CaptureRoi_2007

Industry Watch

Scanning and Capture Technologies 2007Process Integration and ROI Enhancement

AIIM Industry Watch SurveyPrepared by: John F. Mancini, President, AIIM

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Industry Watch

ABOUT AIIM – The Enterprise Content Management Association

AIIM—www.aiim.org

AIIM is the international authority on Enterprise Content Management (ECM), the technologies used to capture, manage, store, preserve, and deliver content and documents related to organizational processes. ECM tools and technologies provide solutions to help users with the four C’s of business: Continuity, Collaboration, Compliance, and Costs.

For over 60 years, AIIM has been the leading non-profi t organization focused on helping users understand the challenges associated with managing documents, content, records, and business processes. Today, AIIM is international in scope, independent, implementation-focused, and, as the representative of the entire ECM industry - including users, suppliers, and the channel - acts as the industry’s intermediary.

As a neutral and unbiased source of information, AIIM serves the needs of its members and the industry by providing educational opportunities, professional development, reference and knowledge resources, networking events, and industry advocacy.

AIIM provides:

Market Education - AIIM provides unbiased information through its ECM Solutions Seminars (held throughout the U.S. and Canada); the Managing Information and Documents Road Show (held throughout the UK); InfoIreland (held in Dublin); AIIM Webinars; AIIM E-DOC Magazine and our online Solution Centers for fi nancial services, healthcare, and state & local government.

Professional Development – AIIM’s industry education road map offers business and government professionals a variety of training opportunities. Our ECM & ERM Certifi cate Programs provide instruction on the Why?, What?, and How? of Enterprise Content Management and Electronic Records Management via Web-based and/or classroom courses.

Peer Networking - Through chapters, networking groups, programs, partnerships, and the Web, AIIM creates opportunities that allow, users, suppliers, consultants, and the channel to engage and connect with one another.

Industry Advocacy - As an ANSI (American National Standards Institute) accredited standards development organization, AIIM acts as the voice of the ECM industry in key standards organizations, with the media, and with government decision-makers. Our Industry Watch research reports provide intelligent information about user trends and perceptions.

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THE AUTHOR

John Mancini has been President of AIIM since May 1996. Working together with the AIIM Board, staff, and thousands of volunteers around the world, his goal is to help AIIM connect the users and suppliers of enterprise content management (ECM) technologies and services. Prior to joining AIIM, John spent 11 years in various positions at the American Electronics Association in Washington, D.C., most recently as Executive Vice President and Chief Operating Offi cer. John holds a Bachelor’s degree from the College of William and Mary and a Master’s degree from Princeton University.

John comments frequently on industry trends and statistics through his blog, which can be found at www.aiim.typepad.com. (Note: Free e-mail subscriptions are also available at the same URL.)


Industry Watch

About This ReportThis document was created through the collaborative efforts of readers of the AIIM Industry Watch blog (www.aiim.typepad.com). This was the fi rst time we have used a wiki to create this report. AIIM (www.aiim.org) gratefully acknowledges the contributions of the following individuals who contributed to this report, who are listed in order of their registration on the wiki. Of course, fi nal responsibility for the contents of this report rests with AIIM.

Name Organization John Mancini AIIMHarold C. Heard Jr. CitigroupLawrence Wischerth TIAA-CREFTK Train Gambro BCTJesse Wilkins J Wilkins & AssociatesJohan Rambags UCAD Corey Smith Fisher’s Document Systems Leon van Oosterom van Buuren DMSMichele Melichar Lockheed Martin Daniel Feurstein Adpunctum Europe Ltd.Joe Kelly Unisys Corporation

Upcoming AIIM reports will also seek to be more collaborative in nature and leverage the knowledge of those whom we serve. For past AIIM Industry Watch reports, go to www.aiim.org/industrywatch . The next report that AIIM will publish will be our multi-country “State of the Industry” report, which will be released at the AIIM OnDemand Conference and Expo in mid-April.


Industry Watch

Survey DemographicsThe survey was administered in January 2007 using an on-line survey instrument. The sample was drawn from those in AIIM’s extended database (70,000+ names), but was not limited to AIIM members. The survey sample includes a higher percentage of large organizations than is typical in the overall business community. In most AIIM Industry Watch surveys, typically half the sample consists of large organizations, with the rest split between mid-sized and small organizations.

Approximately how many employees are there in your ORGANIZATION as a whole?

1-100 240 23%

101-1,000 271 26%

over 1,000 542 51%

Total 1053 100%

In which industry sector does your organization operate?

Banking & Finance 131 12%

Insurance 81 8%

Chemicals & Pharmaceuticals 26 2%

Construction & Building 14 1%

Consultant 74 7%

Education 47 4%

Government & Public Services—Federal Level 63 6%

Government & Public Services—Provincial, State, or Local Level 149 14%

Healthcare 55 5%

Information Technology—NOT in the ECM industry 40 4%

Legal 23 2%

Manufacturing & Engineering 68 6%

Retail 9 1%

Service Bureau or Service Company 73 7%

Telecommunications & Media 16 2%

Transportation & Distribution 17 2%

Utilities, Oil & Gas 73 7%

Wholesale 3 0%

Other, Please Specify 93 9%

Total 1055 100%

As might be expected, the survey has a large representation from sectors that have traditionally been very paper intensive — state and local government, banking and fi nance, insurance, and utilities, oil, and gas. In this year’s survey, we also had a large participation by service companies. Service companies are a bit of an anomaly when thinking about end users. On the one hand, they are heavy users and implementers of capture and scanning technologies. On the other, they do so as service providers to a set of end users. Survey results are available for specifi c vertical industries and will be published separately.


Industry Watch

The majority of the respondents in this year’s Capture survey were from North America, and particularly the United States. As user bases are larger in the US and Canada, they are more likely to have implemented internal document imaging/capture systems. In countries with more small and mid-sized businesses, deployment rates have been less.

In which country are you located?

United States 777 74%

Canada 86 8%

United Kingdom 27 3%


Total 1045 100%

There is an increasing interest in AIIM’s market research efforts outside the United States, and upcoming AIIM surveys will refl ect this expanded perspective. Other regions (EMEA, AP, LatMex) within the world are becoming a stronger driving force in deployment and implementation of capture technologies, and AIIM’s research will expand to refl ect this in the months ahead.

Those considering themselves records and document “specialists” comprised the most signifi cant sample in the survey. This is consistent with past Capture surveys and with the overall demographics of the target audience to whom the survey was distributed.

Pick the choice that best describes your role within your organization:

Line-of-business or process owner (president, CEO, senior executive in charge of particular non-IT function)

156 15%

Records or document management practitioner 451 43%

IT manager or executive 233 22%


Total 1048 100%

The rest of the sample falls somewhat evenly between senior executives and/or those responsible for a particular process (i.e., “business types”) and those from the IT community.


Industry Watch

Key FindingsOverall, the survey fi ndings refl ect a set of technologies that are stable and in widespread use. They also suggest that scanning and capture are by no means “mature” industries. There still exist enormous opportunities relative to recognition, scanning automation, and process integration.

• It is clear from the survey results that while risk reduction and compliance arguments relative to scanning and capture are important to end users, end users clearly see these technologies through the prism of effi ciency and productivity.

• If effi ciency and productivity are the key business drivers, then it should come as no real surprise that “justifying the investment” is a key obstacle that must be overcome in selling capture technologies. It is important as these technologies (and the broader document and records space) become more “mainstream” that these arguments be made in terms that are specifi c to the actual experience of the end user.

• Two “change” obstacles are also clearly important to end users (“change management” and “integration of new technologies”). Interestingly, as users move along the implementation curve (i.e., heavy users rather than ad hoc) they become even more aware of the change management obstacles. Many of these problems are the result of lack of training and education. This “training gap” will get more acute as document and records technologies spread to a larger base within organizations.

• While records managers are important in infl uencing capture decisions, as is the case with other document and content technologies, they tend to not be the fi nal authority. They appear to have the highest purchasing infl uence within mid-sized organizations.

• Clearly, on-line information resources (search engines, AIIM web site, company web sites, and webinars) are extremely important to end users and prospective end users as they consider scanning and capture technologies. In addition, magazines (such as AIIM E-DOC Magazine) continue to be an important information resource, even as many in the B2B publishing business experience challenges with the traditional advertising base for magazines.

• The ROI experience of end users mirrors the impressive results reported in 2006. Even among a sample with a wide range of capture experiences and sophistication (ranging from organizations with an ad hoc interest in capture to those that integrate scanning and capture into key processes) only 11% would evaluate the ROI of their capture and scanning implementations as worse than other IT investments.

• Organizations are clearly seeking to leverage the investment they have made in multi-function devices (MFDs) by extending their use into scanning. Two-thirds of those responding see a role for MFDs in their capture plans. Most of the use is currently for static, ad-hoc scanning applications, although this appears to be changing.

• Scanning and capture are often thought of as “mature” technologies. The data on use of recognition technologies (only 53% of those who indicate they are active users of scanning and capture say they also use ANY recognition technology) suggests that while scanning and capture are “stable” technologies, there are by no means “mature” in their deployment.

• The survey suggests that most end users are still at a relatively early stage in integrating capture with process (i.e., many of those in the sample are still at a relatively immature stage in their full utilization of these technologies). Even in processes that many in the industry think of as relatively mature (fi nance, governance, HR), the percentage of those that actually use scanning and capture in these processes is typically less than 50%.

• The results suggest that there is still much opportunity to enhance and leverage existing capture investments by pushing capture into processes. The interplay between process integration and ROI (see section on ROI) suggests that as users fully tap into the potential of capture and scanning to change processes, their satisfaction grows.


Industry Watch

Understanding the Basics of Capture PurchasingIt is clear from the survey results that while risk reduction and compliance arguments relative to scanning and capture are important to end users, end users clearly see these technologies through the prism of effi ciency and productivity.

This is important because while risk reduction and compliance are often used as wedges to get executive level visibility for these technologies (e.g., Sarbanes-Oxley concerns, HIPAA concerns, new Federal Rules of Civil Procedure), these technologies will ultimately be sold based on effi ciency and productivity arguments. Part of the reason for this response is that it is very diffi cult to make the business case for any kind of solution based solely on compliance or business continuity concerns — many organizations simply don’t think it applies to them and choose to take their chances with the “negative lottery.” Even an organization that says all the right things about records, compliance, and governance will often still be more inclined to spend money on things related to effi ciency rather than worry about things that they think may never happen.

Think about the reasons why you might implement scanning and capture technologies in your organization. Please check the TWO that are the most important.

Compliance 276 26%

Leadership, competitive advantage 82 8%

Improve effi ciency and productivity 770 74%

Risk management/Business continuity 285 27%

Better customer service 308 29%

Reduce costs 260 25%

Faster turnaround, improved response 274 26%

Increased profi ts, better performance 117 11%

The focus on effi ciency and productivity drivers is good news for capture solution providers, because the ROI experience of end users with capture and scanning technologies is good relative to other IT investments. End users are usually able to get a rapid return from driving paper out of their processes through capture, and the ROI increases as the technologies are pushed into key processes.

What are the obstacles that capture users and prospective end users most often face?

If effi ciency and productivity are the key business drivers, then it should come as no real surprise that “justifying the investment” is a key obstacle that must be overcome in selling capture technologies. It is important as these technologies (and the broader document and records space) become more “mainstream” that these arguments be made in terms that are specifi c to actual experience of the end user. Geoffrey Moore’s Crossing the Chasm would argue that in the early stages of a technology, the technology is often bought based on its technical features (speeds, feeds, etc.). In the mainstream phase that we are now in, “justifying the investment” arguments must be clear, precise, and industry specifi c.

Think about the obstacles or potential obstacles in your organization to implementing capture or scanning technologies. Please check the TWO that are the most important.

Justifying the investment, board commitment 408 39%

Getting employee commitment 290 28%

Planning/Managing implementation, change management 401 39%

Understanding/Specifying requirements 226 22%

Selecting products/Suppliers 103 10%

Content control, data migration, and classifi cation 319 31%

Integration of new technologies 351 34%


Industry Watch

Getting approval from management for an investment is a necessity, but it’s useless without sustaining employee commitment. This commitment needs to start at the very beginning of a project by getting staff from a variety of perspectives involved at the design stage, and by being very cautious and attentive to the user interface. How you reach the information is very often more important than what you get as information.

Two “change” obstacles are also clearly important to end users (“change management” and “integration of new technologies”). Interestingly, as users move along the implementation curve (i.e., heavy users rather than ad hoc) they become even more aware of the change management obstacles. Experienced end users also understand that getting (and maintaining) employee commitment is a challenge. This comes as no real surprise given that organizations traditionally spend a disproportionate share on the technology itself, and tend to underspend on the training and education that is needed to maximize the full potential of these technologies.

This “training gap” will get more acute as document and records technologies spread to a larger base within organizations. One of the primary reasons that AIIM launched its training initiative (www.aiim.org/training) was to address this very signifi cant gap in the industry.

Who has the major responsibility within your organization for making purchase decisions on scanning and capture technologies? (Note: not necessarily who signs the fi nal approval, but who is doing the real work of recommending what to buy.)

President or CEO 159 15%

Records or document management professional 227 22%

IT professional 321 31%

CFO 37 4%

Head of department 208 20%


Total 1045 100%

“Selling IT” is clearly important to selling capture solutions within organizations. As might be expected, this infl uence grows with the size of the organization. Only 15% of small organizations (1-100 employees) list IT as the dominant infl uence on scanning and capture purchases, and this percentage grows to 37% in large organizations (over 1,000 employees). It is notable that a signifi cant portion of scanning purchases within large organizations are driven at the department level; 26% of large organizations identify “head of department” as the primary infl uencer vs. only 8% of small organizations.

While records managers are important in infl uencing capture decisions, as is the case with other document and content technologies, they tend to not be the fi nal authority. They appear to have the highest purchasing infl uence within mid-sized organizations.

It is clear from the data (and consistent with past AIIM surveys) that the way in which end users are getting information about scanning and capture technologies has changed signifi cantly in the past fi ve years.

Clearly, on-line information resources (search engines, AIIM web site, company web sites, and webinars) are extremely important to end users and prospective end users as they consider scanning and capture technologies. In addition, magazines (such as AIIM E-DOC Magazine ) continue to be an important information resource, even as many in the B2B publishing business experience challenges with the traditional advertising base for magazines.

The high response given to “Events and Conferences focused on your specifi c industry,” “industry experts/analysts/consultants,” “Company Web sites” and “Webinars” suggests that end users, including those in C-level positions, are more sophisticated than 5 years ago and much more focused on vertical business solutions.

One of the challenges for solution providers in the channel that provide scanning and capture solutions is that their marketing spend (see past AIIM surveys on the State of the Document Management Service Providers Industry ) is usually: a) sub-optimal; and b) not focused on the types of activities outlined above. Companies in the channel that wish to more effectively connect with prospective end users need to focus their efforts on positioning within the AIIM web site, improving


Industry Watch

their own web sites, and positioning themselves (through AIIM, their partner organizations, and other organizations active on the web) to optimize search traffi c. In addition, very few organizations effectively position themselves within some of the major magazines serving the industry (AIIM E-DOC Magazine being just one of these). While this can take the form of advertising (and certainly AIIM and other publishers encourage this!), companies often fail to take advantage of the need that many publishers have for clearly written and documented customer case studies. These will become more important as the industry continues to move toward the “mainstream” and reference customers and case studies within specifi c industries grow more important.

While web-based information sources are critical to educating end users, “edgier” web-based resources (such as podcasts and blogs) are still in their infancy. As end users become more familiar with the content aggregation potential of RSS feeds — whether from blogs, wikis, podcasts, or from web site updates — the appeal of information sources such as blogs and podcasts is likely to grow quickly.

Currently, many end users rely on e-mail newsletters for information updates. For example, there are over 1,000 e-mail subscribers to the ECM Industry Watch blog. The sheer volume of tracking these types of e-newsletters on a regular basis will eventually make updates by RSS aggregation much more appealing.

Which of the following do you use to gather information about scanning and capture technologies (check as many as apply)?

Search engines (e.g., Google, Yahoo) 636 60%

Word of mouth 485 46%

Road shows and events sponsored by individual companies or groups of companies 330 31%

Webinars 546 52%

Industry experts/analysts/consultants (e.g., Gartner, Forrester, etc.) 485 46%

Events and conferences focused on your specifi c industry 552 52%

Magazines 683 65%

Company web sites 595 57%

AIIM web site 612 58%

Podcasts 46 4%

Blogs 83 8%



Industry Watch

Technologies in Use and 2007 Spending PlansThe experience of those using scanning and capture technologies encompasses a wide range of technologies.

Please look through this list of scanning or capture technologies and check off those that are currently used in your organization (check ALL that apply).

% using % planning spending increase in 2007

Workgroup scanners (10-25 pages per minute) 41% 11%

Departmental scanners (25-40 pages per minute) 39% 20%

Low volume scanners (40-60 pages per minute) 33% 11%

Mid-volume scanners (60-90 pages per minute) 36% 21%

High-volume scanners (>90 pages per minute) 35% 28%

ID card scanners 19% 7%

Document capture software 68% 50%

Forms processing software 31% 31%

Outsourced scanning/capture services 24% 21%

Networked-attached multi-function peripheral device (i.e., a printer or copier that is also used for scanning)

50% 25%

Network scanner 24% 12%

Fax server software (to capture faxed documents) 34% 16%

OCR software (to convert images to text) 57% 38%

Software to convert documents INTO PDF 76% 28%

Software to convert FROM PDF into other formats 36% 15%

While there has been a clear movement to decentralized and distributed capture over the past few years (in order to push capture closer to the point of document creation), there is clearly still a large role in many organizations for higher volume scanners. The resiliency of spending intentions at the high end is particularly interesting.

It is surprising (and reported in a later section about use of recognition technologies) how few of those who indicate that they use at least one or more capture devices are also using OCR software. This is particularly surprising given the high accuracy rates reported by OCR end users. One would have also thought that usage of FAX server software would be higher (only 34%) given the length of time that these solutions have been available.

In US dollars, what do you estimate your total spending on document capture and scanning to be during the past 12 months?

<$100K 421 55%

$100K—$500K 229 30%

$500K—$1 million 53 7%

> $1 million 57 8%

Total 760 100%


Industry Watch

In looking at overall scanning and capture spending, one is struck that there is clearly some signifi cant scanning and capture spending going on within the sample (45% reporting spending in excess of $100,000 and 15% reporting spending in excess of $500,000). Given the relative early stage of deploying more aggressive capture technologies (see sections on recognition and process integration), there are clearly growth opportunities for solution providers.

The ROI experience of capture end users in the 2007 survey exactly mirrors that in the 2006 survey:

Think about the Return on Investment (ROI) of your organization’s scanning and capture implementation(s). Please select the statement that best summarizes your organization’s experience with capture and scanning technologies COMPARED WITH OTHER SIGNIFICANT TECHNOLOGY INVESTMENTS.

Much worse ROI than other IT investments 11 1%

Worse ROI than other IT investments 75 10%

About the same ROI as other IT investments 342 46%

Better ROI than other IT investments 249 34%

Much better ROI than other IT investments 66 9%

Total 743 100%

This ROI question was specifi cally asked in both surveys “relative to other IT investments” rather than just relative to whether the ROI “expectations” were met in an effort to raise the bar higher relative to capture ROI. Even among a sample with a wide range of capture experiences and sophistication (ranging from organizations with an ad hoc interest in capture to those that integrate scanning and capture into key processes) it is impressive (and not very well understood) that only 11% would evaluate the ROI of their capture and scanning implementations as worse than other IT investments.


Industry Watch

Understanding the Role of Multi-Function Devices in CaptureOne of the issues that we sought to explore in this year’s capture survey was how end users are viewing multi-function devices (MFDs) in the overall capture equation in their organizations. Organizations are clearly seeking to leverage the investment they have made in these devices. Two-thirds of those responding see a role for MFDs in their capture plans.

Please think specifi cally about how you use Networked-attached multi-function peripheral devices (i.e., printers or copiers, typically in a workroom, that can also used for scanning). Do you use one or more of these devices in your organization for SCANNING as well as PRINTING and COPYING?

Yes 663 67%

No 321 33%

Total 984 100%

An interesting implication of this migration is that the channel by which end users tend to acquire these devices tends to be the offi ce equipment channel rather than the more traditional document imaging channel. As hardware (and consumables) within the offi ce equipment channel commoditizes, this channel will increase its interest in moving “upstream” into the broader document solutions space. The offi ce equipment channel is signifi cantly larger than the document imaging channel, and if even a small percentage of these organizations are effective in their migration, it will have a signifi cant impact on the overall rate at which end user organizations adopt capture and scanning technologies.

As refl ected in more detailed questions on MFD use, the application of MFDs to scanning and capture is still at an early stage and is still largely focused on ad hoc scanning. However, this will change as the devices and their embedded software continue to evolve and particularly as application “hooks” are more broadly deployed.

How do you think your usage of multifunction devices for SCANNING will change in 2007? The amount of scanning on this type of device...

Will increase a lot 144 22%

Will increase 301 46%

Will stay the same 178 27%

Will decrease 20 3%

Will decrease a lot 6 1%

Total 649 100%

Among those who use MFDs for scanning, there is a clear interest in expanding this utilization in the months ahead. Two-thirds of those currently using MFDs for scanning plan to increase their spending on these devices. Only a tiny percentage of the overall sample (4%) see spending decreasing in 2007. We believe this trend will continue as users seek to drive paper out of their key processes and continue to push scanning closer to the point of document creation.

End users see MFDs as complementary to traditional scanning devices. Solution providers need to recognize this interest and perspective in their offerings. Many organizations see MFDs as a cost effective way of reducing the number of devices in a small offi ce environment and yet maintain the ability to capture images required for processes. All small offi ces need faxes, printers and copiers; now organizations have a tool that allows them to leverage their existing needs and add the scanning capability.


Industry Watch

The anecdotal evidence suggests that MFDs are still being used mostly for ad hoc and individual scanning and are not yet being used extensively in more capture intensive situations. Some of the comments in the survey refl ect this perspective:

• “Used for low volume, fi xed image, convenience document scanning purposes only.”• “Networked printers used as backup to our current scanner.”• “Used on a more “informal” basis rather than part of a workfl ow.”• “The volume is very low. Used only intermittently.”• “Security reasons prevent us from scanning with MFDs.”• “Only for personal scanning needs, not work/production related scanning needs.”• “Very few have caught the vision for scanning from the copier here.”

What do you do with documents that are SCANNED using a multifunction device? (check as many as apply).

We e-mail them. 397 62%

We scan into a folder on the network. 401 62%

We send them into an Enterprise Content Management system. 164 26%

We send them into a Workfl ow system. 152 24%

We send them into an Archiving/Records management system. 224 35%

We send them into an ERP (Enterprise Resource Planning) system. 42 7%

We send them into an Accounting system. 63 10%

We send them into a CRM (Customer Relationship Management) system. 39 6%

We send them into an Industry-specifi c application (e.g., mortgage origination). 56 9%

Other, please specify. 40 6%

Scanning to a network is not only popular just because of minimal confi gurations, but certainly because most (recognition) software nowadays offers the possibility of “hot folders”. That means that scanning to a network is just the starting point of a wide range of possibilities. Smaller organizations that don’t have the volume of documents to invest in a dedicated scanner also tend to be the organizations that scan to a network as they probably don’t have large ERP and ECM software systems that support scanning through MFDs. Scan to folder and Scan to e-mail options are popular because they require minimal to no integration with other software. If you want to scan into a back-end ERP or CRM system it must be tightly integrated with the MFD.

Given that MFDs tend to be sold by one channel, focused primarily on the offi ce manager as a point of contact, and pure scanning solutions tend to be sold by resellers or solution providers dealing with either the IT department or with a line-of-business manager, there is a tendency sometimes to think of MFDs and dedicated scanners as “either/or” solutions.

Which statement best describes how your organization views multifunction devices used for SCANNING?

As a replacement for dedicated scanners. 145 23%

We use multifunction devices for some capture jobs and dedicated document scanners for others.

496 77%

Total 641 100%

Clearly this is not how end users perceive them. Nearly 80% see MFDs and dedicated scanners operating in concert with either other, with MFDs clearly part of a move toward distributed scanning.

The lesson in this is that solution providers — whether coming to scanning through the “offi ce equipment” route or the “document management” route — need to provide comprehensive solutions that tap into the relative strength of both sets of technologies.


Industry Watch

Use of Recognition TechnologiesOne of the things we tried to do in this year’s Capture survey was differentiate between casual users of scanning and capture technologies and those further along the implementation curve. One key indicator of a movement from casual capture to a more serious approach is refl ected in the use of recognition technologies.

Do you use ANY recognition technologies in your organization (i.e., technologies to exact data from images)?

Yes 466 53%

No 410 47%

Total 876 100%

Scanning and capture are often thought of as “mature” technologies. The data on use of recognition technologies (only 53% of those who indicate they are active users of scanning and capture say they also use ANY recognition technology) suggests that while scanning and capture are “stable” technologies, there are by no means “mature” in their deployment. There is still enormous unrealized potential in the use of these technologies. Many end user organizations are familiar with scanning and capture technologies and use them on a limited basis. However, relatively few actively push the technologies from static document capture into more dynamic use of the actual information from the documents.

Follow-up questions probing exactly which recognition technologies are in use further illustrate the huge opportunity that exists relative to recognition and forms processing. In the survey we also asked those using each of the recognition technologies to estimate their accuracy. The data suggests that recognition technologies have come a long way in recent years, and represent a huge untapped area for automation within organizations.

WHICH recognition technologies do you use?

% of those using any recog tech

% overall

OCR 90% 46%

ICR 29% 14%

OMR 26% 13%

Bar codes 63% 32%

While OCR is in widespread use among the end users who use recognition technologies (90%), other recognition technologies are still in the early stages of adoption. For example, only 63% of those using recognition technologies (and therefore only about 32% of those who are using scanning) use barcodes to streamline the processing of images.

288 survey respondents reported on OCR accuracy within their organizations, and reported average accuracy of 84%. Service companies reported a higher rate, suggesting that the overall accuracy fi gure may have been dragged down a bit by those not using the technology as intensively. This pattern (higher accuracy rates among service companies) was true across all recognition technologies.

Use of ICR technologies is still in its infancy. While accuracy has improved over the past few years, there is still room for improvement in ICR accuracy (the average reported rate, from the 91 respondents reporting a fi gure, was 68%). Improved recognition of hand written characters will provide signifi cant benefi t for those using scanning and capture in environments in which there is great variety in document formats. For example, consider the processing of expense reports within organization. Many receipts are hand-written and paper sizes of are not very well defi ned or standardized.

OMR technologies represent a signifi cant opportunity for organizations. Accuracy is relatively high (87 organizations reported an estimated accuracy of 92%) and utilization is low (only 26% of those who use recognition technologies use OMR, or only 14% of those using scanning).


Industry Watch

Barcode recognition (estimated accuracy in the sample is 95%, sample of 197) is often used for separation sheets/indexing on top and sublevels of folders. This technique is often used by Service Bureaus to enhance and secure their processes and minimize the need to do extensive post processing. Streamlining capturing processes for end-users is an underdeveloped area within the industry.

Another use for barcodes is as a quality control tool for generating statistics on misfeeds or double feeds. This works for larger volumes by inserting randomly a sheet with a certain number coded in the barcode, (for example “50” then after 50 sheets of paper we again insert a sheet with barcode “end-50”) and then after scanning the whole lot. Then a program check if 50 sheets where indeed scanned in between. Doing so regularly can guarantee that processes are checked against a certain given percentage, without the hassle of comparing the originals with the scanned images.

Some organizations use barcodes to create links between images and applications. For example, a barcode on an invoice might indicate an ERP account number. When the document management database sees it, it can automatically index with all the values that are already in the ERP system. Then, all the user needs to do is to simply add the amount due, and verify terms.

In sum, the core roles played by recognition technologies are to: 1) drive manual processing (and cost) out of the capture processing; and 2) extract data from the images that can link the image to a process or application. The survey suggests that users are underutilizing these key technologies, opening up signifi cant opportunities for “up-sell” among solution providers (and increased potential value and ROI for end users).


Industry Watch

Capture, Process Integration and User ROIOne of the keys to getting maximum ROI from capture technologies (or for that matter, any document or content technology) is by pushing them into core business processes as aggressively as possible. As document technologies move into the mainstream, it is less and less likely that new end users will even start with a focus on technology. Rather it is far more likely that they will engage with ECM technologies through a desire to improve a specifi c process.

The results suggest that there is still much opportunity to enhance and leverage existing capture investments by pushing capture integration into processes. The interplay between process integration and ROI (see section on ROI) suggests that as users fully tap into the potential of capture and scanning to change processes, their satisfaction grows.

The survey suggests that most end users are still at a relatively early stage in integrating capture with process (suggesting many of those in the sample are still at a relatively immature stage in their utilization of these technologies). Even in processes that many in the industry think of as relatively mature (fi nance, governance, HR), the percentage of those that use scanning and capture in these processes is typically less than 50%.

Solution providers in mainstream markets who wish to be successful need to understand these core business processes (as well as processes that are specifi c to the particular vertical industry of a customer) if they are to be credible. Moving from a technology focus to a solutions focus is where future value lies for solution providers, and as is often noted, much easier said than done.

Please think through the following generic business applications, and indicate whether scanning or capture technologies are used in these processes (note: the processes listed in each group are for illustration and not intended as a comprehensive list):

We CURRENTLY use scanning in this process

We PLAN TO use scanning in this process

We DO NOT use or PLAN TO use scanning in this process

Don’t know

Finance (e.g. invoice processing, order processing, cash receipts, expense accounts)

46% 23% 17% 14%

Sales (e.g., order entry, contracts, lead tracking, forecasting, proposals)

23% 17% 35% 25%

Human Resources (e.g., applications, resumes/CVs, benefi ts forms, healthcare forms)

31% 31% 20% 18%

Customer Service (e.g., correspondence, new accounts, service requests, warranties)

39% 21% 20% 20%

Corporate (e.g., correspondence, litigation, contracts) 48% 27% 11% 15%

Marketing (e.g., leads & prospects, customer information, competitive data, surveys)

19% 20% 32% 29%

Mail Processing (e.g., mail that is opened and distributed from a central location)

22% 19% 39% 21%

One way of perhaps differentiating those who are only casually using scanning and capture from those who have fully embraced the technology is to look at two usage parameters: 1) process integration; and 2) use of recognition technologies.


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The purpose of doing so is to see if there is any difference in how these two samples utilize the technologies, how much they spend on these technologies, and most importantly, their perceived ROI from these technologies. We will divide the sample in HARDCORES and LIGHTWEIGHTS as follows:

“Hardcores” “Lightweights”

Use capture in human resources? YES NO

Use capture in corporate communications and governance? YES NO

Use capture in fi nance? YES NO

Use recognition technologies? YES NO

Number of organizations in this sample… 74 138

There are signifi cant differences between the HARDCORES and the LIGHTWEIGHTS:

• The Hardcores tend to be from larger organizations (72% > 1,000 employees vs. 52%).• Lightweights tend to be less aware of compliance benefi ts (24% vs. 30%) and customer service benefi ts (29% vs. 39%).• Lightweights are more concerned about change management (45% vs. 34%) and requirements defi nition (23% vs. 11%).• Business people carry more decision weight in lightweight organizations—they need to be more aggressively sold.

The differences are even more evident when looking at the current level of scanning and capture investment:

Please look through this list of scanning or capture technologies and check off those that are currently used in your organization (check ALL that apply).

Hardcores% using each

Lightweights% using each











58% 46%







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Where scanning and capture investments are headed can perhaps be even better understood by investigating the percentage planning to increase investment in each key technology over the next 12-18 months:

Check off any areas in which a spending level increase is anticipated (check ALL that apply).

Hardcores% using each

Lightweights% using each











25% 23%






A large percentage of Hardcores are planning to increase spending on mid-volume and high-volume production scanners, OCR software, forms processing software, and document capture software (and most of these already have a large investment).

One of the highlights of the survey is the relative high ROI experienced by capture end users relative to other IT investments. In the past, we have asked simply whether the ROI exceeded expectations. In last year’s survey and again in this year’s, we decided to ask a slightly more discriminating question — how the perceived ROI compared to other IT investments.

The results are very encouraging for those considering capture solutions. 43% of respondents indicated that the ROI of their capture investment was “better” or “much better” than other IT investments. This was exactly the same percentage as reported in last year’s survey, suggesting some confi dence in the results. Only 11% of those responding noted an experience worse than other IT investments.

When comparing Hardcores with Lightweights, the enhanced ROI experienced by end users who “push” the technology and focus on processes is clear.

Please select the statement that best summarizes your organization’s experience with capture and scanning technologies COMPARED WITH OTHER SIGNIFICANT TECHNOLOGY INVESTMENTS.

Hardcores Lightweights

Much worse ROI than other IT investments 0% 2%

Worse ROI than other IT investments 10% 13%

About the same ROI as other IT investments 44% 53%

Better ROI than other IT investments 34% 25%

Much better ROI than other IT investments 13% 7%


Industry Watch

SURVEY SPONSORABBYY Software, as a leading developer of document recognition, data capture, and linguistics technologies, provides the foundation for many of today’s popular content management and capture solutions. ABBYY’s product offerings include; FineReader Engine, Recognition Server, and FlexiCapture. FineReader Engine, a comprehensive SDK, includes a full spectrum of ABBYY’s recognition technologies with functions in four major areas: full-page recognition, zonal recognition, PDF conversion and data capture. Meanwhile, Recognition Server, a server-based OCR and PDF conversion solution, provides API access for delivering scalable, reliable and rapidly deployable OCR functions with turn-key integration. Finally, the FlexiCapture line of data capture

and forms processing technology allow users to locate and extract data from forms and semi-structured documents.

ABBYY licenses its award-winning OCR and recognition technologies to many market-defi ning capture and ECM vendors such as Banctec, EMC, EPSON, Freedom Scientifi c, Fujitsu, Hewlett Packard, Kofax, Microtek, Notable Solutions, OkiData, Panasonic, ReadSoft, Samsung Electronics, Stellent, and Toshiba.

Captaris, Inc. is a leading provider of software products that automate business processes, manage documents electronically and provide effi cient information delivery. Our product suite of Captaris RightFax, Captaris Workfl ow and Captaris Alchemy is distributed through a global network of leading technology partners. We have customers in fi nancial services, healthcare, government and many other industries, and our products are installed in all of the Fortune 100 and many Global 2000 companies. Headquartered

in Bellevue, Washington, Captaris was founded in 1982 and is publicly traded on the Nasdaq National Market under the symbol CAPA. For more information please visit www.Captaris.com.

EMC Captiva is the leading global provider of input management solutions used to transform information from paper, fax, and electronic sources into business-ready electronic content. Captiva’s suite of input management solutions meets the needs of organizations large and small and can readily scale from one department to a global enterprise. The comprehensive Captiva input management suite includes document

capture, form processing, invoice processing, intelligent document recognition and classifi cation, distributed capture, imaging solutions, and applications monitoring.

Kodak’s Document Imaging business is an industry leader and digital innovator committed to helping companies capture, manage, archive, and deliver critical business information. Kodak is committed to providing a full complement of document scanners, software, solutions and services to meet the needs of customers worldwide. The award-winning KODAK Scan Station 100—turns documents into fi les for sharing

anywhere on a network with convenience and ease through an intuitive color touch screen—award winning KODAK i1200 and i1300 Series Scanners—deliver high image quality, speed, and affordability with the smallest operational workspace available—and the new KODAK i1860 Scanner takes production scanning to greater heights. All KODAK Document Imaging products and solutions are backed by KODAK Service & Support, named Best Support Organization at the 2006 International Business Awards.

www.abbyyusa.com

www.captaris.com

www.emc.com/captiva

www.kodak.com/go/docimaging


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Kofax, a division of DICOM Group plc (LSE: DCM.L), is a leading provider of information capture software. Kofax products enable organizations to automate business processes and streamline transactions by collecting paper documents, forms and e-documents from throughout organizations, transforming them into retrievable information, and exchanging it all with line-of-business applications, databases and archives. Kofax products are widely

used in fi nance, government, insurance, healthcare, and a broad range of companies and agencies that must capture critical business information from paper and electronic documents and forms.

Visioneer provides a broad range of scanning solutions for the desktop, distributed and departmental document imaging markets as well as the mobile and remote business scanning segments. Visioneer and Xerox DocuMate high-performance business scanners and imaging software solutions offer users speed, image quality, advanced paper handling and ease-of-use with exclusive Visioneer OneTouch™ technology. Through a joint development project in January 2007, Visioneer and Kofax came together to create Visioneer OneTouch with Kofax VRS Technology - an integrated software solution that combines the ease of Visioneer OneTouch scanning, with the superior image quality achieved with Kofax VRS™ (Virtual ReScan®) technology.

www.kofax.com

www.visioneer.com

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