Capture Horizontal ECM Sales
This integrator expects 30% revenue growth in 2009, driven by two primary areas of concern from customers of all types — the threat of legal risk and the desire to automate processes.
Today’s ECM (enterprise content management) systems allow organizations of all sizes and types to reap the benefits of paperless technologies. Smaller, less expensive scanners and multifunction printers (copier/scanners) have made distributed capture of documents more common. In addition, SaaS (software as a service) technology (hosted ECM software) is now at a price point where even small businesses can get into the game. Combined, these trends create a lucrative and sizeable ECM market. In fact, Forrester Research has estimated the 2008 market for ECM systems to be nearly $4 billion. Not only is the market large, but in recent years integrator Advanced Document Solutions (ADocs) has seen increased demand for ECM and business process automation technologies. This demand has been driven by two primary areas of concern for companies: the threat of legal risk and a desire to automate processes.
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The first concern stems from legal risk. Regulatory/compliance mandates such as the Sarbanes-Oxley Act (SOX), the Gramm-Leach-Bliley Act (having to do with the financial sector), and the Patriot Act all have at their core the threat of legal risk. Specifically, should a company get sued or audited, it may be legally obligated to produce any number of records, including email. Years ago, companies could avoid legal trouble by simply not having the requested documentation. Today, being able to produce evidence is required and not doing so can result in huge penalties. ECM systems can minimize, and often remove, legal risk by securely storing all required business information in electronic format, as well as showing a history of who accessed the information.
A common misconception ADocs faces when approaching potential privately owned customers is that only public corporations are required to meet major mandates like SOX. However, Mike Brown, VP of sales and marketing with ADocs, explains that the reality is that no one is safe behind a corporate veil. “Recent changes were made to the Federal Rules for Civil Procedure (FRCP), which means that officers of a nonpublic corporation now can be held directly liable,” he says. “During our sales pitches, we often find ourselves explaining that the officers of a private company can, indeed, be held personally and corporately liable for not producing evidence.” Brown continues by saying that the question isn’t whether regulations apply to a company or not, it’s how much legal risk the company is willing to take. Today, ADocs’ typical customer implements ECM because there is an area of risk they deem unacceptable and which outweighs the costs associated with installing an ECM system.
However, oftentimes, a legal threat isn’t compelling or real enough to move a company to purchase an ECM solution. Unfortunately, one of the more common triggers to implement ECM is a lost lawsuit. Brown explains that he was trying to sell an ECM solution to a medical company for years. After a $50,000 lawsuit where the medical company couldn’t produce evidence and the other party could, ADocs received the order for a new ECM solution.
Automate Processes With ECM Solutions
Another prevalent factor fueling ADocs’ ECM sales is the need for process automation. Companies need to do more with less in today’s environment. There are a few reasons for this need. First, Brown says that many companies today face increased market competition. “ECM solutions and electronic workflow systems can be used to improve employee productivity and streamline business processes,” he says. “The result is a reduction in costs and improved customer service levels.” ADocs has one customer that expected to grow 50% within the year, but had managerial requirements to do so without adding employees. The integrator created a solution that could electronically automate inbound sales orders, recognize certain data, pass the documents to the right people for validation, and then automatically pass the info on to the company’s ERP system. Because of the automation that the ECM solution was able to deliver in concert with an automation software package from Esker called DeliveryWare, the company was able to realize 60% growth on the year without adding employees.
What’s Your ECM Sales Pitch?
According to Mike Hawley, VP of technical services for ADocs, sales cycles for the integrator’s ECM systems can run from months to years, depending on the needs of the customer and scope of the project. “Real prospects to us have a compelling need for the product as evidenced by a trigger event [e.g. a move, lawsuit, regulatory requirement] as well as a budget and timeline,” he says. “In cases where all of those factors were in play, we’ve seen systems close in 30 to 90 days.”
Regardless of the initial factors steering a potential customer to an ECM solution, ADocs’ first step in determining a solution is conducting a thorough needs analysis. This process is split into two parts — a document-centric analysis and a process-centric analysis. Combined, the two look to determine how much paper traffic a company has, identify company processes, and estimate document flow within a process, department, and the total organization. The results of these investigations help ADocs determine how large a repository the customer might need. As a value-added service, ADocs also looks for opportunities to improve processes that can typically be made more efficient by eliminating paper and non-value-added manual labor.
Hawley also says that there are some current trends surrounding today’s available ECM solutions. The integrator’s core technology is represented by ‘off the shelf’ ECM systems from Hyland, FileBound, and Clearview ECM. In the past, Hawley explains, high-end custom code-based ECM solutions were common. No longer. All of these vendors have platforms that are completely or substantially based on Microsoft .NET which allows for easier integration with other line of business applications and for the ability to customize the software.
In addition, both Hyland and FileBound offer SaaS (Software as a Service) versions of their in-house products. The nice thing about a hosted solution is that small companies can make a minimal investment and still receive the full benefits of an ECM solution. In fact, Hawley says that a hosted site can be set up for as little as $3,000 to $5,000 with one entry-level scanner. Per-user monthly fees can start as low as $400 a month. Comparatively, the cost of on-site ECM solutions can reach into six figures. However, there’s typically more integration with ERP systems and other line of business applications with such in-house systems. “With the breadth of products available today, we are able to meet the needs of organizations of all sizes, whether they’re first time ECM buyers or are looking to migrate from legacy systems,” says Hawley.
As the economy struggles and legal risks increase, more and more companies will be looking to gain efficiencies and security with ECM. By focusing on two driving factors behind ECM adoption and by offering a variety of solutions to fit the needs of customers of all sizes, ADocs finds itself poised to increase sales 30% in 2009.