Survey: Brace For Surge In Document Management Sales
By Shelley Solheim
VARBusiness
August 04, 2006
Printer and imaging solution providers should brace for a surge in sales: Document management solutions rank among the top five solutions midmarket IT buyers cited as spending priorities for the next 12 months, according to the VARBusiness Market Insight Report, which polled more than 600 midmarket and enterprise IT managers.
More specifically, one-third of midmarket IT decision makers say document management systems are high on their priorities list for the coming 12 months, the report found.
Midmarket survey respondents say document management — printers and scanners integrated with storage and archiving systems — are an essential component to three other major goals: streamlining business processes (66 percent), backup and disaster recovery (45 percent), and regulatory compliance (33 percent).
On the enterprise side, where these solutions have been around for a while, IT buyers ranked document management solutions much lower on their hit lists.
But the availability of document management solutions designed and priced for SMBs, coupled with declining hardware costs, have contributed to an increased demand among midsize companies, which, like larger firms, want to find better ways to drive efficiencies through increased automation and comply with government regulations around document archival and retrieval.
Printing and imaging vendors say solution providers can tap this demand to drive up sales of multifunction printers, scanners and related hardware, software and services. Most of the major printing vendors are now developing MFPs and scanners with document management in mind by providing hooks into common applications and back-end repositories and providing the ability to customize features, such as a graphical user interface, for a specific business process.
"We're focused on having very clean connections into our products, so you don't have to train an end user on a 10-step process to get a document in," says Laura Blackmer, vice president of U.S. channels for Hewlett-Packard's Imaging and Printing Group.
Parker Lowe and Associates, a small solution provider in Ocracoke, N.C., has found success selling document management solutions centered around Lexmark MFPs into local and county government agencies.
The solution provider has developed an application tailored for land-records management, where users scan a document, such as a record of a deed, and route it to several repositories directly from the machine. Key to the solution is the ability to customize the device's touch screens to prompt users with questions that are specific to the agency's business process, says Keith Parker Lowe, president of Parker Lowe and Associates.
Parker Lowe acknowledges that his customers are often skeptical at first of how an MFP will help them manage their paper problems.
"In most cases, they don't recognize what you can do. They've heard the theory, but they say they have problems with records storage and management," he says. "They say, 'I'm overwhelmed with paper.' "
But the approach has paid off, he adds.
"We'll probably sell 10 times as many machines this year as last year, and get more revenue from the solution via 100 times the hardware," Parker Lowe says.
Key to success — for both end users and solution providers — is customization, vendors agree.
"With these type of systems, there is some complexity involved with the software installation and hardware, and matching the system to the workflow of the company," says Kevin Goffinet, vice president and general manager of worldwide SMB at Lexmark. "What we've found is that there's not only an opportunity for systems [integration] work and long-term maintenance, but for upfront consulting at the site to understand end users' needs; there are multiple components partners can tap into."
Still, vendors caution against jumping into the document management waters without making the right investments and industry partners. "The opportunity is on many fronts — on the hardware side, to provide devices to capture and print; and on the storage side, because any document management system requires storage, and then it also requires consulting services," HP's Blackmer says. "We're working with partners on hooking them up with solution providers that do document management so they can set up relationships where they own it, but [subcontract] the consulting.
Unless VARs are willing and able to "make a fairly sizeable investment" in the document management business, Blackmer advises them to partner.
"You might have a customer that says, 'Gee, I want to do a document management solution,' so you implement something, and then they say, 'Oh, by the way, I have six years of documents I would like to get in there," she cautions. "That conversion is very labor-intensive, where you have people do things like pull staples out and tape receipts onto paper so it can be read by high-speed scanners."
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