A Data Capture Systems Book Review

Yes, Dr. K. Bradley Paxton of ADI (for Advanced Document Imaging) has written a fairly comprehensive book on implementing and maintaining forms processing systems. Paxton spent 32 years at Kodak and is probably best known in our industry for his work encouraging the U.S. Census Bureau to adopt digital imaging technology. He has plenty of experience in our market and it is certainly leveraged in this comprehensive book.

 Here's my complete review of his book on the Amazon page. The title is Handprint Data Capture in Forms Processing: A Systems Approach, but it's really about automating any type of document capture, from OMR to OCR to handprint. Paxton offers plenty of sound advice on how to really make your system hum - and then how to make adjustments to help it keep humming going forward.

As I say in the review, some of the statistical formulas went right over my head, but there is plenty of valuable stuff in there. It's probably the most comprehensive, neutral (meaning non-vendor) piece I've ever read on implementing automated data capture for documents. Can't see how this could not provide an ROI for anyone doing any volume of capture.

Why Sale is Good for Kodak DI

Over the past year, I have more than one conversation with people concerned that Kodak could potentially be using profits from its Document Imaging business to fund its money-losing print ventures. I'm not saying this was happening, as Kodak DI continues to invest in new technology and is even holding a fairly large industry event next month. But, there were clearly concerns that Kodak corporate's money losing ways could eventually drag down DI, which by all accounts was a profitable and growing business.

Here are some facts: In a "public lender presentation" put out by Kodak earlier this year, "document scanners" were listed as one of three core businesses (along with "retail systems solutions" and "digital plates") that generated $214 million in profits in 2011. Kodak also listed four growth businesses, consumer inkjet, digital printing solutions, workflow software and services, and packaging solutions, that combined to lose $415 million in 2011. There were also a number of "manage for cash/value" entities that pretty much broke even in 2011.

Basically, at that time that presentation was published, it appeared Kodak's strategy was to fund the "growth" entities with profits from the "core businesses." Of course, this is not really that attractive a proposition for a business unit like DI, which certainly considers itself a growth business as well. This is one reason why a sale is attractive to DI.

Here's a quote from Dolores Kruchten, who has spent many years in management at Kodak DI, which I thought was pretty telling. “From Kodak DI’s view, it’s business as usual, with the caveat that we are very excited about working with a potential buyer and really being in a position where DI is a core focus of whatever business it ends up being part of going forward.”

As for Kodak corporate, I really don't understand the production print market, so, I guess I really don't understand its strategy. I'll just leave it at that.

Of course, I probably should point out that the bankruptcy and accompanying re-org will likely enable DI to shed some of that onerous pension/retirement obligations that had been a drawback to potential acquirers in the past. This is good for the health of DI as well.

Kodak DI For Sale

Not exactly sure of the strategy behind this, but here's my guess:
1. Document imaging is not printing, so it's not core to Kodak's future direction
2. Kodak is not getting as much money as it hope from the sale of the digital imaging patent portfolio, so they need to raise some additional money to pay off debts
3. Kodak Document Imaging (including the service business) is a healthy, profitable entity that Kodak can get $1 billion? for.

What do you think?

From a press release that was issued today, ".... [Kodak] has initiated sale processes for its market-leading Personalized Imaging and Document Imaging businesses."

Also from the press release: “The initiation of a process to sell the Personalized Imaging and Document Imaging businesses is an important step in our company’s reorganization to focus our business on the commercial markets and enable Kodak to accelerate its momentum toward emergence,” said Antonio M. Perez, Chairman and CEO.

"Kodak said it would move forward as quickly as possible and has targeted completing these transactions in the first half of 2013."

So, who are the potential buyers?

Read more here: http://www.heraldonline.com/2012/08/23/4209859/kodak-takes-next-steps-toward.html#storylink=cpy

Study Exposes the Efficiency of Paper

Yes, I know that sounds counter-intuitive. After all, the tagline to my newsletter is "Business Trends on Converting Paper Processes to Electronic Ones." And, why would we want to go through all the trouble doing that if not to make the processes more efficient. Hold on a minute, and I'll explain.

Here's a quote from a recent IDC white paper commissioned by Ricoh, entitled, It’s Worse than You Think: Poor Document Processes Lead to Significant Business Risk.  Discussing the results of a survey on ineffective document processes, "The least effective processes are also the least paper based. This exposes the myth that simply driving paper out of processes necessarily makes them more efficient."

Basically, I think we all understand the second part - electronifying a bad processes doesn't necessarily improve it, it just codifies it. But, read that first sentence again. It indicates that the paper-based processes are actually more effective than the electronic ones. To me, this could be great marketing material for the document imaging industry. Logistically, it would follow maybe eliminating paper processes is not the most efficient route. Rather, improving them, through strategic capture might be.

Bottom line: In many cases paper processes are more efficient than electronic ones, so why try and replace them? Why not just improve them through document imaging? Does that make sense?

Forrester Capture Report

Has anyone seen this new Forrester Wave report on Multi-Channel Capture? Kofax, which is absolutely the leader, top and to the right with EMC Captiva slightly behind, is making the report available if you register. There is also an AIIM Webinar scheduled for next week.

Anyhow, the report has caused some controversy in the industry. Most obviously, there are only nine vendors ranked, when seriously I think there are about 100 competing in the document capture software space - not to mention the "multi-channel" capture market, which would seem to bring even more ISVs into the mix.

I'll start off by saying that I like the term "multi-channel capture" as a moniker that identifies where the industry is headed. Automating the capture of data from paper documents, while greatly increasing efficiencies, is not enough anymore as paper use declines and new forms of electronic input emerge. I also like Forrester's stressing the analytics is going to become an increasingly important part of this market going forward. I'm not sure they utilizing the same framing of "analytics" that I would, but I think their concepts in this area are strong at least.

On the flip side, ranking only eight vendors seems like a great disservice. I mean they left out clear market leaders like Nuance and ReadSoft, while ranking their competitors like NSi, IteSoft, Brainware, and TIS. Not sure of the rhyme or reason behind the vendor choices although Forrester attempts to link it to customer demand. Some speculation is that Forrester's background is in ECM and not data capture, so maybe their choices were influenced by that. Either way, I think the number of vendors included comes up way short.

I'll have some more details in an upcoming premium issue, but as a word of warning, here's what one ISV (whose company was ranked) said to me regarding the report: "Something like this is supposed to help clear up confusion in the market for end users. This report only adds to it."

Dicom and KLake Partnership Paying Early Dividends

Sounds like Dicom's partnership with KnowledgeLake is off to a good start. Today, the European value-added document imaging distributor "reports a consistently growing demand for products and solutions from KnowledgeLake Inc." [Click for press release.] The companies have been working together for almost a year. It was at last year's Sept. DMS show that Dicom announced it would act as KnowledgeLake's distributor for the EMEA territory.

KnowledgeLake is an ISV that specializes in software for document imaging enabling SharePoint. It has grown its U.S. business primarily through direct sales and a handful of resellers. The EMEA business is being pushed primarily through Dicom's extensive reseller channel. KnowledgeLake had one of the first software products added to the Dicom porfolio in the wake of the distributor's splitting with Kofax.

According to today's press release, "Since September 2011, DICOM was successful in closing a whole series of KnowledgeLake partnership agreements with system integrators in Germany, Switzerland, the UK, Netherlands, Denmark, Nigeria and South Africa and managed to win a significant number of projects throughout EMEA. In addition, DICOM also reports a strong pipeline for the month ahead."

According to Joachim Froning, CEO and co-owner of DICOM, "We have been able to draw to the attention of system integrators and VARs in the ECM- as well as the MS SharePoint and Dynamics space to KnowledgeLake. Amongst already signed partnership agreements are renowned integrators like SP Integration, COI, Data One, Sword, Informed Consulting, Innobit, Intervate, FOXit, iSPartners, Infographic and ProActive, just to name a few."

Thoughts on Parascript/AIIM Forms Processing Study & White Paper

Lot of interesting information in a recent study conducted by AIIM and sponsored by Parascript.

Parascript develops a slew of recognition technology including handprint and cursive recognition. Not surprisingly, a follow-up article written by Parascript's Don Dew highlights some of the shortcomings in adoption of handprint/cursive recognition. According to Dew, "In most organizations, hand-written fields are prevalent on a significant number of forms. 42% of respondents indicated they have hand-written data fields on half or more of their forms. In addition to being prevalent, these hand-written forms are also important to the efficiency of the business process. 40% of respondents say they are quite important; 20% say they play a key role."

 "However, many organizations are not taking advantage of this information. 88% of respondents say they scan forms, but only 32% say they perform text recognition to automatically make that data readily available for use in their organizations. The majority of respondents (55%) report they scan images and manually re-key the data as part of their workflow."

 Of course, this is where Parascript's technology could come in, or, the crowdsourcing data-entry solutions from companies like virtualsolutions and Captricity, which were featured in our last premium issue. Some combination of the two may actually form the most efficient solution.

Another interesting point made in the study is that users cited a multitude of forms as the number one reason that they are not using forms processing technology - in other words, they feel the templates are too hard to set up. This should be interesting news to companies like ITyX, a German artificial intelligence vendor that DIR was recently introduced to.

Anyhow, there is a lot of interesting stuff in this white paper about forms processing adoption, what end users are implementing it for, and why they are not in certain areas.  The bottom line to me seems to be that parochial/departmental management of many forms capture operations prevents users from looking at the top tier capture automation solutions out there. They just don't have the bandwidth to consider the cutting edge technology that is most often included in enterprise capture applications. SaaS/Cloud services may prove to be the way around this.

New Tweets: ReadSoft Hire, DocuWare Move

If you're not following us on Twitter @DIREditor, please do. As I wrote in a recent e-mailer, it's a great way for me to quickly and efficiently distribute links to relevant news stories, like these two the moved today:

• Former Kodak, Kofax, and Cranel sales executive Todd LeVeque has been named director of channel sales at ReadSoft. According to Bob Fresneda, president of ReadSoft North America, LeVeque will be spearheading ReadSoft's recently launched  cloud/SaaS efforts in the U.S.
• DocuWare has moved into a larger U.S. headquarters located at Stewart International Airport in Orange County, New York. The location is not far from DocuWare's former U.S. offices in Newburgh, but, according the press release offers "a new, larger, state-of-the-art office space." With a focus on selling ECM software through MFP dealers DocuWare has experienced an average growth rate of about 20% year over year for the past several years. The German-based company also recently took on some funding, which is being used to help it increase its sales staff and accelerate its growth. 

Visioneer-Xerox renew licensing deal

Scanner vendor Visioneer has renewed its brand licensing agreement with Xerox. First signed in 2003, the agreement" extends Visioneer’s current exclusive rights to develop, market and support the award-winning Xerox DocuMate line of Xerox-branded document scanners."

A relatively unique deal when it was first negotiated, Visioneer's partnership with Xerox has been a key growth driver for the Pleasanton, CA-based scanner vendor's business over the years. Perhaps due to the fact that it is using the Xerox brand, Visioneer has had a tremendous amount of success selling through Xerox sales channels. Here's a quote from an interview with former Visioneer VP of sales Bill Kouzi in 2009:

"The majority of our new sales now come through Xerox. We are now focused primarily on building
our relationships with the Xerox community. This includes focusing on Xerox enterprise accounts. We
are also focused on cultivating the Xerox channel, which includes Xerox Global Imaging, Xerox Global Services, Xerox Peak Resellers, and Xerox’s direct sales force. We have someone focusing on Xerox Canada and our business with Xerox in Latin America has grown tremendously...."'

So, obviously, the extension of the partnership for at least another five years, is an important event for Visioneer.

We first Tweeted about this announcement earlier this morning @DIREditor.

ReadSoft Reports $29 Million Quarter

The numbers for ReadSoft's first full quarter with foxray as part of the business are in. For Q2, the Swedish capture and workflow ISV reported the equivalent of around $29 million in U.S. dollars. This represented 25% overall growth from Q2 2011, 13% of which was organic. ReadSoft's operating profit was down slightly, to approximately $2.5 million.

Said CEO Per Åkerberg in a press release, "Our strong growth takes us back to black figures with regard to our EBITDA result, both for the quarter and the half-year. We are still not where we want to be in terms of results, but we believe that the investments we make in connection with the acquisition of foxray and in new product generations ensure good long-term growth. We have continued to work intensively with the integration of foxray and this is now essentially complete."

ReadSoft showed growth in all three of its major geographical markets, with the non-Nordic European market leading the way, thanks likely to foxray's established business in Germany.

Kofax Hits Q4 Projections; Dratler Back w/ Bish

Big day for Kofax. Couple of important announcements this morning. First, the Irvine-based document capture ISV seems to have hit the fourth-quarter numbers that CEO Reynolds Bish projected after a sluggish third-quarter. When the third-quarter results were announced, Bish had projected at least $69 million in revenue from Kofax's core capture business in fiscal Q4 (ended June 30), which would have represented 5% growth over Q4 2011.

According to the Kofax press release, "The Company ended the fiscal year with record total revenues in the range of $261 to $263 million and expects to report an EBITA of at least the $40.2 million realized during the previous fiscal year, both of which are in line with Company expectations previously communicated to the financial community."

There is a conference call scheduled for this morning. I'm on vacation and haven't had a chance to review the details yet, but, the London investment community seems to approve of the Kofax preliminary report. Kofax shares were up almost 5% in early trading. Of course, that could also be reflective of the news that Kofax has named Howard Dratler as its new EVP of field pperations. Dratler held a similar position at Captiva.

Bish probably would have liked to hire Dratler as his right-hand man when he first took over Kofax. In fact, here is a quote from Bish in our April 4, 2008 issue: “The new EVP position is pretty much identical to the
position I created at Captiva, for which I recruited Howard Dratler who had experience at Veritas. Howard is a very talented guy who did a very effective job. Unfortunately, he is not currently available."

At the time Dratler was occupied as the CEO of Anacomp and Bish hired former HP sales executive Alan Kerr to fill the EVP of field operations role. Kerr enjoyed mixed success, but Kofax seemed to recover more slowly from the 2009 economic downturn than many of its competitors and really didn't have a very strong first three quarters of its fiscal 2012.

Dratler was with Bish when he built Captiva from a company with market cap of less than $10 million to one he was able to sell to EMC for $300 million in a matter of three years. So, the Bish-Dratler combination clearly has a history of success in driving up investor valuation - which was Bish's main charge when he was hired by Kofax, and a goal I'm sure he is still working towards, as by my calculations at least, Kofax's current market cap of around $350 million is about the same as the Kofax (then known as Dicom) market cap when Bish was brought in.This unrealized goal of driving up the value of the company and the recent hire of Dratler would also indicate to me that the rumor circulating about Oracle buying Kofax has no substance behind it.

Psigen Completes Strong Fiscal 2012

Psigen has announced that it achieved 70% growth for its latest fiscal year, ending June 30. According to a press release, "Growth has come from a strong expanding domestic market, and significant growth in Europe and the Asia Pacific Region." Psigen is an Irvine, CA-based ISV that offers a versatile document capture software application.


On the additional strength of some OEM deals, Psigen had reported 90% growth for the six months ended Dec. 2011. Bruce Hensley, president of Psigen, said the new year was off to a good start with a strong July. He cited sales to large companies, including competitive replacements, as helping to drive Psigen's growth.

“In this past year, we brought on a large number of Fortune 500 clients who were looking to enhance their current capture application set and lower their total cost of ownership," said Hensley in a press release.

Kofax Mobile Early Wins

Back in March, at Kofax's annual Transform end user and reseller conference, we told you that the Irvine,CA-based Mobile Capture application was the hottest topic in town. It seems like some of that interest has already turned into business for Kofax, which today announced four Mobile Capture wins in a variety of markets. Three of the wins are with end users, in the areas of service, sales, and healthcare, and the fourth is a Mobile SDK sale to an ISV that will embed the technology in a transportation app for capturing shipping documents.

Said Drew Hyatt, SVP of Mobile Applications at Kofax, " We already have prospective users testing and evaluating Kofax Mobile Capture for mortgage applications, insurance claims, expense management, proof of delivery and accounts payable.”

Last year, while working for Harvey Spencer Associates, Dave Wood had published some fairly aggressive growth numbers for the mobile capture software market. He predicted the market to grow from a couple hundred million dollars in 2012 to more than $3 billion in 2018. Embedding the technology in other mobile apps was one of the key strategies for driving growth.

Canon Announces Print/Scan Mobile Apps

Canon has announced a pair of apps that enable users to scan to and print from their mobile phones and tablets utilizing ImageRunner MFPs. The apps are for the iOS and Blackberry operating systems.

From a press release, "The Canon Direct Print and Scan for Mobile application provides communication between Canon multifunction products (MFP) and an iPhone and iPad, allowing users to perform print and scan functions between the two devices, such as scanning from the MFP to an iOS device or printing from an iOS device to an MFP."


The iOS app is free at iTunes and will work with compatible ImageRunners and Image Runner ADVANCE devices. "Through the app users can remotely manage "scan options from an iOS device (e.g., select paper size selection, select scan resolution, duplex printing, color vs. black and white, select number of prints, collate and more)."


The app for Blackberries is also free and does basically the same things as the iOS app. It does require that users purchase a MEAP application to run on their hardware. (Go figure, a Blackberry app being more inconvenient than an Apple app....market dynamics are hard to change.) Canon seems to have an Android mobile app for scanning and printing photos but not yet for documents. Not sure why Blackberry was ahead of Android in the development cycle. Probably made sense when development started.

DIR on Twitter

Some, I'm totally new to this, so I apologize for anything I do that involves ironing the bumps out if you will, but just Tweeting my first message on Ralph Gammon @DIREditor. Does that give you enough info to find me? Tweet has to do with TIS' partnership with Saperion, announced today.
 
 Twitter seems like a great way to try and update you on some of the cool and interesting press release I get everyday, without have to set up a blog post on them.

Kofax Lands $2 Million Deal

During Kofax's third-quarter financials conference call, CEO Reynolds Bish certainly expressed confidence that the Irvine, CA-based document capture and BPM ISV would rebound strongly in the fourth quarter. A couple of large wins indicate that Bish's predictions may be on target. A little more than a week after announcing a $5 million sale to "an agency of the U.S. government [that] has selected Kofax for a large scale, nationwide capture project," Kofax has followed up by announcing a sale exceeding $2 million to "a top 10 global banking group headquartered in Western Europe."

The deal is an extension of a current Kofax implementation and includes Capture, Transform, and Monitor licenses. In addition to helping Kofax reach Bish's Q4 goal of $69 million in revenue from Kofax's "core capture business," the deal should help boost Kofax's European sales, which have been sluggish as of late.

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.

SaaS Features Highlighted in Kofax BPM

Kofax has announced a new version of its TotalAgility BPM software. Kofax is touting TotalAgility 6.0's ability to be deployed through a SaaS (software as a service) model. Kofax added TotalAgility when it acquired Northern Ireland-based ISV Singularity late last year. At the time, Kofax touted the ability of TotalAgility to be run as a SaaS, and the latest version seems to re-enforce that position.

According to the press release, "TotalAgility 6.0 has been also been enhanced to accelerate deployments through an intuitive process design and execution experience. TotalAgility Workspace and TotalAgility Builder are now completely browser-based, making it much easier for users to design, deploy and operate these solutions. Multiple form factors are also now supported, delivering better user experiences to mobile device users."

There is no mention of the introduction with cloud-based capture, which is something Kofax promised would be on the way, as part of TotalAgility - not as a standalone offering.

The SaaS version of TotalAgility runs on Windows Azure.

Fujitsu Releases New Portable ScanSnap

Fujitsu has released a new version of its popular mobile ScanSnap unit. The S1300i can capture "up to 12 double-sided color pages per minute (ppm), even while using its advanced intelligent image-processing technology...1.5 times faster than its predecessor." It also comes bundled with Scan to Android and Apple iOS capabilities through Fujitsu's ScanSnap Connect capabilities.

Connect still requires a laptop to act as an intermediary, but, utilizing the connect app, images can be automatically transferred from the laptop to a mobile device. Check out this video (the limited words are in Japanese, but you'll get the picture.) There is also improved scan-to-cloud and scan-to-folder capabilities. The device can be USB powered and continues with Fujitsu's tradition of ease-of-use for creating searchable PDF files through the ScanSnap product line.

Kofax Deal May Top Them All

The theme on our blog all week has been the preponderance of large capture software deals that have been announced recently. This included a $7.5 million Latin American deal by Brainware. Not sure if today's announced deal by Kofax is quite that large, but it is billed as being worth in the "mid-seven figure dollar amount" to Kofax. So, it's somewhere around a $5 million sale to U.S. government agency for a "large-scale nationwide capture project."

The sale includes a slew of  Kofax products, including KTM (Kofax Transformation Modules for intelligent data capture) and the Kofax Front Officer server for capture from MFPs. This is also a part of a trend of seven-figure MFP capture deals, as NSi and Nuance were each involved very large sales of MFP capture software last year. The NSi deal was also with a Federal government agency - the DoD.

Let's hope these trends continue.