What Sets You Apart?
To differentiate themselves in a mature market, VARs must address legacy data and current document management while planning for future regulatory requirements and growth.
How do you compete in a mature imaging market? According to Dan Elam, VP and founder of document and content management consultant eVisory (Richmond, VA), the most common mistake resellers make is failing to differentiate themselves from the competition. "Many people walk away from opportunities they can reasonably win, but they forget to position themselves against the competition. End users have a hard time understanding the differences in document management solutions, and VARs who emphasize the distinctions between themselves and competitors by offering solutions to problems are the most successful." To do that, VARs have to prepare a proposal that meets a requested requirement while setting themselves apart by displaying an understanding of the entire business process, including what the customer did in the past and what they will need to do in the future. Imaging VARs can drive more sales by complementing archive and retrieval solutions with specialized expertise.
Let Customers Keep Their Microfilm
For many VARs, the sales pitch for document imaging was (and in many cases still is) as a replacement for microfilm. "For 12 or 15 years there have been people in the industry who have said microfilm is dead, but there's still a lot of it in today's world," says Alex Brunner, founder and chairman of VersaImage Software Corp. (Howell, MI). "If a customer has both digital and microfilm, it's more profitable for a VAR to be able to meet both needs in a single solution. Many resellers don't have anyone in their employ who understands microfilm, so they walk right by opportunities where microfilm knowledge is required."
While it's true that I speak to many VARs who dismiss microfilm, I also speak to a fair number who have held on to their micrographic roots. In recent months, I have spoken to several imaging VARs in the $10 million range that realize nearly 50% of their revenue from microfilm. Most resellers admit they aren't seeing double-digit growth in micrographics, but it is a customer service differentiator. If I am the buyer at a hospital that has been microfilming documents for 40 years or a county courthouse that has records dating back for generations, do I really want to abandon that investment? Am I going to retrieve those files often enough to justify the cost of a full-scale conversion to digital? The cost, length of project implementation, and complexity of going purely digital may be too much for an organization to adapt to immediately. VARs are finding success with hybrid solutions, especially those that provide automated retrieval so seamless that end users don't even realize the image is coming from film. Being able to scan or e-mail microfilm images is also important to many customers.
Microfilm also appears to have a future. Imaging giants like Canon U.S.A. and Eastman Kodak still dedicate significant resources to microfilm solutions, particularly hybrid products that bridge digital and analog media. Having a microfilm repository is appropriate to current trends in both corporate and government environments to document and back up everything. It has even been touted as a component of a disaster recovery strategy. To that end, many organizations have opted to supplement a document imaging initiative with an off-site microfilm backup to protect against viruses, hardware failure, or technology obsolescence. "Microfilm has a long-term future for backup," says Brunner. "With a life span as long as 500 years, it offers a universal media that will always be human-readable."
Increase Vertical Sales With Regulatory Consulting
"What's driving document management today are compliance and regulatory issues," says Dan Lucarini, VP of marketing at IMR, Inc. (Denver). "Legislation like the Sarbanes-Oxley Act has put document management on the radar screen of every publicly held company. VARs used to have to sell customers on the ROI of a solution. Now there is a push down from the top to implement document management." The Sarbanes-Oxley Act, HIPAA (Health Insurance Portability and Accountability Act) legislation, and the Check Truncation Act are in the forefront right now, but there are plenty of other regulations in finance, healthcare, and pharmaceuticals. Corporations feel significant pressure to comply with these confusing regulations, and developing an expertise in these areas is another way to stand out as more than a product provider. Many document management vendors offer white papers and other educational resources to help VARs begin building a knowledge base in regulatory compliance.
Combining expertise in regulatory requirements and vertical market issues can help VARs identify and claim untapped niche markets. "We've seen a focus on market segment specialists," says David Ferretti, director of sales for Xerox' DocuShare Business Unit (Rochester, NY). "For example, one of our resellers also represents a high-end product with a typical 18-month sales cycle. Needing something to fill the gaps between those sales, he focused on an untapped middle tier need for solutions addressing the Food and Drug Administration 21 CFR [Code of Federal Regulations] in pharmaceutical applications. Another is gaining steam by focusing on needs that are specific to small, independently owned accounting firms."
Aside from the regulations themselves, VARs can build their reputations by developing solutions that address technology challenges in compliance, such as capturing IMs (instant messages) or e-mail. They should be able to advise customers about which items need to be saved, how to eliminate non-essential correspondence that could overload the system, and how to ensure future accessibility in the event of an audit. "Many companies have been using Exchange as a poor man's document management," comments Lucarini. "Now the law requires that these documents be stored and accessible, and customers need help understanding these requirements."
Have Your Road Map Close By
VARs have always had a vested interest in the incremental sales opportunities surrounding document imaging installations, and end users are starting to see the value as well. In an economy where IT spending is tight and phased implementations are more common than enterprise-wide ones, buyers are looking at the long-term impact of a technology purchase. "It's becoming much more common that the CIO has to sign off at a buying level before a document management deal can be closed," says Ferretti. "CIOs are pulling back and aren't going to fund independent growth of 15 disparate systems. Many companies are isolating the core functionality or platform for all users and then allowing specialization in individual project groups." VARs who can draw a picture of the immediate benefits of a point solution and its potential for future interoperability demonstrate a commitment to customer satisfaction that their competitors don't.
"I've seen relatively small resellers who understand differentiation and who focus on solutions come in and win against giants like FileNET," comments Elam. "Some resellers won't even respond to an RFP [request for proposal] if they're not in there early, but that's an ineffective sales strategy. Setting your company apart from the competition is what closes deals."