Documens Boss

Having undergone significant consolidation during the past few years, enterprise document output management (DOM) is still populated with a wide range of niche vendors worldwide. Over the last few years, DOM solutions have become an increasingly important facet of ECM and BPM solutions; they have helped users automate their document output management requirements for multi-channel distribution, improved communications and the overall customer experience. Forrester has defined this emerging market as DOCCM (Document Output for Customer Communications Management), putting more pressure on further standardization and integration with ECM/BPM and ERP systems and also, on the vast area of choices of how to distribute, share, print and store all the created documents.
 

During the last 1-3 years, we have seen strong consolidation in this sector, as evidenced, for example, by the acquisition of Exstream by HP, Skywire by Oracle, Detec by Beta Systems, Document Sciences by EMC, Macro4 by Unicom, as well as the BPM company Pallas-Athena, acquiring TDS Modus-One. However, whilst there is a large number of vendors active in the sector, few new notable acquisitions have emerged in the last 12 months. Compared against ECM and BPM, where there are several large vendors operating globally, in the DOM sector, each region seems to have its own local leader.
 

Document Boss has invited  a number of business leaders in the DOM segment to share their opinions on their particular market. 
 
This month, we are fortunate in gaining perspectives from the following leaders:
 
• Bruno Henry, COO of Sefas Innovations   http://www.sefas.com
• Glenn Ricketts, CEO of ActiveDocs            http://www.activedocs.com/
• Richard Burdge, CMO of Thunderhead    http://www.thunderhead.com/
• Uwe Seltmann, MD of Icon                       http://www.icongmbh.de/en
             

Q 1) What is the importance of the DOCCM market and what benefits do these solutions bring to their users?
 
Bruno Henry, Sefas Innovations: The DOCCM market is constantly growing, as it serves the crucial function of communication between the Enterprise and its clients, via critical documents. Marketing, such as that used in Transpromo, is only a side effect of this communication. Such marketing is on the increase, as it would be a mistake to restrict documents only to paper format. In addition, the DOCCM market is now digital, lending it the versatility to become multi-channel and to utilise all new methods of communication.
 
Glenn Ricketts, ActiveDocs: While DOCCM is an important and growing market, efficient document output is only as good as the quality of the documents that were created in the first place. The old saying “garbage in, garbage out” applies here. It is therefore, important for customers to put equal emphasis on dynamic publishing of the content and the output of the document for DOCCM to fully succeed. Never is this scenario more important than with the emergence of transpromotional marketing. The “transpromo” document is a powerful new sales tool with obvious economic benefits to organisations who have the ability use it effectively. In simple terms, transactional documents inform and transpromo documents sell. Transpromo documents are creative, full color and quite likely to be delivered via multiple media. They also have regular changes of layout, based on the products and services the document issuer is promoting. Therefore, facility of creating the document is paramount and the software for delivering the transpromo documents needs to be much more cost effective than older transactional counterparts. There needs to also be continuous pressure to break down historical IT fiefdoms to help facilitate connectivity with document management and archiving software.
 
Richard Burdge, Thunderhead: Whether you look at it through Forrester’s DOCCM or Gartner’s CCM models, customer communications management is critical to customer experience and impacts greatly on bottom line, through increased revenues, better customer retention and improved productivity.

  
Uwe Seltmann, Icon: Even in the current economic climate of restricted budgets and postponed projects, Icon is experiencing immense interest in document composition and automation solutions, both from existing and potential customers. The main reasons for this interest are the benefits customers can profit from. Among others, these include:
• quality of output and communication,
• cost and time savings in the customer communication processes,
• usage of new output channels for new business models
• consolidation of several output systems (also offline point of sale-systems) into one company-wide solution.
 
 
Q 2) Do you expect that the Document Composition vendors will include, either by development or acquisition, the specific features needed for multi-channel support, enhanced printing capabilities or will this remain a separate niche within the DOM market?
 
Bruno Henry, Sefas Innovation: There will not be "Document Composition" only vendors and, as a consequence, the niche will die. The Document market is following the path of other industries by adhering to a supply-chain model which encompasses the supply of information, the creation or re-engineering of a document and its multi-channel distribution. This model is at the source of any efficient and cost-effective production and is the reason vendors will have to grow, either by development or by acquisition, in order to garner the necessary tools to manage the document supply chain. As we saw ERP being the software solution of enterprise supply chain, we will see DRP or Document Resource Planning software suites, to support the document process.
 
Glenn Ricketts, ActiveDocs: Yes. Transactional document creation vendors will increasingly offer support for multi-channel as well as enhanced printing capabilities, because customers are demanding it. Customers want more flexibility, quicker response times and more cost-efficient solutions to meet their growing document needs and are already turning to the niche, transactional companies to fill voids left by the bigger legacy/proprietary software vendors. The larger systems vendors have noted this paradigm shift and have made moves to acquire the more nimble companies in order to compete. 
 
Richard Burdge, Thunderhead: Providing seamless, real-time support for multiple channels, especially for interactive communications, is a capability that must be written into the architecture of the platform - You can’t simply bolt on 3rd party products.  And it’s not just a question of specific output channels; an enterprise platform must have the capacity to coordinate communications across all channels and all modes (Forrester’s structured, on-demand and interactive).  Ultimately, the niche players will be those who are essentially limited to one channel, such as batch print.
 
Uwe Seltmann, Icon: I expect such features will be included in all Document Composition systems sooner or later. We should not forget that the demand for such features is often the main reason customers replace their old, home grown or not state-of- the-art output systems. So, the products which will survive in this market will need to incorporate these features and, in addition, new channels (e.g. public secure e-mail networks like the German e-Postbrief or De-Mail) will increase the demand for electronic output channels.
 

Q 3) What do you predict for future consolidation in this area?   Do you feel there is a global market leader emerging?  If so, who is it?  If not, why not?
 
Bruno Henry, Sefas Innovation: We have seen consolidation from HP and EMC and will continue to see increasing numbers of hardware manufacturers moving into this sector via acquisition, in order to obtain the software and services necessary to support sales of their printers and inserters. They will effectively become "one stop document solution" providers. This is the model IBM pioneered many moons ago.
 
Glenn Ricketts, ActiveDocs: While there has historically been some M&A activity, this has slowed in recent times, either because the bigger vendors can’t afford to acquire or because the niche vendors recognise the opportunity and want to remain independent. This means there are a lot of smart, smaller companies vying for customers’ attention, and no single, global leader is yet emerging. Customers want solutions that match their particular use case scenario, so there is sufficient demand for companies with vertical expertise or with experience of specific user requirements to leave room in the market for multiple vendors. Customers are evaluating vendors project-by-project versus an all-encompassing system, which means there are often multiple document creation vendors servicing one company.
The new freedom to mix and match document software with other enterprise software and hardware products, will eventually fuel consolidations at the high volume end of the enterprise market, once again by companies such as HP, EMC and Oracle. At the lower tiers, there will be expansion of the functionality of individual DOCCM software products, rather than consolidation of vendors. 
 
Richard Burdge, Thunderhead: Following on from my answer to the previous question, support for interactive, multi-channel communications is a key driver in the marketplace.  Also, in today’s fast moving world, the ability for LOB users to control communications development and management is now a strategic issue.  However, we’ll leave it to the analysts to categorize the markets and the players.
 
Uwe Seltmann, Icon: There will be some consolidation, but I don’t expect a global market leader in the near future. In my opinion the reasons are as follows:
• Even very large IT vendors are not putting much effort (e.g. development staff, consulting staff) into the DOCCM business, when compared to mid size, one product companies such as ourselves.
• Many customers prefer to implement Document Creation and Automation solutions with smaller, but highly specialized and more flexible vendors with 100% commitment to just one area of expertise.
• Thus far, acquisitions of smaller DOCCM vendors by large international IT companies have not been very successful - at least not in the DACH region, where we have tough competition among more than 10 small and mid size DOCCM vendors.
 

Q 4) What do you perceive will be the major challenges for this sector during the next three years? Do you expect any major technology innovations to emerge? If so, what are they likely to be?
 
Bruno Henry, Sefas Innovation: The major challenge for everybody will be the economy, as document production is still not regarded as the first priority into which to pour new investment. Colour printing will become the norm, as it is becoming increasingly economical and as processing savings are becoming tangible.
 
Glenn Ricketts, ActiveDocs: Technologically, there will be continued movement to SaaS-based offerings, continued improvement of interoperability with legacy systems and improved product functionality. However, the challenges we see for the next three years are less technical and more business-driven:
• Customers will struggle with the decision whether to purchase a point product to solve their document management needs or a full enterprise platform such as Microsoft SharePoint.
• They will continue to struggle with the ‘build or buy’ debate, thinking it may be cheaper and a more bespoke option if they build their own, as opposed to buying a proven solution already on the market.
• They will struggle with proprietary solutions that require custom coding, professional services and ongoing support, versus those built on standards such as Microsoft Word.
• Great emphasis will be placed on reducing total cost of ownership for document management systems; currently, an entry level, enterprise system can cost $500K or more, whilst an entry-level, transactional system costs $100-200K.
• Customers will demand a better ratio of licensing costs to service. Currently, enterprise systems have a 3:1 ratio (service: license fees) versus transactional systems that generally have a 1:1 ratio or less.
• There will also be a desire to reduce the cost of B2C transpromo document creation, production and delivery.
 
Richard Burdge, Thunderhead: Key challenges are the increasing number of customer communication channels, especially social media and mobile web, the increasing requirement for personalization and time-to-value in the face of an accelerating rate of change.
 
Uwe Seltmann, Icon: Despite the current high demand, it is possible that market saturation may be reached over the next three years, in typical DOCCM verticals, such as insurance and banking. So, the challenge will be to open new verticals or regions for this niche offering, where process optimization is still possible and where the decision makers are not yet clearly focused on DOCCM. In our experience, a considerable amount of evangelism is needed to achieve this, especially in markets outside Western Europe and the US.
On the technology side, I would expect to see solutions than can be used as a service in the cloud. This will open new business and payment models for the DOCCM vendors, e.g. pay-per-created-document and could conceivably, include printing, enveloping and dispatch of business documents for a ‘click charge’. The development and maintenance of document templates and output processes could be offered as a service, which would open new business opportunities for companies specializing in these skills. Our product, DOPE is already technologically equipped for cloud computing and, I predict, other vendors will follow suit, if their product architecture is suitable for this usage model.