Using Departmental Systems To Win Mainstream Enterprise Electronic Document Management Accounts
Mainstream customers are more convinced by a small sampling of technology, rather than by a big plan.
Business Solutions, February 1998
Technology systems to convert paper documents to electronic formats that can be stored and retrieved with computers, are becoming less of a leading-edge, and more of a mainstream purchase. This is according to two vendors of software used in these systems, known as electronic document management (EDM) systems. This is good news for VARs and integrators of EDM systems. The mainstream market is traditionally much larger than the leading-edge market.
Not Willing To Wait Two Years For Results
However, selling to mainstream customers means that VARs and integrators need to make adjustments in the way they sell and install EDM systems. "Mainstream customers are less willing than leading-edge buyers to wait two years for results. This is how long an enterprise-wide EDM installation often takes," says Richard E. Hemmerling, v.p., engineering, at the Plexus Division of BancTec. Plexus, headquartered in Sunnyvale, CA, is a software developer that has 150 employees and had revenues of $259 million for 1996.
To better address mainstream customers, Hemmerling suggests VARs focus on one department within a company, install a small-scale EDM system there, and then work on spreading the system throughout the enterprise. "This way the customer starts seeing a return on its investment in six months," says Hemmerling.
Providing Early Feedback For A VAR
A departmental installation also provides valuable feedback to a VAR. "It gives the customer and integrator a chance to see if there are any differences between the customer's expectations and what the EDM system delivers, before a large installation is completed," says Robin Bunting, Plexus' director of business development. "I've seen VARs spend 18 months on EDM installations, only to have the customer turn and say, 'this isn't what I asked for.' You can have all the meetings and talk with all the consultants you want to. Until end users actually have a system in their hands, you don't know if they are going to be comfortable with it."
Pre-Written Applications Facilitate Departmental Installations
Departmental installations are facilitated by software programs designed specifically for an application, such as customer service, accounts payable or human resources. Each of these departments follows similar procedures and has a similar environment, no matter what the company's core business is.
"In all customer service applications, for example, end users have to recall information through a PC, based on an index such as customer name or account number. The applications are typically run on similar computer systems, with customer service representatives operating on a network of PCs," says Hemmerling. "Once a software program is written to work in one customer service environment, with minimal changes it will likely work in another customer service environment."
Enterprise installations, though, are typically unique. "Few enterprises, even if they are in the same industry, use documents in exactly the same way. Also, two enterprise computer infrastructures will rarely be the same," says Hemmerling. "Enterprise EDM systems typically require extensive customized programming. EDM software toolkits are typically used for enterprise-wide systems."
An EDM toolkit is a software program that contains basic conversion, storage and retrieval commands. It must be connected to an end user's computer infrastructure through commands written by an integrator. Toolkits are typically written in computer languages such as VisualBasic or C++, and can be integrated by a programmer who understands these languages.
Vendors Offering Departmental Applications
To help integrators selling to the mainstream market, EDM tool-kit vendors such as Plexus and TMSSequoia (Stillwater, OK) are beginning to offer pre-developed versions of their software for departmental installations. "We are looking at offering programs for departments like human resources, customer service and accounts payable. So, with little programming work, integrators will be able to install a departmental system. Integrators will also be able to license the programs' source-programming codes. With that, they can grow the system by using their programming skills," says Gail Bower, general manager, Advanced Component Technologies at TMSSequoia. TMSSequoia is a software vendor with 85 employees. TMSSequoia's revenues for 1997 were $5.6 million.
Bower adds that to improve cash flow, a VAR can bill a customer for a departmental system as the first phase of an installation. "To do this, there should be a separate requirements sheet and deadlines. When those are met, the bill should be settled. Then a plan for a second phase should be worked out. This second phase could be adding the EDM system to another department. Being able to break down an enterprise-wide installation into several phases prevents an integrator from having to rely on one big payoff to keep its business going," says Bower.