"Paper has always been a part of the enterprise data stream," observes document capture industry analyst Harvey Spencer of East Northport, NY-based Harvey Spencer Associates. "Now, businesses are waking up to the fact that it hasn't gone away, so they had better do something about it."
There is increasing pressure to make paper-based data streams act more like electronically generated data, Spencer notes. "Organizations are at least beginning to realize they can process paper documents more intelligently, and thereby more efficiently," he says. Intelligent document recognition (IDR), intelligent scanning and distributed capture are three ways companies are doing just that.
IDR employs advanced recognition technologies, business rules and data validations to analyze the content and layout of scanned images. In a break with older technologies that were only practical for high volumes of consistent forms, IDR is designed to cope with diversity (and, thus, a broader swath of paper-based data streams).
Early applications for IDR have included invoices, explanation-of-benefit (EOB) forms and other documents with variable layouts and terminology yet consistent data. In a more advanced application, IDR has been used in "digital mailroom" systems that are designed to automate the handling of intermixed document types with variable processing
needs. According to "Document Capture: The North American Market 2003-2006," a report co-authored by Spencer and the research firm Strategy Partners www.strategy-partners.com , the now-small IDR software market for indexing and classification is growing at a triple-digit rate and will reach $35.7 million by 2006.
Whether it's a consistent or variable form or ad hoc correspondence, such as a cover letter or customer complaint letter, digital mailroom applications are designed to classify images by type and then initiate the appropriate workflows. The workflows could involve forms processing, archiving and routing of images through appropriate hierarchies, or simple forwarding of images to an e-mail inbox.
One high-profile digital mailroom application emerged in the wake of the anthrax and ricin scares on Capitol Hill. The technology is now used by the Senate, among other branches of government, in part to ensure the safety of public officials. Even before anthrax, however, many businesses were examining the costs and benefits of digital capture and distribution of mail.
The exact cost of processing incoming mail varies, but it has been estimated to fall somewhere between 35 cents and $1 per piece. Early ROI estimates on digital mailroom solutions show that cost can be reduced to about 18 cents per piece. One study done by Byline Research, on behalf of digital mailroom software vendor Captiva of San Diego, claims that "hard savings include a close to 50-percent savings in labor costs arising from automation of mailroom operations." The savings could quickly add up, particularly in lending, insurance and other environments where mailrooms handle millions of pieces per month.
Whether the document set is narrow, with just a few intermixed document types, or broader, as in a digital mailroom, IDR is designed to eliminate prescan sorting while also automating (to the extent possible) downstream indexing and data validation steps with the help of OCR, ICR, mark sense, MICR and barcode recognition.
A Hardware Approach to Intelligent Capture
In the rarified world of truly high-volume document scanning (10,000 pages per day and higher), users have long turned to exotic, high-volume transports with sorting, imprinting and built-in OCR, MICR and barcode technologies that can gather data at scan time, route documents and images appropriately and initiate automated workflows. More than scanners, these document processing machines have moved downstream in recent years, and at last month's AIIM show there were a slew of new products displayed by IBML, BancTec, Opex and ScanOptics.
Intelligent document processing fits hand-in-glove with digital mailrooms and other high-volume mixed document environments, but some intelligence features are also creeping into the mainstream scanner market. Last year, for example, Fujitsu launched a diminutive desktop product called ScanSnap! that incorporated automatic color document and blank page detection. At this year's AIIM show, the color detection feature turned up in production-level products from both Bell & Howell and Panasonic. Bell & Howell has also pioneered a multifeed detection feature that can tell the difference between envelopes, documents with mailing labels and true misfeeds. And in another example, Canon's latest mid-volume production scanners include built-in OCR that automatically recognizes and rotates images to either landscape or portrait orientation while also generating searchable images.
Driving the trend toward distributed scanning, which can save time and money over conventional centralized workflows, there has been a surge in sales of workgroup scanners and slow-but-steady growth in scanning from networked digital copiers and multifunction machines.
According to Boston-based InfoTrends Research Group www. infotrends-rgi.com , the workgroup document scanner segment (rated at 10 to 20 pages per minute and priced between $500 and $2,000) grew by more than 100 percent last year. These scanners are much more likely to turn up on individual user desktops and in remote locations where they can be used to capture documents that join mission-critical workflows. The classic application scenario is the independent insurance agent who captures policy applications and claims remotely, but then sends the images into a centralized workflow at headquarters. The business saves on shipping costs while also speeding customer service. Most lower-volume scanning relies on manual data entry for classification and indexing, but Spencer predicts that within the next few years, IDR will move downstream, making it even more convenient to capture paper documents from remote sites.
Even more accessible to ordinary office users are the digital copiers and multifunction machines that now so often include scan-to-e-mail capabilities. Taking copier-based scanning one step further, companies including Xerox, Canon partner eCopy and HP partner NSi now offer capture middleware for copiers. This software lets administrators design and deliver sophisticated workflow- and repository-connected scanning applications right on the device without exposing users to complicated menu selections and settings.
The real answer to the paper problem lies in eliminating it altogether, but that dream has proven to be far too elusive. Pragmatic businesses are finally taking charge of the problem by intelligently transforming their documents into more efficient electronic workflows.
IMAGING GETS INTELLIGENT: SIX PRODUCTS THAT FIT THE TREND
AnyDoc for OCR: This is the core product of the Tampa-based company that aims to automate "any document." Modular offerings tackle invoices and EOBs, but the company has branched out into mortgage notes, freight bills and other variable documents with consistent data.
A new QuickApp tool combines full-page OCR, database lookups and business rules to squeeze data entry costs and labor out of paper-dependent business processes. Captiva Digital Mailroom: Demonstrated last year and released commercially in early March, Captiva's Digital Mailroom application combines conventional recognition technologies applied at scan time with categorization technologies from Autonomy to automatically sort intermixed images from mail. San Diego-based Captiva and Warrenton, VA-based Imaging Acceptance Corp. (IAC) are using the technology to process 5,000 to 20,000 pieces per day for the Bush-Cheney '04 campaign.
Dakota Transform DocIT: Columbia, MD-based Dakota has developed this mailroom processing solution for healthcare payers. Automated classification is used to recognize, sort and route images and data to the appropriate workflows, validation steps, content management systems and business applications.
Datacap TaskMaster 6: Rye, NY-based Datacap relies on business rules to classify intermixed documents and then intelligently apply the right workflows and data validation steps. The system works with consistent forms, variable documents (such as invoices) or adhoc correspondence, reducing prescan sorting as well as manual data entry and validation costs.
Kofax Xtrata and Payables: Intelligent document recognition technology is used in the just-released Xtrata product to automatically recognize and classify intermixed documents by type and then build more flexible indexing and data collection rules that don't rely on rigid templates. Irvine, CA-based Kofax also offers an Ascent for Payables solution that automates invoice processing.
ReadSoft Documents: Another do-it-all document processing platform, but this one will incorporate ReadSoft's widely used (300-plus-customer) Invoices application as well as a planned mailroom application. The platform and mailroom application are set to debut this fall
Three years ago, the idea of enterprise content management (ECM) was born, bringing together what had been separate silos of information management technologies. The idea of deploying a unified platform to handle all content applications across the enterprise has taken root, yet only a small fraction of content in the enterprise has come under ECM control.
With management capabilities moving mainstream, organizations will have new options for sharing content in a secure and controlled way. Processes, meanwhile, have come to the fore as the place where businesses will drive efficiencies. And whereever paper documents remain an intractable part of process data streams, businesses are looking for more intelligent ways to automate with document imaging.
MANAGEMENT GOES MAINSTREAM
After years of evolution, the systems used to manage documents, images, reports, Web content and other forms of unstructured information have steadily moved from isolated, point solutions toward pervasive infrastructure. The technology has also been democratized, moving downstream from the largest organizations and most acute, content-related business problems to small and midsized organizations and broader, day-to-day use among ordinary office workers within the enterprise.
Forecasts from IDC call for the worldwide enterprise content management (ECM) market to grow at a double-digit pace from $2.7 billion in 2003 to $3.8 billion by 2007. While this total is relatively small by IT standards, the fast growth rate and strategic role of content has caught the eye of technology giants Microsoft and Oracle. IBM is already the top vendor in the ECM market (claiming 20 percent market share in one recent report), and its Lotus messaging and collaboration lineup has deepened into core ECM areas including Web content management.
Oracle currently offers basic document and collaborative content management capabilities through its Internet File System and Collaboration Suite, but by all accounts the company is poised to deliver more robust and far-reaching capabilities. Oracle, which posted nearly $9.5 billion in revenue in 2003, was among the suitors last year when Documentum, a $230 million leader in the content management market, went looking for a big-league partner. Storage giant EMC prevailed in that bidding, so it is now unclear whether Oracle will expand from its current capabilities organically or through acquisitions.
Microsoft, for its part, has been steadily adding collaboration and content management capabilities while also growing its SharePoint Portal and Web Content Management offerings. Basic team collaboration and library services (document check-in/check-out and version control) are offered though Windows SharePoint Services, which is bundled with Windows Server 2003 read our SharePoint review on page 10 .
"Windows SharePoint Services is coming up in a lot of our client calls as both an option that people are using and a pain for IT to deal with," says Andrew Warzecha, senior vice president and director of technology research services at Meta Group. "IT officers are trying to lock it down as something they can control, and ECM vendors are determining whether to fight it or partner."
The ECM movement was as much a response to competitive threats from the likes of Microsoft as it was an effort to consolidate and reinforce what had been isolated silos of information management. By combining control over documents, reports, records, processes, Web content and digital assets (photos, graphics, video and other rich media) under the banner of ECM, the leading vendors have created broader, more capable platforms that can, in theory, easily address any content-centric application within the enterprise see "Context" on page 7 .
ECM vendors have also put some distance between themselves and mainstream threats. Oracle Collaboration Suite and Windows SharePoint Services both offer a foundation for Web-based collaboration and electronic content management, but they either don't or only begin to address the more specialized imaging, report management, records management, Web content management, automation, integration and content delivery capabilities that many organizations need to support complex business processes and content-rich applications. The gap might narrow, as Microsoft is already pointing to process integration and granular XML content control in Longhorn, the code name for its next-generation operating system due out in 2005.
The 'New Order' in Content
The ECM vendor community has consolidated and reinvented itself in the last three years, but one clear sign of the more transformative changes ahead was EMC's acquisition of Documentum. (Documentum is now estimated to be the fourth largest ECM vendor [in total revenue] after IBM, Open Text and FileNet).
"The new order will see [IBM, Oracle and Microsoft offering] library services and workflow on the network," Documentum president Dave DeWalt told Transform at the recent AIIM show. "Microsoft Longhorn is going to bring disruptive change to the ECM market... [and] Oracle is going to point to SQL as its standard for ECM."
DeWalt said EMC and Documentum, too, will bring disruptive change by introducing "innovative combinations of content management and storage" and by moving "upstream and downstream" to exploit new content applications. Looking upstream, DeWalt mentioned a benchmarking and scalability methodology the company has introduced with hopes of moving currently mainframe-based content applications to standards-based Unix and Windows environments "at a fraction of the cost" with content management as a backbone.
Value Add or Check Boxes?
In the wake of all the recent vendor consolidation, some now muse that the ECM feature-and-function arms race is all but over. But Brett MacIntyre, vice president of IBM's Enterprise Content Management Software Group disagrees. "Not everyone has checked all the boxes," MacIntyre said, citing digital rights management (for intellectual property control) as one area few ECM vendors (other than IBM and Documentum) have exploited.
MacIntrye said the next stage will be about gaining value from ECM platforms by building out more applications and innovative solutions. "ECM is just beginning to grow," he remarked. "IBM has 11,000 customers on the content side, but our [DB2] database has more than 400,000 customers. If you just look at banking, we have a few hundred unstructured content applications, but we have 6,000 structured data applications for that industry."
When it comes to core ECM functionality such as document management (both image and text readable), workflow, report management and Web content management, there are now at least a dozen vendors that can claim to do it all. Nonetheless, Bill Forquer, executive vice president of marketing at Open Text, warns prospective buyers to look beyond the lists of functionality. "Are those check-box features and functions integrated and interoperable?" he asks. "There's a big difference between checking a box and providing a seamless user experience."
In the wake of its acquisitions of ECM vendors Gauss and, more recently, Ixos, Open Text faces its own integration issues, and at AIIM the company announced plans for new e-mail management, archiving and Web content management products combining selected technologies from all three companies. Those products won't be ready until fall, but in the meantime, Open Text says its acquisitions have made it the largest pure-play ECM vendor (second only to IBM in the market). In a market rife with consolidation, they're saying bigger is better.
How far will it all go? Content management guru Frank Gilbane says IBM, Oracle and Microsoft will never be big enough to serve the needs of the entire market. "I think there will still be plenty of room for new players to emerge from below and from the sides, but there will be more consolidation."
MANAGEMENT GOES MAINSTREAM: FIVE PRODUCTS THAT FIT THE TREND
IBM Lotus Workplace: Messaging and Team Collaboration versions expose e-mail, instant messaging, team collaboration and Web conferencing capabilities that can be mixed, matched, customized and delivered through WebSphere portals or thin-clients built on the Eclipse open standard. Collaborative Learning and Web Content Management editions add richer e-learning, knowledge management and Web content management capabilities. A robust Workplace document management/compound document management offering is expected within weeks.
Microsoft Windows Sharepoint Services: Combines team collaboration, document libraries and services (check-in/check-out and version control), search, alerts, threaded discussions, Web-based polling and Microsoft Office integration (including FrontPage and InfoPath). Operates on Microsoft Windows Server 2003 and can support and enhance team collaboration and management capabilities delivered through SharePoint Portals and sites managed by Microsoft Content Management Server.
Oracle Collaboration Suite: Offers integrated file sharing with library services and role-based security control, e-mail, voicemail, calendar, search and Web conferencing with access from Microsoft Outlook, Web browsers and wireless devices. The suite is built on Oracle's 10g database, which gives it scalability. Users gain single sign-on through a unified interface.
Xerox Docushare: This ECM system is affordable yet scalable on leading databases. Combines Web-based document/content management with support for imaging, basic report management and collaboration. Workflow is optional, and a records management option is set for Q3 release. DocuShare runs on multiple platforms, is used by more than 3,000 organizations and is gaining attention among larger organizations.
Xythos Webfile Server: Web-based file system offering collaborative file sharing with search, library services including check-in/check-out and version control, and integration with desktop authoring tools via WebDAV. The system also controls e-mail, and options include workflow and records management.
PROCESS GETS PERVASIVE
The holy grail of the perfect process ? the ability to handle business processes efficiently and flexibly, with continuous monitoring and improvement ? has become a coveted ideal in the world of business computing. Striving toward that goal, a mix of old and new tools are available. But whether they're workflow components or more far-reaching business process management (BPM) systems, process automation technologies are becoming a more pervasive part of enterprise-level platforms and applications.
Among more than 1,800 business leaders and IT executives surveyed in a recent worldwide study, the more than 500 U.S. respondents ranked process automation technologies (including workflow and business process management) as the top technology needed to support their key projects. In that same study, "Back to Basics: The Search for Efficiency and Compliance," just published by AIIM International, the Silver Spring, MD-based trade association, all respondents cited "improving efficiency" as their top business driver and interest in ECM technologies. This paves the way for even more extensive use of process automation technologies.
Given the user community's interest in improving efficiency, it's not surprising that it's now a rare document or enterprise content management system that doesn't include process technologies. Among the latest to join the party have been IMR, which now embeds the Microsoft-centric TeamPlate workflow system from Captaris, and Xythos and Hummingbird, which are using J2EE-compliant technology from Dralasoft.
Some ECM vendors have brought process to the forefront, making it not just another tool that can compliment content applications, but a strategic enabler that can improve any application. FileNet, for example, plans to weave process automation into its just-released compliance and collaboration offerings. By applying the technology to collaboration, for example, a company could automate the steps of creating a team space, assigning user and group privileges, populating the space with content and initiating other start-up tasks.
Pure-play business process management system (BPMS) vendors have already applied process automation to the challenges of compliance. Fuego's Supervisory Control Application, for example, is designed to automate and enforce control processes required for issues such as Sarbanes-Oxley compliance. Audit trails can be applied to the rules followed, decisions made and content related to those processes. Similarly, Handysoft's SOXA Accelerator combines process control with collaboration and content management tools from Plumtree.
In some cases, process is wholly independent from content. BPMS vendors including Staffware are aiming to build and manage processes whether they involve content or not. "Workflow technology is content centric, and most content is designed for human consumption," says Kuljit Bawa, CEO of New York-based Staffware Corp., the U.S. unit of the Maidenhead, U.K.-based company. "If a company is striving to improve the efficiency of a business process, it may well need to work around or eliminate content from that process because it suggests there's a slow, manual work step involved."
Workflow has been around for decades, but the latest wrinkle is the idea of embedded workflow as middleware service. The advent of Web services and the ability for more applications to call and consume Web services automatically is making it possible for embedded workflow to be dropped into existing applications. "The challenge a lot of ISVs are facing is that their customers are saying they need workflow," says Brent Stankowski, president of the TeamPlate group at Captaris. "The ISVs have to quickly create static workflows or embed more flexible workflows to meet that need."
Charlie Plesums, principal consultant at Computer Sciences Corp. in Austin, TX, contends embedded workflow "is fine until you have to do something outside your current application. To be really useful, workflow has to be extensible enough to trigger workflows in other applications as necessary, he maintains.
Why is the whole area of process automation generating so much attention lately? "For the last several years you couldn't talk about replacing a worn-out anything," Plesums says. "Now with the economy improving and newer, cleaner BPM tools available, there's an opportunity to say 'we ought to be able to do this better. It's time to get new tools that handle processes.'"
FOUR PRODUCTS THAT FIT THE TREND
Captaris TeamPlate: Built on the .Net framework, TeamPlate offers workflow as an encapsulated Web service that can be called by Office and Java applications. Bellevue, WA-based Captaris www.captaris.com offers a complete TeamPlate development environment.
Dralasoft Workflow Engine: Built on Java, this platform from Westminister, CO-based Dralasoft www.dralasoft.com is built on a relational database and supports XML for data exchange. An API lets users build and enable applications such as order processing, CRM and e-commerce.
FileNet P8: This Costa Mesa, CA-based ECM vendor has had workflow features for many years. In 2003, FileNet www.filenet.com launched the P8 Platform, which features a new Business Process Manager component that provides workflow, process modeling, simulation and analytics.
EiStream: This Dallas-based company announced in February that it had acquired the business process management software, professional services and technical support team of Identitech. Through the acquisition, EiStream hopes to expand its BPM presence in the finance, insurance and government sectors. The company is also reselling FYI Visual, the business process monitoring technology that Identitech retained.
IMAGING GAINS INTELLIGENCE
The legacy of document imaging has been as a back-office application, typically run to improve specific lines of business, such as insurance claims, tax form processing or document storage and retrieval related to customer service. Documents have always been a seemingly intractable part of many other business processes, but now, options are emerging to streamline a broader swath of paper-dependent business processes in an efficient, affordable way.
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