Document Capture in a Down Economy

Because of the mixed effect of general economic conditions here in the USA many economists and industry analysts have opined that IT spending will continue at a flat rate through 2008, although the majority of IT spending that does occur will be heavily focused on ROI in addition to technologies that address and promote knowledge-worker efficiency.  We see this as a grand opportunity for the document capture, workflow and the document management markets.  As companies continue to focus on reducing costs and invoking parallel cost avoidance measures, so are vendors looking to provide solutions to help companies achieve these goals.  InfoTrends has observed an important trend unfolding in our market and it has to do with the growing interest and activity around the optimization of MFP fleets and the initiation of workflow improvements to increase work efficiency and reduce costs.

 

In our on-going research in this area, we continue to measure companies’ document related output spend and that in  many cases we have observed SMB and enterprise class businesses spending upwards of 6% of their annual overall revenues on document output related activities! InfoTrends believes the first step toward the realization of cost savings can most easily be achieved through managing output spending more effectively via fleet management – Sharing MFP devices and eliminating from the fleet inefficient devices that are costly.  The next step in reducing unnecessary print output and also improving efficiencies is through capture, workflow and document management initiatives.  Interestingly enough, when C-Level executives first experience the savings from both of these initiatives, they are much more inclined than not to act upon these reasons than any other.  In a recent Multi-client study entitled,” Document Assessments and Cost Optimization” InfoTrends found that, on the average, companies that have performed document assessments have saved 15% to 20% on output related costs. Furthermore, 90% of these very same organizations implement strategies and tactics to continuously improve document workflow across the enterprise in their drive toward operational efficiency. When asked “What types of software solutions has your company incorporated in your organization due to implementing document assessment and workflow services?” – The top 2 solutions mentioned were document management/electronic storage and scanning/capture technologies.

Jon K. Reardon - Group Director, InfoTrends

Comments

[Stephen Boals]

It is so interesting, as MFPs have evolved, and the scan quality has improved, it now makes financial sense to leverage these assets on the scanning front. The cost savings not only extends to output costs, but also to overall cost of ownership of the scanning device. Take for example, the new Konica-Minolta MFP line, where even the entry level device scans at 70 ppm. When you look at the cost of a 70 ppm scanner, and its single function, it is usually more expensive to buy the dedicated scanner. So on the purchase side, you can immediatley save. The real savings comes on the back-end, via maintenance costs. Take a 70 ppm Fujitsu for example. The annual maintenance can run as high at $1595 for the first year. In the MFP space, the market does not yet allow for a per scan charge at the copier, so you get your scanning maintenance for "free", just paying a minimum for copies and prints. Dedicated scanners obviously have their place, but I agree, the MFP is a great investment for the majority of organizational scanning needs.

Some other insights at

http://scanguru.blogspot.com

and

http://www.scanguru.com

[Ralph Gammon]

High-quality 70 ppm dedicated document scanners now list for less than $10,000. Are MFPs now competitive with that type of pricing?

[Omri Duek]

Interesting synthesis, Jon!

Prospective document imaging customers (and vendors) should also consider the total cost of ownership (TCO) impact given the Economic Stimulus Act of 2008.

(Technicals can be found @ http://waysandmeans.house.gov/media/pdf/110/hr5140/Technical%20Explanation%20of%20HR5140.pdf)

At a high level, there are substantial savings to be had thanks to the underreported "business" benefits, which are estimated at a compelling $50B in near-term tax savings. Of course, there are certain stipulations -- equipment must be purchased and placed in 2008, only tangible property and "off-the-shelf" software (legal definition) qualify, etc.

InfoTrends has been digging into this issue more thoroughly and is planning to shortly release a report discussing the effects of these business stimuli across our practice areas.

[Stephen Boals]

You can now get color MFPs, scanning at 70 ppm for under 10K. The Konica BizHub line is an example.

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