Magazine Article | October 9, 2009

Repeatable Success Is Key To Document Imaging Growth

Learn how PIF Technologies grew to become a $5.6 million VAR by tackling multiple verticals and leveraging best practices to refine the solutions offered to its 2,000-plus customers.

Business Solutions, October 2009
Written by: Gennifer Biggs

The president of PIF Technologies (PIF Tech), a document imaging solutions provider, readily admits his technology is mature, making growth opportunities more difficult to uncover. However, this VAR’s revenue has been consistently growing 10% every year — and 2009 is no different. That’s because PIF Tech has honed its sales pitch during 14 years in the document imaging space and uses best practices from its diverse customer base to expand into new verticals and drive ongoing sales with existing customers.
“We don’t sell a cookie cutter solution and walk away. That mindset — sell the scanner, then teach them to scan and dump files on some network — is what we see from our competitors,” says Sam Ruddy, president of PIF Tech. “We provide customers with a turnkey, hand-holding experience that encompasses the hardware and the software, but also the best practices we’ve discovered after working with 2,000 customers and honing our solutions over time.”

Focus Document Imaging Pitch On Shared Pain Points
To enjoy success similar to PIF Tech, Gary Saklad, VP of PIF Tech, recommends document imaging VARs seek out transaction-based businesses — such as insurance, finance, law, etc. — where the “product” is paper and the information on it. “They are not taking widgets off a shelf and selling them; their profits come from managing paper, and if you can improve that process, you can have an immediate impact and you will get the sale,” says Saklad. Once you’ve found businesses that fall into that category, PIF Tech has identified five pain points that tend to bridge over transaction-based businesses. First is securing information, or simply protecting the information as it flows through the business (for example, resolving a proof of delivery problem). Second is improving productivity, offering customers a better, faster way to get their hands on their information. Third is lowering costs by eliminating such items as the rent for additional storage space to hold paper files. Fourth is reducing the expense of office supplies and equipment such as file folders or copiers. Fifth is avoiding potential for disaster by having electronic stored files vs. paper-based (it’s difficult to back up paper files in a file cabinet). By preparing value propositions around those common pain points, most VARs will find they can start to move between verticals as well as develop a deeper relationship with existing customers after an initial sale.

Adding Value To Stock Document Imaging Solution A Differentiator
Once PIF Tech has identified the problem, it adds value in two ways. The first is discovering what applications the customer uses that need to be integrated with the document imaging solution and determining if customization is needed. For example, many insurance clients use an agency management system (AMS), and the document imaging software used by PIF Tech offers integration with many of those systems. “That allows agents to interact with documents handled through the document imaging package while they are typing in notes into the AMS about that day’s activities,” explains Ruddy. If the customer uses an AMS not already integrated with the imaging software, the project gets more complicated. At that point, one of the VAR’s five software engineers steps in to create a custom bridge between the applications. “We do have the plain vanilla software we can sell to anyone, and it works well,” says Saklad. “But if you can take it to a medical office and customize it, perhaps layer a security product over the enterprise content management (ECM) solution to meet the customer’s compliance needs — then you have a differentiator.”

Both Ruddy and Saklad agree the market has changed over the last few years. As recently as eight years ago, a document imaging solution meant scan it/name it/save it. Up to 85% of PIF Tech’s business fell into that category. Today, only about 5% of its customers are willing to settle for that baseline solution. For PIF Tech, more than half of its deployments — up to 70% — require some degree of customization. That extra effort impacts the cost — and the margins — but only when an engineer creates custom links between databases or adds software modules to handle extra duties. Customization can increase the solution cost as much as 25%, (an average installation costs between $25,000 and $30,000), which means it can bring in an extra $6,250 to $7,500 in revenue.

A second place where PIF Tech adds value is around workflow. The VAR makes a point to walk through the proposed solution with key users — people who will use this system every day — in order to identify any modifications needed to address unique steps within that particular business’ workflow. “We often spend hours with a team, and we are happy to because it just give us more ammunition for our next customer; it’s a good investment of our time,” says Saklad. He recalls a distribution customer where PIF Tech devoted a great deal of resources to determining a solution and the impact it had on future sales. Saklad recounts that this customer had several distribution hubs feeding into one AP office, where the billing staff was, at the end of each day, physically sorting through proof of delivery slips to match delivery information with order details before issuing an invoice. Because some deliveries could be short a box or a customer could refuse full delivery, the reconciliation process was a must-have. “It took us quite a while to get our arms around that process and determine where we could automate the workflow and save them time,” says Saklad. Eventually, PIF Tech used document imaging to funnel all delivery slips to the billing office and wrote a custom program to automatically match invoice/order numbers with those delivery slips. “What had been taking two or three days to manage, we got down to 30 minutes a day,” explains Saklad. The time invested to tackle that customer’s issue was quickly validated as PIF Tech rolled out that solution to other distribution customers.

Cultivate Sales With Current Document Imaging Customers
The VAR also has two tricks for reopening sales opportunities with existing customers. First, it utilizes a document imaging product that allows it to integrate more fully into a customer’s business processes through new offerings. “As the technology expands, we can offer a customer additional features that let them do more with the system they’ve already invested in; that provides us a chance to keep in front of them,” says Ruddy. “You may not sell another full deployment, but you may add modules, or new imaging stations, or work with them as they add branches.” (See sidebar.)

For example, the new business document package (BDP) released by DocSTAR is a module that automates workflow by improving functionality around interdepartmental document routing (versus intradepartmental routing) and features alerts that improve visibility of documents within the system and at certain stages of the workflow. “These products reignite the sales process; they give us a reason to go back and have another conversation,” says Ruddy. In the case of the new BDP, PIF Tech asks customers to explain the current process for a document that needs approval from staff in several different departments. For example, if you have a purchasing order, you may need a department head to request an item, a purchasing agent to create the formal request, a budget director to approve the expenditure, and a final OK from operations. “We ask what happens if someone is on vacation? Does that paper form just sit in their inbox? How does the person trying to buy something know what is going on? Do they have to wander from office to office looking for it?” explains Saklad. Since the new BDP allows a form to sit in the network and be accessed by the various offices electronically, it never gets lost. Plus, an administrator can set an alert that indicates someone is on vacation or hasn’t viewed the document within the allotted timeline.

As the new BDP rolls out, Ruddy estimates his company will achieve nearly 40% penetration with its existing customers. That means about 600 or so current clients will adopt the new product, bringing thousands in new revenue onto the books. “It is easy to go back to someone already using this product, who is happy with this product and has already seen the ROI,” says Ruddy. “That’s a warm sale, and it plays a big role in our yearly revenue. More importantly, it helps bring us that much closer to our customers.”

The second trick, says Ruddy, is looking beyond the initial problem that drives a new customer to look for a document imaging solution. He explains that most customers want to resolve one particular problem. For example, a customer comes to PIF Tech looking to resolve a proof-of-delivery problem. The business’ trucks are out all day, making deliveries, and that printed/signed proof-of-delivery slip provides the only proof a delivery was made on time and to the right place. But, when working with paper, there is always the chance the slip will be misfiled or lost. So, PIF Tech develops a document imaging solution that addresses that problem, typically a scanning station where those slips are captured the minute drivers return to the office. But, the sale shouldn’t stop there. The key to success in the ECM business, says Ruddy, is not to just walk away from that customer with your margin in your pocket. “They may become a customer based on that problem and solution, but then it is up to us to educate them,” he says. That means perhaps giving the customer 90 days — time to reap the cost saving and increased productivity of a solution — and then revisiting them. “We show them where else they can leverage a document imaging solution to solve other business problems,” says Ruddy.

As part of its follow-up sales effort, PIF Tech often illustrates the benefits of additional document imaging solutions through demonstrations of solutions being used by other customers in similar if not exact verticals. “Once you show them how you are solving a business problem in 150 other distribution businesses, it is hard for them to ignore that potential within their own distribution business,” says Saklad. To seal the deal, PIF Tech brings in a fully operational demo of the solution being recommended. “We set it up — scanner and all — then walk them through a live demo to show how this particular solution is working at other customers’ sites, and we get instant credibility.” For example, imagine how much easier sales to distributors were after resolving the problem with that early client and using actual efficiency and ROI reports with future customers. In fact, while every business has its idiosyncrasies, Ruddy says about 85% of the workflow processes are the same within similar businesses, making PIF Tech’s knowledge highly transferable.

For PIF Tech, the ability to diversify its customer base by leveraging its decade-plus of experience has translated into steady 10% annual growth and revenue expected to top $6.5 million this year. With industry analyst group Gartner projecting the total software revenue in the ECM market will grow at an annual rate of 12% through 2012, document imaging is clearly an IT space that remains full of opportunity for VARs. But don’t just add a document imaging package to your line card, and expect business to boom. Growth in today’s document imaging market demands customization and expertise, and, more importantly, a range of customers in a variety of verticals.