Capture SMB Content Management Dollars
SMBs will account for the majority of content management spending in 2006. Do you know all you need to successfully sell to this audience?
In case you haven't figured it out for yourself already, SMBs are the new hot market for IT products and services, particularly ECM (enterprise content management) solutions. According to Forrester Research, purchase plans for content management technologies increased 15% from last year as firms of all sizes adopt strategies for managing documents, Web content, and digital assets. A recent survey by AIIM shows that a large portion of this growth can be attributed to the SMB community. The survey asked businesses with 100 to 1,000 employees to divulge their ECM purchase plans for 2005. Seventy-four percent of these businesses said they would spend at least $10,000 on ECM technologies throughout the year, and 50% said they would spend more than $25,000.
There are several reasons for the demand for ECM technologies among the SMB community. First, businesses of all sizes have been affected by recent government-imposed regulatory requirements such as Sarbanes-Oxley and HIPAA (Health Insurance Portability and Accountability Act). These acts require public and private companies to establish and maintain document retention policies to prove they are operating in an honest manner. Failure to comply with these regulations can result in hefty financial penalties.
Second, the reduced cost of document scanners and storage combined with greater ease of use through improved Web functionality and GUIs (graphical user interfaces) have made ECM solutions an affordable and appealing way for SMBs to optimize internal business efficiencies. "ECM solutions used to be designated for larger enterprises with high-volume, paper-intensive applications," says Bill Rynkowski Jr., CEO of BlueChip Technologies. "This is no longer the case. The recent affordability of hardware and software components makes ECM solutions a strategic possibility for all businesses, and SMBs are quickly taking advantage of the technology." As content management becomes a mainstream application, the future success of ECM VARs will depend on their ability to sell to and service SMBs. The following tips will ensure you are well prepared to address this market.
SMBs Deploy ECM Incrementally
An SMB's objectives in implementing an ECM solution are essentially the same as that of a large enterprise — reduce expenses, improve margins, increase efficiencies, shift costs to growth-oriented initiatives, and comply with changing government regulations. However, there is a major difference in the way SMBs and large enterprises deploy ECM solutions.
"Large enterprises have the resources to deploy ECM as an infrastructure," says Colby Weaver, VP of channel sales for Questys Solutions. "These companies tend to encompass as many as 7 to 10 business issues in an initial deployment, which adds to the cost and implementation time of the solution. SMBs, on the other hand, usually look to deploy ECM technology on a much smaller level. These organizations typically want to address only one specific pain point, such as streamlining invoice retrieval in the accounts payable department for customer service purposes."
Once ECM helps solve an initial problem and ROI is realized, most SMBs will look to expand the solution incrementally throughout their organization. One of the main reasons SMBs take this approach is they do not have the IT resources necessary to support a prolonged ECM infrastructure implementation. While an enterprise application may be developed over the course of several months under the direction of consultants, most SMBs expect each departmental ECM implementation to be up and running in a matter of days.
SMBs Seek Comprehensive ECM Software
Another reason SMBs take an incremental approach to ECM implementations is that they have smaller budgets. These budgetary limitations make the affordability and standard functionality of an ECM software package the primary deciding factor for an SMB. Most SMBs expect to implement an initial ECM system — including software, hardware, and professional services — for somewhere between $10,000 and $60,000. Furthermore, SMBs expect more for their money than most large enterprises.
"Where a larger enterprise would traditionally pay for add-on features such as retention scheduling, revision control, and audit control, SMBs expect this functionality to come standard in their ECM software solutions," says Weaver. "An SMB doesn't want to have to worry about what additional features they may need. They want the product to be all-encompassing, and they want it to have the capability to handle more than just paper documents."
To attract more SMB business, the ECM software solution you resell should also be largely user-maintainable. "Wizard-driven ECM software is particularly appealing to the SMB community," says Laurie Shufeldt, VP of business development for FileVision. "Wizard functionality provides employees with the proper prompts so that they can perform functions like adding users or data fields to the system themselves. To foster user adoption, the product should also have an interface that mimics an environment that employees are familiar with."
While adding users, data fields, and feature sets to an ECM solution used to be a VAR function that produced service revenue, reselling a software package that allows customers to perform these tasks themselves is a sacrifice you'll have to make in order to compete for and win more SMB business. Plus, opportunities for professional service revenue will still be plentiful by taking this approach. For example, VARs can earn consultation revenues by analyzing the processes of a new department that an SMB wants to add to the solution. Furthermore, you can earn recurring revenues by providing system training or selling complementary technologies such as operating system or scanning hardware upgrades.
Focus On Business Processes, C-Level Benefits
Many vendors have developed ECM software packages especially for specific vertical markets (e.g. healthcare, legal, banking) in an effort to attract SMBs in certain lines of business. However, you may be limiting your SMB opportunities if you go the vertical route. "VARs should focus on business processes and not necessarily vertical markets," says Paul Lord, president and CEO of Westbrook Technologies. "Most SMBs, regardless of vertical, begin by implementing ECM to streamline a specific process, such as accounts payable, credentialing, or human resources. These processes are common to all businesses. By becoming an expert in the process, you can gain a foothold in a variety of different industries instead of specializing in just one."
In addition to becoming an expert in the common business processes, VARs should also focus on simplifying the technology for their SMB customers. "An SMB shouldn't have to worry about the inherent differences between document imaging and document management, and they really don't care if auto-indexing will allow them to locate a document 5 minutes faster," says Greg Schloemer, president of DocuWare. "VARs should focus on how ECM can provide an SMB with C-level benefits, such as bottom-line improvements, competitive advantages, and enhanced internal services."
As with any implementation, the key to success is asking the SMB the right questions. Effective introductory questions include: What types of content do you plan to store? How often will you need to retrieve this content? What criteria do your employees use to search for content? What processes does this content affect? And what different departments does this content touch? Once these questions are answered, actually sit down with an employee responsible for the process ECM is intended to streamline, not a supervisor or executive, and observe their daily routine. This will ensure you catch any steps that they may have overlooked in their verbal responses. By following this practice, you will have a good foundation on which to build a solution that effectively addresses their specific needs.