What are the key industry markets that the office printing and document imaging industry is exploring today? Is this the right move and are they attractive markets to move into? Would you consider them blue oceans or are they just more red oceans? Is this the right strategic move for the players and the industry? Will entry into these markets protect them quickly enough or will the transition be too slow and difficult to avoid the inevitable and ever increasing tidal change of the red oceans where they currently operate?

Let’s explore just a few of the new market segments the industry leaders are in, or considering moving into.

At present we are seeing a number of the well-known OEM brands either delivering, or in the midst of launching, a business process service (BPS) or business process outsourcing (BPO) service in Australia.

One of the principle aims of a BPS or BPO is to provide the end customer with increased organisational flexibility. Behind this are factors such as reducing production and process costs through eliminating the physical labour required to manage manual and labour-intensive functions like processing medical claim forms. In other words: cost efficiencies.

Other areas of business improvement can include reducing error rates and re-work, improving operational efficiencies and increasing processing speeds and approval turnarounds. In short: eliminate bottlenecks and increase profits while improving the capabilities of that business function or process.

Moreover wider business process services or business process outsourcing can involve the contracting of the operational responsibilities, or specific business process and functions, to an external third party provider.

A number of large organisations such as Australia Post, NEC, IBM, Dell, CSC, Cap Gemini, Accenture and Oracle, to name a few, deliver a variety of BPS and BPO services.

As BPS and BPO can include a wider provision of services, for the sake of this discussion, I will focus on office printing and document imaging. At the same time this approach appears to be a more natural fit for what the industry is best known for. At the same time I would expect there is a level of end client comfort which would suggest that this is a more effective first point entry for players that are new to this industry segment.

From that standpoint, a BPS or BPO provision can be designed to take advantage of the opportunity to transition existing paper-based, back office processes such as mortgage processing, rental bond and tenancy agreements into an integrated digital workflow, data management and processing service.

Business process services has, in some respect, been derived from business process outsourcing, which lost some favour due to the negative connotation that an organisation’s labour is effectively outsourced.

However, the business process services strategy is not an uncontested market. There are a number of existing major competitors in this market. I think it’s fair to say these OEMs are playing in someone else’s backyard. In that respect I would really question whether this is a blue ocean or if these players are just moving into someone else’s already established red ocean.

Maybe the view is that it’s a very big red ocean and on this point it may be a very valid opportunity. According to IDC “the Australia business process outsourcing (BPO) market (alone) by key horizontals for the 2013-2017 forecast period will grow at a five-year compound annual growth rate (CAGR) of 6.1 per cent reaching AUD$10.7 billion in 2017”.

I would like to acknowledge that there is a natural synergy in the sense that the office printing and document imaging industry continues to build its business around reproducing, moving and managing the document or image. As early as in the 1990s Xerox’s worldwide slogan was the “Document Company”, and whether the document is paper or electronic, the context does not really change. What changes is where, how and what format the user or owner wants the information to be presented in: hard copy or an electronic version.

Business process services is a business model that lends itself to moving to a more paperless world, as ongoing efficiencies and cost minimisation are achieved through the reduction of physical paper-based output and processes. It will be interesting to see how this new BPS adoption process materialises and can be sustained in light of the transitioning of the existing operational and cost model around device hardware sales.

From the industry’s perspective the upside of this new business model is that as a BPS or BPO you become more critical to your end customer’s business. You start to own the process and in most cases the access to, availability of, or actual data itself. Your value in the relationship grows and it can become very difficult for the end client to jettison you from the account due to the connectedness, intellectual property and knowledge that you have developed as you integrated your business processes into theirs.

I’m not exactly sure who said this first but there is a more common saying today, “that whoever owns the data owns the business”. That statement appears to be holding some truth in today’s world.

The biggest challenge I see is how today’s OEMs convince the end clients that they can do more than manage the transition of paper to digital format as a BPS or BPO service. The end game of OEMs in the BPS or BPO space is to move into more integrated business processes and application management services. It will take time for the OEMs culture to adapt. It will also be interesting to see how the competitive marketplace reacts to such players entering its market space domain. Also at what speed will the end client adapt to this offering from the new players.

Mitchell Filby is Managing Director - First Rock Consulting (www.first-rock.com) Mitchell’s extensive twenty-five (25) plus years of market and industry experience & senior executive roles within the wider ICT community includes working with a number of leading OEM brand names such as; Oce, Kodak, Fuji Xerox and Canon. He is the author of Rest In Print: From office printing to The Rise of Managed Services available at Amazon.com