Are You Missing Out On OCR Sales?
Mature OCR (optical character recognition) technology helps VARs expand their user bases by developing solutions that begin at the desktop and scale to the enterprise.
The good news is end users are willing to pay more for a total solution, according to Janet Waxman, IDC's VP of hardware channels. At a conference held in mid-2002, Waxman said end users are willing to pay a single source 10% to 15% more for a complete solution that includes hardware, software, and integration. The bad news is there aren't many end users who can afford a total solution right now. A September 2002 report from IDC predicts spending for integration services may not rebound until mid-2003. That's why VARs need to be able to offer vertical solutions that can scale from affordable desktop pilots to full-blown enterprise applications. VARs can build on the reliability and versatility of mature OCR/ICR (optical character recognition/intelligent character recognition) technology to design systems serving a single user or hundreds of users and provide measurable return for the end user. This helps VARs capitalize on both trends, offering entry-level solutions that meet current tight budgets while positioning themselves as a trusted sources for an end-to-end forms processing solution when the spending resumes.
Robert Weideman, VP of worldwide marketing for ScanSoft, Inc. (Peabody, MA), contends that desktop applications are a good way for VARs to increase the number of users in an OCR/ICR solution. "The use of OCR/ICR has expanded from data collection to document reuse. OCR is getting out of the imaging room and offering day-to-day productivity benefits for office professionals. VARs have much more to offer their existing markets, and desktop purchases have a more apparent and obvious return than enterprise capture in the back office." A marketing team, for instance, would benefit from the ability to apply OCR to existing collateral materials and reuse the text in new materials or other formats.
Weideman believes advances in OCR technology are making it more versatile for day-to-day use. Forms processing vendors don't dispute that most production engines have attained nearly 100% accuracy, but Weideman points out that accuracy involves more than appropriately identifying text. "The definition of accuracy is expanding to include correct representation and page segmentation," says Weideman. "The ability of OCR applications to support PDF [portable document format] and convert it to an editable Word document or XML [extensible markup language] also makes it more powerful at the desktop." For example, if a company receives a PDF document which has two or more columns, OCR software has to be able to recognize that the text doesn't go straight across but flows from one column to another. An employee can then use that document to build another, such as using a specification sheet to create marketing collateral, or reformat it for Web or wireless applications.
Sell Desktop OCR Today, Enterprise Data Collection Tomorrow
Weideman doesn't dismiss the importance of winning enterprise installations. He advises VARs to design desktop applications with open standards, allowing these modest solutions to be migrated to larger ones in the future. "If an OCR solution feels good at the desktop, users will get accustomed to it, and that will eliminate barriers down the line," contends Weideman. "When they see the productivity value of a desktop OCR solution, it helps a VAR make the case down the line for an enterprise solution such as a batch system to process invoices."
"Starting with a pilot program and growing a solution is crucial to a reseller's success in this economy," agrees Bob Fresneda, president of U.S. Operations for ReadSoft, Inc. (New Orleans). "Selling a $250,000 or $300,000 system without proving its value at an entry level was hard even before the economy went bad. With an entry-level solution, a VAR can collect some services revenue for consulting and integration and sell some complementary technologies such as scanners or document management software. From there, the reseller can grow the solution to the enterprise over time as it wins that customer's trust." This strategy requires VARs to choose products that work in both desktop and server environments to ease the transition from desktop to full production.
Though Reynolds Bish, president and CEO of Captiva Software Corp. (San Diego), admits VARs and vendors have to offer solutions that meet a variety of end user budgets, he doesn't believe point solutions are the best use of a reseller's time. "Forms processing and document capture are headed in the direction of automated capture and indexing with a universal platform. VARs should be implementing systems that extract and purify data and then send it to enterprise applications rather than point solutions that focus on a single problem. What customers want is a more strategic BPA [business process automation] solution and a single platform. Why would a customer want to deploy numerous point solutions that become a nightmare to support and maintain?"
VARs Win In The Enterprise Through Vertical Expertise
A VAR's ability to meet demand for a truly complete solution may be an advantage when competing against vendors' direct sales forces. "There are a lot of forms processing vendors who talk about selling their products directly to end users," says Stacey Mason, director of marketing for Microsystems Technology, Inc. (Tampa, FL). "But capture and forms processing are really only a piece of the total solution end users are looking for." She says VARs who pursue end-to-end solution opportunities are winning the game, but she emphasizes that is because of their expertise in specific vertical markets. "For instance, we've found that many accounting packages are sold through the channel. VARs who service that market know the needs of accounting customers better than a company that makes capture and forms processing software. The role of the forms processing vendor is really to give them the tools and technology to make the solutions they design work."
Many VARs have chosen to pursue specific vertical markets, and new ones are being identified. "I think now we are extending beyond the traditional forms processing applications and moving into many that are more interesting and exciting like correspondence, legal briefs, and regulatory filings," comments Bish. He also acknowledges that traditional markets such as healthcare and insurance are still viable.
The challenge in creating a vertical reputation in forms processing depends on working with vendors who have proven track records of vertical expertise, including certifications by complementary technology vendors and reference accounts. "If you're pitching a solution in a specific vertical market, it's going to be a much tougher sale if you can't point to a past success," says Fresneda. "Vendors who truly support their resellers will give them access to the existing customer base and the opportunity to showcase successes using the same technology."
Because the technology is mature, even vendors admit that VARs have a number of acceptable choices when it comes to choosing OCR products. Rather than focusing only on products, VARs may want to also consider how well a vendor will support their individual business strategies and help them be successful in whatever market space they pursue.