by Elizabeth M. Ferrarini

Xerox's 50-year history has run the gamut from a that of a leader in disruptive technology, to bad product mixes; from financial turmoil, to financial and market share recovery. In 1959, the company rolled out the first plain paper copier, the 915, and also trademarked the duplicating process as "Xerography." The company's name was changed to Xerox. Other innovations have included the invention of Ethernet, the first laser printer, and the first plain paper FAX machine. During the 1980s, Xerox dabbled in everything from typewriters to personal computers.

At the start of the new millennium, however, Xerox found itself in enormous debt and near bankruptcy. It was by carrying out massive "rightsizing" programs such as Lean Six Sigma that this legacy disruptive technologist has reduced its debt from $17 billion to $7.3 billion, and has cut the workforce from 110,000 employees to 55,000 employees. Today the company owes its $15.7 billion annual revenues to a leadership role in digital printing.

Since 2002, $600 million of the $1.8 billion reduction in operating costs has come from IT. And in what may be supreme understatement, Patricia Cusick, Xerox's CIO for the past seven years, says of her first two years in the role that it was "an intense period." Enterpriseleadership.org recently sat down with Cusick to talk about the cost cuts, the role of Lean Six Sigma in IT, and the way IT works with the business units.

EL: Can you provide an overview of your IT organization?

PC: The IT worldwide organization has about 3,500 people -- 1,000 are Xerox employees and the rest, either from EDS, our primary IT supplier, or other contract sources.

Xerox IT employees handle strategic planning for IT and the linkages with the business partners. For example, relationship managers support specific territories within business units, such as sales, or manufacturing. These managers understand the business and the systems requirements, and can provide the appropriate delivery service, whether it's internal or through an outsourcer.

At the next level of IT, we have integration folks who work on how applications come together. Our project teams in this area work within different organizational models. Xerox personnel tend to work on proprietary solutions. Project management teams use people with similar skills. Project creation-to-delivery teams comprise people with a range of skills who are drawn from inside the organization and from our outsourcers.

EL: Can you talk about how you accomplished the cost cuts in IT?

PC: Because the company was near bankruptcy, we were under pressure to cure the company's financial health. Improvements in productivity, starting with the CEO on down, have became a key driver of returning Xerox to profitability. IT played both the role of participant and enabler, finding places to reduce costs through automation. We were successful at making the company lean and more efficient.

Cuts in the number of employees and the outsourcing of key functions such as manufacturing reduced the size of the operation IT had to support. Meanwhile, we started to consolidate a whole series of decentralized IT operations across the company. This consolidation and standardization across operations, and improvements in productivity enabled us to drive $600 million of cost out of IT.

EL: How does Lean Six Sigma factor into productivity improvements in  IT?

PC: Since 2003, we've been developing our Black Belts and training in Lean Six Sigma, and we've been using the Lean Six Sigma tools and the methodology to standardize IT processes. This causes us to focus on how we can reduce costs and meet our productivity goals. For example, the IT people on the business teams focus on how to simplify their processes by getting rid of waste, and automating any manual tasks.

Lean Six Sigma has helped us to put better processes around the entire application development flow -- from project requirements to final production. In fact, the applications development process flow is very similar to that of product manufacturing, where Lean Six Sigma has its roots. For example, we have an initiative going on now called "patch progression." When we get a fix from a major supplier, such as Oracle, we identify the environment, make sure it's compatible and tested for integration, and then we promote it to production. Using Lean Six Sigma, we've laid out the individual steps in this process, looking at where there was time lost and how we could simplify that process.

EL: What does your governance model for IT include?

PC: Our information management board, which I head, meets annually with the executive committee to go over upcoming projects and their budgets. Each quarter, we meet to review project status, budgets, and project deliverables. This process repeats itself down through the various working levels of the organization.

EL: How do you ensure that IT delivers on what is promised to the business  units?

PC: Our overall lifecycle management process, which we call "time to market," is key to IT's delivery of services. It uses the same type of process we have for our product delivery. The process has all of the same disciplined phases, starting with the business engagement and examining all of the requirements. Each project has a decision team -- a partner from IT and a business owner -- which report to a governance board. For example, the decision team goes through phased exits at each point in the lifecycle. At each point, the team must account for the business case to the board. These steps exist to ensure that we've met our objectives. The entire lifecycle process helps us to keep the alignment with the business units, as well as with the IT project teams.

EL: What kinds of training programs do you have to keep IT people on the  ball?

PC: We have development efforts across all levels of the organization. We set a specific number of hours each year for each IT employee. We also do extensive e-learning, both within the company and externally. And we do a lot of creative things such as the Lunch and Learn program. Each week, we'll have a program for IT people, such as an overview of Microsoft security updates.

EL: What initiatives have IT undertaken to drive product  innovation?

PC: We created a remote capability that enables customers' machines to link to us for things such as ordering supplies, doing meter readings, and alerting technical support to a problem. This communication is accomplished entirely over the network; interactive communication with our products has helped to strengthen Xerox's competitive advantage.

EL: How do you promote technology careers outside of the company?

PC: I'm a member of the Rochester CIO Roundtable, which works with local colleges to promote IT careers. We'll take a few days and go around and talk to students about our roles in IT and the kinds of people we're looking for.

EL: What were some of the most challenging assignments you've had as a  CIO?

PC: Supporting the CEO, Ann Mulcahey, in her efforts to turn Xerox around and return it to greatness has been both the most challenging task, and most rewarding, of my career. We had to have absolute focus on managing our expense base, changing the profile of the campus, and concentrating on our customers and technology. As for IT, my challenge was to make IT a shared service, while driving cost reduction and being sensitive to the minds and hearts of the people.

Another challenge has been to build the credibility of IT people among business partners inside the company. I feel passionate about getting IT people to be involved in how every aspect of the company works together.

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Elizabeth M.  Ferrarini is a free-lance technology writer from Boston, Massachusetts.