Ricoh IT Services: ready for the big league

Australian managed services company, IMC Communications, was acquired by Japanese imaging giant Ricoh in October last year. Almost a year since the acquisition, IMC only recently started life as a new entity Ricoh IT Services A/NZ.

The man at the helm of the new entity, Matt Dixon, moved over from IMC as part of the deal and the time spent between signing the dotted line and the re-brand has been most instructive on many levels.

But why would an overseas print behemoth, a Fortune 500 business, buy a relatively low-profile Australian IT services, re-badge it and give it a home in its global portfolio?

The move starts to make sense when you consider that revenue from the traditional print business has started to slow down for Ricoh and its peers. With its business model changing buying global managed IT services firms to find a foothold in a growing market serves as a handy hedge for Ricoh as print revenues plateau.

Ricoh isn’t a novice in the IT services game; they have been doing IT services in different capacities since the 80s. Ricoh’s initial focus was on monitoring its devices on IP networks however, given its primacy in the Japanese market it was only a matter of time that the network monitoring/management unit quickly spawned into a billion dollar business.

The IMC acquisition fits into Ricoh’s concerted effort to expand its global footprint and in IMC, Ricoh found a company with a small but profitable client portfolio, with customers ranging from Network Ten and SBS to the likes of Chandler MacLeod and the Royal Australasian College of Physicians (RACP).

As Dixon points out, IMC was doing quite well but Ricoh’s interest came at a crucial time.

“We were quite comfortable in fact, I think we got to a point where we were a little bit complacent,” Dixon says.

Dixon adds that IMC’s sales force was quite limited and there was a strong focus was on IT engineering, which left it exposed to not having a broad enough set of customers.

“There was a lack of investment and capital into the business to help us grow.”

The capital constraint issue isn’t surprising either given that many medium sized businesses in Australia hit the growth ceiling at some point. Established in 1994, IMC had spent close to more than a decade building its relationships with its customers but as Dixon points out it needed that extra push that Ricoh provided.

“We had very good engagement with our customers and built our business based on what they were asking from us. But we were struggling to get to that next level,” Dixon says.

Ricoh’s offer wasn’t the first one to land on IMC’s table, when you have been around for 18 years you get to see a few of those, but Dixon says that he wasn’t to enthused when the deal was tabled.

“I didn’t take it too seriously at the first stage. But as things started to progress and we started to get more sense of what the overall strategy was for Ricoh, it became a lot more exciting.”

Apart from the growth impetus, Dixon says that Ricoh’s offer provided a growth part for IMC’s staff.

“Over the years, every offer we had received had to tick the boxes and we needed to consider how a deal would affect our staff, was the culture aligned to the way we operate with our customers.”

With IMC now operating as Ricoh IT Dixon says that some of the early promise of the acquisition is already starting to materialise.

“Ricoh has a massive customer base and the deal has opened new doors for us and we have had some wins.” Dixon says.

With the benefit of broader scale and greater capital Ricoh IT is starting to win the jobs that IMC would have normally missed out on.

Earlier this month, Ricoh IT was named a registered supplier with the NSW Government ICT Services Scheme. As an ‘Advanced Registered Partner’ Dixon and his team can now bid for government contracts over $150,000. 

For Dixon, achieving registration as a supplier to the NSW government is a clear endorsement of Ricoh IT's abilities.

The extra money is proving to be handy as well with Ricoh IT currently building a new version of the Ricoh Cloud – a platform to deliver monitoring and management services – in Australia.

“We already have a data centre in Homebush and we had our own server and storage infrastructure, but what we are doing now is refreshing that infrastructure and putting a platform in that will help us keep pace with the demand that’s coming through from Ricoh’s client base.

The final piece of the puzzle is the reach. IMC was a Sydney-based company with limited resources but Ricoh IT has a national presence.

“The rollout is happening progressively, we are not going big bang, with Perth our first inter-state market with a little bit of work happening in Adelaide. Melbourne and Brisbane will follow later,” Dixon says.

“We are not rushing it and are being encouraged to do this at a pace that we can handle. The one thing we will never do is try to roll out so fast that it starts affecting service levels.”

“Every touch with every customer needs to be a positive one.”