Why Xerox Is Helping Customer Use Less Paper

It's Sophie Vandebroek's favorite magic trick. Vandebroek, the chief technology officer at Xerox, is standing before a roomful of people at the Massachusetts Institute of Technology, holding a pen that shoots out a beam of ultraviolet light. Scrawling with her mini light saber, she draws a large letter X on a piece of paper. Next she pulls out a hair dryer and sets to work heating the paper. As she does, the X disappears. For Xerox, however, this isn't a cinematic trick—it's a new technology they call erasable paper. Someday, Vandebroek says, workers will print out a document they need temporarily, then instead of throwing it in the recycle bin, they'll feed it through a machine with a heating element.

The newly blank paper will then get loaded back into the printer to use again … and again. Over time, it's a technology that could save millions of dollars in paper costs—and thousands of acres of trees.

It's part of a companywide effort at Xerox to find ways to reduce waste and cut down on the consumption of natural resources—and in a way, it couldn't be more ironic. Xerox, the second-largest company in the printer-copier market (behind HP), seems well aware that the problem they're trying to solve is the very one that they helped create. "We're the company that created information overload," Vandebroek says. For years computer gurus talked about the paperless office, but since the emergence of the Internet, America's consumption of paper has shot up 40 percent. Now Xerox is trying to create a profitable business by finding ways to help companies make do with fewer printers and copiers, and less paper. It's also trying to apply its expertise to emerging "greentech" industries. "We're looking for radical solutions [by] asking ourselves, 'What does it mean to be radically green?' " Vandebroek says.

In some respects, Xerox has a long history of trying to find ways to reduce, reuse and recycle. It began remanufacturing equipment earlier than competitors, and it developed earth-friendly technologies like the first machines that automatically did double-sided printing. "Before it was categorized as green, we thought of it as just being efficient," says Xerox president Ursula Burns. But the commitment ratcheted up in 2003, when Xerox set an "energy challenge" to cut its greenhouse-gas emissions by 10 percent by 2012. In fact, Xerox overachieved, cutting 18 percent by 2006, and now has raised its goal, aiming to cut 25 percent by 2012.

Around the same time, Xerox customers began realizing a greener approach could help them win new business. Professional print shops, which represent 28 percent of Xerox's business, say more environmentally-friendly operations help set them apart from rivals—because customers now shop not only on price, but also on which printer can provides a cleaner, greener service.

So today Xerox is pushing a variety of more earth-friendly technologies, such as solid ink, which ships in a block that melts once it's placed into the printer. Solid ink doesn't require a cartridge—it's delivered in a thin plastic wrapper—so there's less waste. For laser printers, Xerox is pushing a new kind of toner that requires 25 percent less energy to produce. High-yield paper, which Xerox introduced last year, is another breakthrough. This paper is made in a way that uses 90 percent of the tree, about twice as much as usual. The paper itself is thinner, so customers get more sheets per pound. There are drawbacks—the paper yellows if left exposed to sunlight, and it's no good for archival material. But for dayto-day printing it's fine, and it costs no more than traditional paper.

To help corporate customers use less energy and less paper, Xerox relies on its teams of consultants. Like IBM, another tech company selling to a mature customer base, in recent years Xerox has turned to services for new growth; its services arm employs 15,000 people and delivers more than $4 billion in revenue. Xerox consultants have created a "sustainability calculator" that measures how much energy a company is using in its print and copy operations, and how much could be cut.

Some of the savings arise from pretty simple stuff. Instead of giving each worker a desktop printer, for example, companies can consolidate and use networked printers. They'll install multifunction machines that can replace separate printers, copiers and fax machines. Another trick: create a print-on-demand system for brochures, forms and other corporate literature, to avoid printing up thousands of copies and storing them until they are needed—or thrown out when they're not. Owens Corning outsourced its print operations to Xerox and saved $1.5 million a year by adopting a print-on-demand strategy. Its system now lets building contractors go online to print customized brochures about Owens Corning products. That saves money for Owens Corning and also lets contractors deliver material that's tailored to each customer.

On the surface, there's a certain ludicrousness to all this. Shouldn't Xerox want people to be buying more paper, ink and toner? Aren't these save-paper initiatives a bit like McDonald's convincing Americans to go vegetarian? Xerox executives see the irony. "I'm in a funny business—I'm looking for ways that companies can print less," says John Kelly, president of global services at Xerox. "Printing is not going to go away, but we think you have to print more efficiently, and when you do print, print stuff that's relevant. We know that if we do that we can continue to grow."

It's only natural to be skeptical of such claims. Every company talks about being green these days, and often it's mostly talk. But outsiders maintain that Xerox walks the walk. Earlier this year the company won a coveted corporate-leader award from the U.S. Environmental Protection Agency. In a recent survey by researcher Brown-Wilson, Xerox ranked 35th out of more than 600 outsourcers measured by their greentech capabilities. Even the cynics on Wall Street approve of the initiative. "We care about how it positions them competitively, and customers are asking for it. So at the very least it's good marketing," says Shannon Cross, analyst at Cross Research, an independent stock-research firm. Cross also points out that Xerox can use a greentech-consulting engagement to revamp a customer's printing systems—and sweep out equipment made by its rivals and replace it with Xerox gear. The biggest reason that green solutions are popular is that they're really about saving money, says Angèle Boyd, analyst at researcher IDC. "Frankly, what the customer is benefiting from is a reduction in cost, but at the same time they get the benefit of a reduction in their carbon footprint," Boyd says.

Some of the biggest long-term reductions may result from green initiatives that have nothing to do with printers and paper—at least not directly. At its renowned Palo Alto Research Center, which became an independent organization in 2002 but is still owned by Xerox, scientists have discovered something surprising: their expertise in printing transfers surprisingly well to technologies like solar panels. For instance, PARC's expertise in optics and lenses helped a company called SolFocus develop a new kind of photovoltaic cells for solar-energy systems. PARC's expertise in particle manipulation, developed while researching toners, has led to a water-filtration system that uses much less energy than conventional methods; it could find use in municipal water-treatment plants and desalinization plants.

PARC also had a role in developing erasable paper, which Xerox first demonstrated last year. Xerox research has found that more than 40 percent of printouts are discarded within 24 hours. Even if that paper gets recycled, it still takes lots of energy and chemicals to create recycled paper. Why not avoid that altogether? Vandebroek says there are hurdles to overcome before erasable paper can make it to market. "It's still a research project," she says. But if it all works out, the planet will be a better place. And though Xerox might end up selling a lot less paper, the company will get to sell a whole new generation of printers. Enlightened self-interest? It's a beautiful thing.