Xerox Corp., headquartered in Connecticut and a major part of the Rochester-area economy, has started working with an Indian outsourcing giant to reach new customers, offer new products and help it shed some of its own work force.
Xerox's global agreement with HCL Technologies, announced earlier this month, has the two companies closely entwined. Xerox will turn to HCL to handle some of its midrange computing work as Xerox handles HCL's document management — essentially a variety of services revolving around paperwork and data. The two also jointly will market their services to their respective big clients. HCL specializes in information technology and software development outsourcing.
HCL Technologies "will do a lot of business with Xerox in the future," said Xerox CEO Anne M. Mulcahy. "It's a multifaceted relationship."
Xerox also will outsource some of its research and development and engineering to HCL in the future, particularly in developing software and re-engineering components, Mulcahy said. And in the future, much more of the company's R&D work will be done with partner companies, Mulcahy said. "It's where we think we can do things more efficiently," she said.
The area's fourth-largest employer, Xerox employs 7,400 in the area. Xerox currently is cutting about 3,000 people or 5 percent of its North American and European work forces.
Xerox last week said those cuts would include manufacturing and marketing. The company has not disclosed the impact on its Rochester-area workforce. Its sprawling Webster campus is heavily involved in R&D, engineering and manufacturing.
In a presentation last week to the Wall Street investment community, President Ursula Burns said partnerships and what she called "best shoring" would be two key tactics the company uses as it restructures its R&D and engineering operations. The company spent $228 million in the third quarter of 2008 on R&D and engineering.
Xerox's business process outsourcing business line, in which it handles all of a client's documents, is growing about 9 percent to 10 percent a year, Burns said. Outsourcing, equipment service and rentals added up to $2.1 billion in revenues for Xerox in the third quarter.
Earlier this month and separate from the HCL deal, Xerox announced it will scan and image documents for IBM as part of that company's Managed Business Process Services, a division that automates back-office functions such as payroll and human resources for clients. And Computer Sciences Corp. of Virginia announced earlier this year it and Xerox would jointly begin pitching their IT and document management products to such industries as manufacturing, healthcare and financial services.
"This is a time when outsourcing is very, very attractive for our clients," Mulcahy said.
The HCL tie will resemble the years-old alliance Xerox has with business process and IT outsourcing company EDS, which is both a large supplier to and customer of Xerox, said Russ Buchanan, Xerox's vice president of alliance and partnerships.
HCL has begun pitching to its clients new document management services it can offer through Xerox, Buchanan said, and Xerox plans to do likewise. The combined services also can let the two companies cut some costs, he said — for example, by having employees on site doing work both for HCL and Xerox.
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