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Document classification is defined as the identification of information from a document, a set of documents, or any other data being processed. Document classification software is used to separate documents without the need for physical separator sheets (paper that separates batches of documents). Document classification also is the first step of business process automation using imaging technology. What does document classification have to do with sales growth for ECM VARs? Samuel Schrage, president of AnyDoc Software, Inc., and Robert L. Fresneda, president of ReadSoft North America, have some answers to that question.

Understand OCR, ICR, IDR, Document Templating
Since a discussion of document classification can quickly turn into a conversation filled with acronyms, a primer on those acronyms is a good place to start. Optical character recognition (OCR) is the process of analyzing and capturing computer-generated text located on documents. Intelligent character recognition (ICR) is designed to analyze and translate handwritten characters located on documents. Intelligent document recognition (IDR) is the ability to recognize the type of document inside a business application. In each process, the goal is to extract data from a document in a format that is usable to another business system such as an ERP (enterprise resource planning) or accounting system. Finally, document templating is the process of defining the type of data to capture, the location of the data on the form, and how the data will be presented on the form.

Document classification solutions combine those processes to provide workflow engines for document capture, classification, and processing. For instance, a workflow (the movement of documents and/or tasks through a work process) can be created based on existing business processes. It can involve sorting, batching, and routing a customer's document images and data automatically. After scanning a document, the software will recognize the document type based on size, image pattern matching, customizable keywords, and/or other document tags. Once identified, the software organizes the documents into individual document sets. The document sets then can be routed to a defined network directory or to an OCR solution for data capture and processing. Customers can realize greater productivity and reduced labor costs by eliminating stacks of documents waiting to be manually sorted.

Classification Solutions Have Horizontal Appeal
Every industry faces the challenge of managing paper. Some verticals such as insurance and healthcare are particularly suited for document classification because of their needs to confidentially manage many different types of documents for each customer and patient respectively. The mortgage processing industry is another example of a document-rich environment. Manual sorting of documents can slow turnaround time and increase the chance for misplaced or misrouted documents. Automatically sorting, batching, and routing documents can decrease turnaround time and manual errors, giving your customer an advantage over its competition.            

"There are many VAR opportunities for selling document classification solutions," says AnyDoc's Schrage. "The management of invoices, remittances, freight bills, tax forms, surveys, claims, warranty cards, applications, loans, student records, medical records, explanations of benefits, and check and coupon processing are all examples of forms that can benefit from document classification products."

ReadSoft's Fresneda says, "VARs can sell classification software as a front end to forms processing applications for structured, semistructured, or unstructured business applications. The software eliminates the need to place separator sheets in most applications where documents need to be classified by document type and then tied together for the back end application. Document classification solutions are a great add-on opportunity for VARs that sell document management technologies. Successful VARs will go back and sell classification solutions to their installed bases as well as to new prospects."

Don't Forget To Manage The Business Process
It's important to keep your eye on the business problem — not get caught up in selling the technology. Nowhere is that more evident than when selling document management solutions. "Successful VARs are learning their customers' businesses and watching the ways they process documents and data," says Schrage. "You cannot solve a classification bottleneck without understanding the intricacies of the business processes and the decisions associated with each action. VARs must provide a solution that will mold to the needs of the customer and not just be a black box in the corner."

In addition to solving customers' business problems, there is a definite opportunity for VARs to tack on professional services revenue for business process management consulting. Oftentimes, VARs can show the customer a time frame in which it can expect a payback for its document management investments — making the professional services an easier sell up front.

Finally, don't forget about your existing customers. "Successful VARs are prospecting for document classification needs in their installed bases of document management customers," explains Fresneda. "They are looking for areas where the customer has high labor costs associated with scanning, such as paper prepping and sorting." That's a good place to start with document classification, since VARs are apt to know their customers' business processes in more detail than the business processes of new prospects.