Friday, February 3, 2012

The Secret Costs of Document Capture

If you think you know what you’re actually paying to keep your centralized document capture solution running, your ECM vendor is keeping secrets. He knows a lot more about the real costs than you do.

Here’s the truth: Capture vendors (and ECM vendors who might offer a bundled Capture product) purposefully do not want the market to shift toward Distributed Capture because it ruins their licensed revenue pricing models.

There, I said it. Truth hurts. Now that the cat is out of the bag, let’s break it down.

Per Click Charges. Legacy vendors want to maintain getting the per-click charges for each page scanned through those centralized, monstrous, money hungry IBML and Kodak scanners versus a compact, $400 desktop scanner. They pump out lot more paper than any desktop scanner can and you pay for page counts you didn’t know you had to pay for. Think of all those bar code, patch code and document separator pages that you need in a centralized environment to keep the scanners running at rated speeds. Also, if you happen to incorrectly scan a few hundred batches, or thousands of pages, rescanning will cost you additional software click charges.

Thick as a Brick. No, we’re not talking Jethro Tull, but how vendors encourage you to install thick client-based applications so they can get revenue for each seat license sold. Whether you use the capture application frequently or occasionally, they want that license revenue, and they will require you to pay for it. If there is no software to install, they can’t count the per seat user.

Licensee Sticker Shock. Speaking of licenses, if you haven’t priced them lately, be prepared. The vendor wants you to pump as much volume through their server as possible so they can drive that monthly or annual license volume through the roof. Even if by chance they do offer a Web client, it no doubt will be required to connect into their server backbone so they can implement per-click charge(s). That’s why the conversation early in the sales cycle from the manufacturer will quickly gravitate to the question, “Can you tell me what your expected monthly or annual volumes will be?” which directly equates to revenue recognition for them. Sound familiar?

The Bigger the Scanner, the Higher the Cost. Here’s an example where bigger is certainly not better. Because you might need a high-volume scanner, the capture software vendors penalize your business for the processing of all that paper through that big scanner, and charge you more for the software license and software maintenance.

Even More Costs. Consider these other elements and add-ons that surely will increase your costs: test development licenses; intelligent character recognition (ICR) and optical character recognition (OCR); advanced forms export modules; remote scanning indexing-only users; quality assurance monitoring administration; fault tolerance and other features; all on top of the page count and service license charge. Are you beginning to get the idea of what is going on here? Sounds like deficit spending.

Analyze that software maintenance agreement language carefully. It is not widely known that some vendors have introduced a concept of automatic CPI increases that usually range between 3 and 5 percent per annum. That means you can expect the cost of your software maintenance bill to increase every year, regardless of whether your volumes and usage of the software remain constant. (Pssst...want to obliterate CAPEX software and hardware purchases, maintenance bills, server hardware, etc., consider a secure Cloud alternative).

The bottom line: take a long look at the cost advantages of Distributed Capture. Even if you’re comfortable with the centralized option, ask some harder questions to see what you can take back from your vendors.


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