Executive Conversations

What It Takes for Services to Win in the AI Era: A Conversation with Sanae Endo, President, RICOH Software Business Unit

“AI itself is evolving so quickly that a proof-of-concept can become obsolete almost as soon as you run it.”


This article is a translated excerpt of a discussion with Bain Partner Shingo Inoue and Sanae Endo, President, RICOH Software Business Unit, moderated and published by Business + IT, a SoftBank Group-affiliated business media program. View the full interview here. Ricoh is widely known for its printers and multifunction printers. Today, the company is building on that foundation as it expands into digital services that support how companies work. Sanae Endo, President, RICOH Software Business Unit joins Shingo Inoue, a Bain partner who advises companies globally on transformation and growth strategy in the age of AI, to unpack a fundamental question: Which services will still be chosen in the age of AI? Q: Multifunction printers have traditionally played an important role in the office. How is that changing, and how does Ricoh view that change? Endo: The way people work has changed significantly. During the pandemic, many people worked from home, and that was followed by the spread of hybrid work. One visible consequence is that the number of multifunction printers is declining, and the actual volume of printing is also decreasing. At Ricoh, we are not assuming that print volumes or the number of printers will start growing again. The question is how we continue to create value for customers, even as those volumes decline. Q: Against that backdrop, Ricoh has already shifted the center of gravity of its business significantly toward services and software. What kind of value are you trying to deliver to customers through that shift? Endo: A multifunction printer sits inside a customer's environment and is connected to the network. Customers began asking us to manage those devices remotely, so we expanded into managed services. Then they asked whether we could also support other devices connected to the network. From there, the conversation broadened to whether we could improve productivity in the work being done on top of that infrastructure or automate parts of it. That has led us into DX-related services such as process automation and operational efficiency. Q: You mentioned the importance of in-person interaction earlier. How do you think AI will change something as ordinary as the meetings we have every day? Endo: AI is already handling meeting minutes quite well, so I expect individual functions involved in meetings to become increasingly automated. Emerging technologies can help people understand the substance and context of a discussion, which enables higher-quality discussions without depending entirely on a particular facilitator. AI might even say, "Isn't it about time to move into the closing discussion?" We are already experimenting with it ourselves in a dedicated collaboration space with an “AI Buddy.” We can set a theme, capture the conversation continuously, and automatically turn the discussion into a structured view. "The question is how we continue to create value for customers, even as [print] volumes decline." Sanae Endo \| President, RICOH Software Business Unit Q: Tell me about Bain’s global analysis of what AI is likely to replace and what will continue to retain value. Inoue: Earlier this year, there was what people called the "Anthropic shock" in the equity market, when the perceived value of different companies moved sharply. After that event, we analyzed more than 1,000 analyst reports to understand what investors and the equity market believed would cause companies to gain or lose value. Three keywords emerged. The first is the accumulation of proprietary data. Take the meeting example Ms. Endo mentioned. If a service simply creates minutes from each meeting, it does not necessarily build a proprietary data asset. But if it learns that a meeting with a certain type of agenda and a certain set of participants went particularly well, stores those outcomes, and feeds that learning back into future meetings, it becomes harder for a general-purpose AI to replace. The second is being deeply embedded in the customer's workflow. The third is having a physical element. As we discussed, the meeting room has three displays, speakers, sensors, cameras, and other physical components. A service that connects with those physical assets and uses their information as inputs is harder to replace with a general-purpose AI that exists only in the digital world. Q: There are already countless AI tools for meetings. Where do you think long-term differentiation will come from? Inoue: A company could accumulate data on the content and outcomes of meetings across the organization and learn, for example, that a particular kind of agenda works better in a certain type of meeting room or with a certain seating arrangement. There are also physical-operational issues. You may have booked a room, but the previous meeting is running over. Or there may still be cups and other items on the table, so the next group has to wait. If cameras and sensors in the room can detect those conditions, the service could help reset the room quickly and even link that information to the reservation system. Q: From an operating company's perspective, how do those three characteristics relate to what Ricoh has been building? Endo: I actually found it encouraging. Earlier you asked how the value of multifunction printers is changing. Even today, there are relatively few customer workflows that go from beginning to end without ever involving paper. Take logistics. When a shipment passes from one handler to another, paper may still travel with the goods. That paper is then scanned back into digital form and re-entered into an electronic workflow. The same is true in sectors such as finance, insurance, education, and healthcare, where paper still plays a significant role. Q: What are the conditions for a service to continue to be chosen in the age of AI? Inoue: I mentioned three characteristics: accumulating proprietary data, becoming deeply embedded in the customer's workflow, and having physical or human assets. Those are important conditions for a service to remain defensible in the AI era. But, more importantly, the service has to create real value for the customer, and the use of technology has to allow that value to keep increasing over time. Ultimately, the strongest service is one that customers genuinely want. Endo: Many AI initiatives end at the proof-of-concept stage. I do not think that is unique to AI; we have seen similar patterns during other major technology shifts. Many providers moved very quickly to provide AI-related services. Customers can often get as far as a proof-of-concept with those providers, but when they think about entrusting a real business process to someone, they also need ongoing day-to-day support. There are still relatively few partners that can truly stay with the customer through that operational journey. And AI itself is evolving so quickly that a proof-of-concept can become obsolete almost as soon as you run it. So, in addition to those three characteristics, two further elements are critical: having a partner that truly understands the customer's operations and can support them through implementation and ongoing operations, and ensuring that the service itself continues to evolve with advances in technology. About Ricoh Ricoh is a global integrator in workplace transformation, operating in approximately 200 countries and regions and headquartered in Tokyo. Supporting customers' value creation, Ricoh offers workplace services and solutions that empower organizations to work smarter through advanced technologies—including AI— together with long-standing expertise rooted in printing.

This article is a translated excerpt of a discussion with Bain Partner Shingo Inoue and Sanae Endo, President, RICOH Software Business Unit, moderated and published by Business + IT, a SoftBank Group-affiliated business media program. View the full interview here.

Ricoh is widely known for its printers and multifunction printers. Today, the company is building on that foundation as it expands into digital services that support how companies work.

Sanae Endo, President, RICOH Software Business Unit joins Shingo Inoue, a Bain partner who advises companies globally on transformation and growth strategy in the age of AI, to unpack a fundamental question: Which services will still be chosen in the age of AI?

Q: Multifunction printers have traditionally played an important role in the office. How is that changing, and how does Ricoh view that change?

Endo: The way people work has changed significantly. During the pandemic, many people worked from home, and that was followed by the spread of hybrid work. One visible consequence is that the number of multifunction printers is declining, and the actual volume of printing is also decreasing.

At Ricoh, we are not assuming that print volumes or the number of printers will start growing again. The question is how we continue to create value for customers, even as those volumes decline.

Q: Against that backdrop, Ricoh has already shifted the center of gravity of its business significantly toward services and software. What kind of value are you trying to deliver to customers through that shift?

Endo: A multifunction printer sits inside a customer's environment and is connected to the network. Customers began asking us to manage those devices remotely, so we expanded into managed services. Then they asked whether we could also support other devices connected to the network. From there, the conversation broadened to whether we could improve productivity in the work being done on top of that infrastructure or automate parts of it. That has led us into DX-related services such as process automation and operational efficiency.

Q: You mentioned the importance of in-person interaction earlier. How do you think AI will change something as ordinary as the meetings we have every day?

Endo: AI is already handling meeting minutes quite well, so I expect individual functions involved in meetings to become increasingly automated.

Emerging technologies can help people understand the substance and context of a discussion, which enables higher-quality discussions without depending entirely on a particular facilitator. AI might even say, "Isn't it about time to move into the closing discussion?"

We are already experimenting with it ourselves in a dedicated collaboration space with an “AI Buddy.” We can set a theme, capture the conversation continuously, and automatically turn the discussion into a structured view.

"The question is how we continue to create value for customers, even as [print] volumes decline."

Sanae Endo | President, RICOH Software Business Unit

Q: Tell me about Bain’s global analysis of what AI is likely to replace and what will continue to retain value.

Inoue: Earlier this year, there was what people called the "Anthropic shock" in the equity market, when the perceived value of different companies moved sharply. After that event, we analyzed more than 1,000 analyst reports to understand what investors and the equity market believed would cause companies to gain or lose value.

Three keywords emerged. The first is the accumulation of proprietary data. Take the meeting example Ms. Endo mentioned. If a service simply creates minutes from each meeting, it does not necessarily build a proprietary data asset. But if it learns that a meeting with a certain type of agenda and a certain set of participants went particularly well, stores those outcomes, and feeds that learning back into future meetings, it becomes harder for a general-purpose AI to replace.

The second is being deeply embedded in the customer's workflow.

The third is having a physical element. As we discussed, the meeting room has three displays, speakers, sensors, cameras, and other physical components. A service that connects with those physical assets and uses their information as inputs is harder to replace with a general-purpose AI that exists only in the digital world.

Q: There are already countless AI tools for meetings. Where do you think long-term differentiation will come from?

Inoue: A company could accumulate data on the content and outcomes of meetings across the organization and learn, for example, that a particular kind of agenda works better in a certain type of meeting room or with a certain seating arrangement.

There are also physical-operational issues. You may have booked a room, but the previous meeting is running over. Or there may still be cups and other items on the table, so the next group has to wait. If cameras and sensors in the room can detect those conditions, the service could help reset the room quickly and even link that information to the reservation system.

Q: From an operating company's perspective, how do those three characteristics relate to what Ricoh has been building?

Endo: I actually found it encouraging.

Earlier you asked how the value of multifunction printers is changing. Even today, there are relatively few customer workflows that go from beginning to end without ever involving paper.

Take logistics. When a shipment passes from one handler to another, paper may still travel with the goods. That paper is then scanned back into digital form and re-entered into an electronic workflow. The same is true in sectors such as finance, insurance, education, and healthcare, where paper still plays a significant role.

Q: What are the conditions for a service to continue to be chosen in the age of AI?

Inoue: I mentioned three characteristics: accumulating proprietary data, becoming deeply embedded in the customer's workflow, and having physical or human assets. Those are important conditions for a service to remain defensible in the AI era.

But, more importantly, the service has to create real value for the customer, and the use of technology has to allow that value to keep increasing over time. Ultimately, the strongest service is one that customers genuinely want.

Endo: Many AI initiatives end at the proof-of-concept stage. I do not think that is unique to AI; we have seen similar patterns during other major technology shifts.

Many providers moved very quickly to provide AI-related services. Customers can often get as far as a proof-of-concept with those providers, but when they think about entrusting a real business process to someone, they also need ongoing day-to-day support. There are still relatively few partners that can truly stay with the customer through that operational journey. And AI itself is evolving so quickly that a proof-of-concept can become obsolete almost as soon as you run it.

So, in addition to those three characteristics, two further elements are critical: having a partner that truly understands the customer's operations and can support them through implementation and ongoing operations, and ensuring that the service itself continues to evolve with advances in technology.

About Ricoh

Ricoh is a global integrator in workplace transformation, operating in approximately 200 countries and regions and headquartered in Tokyo. Supporting customers' value creation, Ricoh offers workplace services and solutions that empower organizations to work smarter through advanced technologies—including AI— together with long-standing expertise rooted in printing.