Moving Beyond Integration
Integrators may not consider conversion services to be the most glamorous work, but it can be highly profitable. The addition of a service bureau has also helped Input Solutions, Inc. close more document management and imaging integration deals.
Ah, the finger-pointing. It's a common occurrence when multiple integrators work together on a project. Unless the project is flawlessly completed, the finger-pointing is almost inevitable. Beginning with the customer, the finger-pointing progresses like a chain reaction until it reaches every integrator involved with the project.
The only way for an integrator to eliminate the finger-pointing is to have the in-house skills to handle a project from start to finish. While Input Solutions, Inc. was not founded as a one-stop shop for document management and imaging integration and services, the company has evolved into just that. "I wish I could say that we had a magical idea when we started the company in 1988, but that's not the case," says John Solomon, COO and vice president of Input Solutions. "Our customers mostly dictated what types of services we should deliver."
Input Solutions was founded as an input (scanning) specialist to help companies handle the mountains of documents they deal with on a daily basis. Initially, Input Solutions sold mostly stand-alone optical character recognition (OCR) systems. The company grew to offer forms processing and enterprise-wide document management and imaging integration.
In 1992, Input Solutions altered its business forever with the addition of a service bureau. "For a number of years, we were using our demo room to convert documents for customers who had occasional increases in the level of documents they were imaging. We were also converting some backfile documents for customers after we installed a document management system for them," recalls Solomon.
The combination of document management and imaging integration with conversion services can be a powerful sales tool for integrators. As a full-service company, Input Solutions has grown to 62 employees and is projecting gross sales of $9 million in 1999. Integrators should seriously consider the benefits of adding a service bureau to a company's current offering. Having only one company means there is less miscommunication. It also allows for a more profitable sale.
A one-company sale is a concept that Input Solutions pushes emphatically to its customers. As a single point of contact, the company can avoid some of the most common and contentious aspects of working with other companies on a project.
For example, a typical integration project may involve four integration and service companies. The company that won the account is usually designated the prime contractor, while collaborating companies are labeled as subcontractors. Any time a company assumes a subordinate role, the chance of miscommunication increases. Battles may arise over whether the subcontractor or the prime contractor is more expert in a certain area.
"When a company has a subordinate relationship with another company, there is a chance for conflict. Both companies feel they are experts in their areas and should be treated as such. This is when egos can clash," relays Solomon. "When one company thinks it knows your specialty better than you do, then a project can go south rather quickly."
Problems also arise when all project information must flow through the prime contractor. The subcontractors tend to be left out of technical discussions with the customer. The prime contractor relays the information from such meetings, but the chance of a miscommunication is almost a sure bet. "The prime contractor covets the customer relationship so much that it portrays expertise in all areas. If that were the case, then it wouldn't have needed the subs in the first place," says Solomon.
Offer A Single Point Of Contact
The addition of conversion services did not happen immediately for Input Solutions. The company started converting documents in its demo lab before it finally took the plunge with dedicated equipment and personnel. The current conversion facility at Input Solutions is about 2,000 sq. ft., and the company has invested $250,000 to date on infrastructure improvements.
Input Solutions does all forms of conversions for its customers. If the company doesn't have the expertise in-house, it outsources the work to one of its partners. For example, Input Solutions doesn't convert large-format documents in-house. The oversized documents are converted by a different service bureau with which Input Solutions has had a long relationship. To the customer, however, it appears as though Input Solutions is the only company involved with the project.
Close More Deals
Providing both integration and conversion services can eliminate finger-pointing, and it can also increase the number of deals you close. Drafting and submitting a proposal to prospective customers is more difficult when several integration companies need to be involved. "When all the expertise resides in-house, you can certainly deliver a cleaner proposal to customers. You have a better understanding of each aspect of the proposal, and you can be more accurate in terms of how the entire project will be completed," explains Solomon.
Adding a service bureau to your current line of document management and imaging integration services allows you to present a better overall project price. Eliminating other subcontractors from the equation allows you to eliminate their markup as well. Without the middlemen, Input Solutions offers a single point of contact at a better price. While it is not the only concern for customers, Solomon does admit that his company "wins an awful lot of deals based on price."
Manage Service Bureau Employees
Purchasing equipment is the easy part of establishing a service bureau. The real trick is managing the necessary employees. Of course, a service bureau needs to have a core group of full-time employees. However, if a salesman secures a deal for converting three million documents, then you need to hire more employees. Once the three million documents are converted, then you have too many employees. Customers' conversion patterns may also spike on a quarterly basis and then return to normal. "I have talked to smaller service bureaus and much larger service bureaus," says Solomon. "And every company struggles with the peaks and valleys that are inherent to this business."
Hiring temporary employees is one way to counteract the hectic production cycles. In addition to temps, Input Solutions uses telecommuters for some parts of the conversion process. "We send files to telecommuters on a disk or by FTP (file transfer protocol). These employees work at home and perform text editing and linking for us. When they're done, the images are sent back to us. It's an overnight process," says Solomon.
Perception Is Not Reality
For some integrators, the very thought of running a service bureau is tough to comprehend. "Many integrators think systems integration is sophisticated work and service bureau conversion is grunt work," says Solomon. "That perception is not true, but it certainly exists."
For example, many integrators cannot see themselves removing staples from documents and taping frayed corners of documents. But both of these processes are part of converting paper documents. Solomon adds, "Taking thousands of documents out of envelopes is not what integrators dream about."
Integrators, however, do dream about increased sales. Adding conversion services is certainly one way to make that dream a reality.