Ephesoft's Vision for the Future of IDR

Coming out of AIIM last year I had come up with a vision on the potential future of the document imaging industry. I've repeated the mantra several times since - and it goes like this: "Capture it all and let the technology sort it out."

In fact, I recently completed a piece for Quality Associates' upcoming Insights newsletter detailing what I see as some of the driving forces behind this vision. They include trends like increased multi-channel capture and increasing intelligence in capture driven by emerging technology like natural language processing.

This year I attended the Ephesoft Innovate conference  prior to heading down to San Diego for AIIM 2015. At Innovate, Ephesoft founder and CTO Ike Kavas presented on his vision for the future - which I thought dovetailed nicely with mine. Kavas and his team at Ephesoft have even gone so far as to developing a brand new product - Ephesoft Universe - designed to enable organizations to mine their documents.

Due for release later this year, Universe leverages Big Data tools like Hadoop. According to Kavas, Universe is able to leverage 16 different characteristics to classify a document and recognize a field. Ephesoft is developing machine learning algorithms to consider these characteristics. The bottom line is that this is a lot of data being put through a process that requires a lot of computing power - hence the need for the Big Data tools, especially if a user is throwing a high-volume of documents at it.

The end game for Universe is trying to reduce the time it takes to implement a classification and extraction application from months to minutes. Also, the idea is to enable individual users (not system admins) to set up personalized auto-classification and extraction applications.

Kavas was brave enough to show a demo of Universe, which he expects to be released, in Version 1.0, later this spring. Basically, a user creates their own document classes, feeds it examples, and chooses and labels which fields it wants to extract based on the highlighted fields that Universe was able to recognize. Once the data is extracted, it is fed into an analytics application that is also built into Universe. An example Kavas showed utilized hot/cold zone graphing to show the average price of houses in different states in the country.

Other potential application ideas tossed about included mining medical records for various reasons including enforcing records retention policies, mining expense reports to enable more informed negotiations with vendors, and examining financial documents for at-risk loans or security risks.

There is a lot here, and I'll have more detail in my next premium issue of DIR. Ephesoft's current goal is to find some customers and partners to help it determine what needs to be done next on the road to productizing Universe. But, there is clearly a lot of potential, mainly because it offers to make accessible what has historically been very high-end technology, whose adoption has been slowed somewhat I feel by paralysis by overanalysis.  If Ephesoft can really make Universe a universal tool, I think we'll start to see a slew of new IDR applications developed on top of it.

What Ray Rice & Donald Sterling can Tell Us about the Future of Capture

For those of you who attended the Harvey Spencer Associates (HSA) Capture Conference last week, you got to see a cool presentation by HP Autonomy's Christopher Surdak on doing automated capture from video files. Examples that Surdak presented included matching license plate numbers with car models to protect against stolen vehicles and analyzing faces taken on video at airports for matches against dangerous persons databases.These aren't exactly examples of the transaction-oriented capture that HSA typically focuses on, but you can see where it could lead. Harvey likes to give the example of being able to take a video of a car engine that is not working right, and sending that video to the cloud - where analysis is done and then the user is sent a list of parts that they can order to fix the problem.


In DIR's annual news review and predictions presentation, I offered my opinion that as millennials and born digitals take over the workforce and smart phones and other computers continue to advance, videos and photos are going to become increasingly important to conducting business. Traditional documents are destined to become so yesterday.

A recent sports news story helps bring the point home about how much more powerful video cam be as a means of communication than traditional text. Many of you have by now surely heard the story of Ray Rice, the Baltimore Ravens running back that has been driven out of football due to his being caught beating up his fiancee this past offseason. Here's the timeline:

• Story comes out about Rice beating up girlfriend/fiancee. 
• Rice gets suspended for two games.
• People get up in arms about the light punishment and NFL commissioner Roger Goodell stiffens NFL's domestic abuse policy - but nothing more happens to Rice
• Video comes out showing what Rice admitted to
• Rice's team (Baltimore Ravens) terminate his contract and league suspends him indefinitely

 From this ESPN story on the Rice incident: "The source said that Rice admitted to the Ravens from the start that he was guilty of striking Janay and, for the most part, accurately described what they eventually saw on the video. But the brutality of the assault when seen on the security video made a different impression."

So, basically, until everybody actually saw what Rice was doing, the full impact of the event was not realized. As a text-oriented guy, this kind of disturbs me, because I really wasn't surprised by the video and had a hard time believing many people are just now becoming outraged with Rice's behavior. But then again, we had a similar situation with Los Angeles Clippers owner Donald Sterling earlier this year.

If you remember, Sterling was essentially driven out of the NBA after a recording surfaced with him making racial comments to his ex-girlfriend. Shocking right? Well, not so much.  As far back as 2006, Bomani Jones wrote this article for ESPN's Page 2, entitled "Sterling's Racism Should be News." In spite of this, big name athletes and Coach Doc Rivers continued to sign with the Clippers from 2006 through 2013. Then, they acted all surprised when his racist rants were caught on audio recording this spring.

The bottom line is that apparently, nobody in the mass market pays attention to text media anymore. Which brings me back to my point about multi-media being so much more powerful than text. Maybe traditional documents still have a place in business today, just like there is still print/text media out there being published. But as things move more toward video, audio, and the like in mass media, I don't think there is any question they will also move that way in business transactions. Didn't Blackberry rule the business world before iPhones took over the consumer market and then moved into business? The momentum in favor of video is just too great. Expect more video in business in the next few years!

Perceptivce Lands $1.6M Invoice Processing Deal

Perceptive Software announced it has landed a $1.6 million invoice processing software contract with Doosan Infracore International. Doosan will implement Perceptive's Intelligent Capture (powered by Brainware), as well as Perceptive Content, which will manage workflow. Doosan is a Global 2000 company based in Seoul,  South Korea. It manufactures construction machinery. 

The Perceptive technology will be integrated with Doosan's Oracle and SAP systems. For the complete press release, click here.

“EDI provides a great deal of efficiency in reducing our paper volumes, but it will not work without a clean three-way match, and it’s simply not a feasible solution for our lower-volume vendors—which is to say, most of them,” said Jim Adkins, director of materials for Doosan. “Perceptive Software’s technology offers a great capability for keeping exceptions manageable, standardizing the workload for all territories and converting diverse paper documents to electronic data that is visible and processed with efficiency. We anticipate this project will remove a considerable amount of manual data entry from our routines, giving our staff more opportunities to pursue improvements for the shared services center.”

Top DIR Stories 4 thru 6: A Pair of Acquisitions & Flesh Eating Bacteria

Top DIR stories of 2013, numbers 4 through 6:

4. Hyland Acquires AnyDoc Software: Hyland, a BPM and ECM specialist with strong document imaging technology, had been developing its own advanced capture technology. It decided to ramp up its development efforts with the acquisition of forms processing industry pioneer AnyDoc. "We’ve been really pleased with the progress of our capture product," said Bill Priemer, long time Hyland sales exec who was promoted to CEO in 2013 with the retirement of A.J. Hyland. "But, we only had three years of development in advanced capture, which, by industry standards, gives us an application that is considered rather basic."

5. JBIG2 Compression Causes Major Headache for Xerox: The implementation of this advanced compression technology in Xerox's MFPs caused quite a stir when a German computer scientist found that it had altered the numbers on several blue prints he was scanning. One journalist went so far as to compare a “document-altering scanner” to “flesh-eating bacteria." This was probably an exaggeration, and the character changes apparently occurred only when more aggressive compression settings were turned on with smaller font and "stressed" documents. Nonetheless, Xerox eventually pulled non-lossless JBIG2 compression from its devices - kind of a bummer because the technology really has some tremendous document compression potential and is still utilized by many organizations through software implementations.

6. DocuWare acquires Westbrook: Westbrook was apparently up for sale due to some financials obligations by its principal owner - Allen & Co. Like AnyDoc, Westbrook was a pioneer in the document imaging industry, but had fallen on some tougher times recently. It did, however, maintain a strong relationship with Ricoh -  a partnership that was orginally formed with IKON more than 10 years ago. This relationship was very attractive to DocuWare, which has had much success in recent years through partnerships with MFP dealers, but did not have a formal relationship with Ricoh. Westbrook is currently operating as a wholly owned subsidiary of DocuWare.

Live from Kodak (Alaris) DI Global Directions

About 400 people here at the event being held in the Gaylord National Resort & Convention Center at the National Harbor in Washington, DC. Mix of Kodak employees, resellers/channel, end users, ISV partners and media/analyst. The great Ray Kurzweil gave the opening keynote.

Kurzweil, a renowned futurist, discussed the exponential growth of the information technology market. He also said that companies competing in this market need to be looking 3-4 years out. This coincided nicely with the Big Data message that seems prevalent at the conference. Speakers from big-time software companies like Google, IBM, Microsoft, and Salesforce.com took the dais on Day 1 and there overwhelming message was that Big Data is coming.

So, what does this mean to the attendees? Two things as far as Kodak Alaris Document Imaging is concerned:

1. The emergence of a multi-channel/source capture model to deal with an increase in information being received by organizations through an increasing number of input sources.
2. The need to add some sort of intelligent processing to efficiently manage this increasing volume of incoming information - which is the point of the Info Insight software that Kodak first discussed last year and recently made available as a product.

Kodak Event to Focus on Leading Edge Information Management

Here's an excerpt from an article that appeared in last week's premium edition of DIR:

From Sept. 22-25, Kodak DI will be hosting its second annual Global Directions Conference at the Gaylord National Resort and Convention Center in Washington D.C. The event features a keynote by Ray Kurzweil, the noted technology inventor, author, and visionary who is currently employed as the director of engineering at Google. Kurzweil, who is probably most widely known for his work on artificial intelligence, but was also an early pioneer in the area of applied OCR, will talk on “The Next Wave of Intelligent Information Management.” According to the Global Directions Web site, the talk “sets the stage and explores the exponential increase in computing power, computing intelligence, and the inexorable impact they will have on transforming information management for the enterprise.”

This is in line with the event’s theme of intelligent information management. “We look at Global Directions as an educational conference,” explained Tim Palmer, VP of worldwide marketing for Kodak DI. “We want to help advance the thinking of the whole industry around understanding information and taking friction and cost out of business processes.”

The other opening day keynotes reflect this broad focus that expands well beyond the traditional areas of business for Kodak DI. In additional to Kurzweil, high level executives from IBM, Google, Salesforce.com, and Microsoft will take the dais to discuss topics like big data and analytics, smarter enterprise search, the death of the desktop, and the future of business collaboration. There will also be a panel discussion moderated by Michael Hickins, editor, Wall Street Journal/CIO Journal, that will pull together multiple keynote speakers, including Kurzweil.

“We are taking a very broad view of where Kodak DI intersects with traditional business and new business going forward. We are looking to have our brand and division associated with end users, service providers, manufactures, resellers, etc., as they think about what they need to do to go to market in the future.

“If you consider the concept of information workflow, traditionally capture for us has meant scanning paper documents. But, we realize that information is coming from more and more sources and the growth of digital information as input is increasing exponentially. In the future, we need to help businesses capture information not only from paper, but from multiple other sources.

“‘Collecting’ is probably a better term than ‘capture,’ when you talk about taking this one large stream of information and getting it all to the right places, routing it, understanding it, semantically and contextually, and making sure you have the right associations and the right conclusions are being made.”

We asked Palmer, if Kodak’s Info Insight platform, which brings semantic and contextual understanding to the table, will be prominently featured at Global Directions. “It certainly fits on the far right of the information workflow model,” he said. “But, the event is focused on themes that are much wider than our current product offerings.”

A look at the agenda
After a Sunday evening reception, the full first day of Global Directions, Monday, Sept. 23, will be full of keynotes presented in a general session followed by an exhibitor showcase where dinner will be served. Tuesday and Wednesday will feature four tracks of breakout sessions, with no more than two or three sessions overlapping at a given time. Tuesday evening will feature a “Monuments by Moonlight” bus tour of downtown D.C.

Kodak is hoping for 300-400 attendees, or about double the number from last year’s inaugural Global Directions, which was held in Las Vegas [see DIR 9/28/12]. “We are looking to make a giant leap forward with this year’s event,” said Palmer. “We felt last year was pretty successful, and we definitely learned a lot, but this year we feel we are really offering a world class conference.

“We think we have a strong enough program to attract senior IT executives at end user organizations and business process owners. Primarily we are marketing to end users with the understanding that if they show up, systems integrators and resellers will certainly follow. We are marketing the event throughout the U.S., as well as internationally. We expect a decent turnout from Central and South America, and our team in Europe is looking to bring over some top end users customers—at least a double-digit number. Just because of logistics, we think it may a little tough to attract attendees from Asia-Pac.”


Kodak is also looking for sponsors and exhibitors. It is looking for a total surpassing 20. “Anyone that believes they can make a contribution to the future of intelligent information management is encouraged to exhibit at Global Directions,” said Palmer. “We expect plenty of end users to be on hand looking for those types of partners. We are taking a broad view of this conference as an educational opportunity, and we are looking for a similarly broad representation of exhibitors.

“The bottom line is that I think we are at the beginning of a very exciting period of time that will play out over the next 5, 10, and even 25 years. I sense another revolution in the way we are going to use information. With the presentations and networking at Global Directions, we hope to help attendees bridge the gap between this revolutionary vision and the practical first steps that need to be taken. We are hoping people are able to come away from our event energized and with at least a few things that they can put into action when they get back in the office on Thursday [Sept. 26].”

Beyond Paper: Info Insight Automates Processes

Multi-channel capture is certainly a hot topic. A couple weeks ago, we visited ibml and ReadSoft, who each discussed their expanded focus to include multi-channel capture. This week, we briefed with Kodak Document Imaging on its new Info Insight application, which was announced last week.

Info Insight is a Web-based IDR solution that is able to automate classification and capture of document from multiple inputs. Kodak is advertising it for use with scanned images, faxes, e-mail, and input from social media sources. So, from the capture side, which Kodak is calling its "integration platform edition," InfoInsight certainly has multiple channels covered.

From the output, or process standpoint, Info Insight also addresses many, what we'll call "avenues." Kodak calls this side of Info Insight its "solutions edition module." It includes assisting with both automated and manual responses to e-mails, social media input, and traditional paper correspondence. It also includes being able to track the "moods" on social media sites via a graphical screen.

No, I wouldn't say that Info Inight is deeply into what Forrester has defined as the Smart Process Application space, but it's clearly a step in that direction. Info Insight is designed to take input form multiple sources, apply technology like self-learning and artificial intelligence, as well as data aggregation, and produce some sort of response to the input. The main SPA element that I see it as missing is a true BPM engine for dynamically automating complex processes. (Yes, Kofax has trained me well in the use of the word "dynamic," but I think it makes sense here.)

All and all, it is interesting to see where the capture market is heading. I completely agree with Kodak and Kofax's and others' position that it is very important for capture companies to expand their front ends to embrace multiple channels, because clearly the generation currently going through higher education and those behind it have less use for paper than any generation in the past 100 years.

That said, the processes that paper has traditionally been a part of are not going away. So, it's very important for anyone in the capture market to realize that the future is about owning the process, not the paper, and Info Insight, and Kofax's SPA strategy, and quite a lot of what I'm starting to see show up on the market, seems to be taking this approach. Good work guys!

Kodak Global Directions 2012

Out here in Las Vegas (JW Marriott up in the hills a bit) for Kodak's first Global Directions conference. About 200 people here, which Kodak described as 60% SIs, and 30% end users. Rest our technology partners and analysts. Certainly smaller than Kodak Breakaway events in the past, but also not necessarily trying to be Breakaway.

To get a taste of what's going on out here, check out Twitter #kgd2012.

Tony Barbeau, GM of Kodak Document Imaging has described the event more of as an industry than a vendor event, of which Kodak is a sponsor. And Kodak has mostly delivered on this promise. There is not a lot of Kodak vendor content in many of the presentations. I'm sitting in Kodak DM Director of Technologies Roland Simonis' presentation on IDR right now, and he certainly has not mentioned a Kodak product 45 minutes into his talk.

Kodak did introduce an IDR product at the conference, InfoInsight, powered by German ISV ITyX. But, Simonis is clearly presenting an educational, not an advertorial track. Lot of good, diverse presenters here, including Shad White of CloudPower, Brian Dirking of Box, and Rai Wasner of Kollabria, who helped put the agenda together.

Interesting this is that scanning hardware, Kodak DI's bread-and-butter for many years, are really not playing a prominent role. This was a deliberate move to Kodak to really spotlighting their software. I'll get into reasons for this in my next premium issue, but it certainly seems like a good idea, as expanding into software and solutions are clearly the future for Kodak DI.

TIS Scores Singapore Mailroom Deal

Earlier this week, Top Image Systems (TIS) announced it has "won an $855,000 project to deploy eFLOW® Digital Mailroom (DMR) at a public administration in Singapore. The solution will optimize and accelerate processing of all incoming documentation – free text and forms, paper and digital, estimated to reach a volume of tens of millions of documents annually."

According to Alex Toh, VP, Asia-Pac for TIS, the organization is "a long time customer of ours doing traditional big volume scanning and have recently been convinced that our DMR solution can further increase their efficiencies through automation and STP."

According to the press release, "The agency processes, audits and archives the 2-4 million forms and 8-16 million semi-structured and unstructured documents it receives each year, including letters, bills, statements of account, identity cards, etc. The project involves complex indexing and comprehension of unstructured documents written by people with different levels of command of the English language and from every walk of life. The DMR system will achieve document recognition rates of 90% for forms and 30% for semi-structured documents. The system is expected to go live in the first half of 2013."

This is the fourth significant announcement TIS has made in the last month regarding capture software sales. They have also announced a logistics win, a census win, and four significant European wins.

NovoDynamics Release new IDR Product

NovoDynamics, the Ann Arbor, MI-based ISV best known in our industry for its Verus Middle Eastern language recognition technology had released a new document classification and extraction product. The new NovoDocufier utilizes NovoDynamics pattern recognition expertise to rapidly classify and group documents without having to perform full-text OCR. This technology the was foundation of Novo's previous generation Coronado classification engine.

With NovoDocufier, NovoDynamics has added the ability to apply OCR-based data capture to a process. There is an intuitive process for highlighting fields the first time through and thereafter they will be captured automatically. According to Novo VP of marketing Tim Dubes, the product is currently in beta at several service bureaus. "They like the fact that it can be set up very quickly to run diverse jobs," he told DIR.

Goerke Joins ABBYY
Speaking of intelligent document capture (IDR), Alexander Goerke, the former VP of Transformation Software (KTM) for Kofax, has joined ABBYY as VP of Semantic Technology Products. According to the press release, "In his new position at ABBYY, Alexander will be responsible for development and market introduction of a new generation of software products for document understanding and information retrieval based on ABBYY's innovative semantic technology."

Goerke was most recently working on an initiative called Skilja, which is focused on the "document understanding" market.

Brainware Announces another seven-figure deal

A few weeks after announcing a $2 million sale to a European service provider, IDR specialist Brainware has announced a $1 million deal with a "U.S.-based product distributor serving the construction and retail hardware industries." It's an A/P deal initially for handling invoices and expense reports and includes integration with JD Edwards ERP systems.

Brainware CEO Carl Mergele was quoted in the press release: "For businesses that are experiencing growth through acquisition, the effective, efficient consolidation of back office operations can pose a significant challenge, requiring the reconciliation of diverse processes and legacy IT platforms. By providing the ability to capture and reconcile data across diverse transactional and content management applications, Brainware enables complex enterprises to achieve world-class performance in accounts payable without increasing headcount."

Sounds like Brainware is having some success in the emerging enterprise capture market.

Brainware Announces $2 Million Deal

Intelligent data extraction specialist Brainware has announced a $2 million deal with a European service provider. This customer specializes in financial and accounting processes and Brainware's software will be used for invoices and "other financial documents." This represents that latest of several large deals for the Ashurn, VA-based ISV that has seen some impressive growth in the past few years. It is also a nice size win in a European market where some have speculated there is weakness due to macro-economic conditions.

TIS Wins $2 Million Invoice Processing Deal

In a good sign that big invoice processing deals are still out there, Top Image Systems just announced it had completed installation of a 1.5 million Euro (almost $2 million) deal with an Italian power company. The customer is running an SAP ERP system. Because there has been so much focus on the capture of invoices in SAP environments over the past few years, especially by vendors like ReadSoft and Open Text, we often wonder how many big deals of this nature are left, and the answer we typically get is that the market is only 25% penetrated at most.

Historically, TIS has been strongest in Europe, but espeically Germany, so it's a good sign for them to win such a big deal in a market other than Germany. And apparently, there are still big invoice processsing deals out there to be won.

Brainware completes installlation with Sun Chemical

These are the types of deployments we hear about relatively often from Brainware, which is kind if a dark horse contender for large invoice capture applications. They don't quite have the same background as Kofax, ReadSoft, and Open Text, but seem to win their share of large implementations, often replacing competitive vendors' implementations. At Sun, they tout a Kofax replacement.

Here's a quote from the Director of Corporate Accounting at Sun Chemical that validates a lot of the stuff we hear directly from Brainware:

 “Brainware touted its ability to achieve 80-90% field extraction rates out of the box, but we realized that those were conservative estimates as we have experienced extraction rates as high as 93-99%,” said Ray Baer, Director of Corporate Accounting for Sun Chemical. “Once our team started to use the system, we quickly recognized how much more user-friendly it was compared with what was previously in place.”

More OEM Deals

Couple of interesting ECM-related OEM deals were announced today, with major, major, large software vendors. First, you have Brainware announcing an OEM deal for its capture software with Oracle. The most obvious fit will be using Brainware for invoice capture in Oracle Financials implementations, but the announcement is pretty vague, so Brainware's capture could theoretically be used in a lot of ways. A couple years ago, Oracle picked up some strong distributed capture technology when it acquired Captovation, but Captovation doesn't do much data capture, so this is a great complement for that....Also, SAP has expanded its agreement with Open Text and is now offering Open Text's full ECM application. It had previously offered SAP's invoice capture and processing technology as well as its document archiving. This is another sign of how ECM is going mainstream.

OCR Invoice Market Penetration

After Kofax just paid $30 million for an ERP-workflow specialist, we got to wondering how far penetrated the maturing market for invoice capture was. Henry Ijams of Paystream has it at about 16% for IDR adoption among Fortune 1000 companies with 45% having some sort of imaging for processing paper invoices.

Captaris-ODT

Captaris has agreed to acquire Oce Document Technologies (ODT) for some $15 million net, when considering ODT's $29 million in the bank. ODT brings fax-server market leader Captaris some serious document capture technology as it attempts to transition into the world of document capture. We first learned of Captaris' close ties with ODT when discussing a new capture-for-SharePoint module that is being introduced for their RightFax product. [See article in our latest issue.]

The deal also includes Captaris accepting responsibility for some $17 million in retirement and bonus obligations, so it will end up costing Captaris somewhere around $30 million. For this, Captaris' receives a 180-employee company, headquartered in Constance, Germany, with a run-rate of approximately $33 million. This is down from the 300-employee, $40 million company that we reported Oce acquired when it bought CGK in 2000 [see DIR 5/5/00]. Oce, does, however, through ODT's CGK roots, continue to develop some of the premier OCR/ICR technology for data capture on the market. Almost all the market leaders in the IDR and forms processing space utilize ODT's technology. It will be interesting to see how Captaris manages these relationships, while at the same time pursues its own distributed capture initiatives.

In North America, ODT focuses primarily on OEM sales, while in Germany, it has a full-service capture solutions business.

Invoice processing

We did a great couple issues recently on the state of the invoice processing market. We learned all sorts of neat things, from vendors who were very forthcoming with information. If you're interested in taking a look at our study, please get in touch with me.

Here's little bit of what we wrote that we've posted on our VAR Page.

Thanks.

Ralph

Kofax

Yes, we've been giving Kofax a hard time lately because of its constant reorganizations and lackluster financial results. However, a couple press releases from last week indicate some of the potential that the capture marketshare leader has for turning things around. The first involved an invoice processing win and the second a significant distributed capture win. These are the two hottest segments within the document capture space, and Kofax conceivably could be a powerhouse in both areas - not something too many vendors can claim.

Cheers.

Ralph

First post of fall

Got the kids off to school today. Much quieter around here. Hopefully will leave me more time (and energy) to blog. Preparing to travel to the annual HSA Capture Conference next week. There I will be presenting on the top seven news trends of 2007, which got me thinking about two themes in particular:
1. The changing Interface of distribtued capture
2. The adoption of invoice processing - as outlined in my last issue, there are like some 500 North American installations of invoice capture, I'm guessing like a 1,000% increase over three years ago.

Distributed capture and invoice processing are two trends that we talked about a lot of years that have both now become an increasing reality. So, I guess there is some value to this speculation that we run in DIR.