Document-management systems aren't just for large enterprises

What will be the document-management sweet spot in 2007? Savvy solution providers will be looking to mid-sized companies, many of which are targeting this area with the same drive that enterprises have exhibited in the past for electronic documents.

A recent VARBusiness Market Insight Report, which surveyed more than 600 IT managers, ranked the area in the top five spending priorities for mid-market IT buyers through next fall. One-third of the mid-market IT decision makers said document management systems "are high on their priorities list," the survey found.

For many of these IT managers, the push for document-management systems will come from a desire to achieve multiple objectives, including streamlining business processes, building comprehensive backup and recovery systems, and fully addressing regulatory compliance requirements.

In addition to seeking the inherent business advantages of document-management systems, mid-market companies will also be attracted by the growing number of solutions priced for non-enterprise customers. "It used to be that you had to be a General Motors to afford document-management systems. But now vendors are making some of their applications modular so customers can start out with basic systems," says Dave Brownlee of CamCorpUSA, a Lakeland, Mich., solution provider. For example, Xerox's ScanFlowStore provides a first step to electronic document management by converting files into searchable .pdf formats. Other mid-market solutions include Informa Software's ImageQuest mfp and LSSP Corp.'s eDrawer document-management system.

Another incentive will be the continuing decline in hardware costs, especially in multifunction products (MFPs), which offer integrated document capture and output capabilities, as well as internal storage resources for protecting documents until an authorized staff member requests a hard copy.

Adding document-management software and support services to a hardware sale can provide a significant profit boost for solution partners, says Russ Ramski, vice president of business development for Informa Software, Maitland, Fla. Even quick-to-launch electronic archiving software can represent an additional $2,800 in profits after installation, configuration and training fees are factored in. "Suddenly, you turn that 5 to 6 percent margin just for hardware into 27 to 30 percent margin," Ramski says.

Dale Fulkerson says the key to selling document-management solutions to mid-sized businesses is the ability to demonstrate concrete benefits. "Customers define a business need, and then we go in and show them how it can be addressed and where they are going to save money," says the owner of LaserComp, a Livonia, Mich., solution provider. "That's what it's all about."

Fulkerson adds that 80 percent of his business goes to small and mid-sized businesses. The biggest cost saver for document-management users comes from shortening the time it takes staff to find electronic documents compared to paper versions, he says.

Other solution providers are also benefiting for a consulting approach that focuses on finding ways to optimize customer business processes. "Everyone's ears perk up when you say you can improve and automate their business process," says Mario Duckett, vice president of sales for Mackin Imaging Systems, Philadelphia. After studying a client's business, he tells customers, "We're not going to sell you an MFP and have it sit here. We are going to sell you a capture device that's integrated with your host system and backend document-management software.'"