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.

What does the Microsoft Azure opportuntiy mean for you and your business?

To Embrace the Cloud or Not, that is the question before all of us ;-)

Have you given much thought to the Microsoft Azure Cloud Computing strategy and its inevitable effect on your business?   Or, when somebody mentions Azure, does Prime Rib immediately come to mind?

BTW, Microsoft points out that the best way to remember how to pronounce Azure is to think of it like this: "AS you are walking through the door."

Microsoft Azure and Cloud computing is quite the buzz in the world of IT these days, how much time have you and your executive team dedicated towards a single discussion around the subject?  Are you aware of the massive Cloud initiatives currently underway by Amazon, Apple, Salesforce.com (force.com) and others?   Microsoft sees those vendors as a serious competitive threat to the traditional Microsoft based datacenter/on-premise based solutions - if they see competitive Cloud offerings as a threat, how does your organization view the Cloud?  How will the Cloud affect your ECM business?  What will the Cloud do to the traditional pricing models that exist in the market place today?  What will the Cloud do to my top line revenue growth forecasts? How do I address commission/comp plans?  Can I finance Cloud receivables?  These questions are just a tip of the iceberg.  You can either stick your head in the sand and ignore the challenge and deny the opportunity or you can choose to face the challenge head on and find the "opportunity."

You can see the topic of the Cloud will open an entirely new set discussions at an executive level and will present a new set of challenges. 

No doubt there is a whirlwind of change occurring right before your eyes with your customers.  If you haven't been talking to them about Cloud-based initiatives they are contemplating, I'll betcha dollars to donuts your competition is.   The economic value proposition is simply undeniable and let's face it, "dollars and cents" do a lot convincing these days with buyers in the sales cycle.  

First, if you know nothing about Microsoft Azure, here is a great set of resource to start with, although I promise you reading through the abundance of Microsoft authored whitepapers will take more than a few minutes:  http://www.microsoft.com/windowsazure/whitepapers/  

For the sake of time, let me provide you with an abridged version.  Microsoft Azure is a group of computing services based offered via the "Cloud." In other words, rather than buying, installing, provisioning and maintaining your own hardware/OS platforms, why not exploit the massive availability of web-accessible Windows servers in the market today?

Today, Microsoft Azure services can be broken down into the following 4 major categories: 

1) Windows Azure AppFabric;
2) SQL Azure (which CAPSYS CAPTURE announced support in early February);
3) Windows Azure and;
4) Windows Azure Marketplace.

• Windows Azure: A Windows environment similar to what you have experienced in the past, only this time hosted in the Cloud for the purposes of running applications and storing data on computers in Microsoft data centers. 
• SQL Azure: Relational data services in the cloud, based on SQL Server - again hosted in Microsoft's Datacenter.
• Windows Azure AppFabric: Cloud-based infrastructure services for applications running in the cloud or on premises, hosted in Microsoft's Datacenter.
• Windows Azure Marketplace: An online service for purchasing cloud-based data and applications.

So, why should you care and how does affect your business as a CAPSYS business partner, what is the opportunity for you and your business?  Here are a handful of points to noodle on and get your started in the right direction:

1. Are you interested in "completely resetting the table" from a competitive positioning standpoint or do you like the idea of walking into a competitive situation and saying "we can do that, or me too?"    
2. Do you sleep well at night hoping for the "one hit wonders" every quarter that you have banked on for years knowing that that they are growing further and farther in between due to CAPEX restrictions or; 
3. Are you interested in a more predictable revenue/profit growth model?  Albeit at a smaller clip than on-premise transactions, but PREDICTABLE.
4. Have you grown tried of fretting over whether or not your largest Software Assurance Renewals are actually going to "renew" year after year?  Or, perhaps your customers have caught wind of the "game" and know to beat you up every year for a 10% discount while your vendors are somehow justifying raising their cost to you for SWA renewals?  Tired of getting squeezed? 
5. Are you interested in putting forth a solution in front of your prospect that any on-premise based competitive offering would have a very difficult if not impossible time task of matching or beating terms of: Time to Market, Cost and ROI?

If any one of these questions hit a nerve, than you should give serious thought to looking into Cloud based solutions because the Cloud is positioned very well to address everyone of the questions/challenges raised here plus offer plenty more opportunity than I can discuss in this post.

One other point I will leave you with.  Consider Microsoft's massive marketing machine and give some thought how your business can effectively ride that wave.  Did you know that you can market your solution through Microsoft's Pinpoint online marketing engine - for free? Assuming you are an authorized Microsoft Partner.  Don't have a Microsoft Azure solution to go to market with?  Well, if you are an authorized CAPSYS Business Partner, than you need to rethink your answer because YES you do!   CAPSYS now supports Microsoft SQL Azure.  So, update your Microsoft Pinpoint profiles.  Perhaps your business is not currently a Microsoft Authorized Business Partner.  visit www.https://partner.microsoft.com/ and as Larry the Cable Guy says, "Get 'er Done!"