ECM: A Changing Market
by Michael Glass
Many owners or managers of service bureaus will laugh at the idea of changing any of their systems just because there is faster, new technology available. They will be quick to point out that they still provide customers with microfilm copies of their records filmed on an old Recordak 600. Every service bureau that has been in business for five years or more will have similar stories. There is no reason to change for change sake or simply to have the latest server, scanner or software program.
Shifts in the document management or imaging market will require modifications of your service offerings and capabilities in order to get new business and to maintain current customers. Customers are requesting new services including:
These new demands along with the need for some organizations to justify the acquisition of their new, large Storage Area Network (SAN) is requiring that service companies examine their delivery systems and the clients/markets they are serving.
Changing Requirements of Vertical Markets
One example for external forces that are formulating new business opportunities for Service Bureaus are the new Federal, State and Local Government regulations. The Federal Government has historically regulated the Health Care and Financial Services markets, which are large users of technology services. Recent changes mandated by U.S. Department of Health and Human Services for the security and privacy of customer records in the Health Insurance Portability and Accountability Act (HIPAA) is projected to cost the health care market several billion dollars over then next two years. Companies and hospitals must track and control access their patient records. Many hospitals are looking to replace their microfilm or old document management systems with new digital document management systems that are HIPAA compliant.
Demand for New Products/Services
The new service offerings that are in such high demand are a combination of old and new technologies and demand investments in new hardware and technical services.
Microfilm Scanning
Eastman Kodak has long been a major supplier to the service bureau market. Kodak has provided microfilmers, processors, scanners and supplies that have which were the foundation for many service bureau products. Kodak invented microfilm and grew the sales and service of microfilm to a billion dollar business. Although many of these records will never be converted to digital images there are several large microfilm legacy repositories that are being considered for conversion to digital images for access via the Internet.
The largest microfilm repository in the world resides with the Church of Later Day Saints. With more than 6 billion (yes that is with a B) images on 16 mm and 35 mm film in their genealogical collection that they want to make available for research and analysis via the Internet, the church represents the largest conversion opportunity for microfilm conversion.
Although the LDS church may be the single largest potential customer for microfilm conversion, Federal State and Local governments have been the largest users of microfilm systems and are slowly converting all their legacy microfilm systems to digital document management systems. Although many State or Local Governments will issue Requests for Proposals (RFP) for systems and include their conversion requirements, the Federal Government has issued several very large conversion contracts from both the Defense and Civilian Agencies. With only one exception, these multimillion-dollar contracts were set aside for small business.
Although Banking and Insurance have been and continue to be large users of microfilm, they rarely perform large microfilm conversions. This is due in part to the nature of their business requirements where they rarely need information on a customer more than 3 years old, and in part to their early adoption of digital document management systems.
Legacy System Conversion
With the consolidation of the document management and knowledge management market customers are moving more aggressively to new platforms and systems. Some are embracing new open architectures from historical imaging vendors such as FileNet, IBM and Ceyoniq while other customers are converting their legacy digital libraries to PDF format to be accessed via the Internet or Virtual Private Network. Whatever the platform, customers are demanding that systems with old, proprietary formats be replaced with new systems that use image formats that can be viewed either using their WAN/LAN based imaging software or the Internet.
The conversion of legacy data offers both an opportunity and potential hazards for service bureaus that have little experience in this area. Many older imaging systems require the use of legacy hardware and software in order to read/copy the legacy data. As with any system knowledgeable technical staff that have experience with the older imaging systems from Viewstar, Minolta and Optika will be a critical success factor in performing a legacy imaging conversion within budget and according to the customer’s schedule.
Remote QC and Access
The use of the Internet as a business tool have become so pervasive that no imaging vendor dare propose a solution without a thin-client/internet access. The Internet also offers an opportunity for service bureaus to get their products reviewed and accepted more quickly by customers. Remote access and acceptance can cut days and sometimes weeks off customer review and acceptance. This remote acceptance process often results in faster payment and better cash flow for work performed, which for most service bureaus is critical. Smaller service bureaus that do not have the technical talent to develop the software and to buy the hardware required for this service will be forced to rely upon the antiquated processes of mailing images with index data to customers which requires them to load the product onto their systems, then locate someone with knowledge and authority with time to review the images and finally which images have been accepted for payment. Figure A shows the conventional process of acceptance where once the documents have been scanned, indexed and reviewed they are output to CD-ROM, DVD, optical disk or tape before being sent to the customer for quality review. Upon receipt of the converted images, the customer must first load the disks or tapes into the imaging system before beginning the quality review process.
Many companies/government agencies will only permit technical staff to import data into their system. This prudent system administration often results in the images waiting several days before the technician or system administrator has an opportunity to load the images on the LAN/WAN for review. After finishing quality review customers notify the service bureau (generally by letter) of the number of images that have been accepted so that they can invoice for the work performed. The invoice for the work performed by the service bureau is often 30 days after the work is completed. In the rare cases that the customer quickly pays their invoice immediately at least 60-75 days have passed since the work was performed before payment is received. Figure B illustrates an Internet based quality review process that makes the images available the same day that the work is completed for acceptance by the customer. This process requires specialized software for access, security and acceptance. However since the client can perform the review on-line, their transmittal letter often follows via email the same day that the performance review is performed this shortens the payment cycle by several days to weeks.
Using remote QC and Acceptance processes can also provide customers with much faster access and use of their image/index data much days/weeks earlier which in turn makes their imaging systems more useful and staff more productive.
Re-Examine Your Offerings
In order to remain competitive in today’s market, service bureaus must re-examine their service offerings and customer base in order to ascertain if you are vulnerable to the competition or if you have untapped opportunities in our customer base. Technology will not cure every problem that plagues your service bureau but it can open up new service opportunities and can be used to increase cash flow and drive down costs.