Xerox's ACS preps to double down on smart systems R&D

Xerox acquired ACS last year. Now the company's planning to leverage its resources to double down on research and development, CEO Lynn Blodgett says.

There's a company that accepts your highway toll, processes your Medicaid payment and manages your student loans, but you've probably never heard of it.

It's called ACS -- the acronym stands for "Affiliated Computer Services" -- and the company has never been closer to the limelight than now. That's because iconic American technology company Xerox acquired it last year.

I sat down with ACS CEO Lynn Blodgett, vice president and general manager Paul Dorin and senior vice president Tom Davies at New York's Citi Field to discuss the business opportunities in the government, transportation and information technology sectors -- and why it's a good thing that they're the biggest little company you've never heard of.

Here are my paraphrased notes of what they said.

Lynn Blodgett:

ACS' IT group makes about $1 billion in revenue.

The company tries to keep it that way -- about $1 billion per group. We have a "divide and conquer" strategy -- split groups before they get too big.

ACS' government group handles mostly state and local government; a recent non-compete agreement with Lockheed Martin is over, so now we're building up our federal presence again. Technologies like processing child support payments, or Medicaid requests.

ACS' transportation group handles things like tollways -- for example, EZPass in New York and New Jersey.

We provide, but not manufacture, these systems.

All of ACS' businesses either generate money or reduce cost, such as those fare collection systems. A new one was just implemented in Lima, Peru. An intermodal system -- use one fare pass to ride a bus, or a train, or a gondola -- was recently implemented in Vienna.

ACS also does parking fare systems.

The Xerox deal allows us to go beyond our core research.

We're really good at applying technology.

Paul Dorin:

With the Xerox deal, we're now very involved in education. One example is student registration systems. In education, you can get the longitudinal data to look at process effectiveness. If a student goes from one school to the next, you normally lose that data rail. Now you can reduce those data barriers between institutions.

There are also more government requirements on reporting this data -- that's the big driver. Then we can take those exclusive technologies and see if we can offer them to other clients.

Tom Davies:

We're connecting government funding sources with R&D. Example: the electronic payment card. Some of it is driven by legislation.

Lynn Blodgett:

Xerox is really good at the "R" in R&D. ACS brings real-world problems to the lab.

One example is traffic photo enforcement in Los Angeles. That took 15 years to evolve.

Sometimes you just need a compelling event.

Tom Davies:

There's an adoption curve in the public sector. Big cities are slower to move.

[What about New York City?] New York is at a whole different level. It's an outlier. Small cities can usually implement things faster, and can fail without being in the public eye.

It also takes visionary leadership. Mayor Michael Bloomberg has been great for New York.

On the other hand, the state of California has been risk-averse and has had problems in the past with implementing public transportation systems.

Paul Dorin:

It's all about how you look at a problem. One project we did is graffiti cleanup as a cost recovery. You look at cleaning it up as a way to recover abatement costs.

It takes leadership, vision and a different approach.

They've been doing pioneering work in Indiana. The governor has really been brave. Things like eligibility for government services -- this kind of thing used to depend on a case worker, over time. We're moving beyond all the humans and the mountains of paperwork necessary to do this today.

Lynn Blodgett:

We are an extremely technology intensive company. We've got lots of stuff in the pipeline, and Xerox gives us the rigor and resources necessary for more and better research.

We're closing the gap between the front line -- the caseworkers, et. al. -- and the lab.

This post originally appeared on SmartPlanet's Smart Takes blog.

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