote work such as work-from-home as an alternate way of working at Ricoh. This is something that the company will do as part of its employee’s “job satisfaction reform.” The company also aims to provide customers with know-how accumulated through its prior practices in response to the rise of work-from-home in Japan due to COVID-19.
In Japan, attempts have been made to reduce the size of offices in city centers to decrease or eliminate commuting time for employees, relieve the stress of riding on crowded trains, and lower transportation expenses by standardizing work-from-home even after COVID-19. Companies such as Hitachi and Fujitsu have already announced their policies to standardize work-from-home and telework, and Ricoh will follow. Ricoh’s will be the first initiative in the imaging industry.
Since March 2020, the Ricoh Group has been working to maximize the use of work-from-home to prevent the expansion of COVID-19. Recently, the company conducted surveys with its employees about changes in productivity, life, and health. More than 80% of respondents noted that “productivity was preserved or improved” when working from home, and the ratio of “preserved/improved” was also high in terms of life and health. As a result of these findings, Ricoh is standardizing work-from-home as a new work style.
Access Related Content
Visit the www.thecannatareport.com. To become a subscriber, visit www.thecannatareport.com/register or contact cjcannata@cannatareport.com directly. Bulk subscription rates are also available.
