Breaking Through
Biel's Information Technology Systems combines its 60 years of micrographics experience with digital imaging solutions. The transition has opened new markets and boosted gross sales to $10 million.
A lot has changed in the 60 years since Biel's first opened its doors. While the Yankees are still winning World Series titles, Hollywood and the landscape of Europe are vastly different. And, Biel's now goes by the name of Biel's Information Technology Systems.
The family-owned company changed hands in 1973, and Dennis Kempner is now the president of the still Buffalo-based business. Micrographics conversion and hardware system sales are still a mainstay at Biel's. But, as the world around Biel's has changed, so has the line of products and services offered by the VAR. In addition to micrographics sales and service, Kempner has positioned the company to offer digital document management and imaging solutions. However, Kempner explains that this transition has not been painless for the 100-employee company.
"We thought that moving into the digital side of the industry was going to require a large investment, and we were certainly right about that," says Kempner. "We needed to get up to snuff from a technical perspective. Also, we had to retrain our salespeople to sell a new technology."
Currently, about 40% of the company's 1999 projected gross sales of $10 million is derived from digital solutions. "Going forward, we expect the digital side of the business to grow by 10% to 15% each year. The micrographics business will always be there, but sales will continue to be flat," explains Kempner. "As a result, micrographics will be a smaller and smaller percentage of our gross sales." Instead of focusing only on digital solutions, Biel's tries to exploit the expertise it has developed over the last six decades in the micrographics industry. This philosophy has allowed the company to create hybrid solutions that incorporate both micrographics and digital technology. Also, Biel's was able to tap into its existing customer base with new solutions.
Combining Micrographics And Digital Imaging
With the proliferation of local area networks (LANs) and document management and imaging software, it is tough to imagine that microfilm and microfiche have any long-term security. Even Kempner, who describes his view on the future of micrographics as "rosier than others," predicts that sales will continue to be flat. To maintain micrographics sales, Biel's offers its customers hybrid solutions that incorporate both digital and micrographics technology. The same course of action also opens doors to increased digital sales.
Biel's salespeople often pitch a hybrid solution to customers who need to store paper documents on a long-term basis. A manufacturer, for instance, will typically scan purchase order documents and store the digital image on the company network. Customer service personnel can then access the documents from their desktops and respond to billing or ordering inquiries. Most inquiries occur within the first 30 days. After 90 days, a record of this type is rarely, if ever, accessed. Yet, the digital images remain on a company's network. Eventually, they may be purged from the system. Until that happens, a system administrator must manage all these rarely accessed files.
"Managing archived digital files can get very expensive, and these files tie up network storage. If a company changes its storage media, it has to migrate these stored images from one media to another," says Kempner. "For long-term archival storage, we suggest creating both a digital and micrographics image. The digital images will be accessed initially, and they can be purged after a specified period of time. The customer still has the images stored on microfilm for long-term storage."
Learning To Sell A New Technology
Offering a digital solution in addition to micrographics involved a major operational shift at Biel's. Salespeople who had been selling micrographics technology for years had difficulty handling the new digital technology. Despite intensive training, most of the micrographics salespeople were not successful at selling digital solutions. The salespeople had expertise rooted in micrographics, and the transition to a new technology was not smooth. "Eventually, we split the sales force. One group handles micrographics and the other handles digital," says Kempner. "When we split the sales force, there was a collective sigh of relief. The salespeople were now able to sell the technology that was most familiar to them."
Biel's also ran into resistance when it began offering digital solutions to its current micrographics customer base. Microfilm technology was typically a departmental sale for Biel's. For example, a Biel's salesperson would sell microfilm conversion services and hardware to a company's accounts payable department. In this case, the accounts payable manager, and possibly the CFO, made the decision to purchase the micrographics technology. A digital document management and imaging sale was a whole new ball game for Biel's. "A digital system is a cultural change for a company," says Kempner. "Obviously, you need to get the blessing of the IT (information technology) department. But, the overall business process change that takes place means that many other departments within a company need to be involved."
It's not unusual for Biel's salespeople to identify a person within a company who has the budget for a digital system. However, the decision to spend that money falls to more than one person. "Instead of asking if companies can afford such a solution, we identify the people within a company who can approve such a technology," explains Kempner. "If that group of people turns out to be an ‘imaging committee,' then you can expect the sales cycle to be a lot longer. But, you have to be prepared for that."
New Vertical Opportunities
Selling document management and imaging technology bolstered flat micrographics sales and also opened doors to new vertical markets for Biel's. Currently, the company has three branch offices (Rochester, NY; Syracuse, NY; Erie, PA). However, Kempner plans to open a fourth office in Albany, NY, to capitalize on the company's growing presence in state government applications. In these applications, Biel's usually leads with forms processing technology. This includes optical character recognition (OCR) and intelligent character recognition (ICR), which recognizes machine-printed and handprinted characters.
A government application may involve scanning tens of thousands of forms — automobile registrations and license applications, for example. These forms are scanned, and data is extracted using recognition technologies. Once extracted, the data can be used to populate a database. This type of application eliminates manual data entry, which makes it an attractive solution for customers. "When a company can eliminate data entry costs, the sales cycle is much shorter. These are hard-dollar savings that can be easily demonstrated," says Kempner.
Hard-dollar savings in forms processing applications can lead to additional sales for Biel's. Forms processing software will extract data from a form, but companies will also be interested in imaging and storing the entire form. Those imaged forms then need to be managed with document management software. Eventually, the digital forms may be migrated to microfilm for long-term storage. "About 75% of our digital sales includes both forms processing and document management software," says Kempner. "We always recommend that a customer integrate both technologies. We can do it all at once or in a phased approach."
Predicting The Future
When Ernie Biel founded his company 60 years ago, he couldn't have imagined the type of technology that exists today. Digital sales have opened new doors for what was once a micrographics-only dealer. As Biel's continues to expand its digital base, Kempner feels that this may one day increase current micrographics sales. "Digital and micrographics will continue to be intertwined in the solutions that we offer customers," says Kempner. "The digital side of the business will continue to grow much faster. But, within five years, I think the digital sales will ultimately pull in more micrographics business."