Managing Content Management

At AIIM 2002, a number of people blamed dwindling attendance on consolidation in a mature market and the fact that there is "nothing new." I can't help but wonder what show they attended. Admittedly, we're still talking about the same basic concepts (scanning, capture, workflow, indexing, etc.), but advances in technology and trends among end users are creating the opportunity to expand existing customer sites and win new ones. Recognizing these opportunities, however, might require VARs to look at their solutions from a different perspective.

VARs Profit From Data Integration Trends
"In many cases the emphasis is on expanding current systems rather than purchasing new ones," comments Dane Clarke, sales representative for Docubase Enterprise Systems Inc. (Clearwater, FL). "Some customers have been involved with imaging for 10 years and may have two or three existing systems. We were in one credit union that had two different versions of the same company's package and still had to operate dual systems. Lots of people view COLD [computer output to laser disk] as just grabbing a report, but it can be so much more than that when combined with other solutions."

"Integration is a huge trend," confirms Pat Turocy, principal content management analyst for Doculabs. "When we go into Global 2000 companies, all have at least one EDMS [electronic document management system]. They need to integrate those existing systems with new ones as well as legacy and enterprise apps like CRM [customer relationship management] and ERP [enterprise resource planning]. This trend is a tremendous opportunity for VARs who can do that integration."

Being able to accomplish the integration in a cost-effective manner will depend on standards-based products with open APIs (application programming interfaces). "Anything can be done with enough time, money, and resources," says Turocy. "VARs need to look at that extra time in terms of dollars. Their clients are looking for good ROI, and they don't want to wait a year."

Bill Priemer, VP of sales and marketing for Hyland Software, Inc. (Westlake, OH), agrees that integration with third-party apps has "exploded." "Two years ago, it was rare, now it isn't all that unusual, especially in workflow. For example, if you're looking up a transaction record in an ERP application, you want to be able to pull up the actual image. You can see the dollar figure in an ERP system, but you can't see the contract. Those types of solutions are becoming standard, and there are lots of potential applications from a line of business perspective."

Demand for automated workflow is also growing, according to Priemer. "Customers have been sold on the efficiencies to be gained at pulling up and finding documents easily. They're realizing there's even more efficiency if content is pushed to them and they are prompted to do work." Priemer says that workflow is easier due to graphical tools that enable it, but VARs need to hone their skills in designing the workflow itself. "It's very easy to get in over your head," he warns. "But that's the space where the Big Five have been making their money. This could be a great opportunity for smaller VARs to compete against the giants." However, that's a skill set that still requires some development. Priemer says that while most of their VARs will sell workflow, only about 20% of them are prepared to go beyond departmental installations. Hyland is responding by enhancing training in business process design rather than products. According to Priemer, traditional imaging VARs may need to hone their consulting skills or solicit partners who can provide design expertise.

When evaluating vendors that are suitable for increased integration opportunities, Doculabs suggests that VARs look at partnerships, integration, building on application servers, as well as security and disaster recovery. Sean Donegan, president of Westbrook Technologies Inc. (Branford, CT), advises imaging VARs that this may mean they need to begin thinking about solutions from another perspective. "We've seen lots of initiatives for exchange of data, and the trend is toward security, digital certificates, and encryption," says Donegan. "This is going to require lots of thought and planning on the part of both vendors and VARs. Resellers must demand that their vendors be forward-thinking in this regard."

New Opportunities Still Tangled In The Web
At the risk of sounding obvious, the Internet has changed the way many VARs, vendors, and end users look at enterprise applications. Not only are companies taking advantage of the efficiencies to be gained through electronic exchange, the potential to reduce expenses with browser-based apps and hosted solutions is still viable. "Applications driven through thin clients are growing at an unanticipated rate," says Donegan. "In 1997, about 25% of our customers were talking about it, but only about 8% were actually implementing it. Today, 60% or more are delivering applications via a thin client."

The adoption of thin clients could also promote the adoption of hosted applications. "A year ago everyone had to have an ASP (application service provider). Obviously, that market didn't mature as predicted," admits Donegan. However, he says a significant number have had success with the model, and some even specialize in Internet delivery. Donegan sees the ASP model as a logical integration for service bureaus. From an end user perspective, the cost savings are still attractive. It can be counted as a profit/loss expenditure rather than a capital expense. The use of the thin client model also reduces infrastructure costs for the end user, and VARs can realize the same savings with the services of a hosting provider.

This trend toward outsourcing is also true of repositories. Mike Bridges, president of PaperClip Software, Inc. (Hasbrouck Heights, NJ) says this may not be an opportunity for VARs, however, as repository space becomes a commodity. He recently saw a deal in which a company paid a flat fee for 30 years use, not as an annuity, but an outright payment.

Hyland Software sees that there will be an increasing need not only to index and retrieve via the Web but also to publish to the Web. "VARs have to be cognizant of that trend," says Priemer. "It's one thing to go to a company and offer a way to store content in various formats, but they're going to want to know how to post it. A VAR's going to need a story for that." In addition to integration skills, this will also require Web development and design skills, either in-house or through a partner. "For the typical imaging VAR that's a new thing," admits Priemer.

Is It Time To Reevaluate Your Sales Approach?
Some who see the imaging market as mature are advising that only enterprise installations will fuel a VAR's growth. "It's a mistake to only go after the enterprise," states Clarke. "Most companies are still afraid to drop a huge amount of money all at once on a huge enterprise system. It's easier to get a small system in and then grow it from there." In fact, Clarke recommends leasing solutions to customers. Some customers might be concerned about going to a big leasing company and disclosing financial records. However, when a vendor is willing to offer software and maintenance for a monthly fee, a department doesn't have to get the CFO involved. "Once it's in-house and they start using it successfully, a VAR can go in and ask for names of other department heads. We have one customer that initially signed up for six months and is still using it after three and a half years."

The increasing complexity of workflow and other technologies is making it hard for VARs to meet the needs of diverse customers. "If you're a horizontal imaging VAR, you're gone," says Bridges. "Capture requires verticalization; retrieval needs verticalization. If you're a struggling imaging VAR, you need to verticalize and make money with cookie cutter solutions within a specific industry." PaperClip focuses on solutions for insurance and mortgage companies. Bridges attributes the company's success in those markets to recruiting an industry insider who knows the nuances of the environment. "When you first enter an industry it takes a couple of years to make a name for yourself. You have to volunteer and participate, tour a lot of sites, and get to know them."

Nearly every content management vendor I spoke to expressed a common concern about the industry: VARs and vendors need to make it less confusing to end users. "The biggest frustration customers are voicing is the continual stream of different words to describe a limited number of processes where no canyons of differences exist," says Donegan. The move toward verticalization and the need to create a market identity customers can relate to may be one reason there are fewer "imaging VARs" and more "remittance processing integrators" and "health claims specialists" at VAR conferences.