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On-Demand ECM: Strengthen Bottom Line Results Through Recurring Revenue

10 Jan, 2006 By: HK Bain imageSource

On-Demand ECM: Strengthen Bottom Line Results Through Recurring Revenue

The paperless office is as
threatening to printer and copier dealers as hybrid cars are to oil companies.
We were all relieved that this vision of a paperless office never came to pass
and, frankly, it’s highly unlikely that it ever will.

People love their paper and seldom work as effectively without it. Good news
when you’re in the business of selling printers and copiers, but bad news for
your customers who have to manage all this paper.

Managing corporate information, both paper and electronic files, is more than an
everyday headache for office workers, it’s a major problem. The Delphi Group, a
technology market analyst firm, conducted a survey of 300 IT and line of
business managers showing that:

• 68 percent feel that finding corporate information is difficult and

• 62 percent express dissatisfaction or extreme dissatisfaction with their
corporate retrieval environments.

This inefficient management and retrieval of corporate information translates
directly into decreased productivity and profit generation and an increase in
overhead. Chances are precious few of your customers carry the title of “expert
filing manager,” leaving the door wide open for technology to streamline and
simplify this process, especially if it can create a near immediate ROI.

Why the advent of on-demand ECM
changes everything

Over the past five years, companies have increasingly realized that electronic
content management (ECM) is an excellent solution for managing corporate
information. ECM enables businesses to more effectively and securely manage,
retrieve and store corporate information of any kind, including invoices, school
transcripts, medical records, and CAD files.

To date, however, the cost of ECM systems has been prohibitive, reserving this
technology for only large corporations and occasionally an operational luxury
for small to medium-size businesses.

The advent of on-demand ECM, a hosted or online ECM solution that businesses can
“rent” service from instead of implementing an in-house system, is changing
everything. It not only brings the cost of enjoying the benefits of ECM down
considerably for businesses of any size, but also creates a vehicle for
generating recurring revenue for resellers—providing profit margins that can far
exceed the existing maintenance, supply and toner revenue you depend on month
after month.

Customers become subscribers to a service that generates consistent monthly
revenue for the reseller. This subscription model is exponential in nature
because as the customer base builds, so does the monthly billing. A one-time
sale continues to pay you over the entire life of the customer.

Like maintenance, supplies and toner, your top line revenue doesn’t start at
zero every month or year. It starts where your billing ended last month,
eliminating the chore of constantly finding new customers for next month’s
revenue target.

Offering customers the option to outsource ECM also significantly reduces the
time, effort and energy involved in the sales cycle, even if they ultimately
decide on an in-house solution. The rental fee paid by the customer is a tax
deductible business expense, which means that, depending on their corporate tax
rate, the government will essentially pay for up to 40 percent of their systems
in the form of write-offs.

The reduced cost of ECM that is brought about by the on-demand model means that
literally any business in need of enterprise printers and copiers can achieve
near immediate ROI and your business will gain recurring revenue streams. By
completely flipping the paradigm that has to date surrounded ECM, it moves from
a luxury convenience to an essential element of any well-managed business.

Case in point: Reliable Automotive

Although your middle market client may not have the same deep pockets as their
larger competitors, chances they’re as motivated as ever to get control over
their paper and electronic corporate information. Often times, they merely need
a brief introduction to the implications of ECM on their organization and bottom
line to bring about a sale.

Reliable Automotive, a wholesale distributor of automotive parts and supplies,
manages paper-based data for thousands of customers, distributors and automobile

By implementing a Digitech Systems ECM solution, Reliable Automotive was able to
access up-to-date pricing sheets and discounting schedules from any office. The
new system has streamlined its customer service and order fulfillment processes
by placing account data at the fingertips of dealers, which has eliminated
confusion regarding order histories and pricing.

In addition, Reliable Automotive’s instant access to its customer data has
created a competitive advantage for them in the marketplace, improved customer
service, and proven that ECM is shifting from a technology sale to an economic

“The ease of use and open architecture of this ECM solution gives us the
flexibility to address the immediate and future needs of our customers,” said
Matt Neuerburg, president of Select Imaging, the reseller that executed Reliable
Automotive’s ECM program. “The products were easy to deploy and have resulted in
real savings of time and money.”

Reliable Automotive’s implementation has also shortened the training cycle for
its new employees. In fact, the training cycle is so drastically shortened with
Digitech’s ECM solutions that another customer, Randolph-Brooks Federal Credit
Union in Texas, was able to train its branch managers in less than a day and
trained remaining employees simply via a memo.

Eliminating the hurdles of ECM

Historically, ECM solutions have been expensive, hard to use, and mired in
proprietary complexity. Worst of all, they were stand-alone and unable to
integrate with the myriad of software applications and unique business processes
employed by organizations from multiple markets.

But some providers are now embracing a far more open architecture design and
application interface support, which results in the power to integrate being
simplified to the point that the customers can do it themselves using simple
point and click technology. This increased ease of use and implementation
further reduces selling time and increases top line growth.

Never before has the ECM industry had such an impressive and revenue generating
economic model available to resellers. Regardless of whether you choose to host
the solution yourself or resell from an existing on-demand ECM supplier, this is
the pot of gold at the end of the rainbow.

Reseller Tips

Interested in becoming an ECM reseller? Consider the following:

• Look for products that are easy to implement, thus making them easy to sell,
requiring a significantly shorter sales cycle.

• Inquire about retaining professional services revenue.

• Request technical support, training and complimentary full updates.

Hk Bain is the president and CEO of Digitech Systems, Inc., a provider of
document and content capturing and management products. For more information,
email info@digitechsystems.com, call 866.374.3569, or visit

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