The acronym SOS can stand for a couple phrases, both pertinent to the state of the document service provider industry. The first is “Save our ship,” which is a well-known distress signal. The second is “same old stuff,” which is part of the reason service bureau consultant Bob Zagami believes the industry has reached its current “save our ship” mode. To address these disturbing trends, Zagami has gotten together with Harvey Spencer Associates (HSA) to launch CapServe 17—a Service Provider Capture Summit.
The event is being held April 5-6 at the Hilton Washington Dulles. Ostensibly, CapServe is a revival of the AIIM Service Provider Executive Forum, which was last held in 2014, but Zagami sees it as much more than that. “If we were going to do the same thing we did at SPEF, we might as well have stayed home and played golf for a couple days,” he told DIR. “What proved to be the demise of SPEF was that the service providers were mostly presenting to themselves. We didn’t take attendees out of their comfort zones and force them to look at what was happening within their customers’ enterprises and the world at large and then try to explain to them how they could compete in this evolving market.
“If you look at the agenda for CapServe 17, we are bringing in speakers from outside the tent. Service providers have to look at disruptive new models like cloud integration. However, this moves discussions away from IT and departmental managers and toward business users. Traditionally, when selling their services, service providers might talk to a departmental manager, who would work with IT to develop some application that fit within the framework of a large ECM solution. Those days are going away.
“Business users are driving the discussions now. When they leave work, they are used to having all their applications on the cloud and all their information instantly available through their smartphones and tablets. When they come to work, they except to have business apps that work the same way. If you look at the way people work and communicate with each other, we are now in the cloud. That plane has taken off and it’s not landing.”
Harvey Spencer, the principal of HSA, noted that the shift to cloud software is a scary time for most service providers. “The cloud is going to change their business models,” he said. “Traditionally service bureaus have licensed software for a particular customer or set of customers and then been able to use it again on future projects. In the case of the cloud, it’s going to be a software rental, rather than traditional licensing model.”
Zagami noted that ISVs that sell to the service provider market are also struggling with how to adjust their models. “They are all looking at some sort of revenue sharing,” he said. “That’s why so many sponsors have been eager to participate in this event. Many of them are in the early stages of developing these new models and want to meet with service providers to discuss ideas and strategies.”
According to Erin Dempsey, event director for HSA, CapServe 2017 sponsors include ibml, Kodak Alaris, Xamcor, ABBYY, CaptureFast, Parascript, OpenText, GRM Document Management, Kofax, OPEX, SourceHOV, and I.R.I.S. “The key to the success of this event will be the three-way exchange among attendees, vendors, and presenters,” said Spencer. “We’re going to encourage a lot of bi-directional interaction.”
Time to fish or cut bait
When we spoke with Spencer and Zagami, Russell Stalters, the CEO of ClearPath Solutions, had just been announced as a speaker. Stalters first came to DIR’s attention as president of TrueArc, a records management ISV that was sold to Documentum in 2002 [see DIR 11/15/02]. “Russ was working for BP when the big oil spill happened [in 2010], and he worked extensively with service bureaus to manage the records and information associated with that event,” said Zagami. “He has real world advice for service bureaus on how to work with enterprise customers. We never had speakers like this at the AIIM SPEF event.”
Zagami acknowledged that not all service providers are going to have the resources or desire to transition to a new market where electronic input surpasses paper, the cloud overtakes on-premises software, and business users expect access to services through apps. “We are likely reaching a turning point where service providers have to decide whether or not they want to play in the market going forward,” he said. “If they want to play, there may be opportunity for acquisition of other service providers who might decide they want to sell out. At CapServe, we’re going to have an investor panel to discuss these options.”
“We’ve seen some service bureau roll-ups in the past that haven’t necessarily gone so well,” noted Spencer. “One of the changes I think we are seeing in the market is a major shift toward verticalization and more specialized-type services that can add value to a provider’s offerings. One way to add expertise in a particular area is through acquisition. On the other side of the coin, a lot of companies looking to sell have no clue as to what they will have to go through. For one, it typically takes a great deal longer than anyone anticipates. We are going to have panelists with experience on both sides of the coin.”
Preparing for the future
CapServe also features a half-day production/operations mangers workshop. “This is something I always wanted to introduce into SPEF; it gives service providers the opportunity to bring additional people who can get some value from the event,” said Zagami. “Why not bring in some of the people who are actually doing the service work? They have to understand how their deliverables will change, for example, when they suddenly find that 70% of the documents they are capturing are coming in digitally instead of on paper like they were a few years ago.”
Zagami explained that there are also new security concerns for service bureaus as they move more heavily into the cloud. “It used to be that a service provider only had to worry about rules created by IT,” he said. “Now, they have to worry about their customers, as well as the government. Security and privacy is the number one issue for any CEO. When data breaches occur, they spread like wildfire and companies can quickly end up on the front-page of the Wall Street Journal or with significant fines to pay. These fines can end up getting passed along to a service bureau.”
On the sales side, Zagami stressed that service providers may have to learn a new language. “I read somewhere that approximately 30% of management is soon going to be staffed by millennials,” he said. “In other words, companies are hiring people that think completely differently from the production managers who service providers have sold to in the past. Service bureaus are going to have to understand how to reach out and relate to these millennials.”
Spencer suggested that one way to achieve this connection is by potentially creating apps for particular services that can be accessed by business users on demand. “For example, a service provider might make an app available for translating a document before it’s entered into a workflow,” he said. “On the back-end, the service provider might be leveraging an ISV’s technology and they each would receive a piece of the transaction fee. This type of services-oriented model creates more flexibility for everybody involved.”
In addition to expanding the horizons of current service providers, CapServe is attempting to broaden the audience it is addressing and embrace entities like MPS vendors and shared services providers. “One of the potential trends we’d like to explore is how cloud-based managed print services (MPS) could be a lead-in for offering managed content services,” said Spencer. “As more MPS providers have expressed a desire to play in content services, we think it makes sense for them to participate in CapServe 17.”
In conclusion, Zagami noted that ignoring the changes taking place in the market is not going to prevent them from happening. “A lot of service providers have been working with microfilm and traditional ECM products for the past 30 years and really don’t know how to move forward,” he said. “They need to watch what their customers are doing. As they move to the cloud, they are not always keeping their traditional ECM vendors, because they bring too much baggage. Service providers can’t let this happen to them. They need to be prepared with modern solutions.
“How do they do that? How do they adjust their technology platforms and speak the right language so that their services remain attractive to their customers? The speakers at CapServe will be able to guide them. This is a new event and it’s nothing like the service provider community has ever seen before.”
A general attendance pass for CapServe 2017 is $999, with a production workshop-only pass available for $595. Discounts are available for multiple attendees from the same company.
For more information: https://www.hsassocs.com/capserve17/