Market Trends: Providers of Managed Content Services Help Their Customers With Business Processes
What more can you offer MPS customers once you eliminate 20% of their waste printing through pull printing and usage tracking? We explain the business-process-related solutions that are emerging in MCS, what buyer trends drive demand, and how these solutions are being tied to other technologies.
- Though business process automation and optimization both offer opportunities, they are not identical in terms of the skills you need in order to provide them or the relationship that you need to have with your customer.
- Business process solutions look like an easy way to pick up some extra revenue from MPS customers, but they are actually an important developmental activity for printer and MFP suppliers. The solutions you choose to develop today will shape your company's competencies beyond the printing-centric ones and pave the way for your future business.
- Business process automation and optimization complement established technologies, such as ECM and business process management, rather than replacing them.
- In paving the way with customers for MCS, use your current MPS engagements to identify new operational contacts in your customer organizations. For example, departmental and workgroup managers directly benefit from shorter cycle times for work processes. The lead contacts for MPS in IT or purchasing may lack the authority to initiate a business process automation solution, but can still help you identify contacts or provide a reference.
- Once you have established MCS customers, use your business process solutions to expand your contact points inside the customer organizations. Go beyond the usual printer-centric roles to engage operational managers. Those contacts will help protect you against competitors and also prepare the way for you to launch new products and services to reduce your own dependence on paper and printing revenue.
- Design and implement your business-process related solutions so they bring consultative value to the planning phase, and so that the customer benefits from your expertise with implementation and support. Don't rely solely on selling software or cloud services the customer could also buy elsewhere.
Managed content services (MCS) represent the extension of established managed print services (MPS) practices into new categories of services. Two of those categories are business process automation and business process optimization. Though MCS is still immature overall, the technologies and service structure the providers offer is becoming clearer, as is the way different kinds of buyers react. It is important for today's MPS providers and printer and multifunction product (MFP) suppliers to understand these trends and to take stock of the opportunities they bring.
MPS customers often ask for the reduced dependency on paper and accelerated business processes that business process automation and optimization can provide, but they don't necessarily understand how to get there. It's not that the tools are entirely lacking. Most large and midsize organizations have enterprise content management (ECM) software, with customers spending $5.1 billion annually in total worldwide, but most ECM customers use it in a limited way that focuses on only certain categories of prominent documents and processes. Business process automation solutions allow customers to digitize paper documents from many processes and bring them into ECM and other business systems at just the right point in the process. For example, a university enrollment process that requires documentation of the student's finances and academic performance might reduce the processing time and shorten the time to receive federal subsidies by feeding digitized and indexed images of paper documents into an ECM system while the student is visiting the admissions office, instead of waiting until all of the documents are in place and then scanning them as a batch. In this example, the scope of the business process automation is limited to a specific process, and the focus is on the document capture phase. Business process automation solutions may leverage existing ECM repositories, or where none exist, MCS providers can also create custom on-premises or cloud-based repositories with full-text search and retrieval. Though the customers might create such a departmental solution on their own, the MCS provider brings the expertise and staffing to design, implement and support the solution. MCS providers are gradually building up that expertise today since, returning to the example, enrollment processes are found in different organizations and across many sectors.
Business process optimization may be required, since digitizing paper documents isn't always enough. Sometimes the process itself needs to be revisited and simplified. For example, a midsize professional services company follows a process for orienting new hires to its own, proven methodology and internal procedures. The problem is that the managers responsible for this orientation find the reporting of the orientation steps leading to certification cumbersome, and often fall behind, sometimes forcing HR to intervene. Automating the reporting process with a simple forms automation solution has cut the time involved significantly, but managers continue to lag in completing this step. Further automation might have cut the time spent reporting. But a systematical optimization of the process folded the data gathering about the progress of all of the recent hires into an existing, unrelated, HR reporting process. This reduced the number of reporting processes from two to one, and reduced the number of reporting instances from approximately one per week for each recent hire, to a single weekly process for all of the recent hires. It also reduced the time the busy managers spend filling out online forms by moving this task to an HR administrator who already contacts them regularly.
MCS providers are not the only ones that help organizations automate their business processes, but MPS engagements provide you access to established customers, without which business process automation providers would need to seek out distributors, or add personnel to sell their business process services directly. The printer equipment and supplies revenue, in effect, subsidizes the cost of selling business process automation solutions. In addition, MPS needs assessments spotlight just how much paper is being printed, and MPS customers often tell us they would like to reduce their dependence on paper. MFPs are often used to scan and route the documents as well, and an important part of the business process automation solution may be the job of programming the MFPs to prepare scanned documents for the next step in the process.
Business process optimization also draws on the research that MPS providers conduct in the needs assessment stage. The assessment may, for example, reveal individuals and departments that do unusually intensive printing as candidates for a business-process-specific assessment that pinpoints the paper-intensive processes that may have been overlooked in earlier business process management initiatives.
Gartner polled the largest and most globally entrenched MPS providers about their business process automation and optimization solutions in 2014. Although important gaps remain, their responses, and what we hear from their customers, show signs of maturation.
The MPS and MCS providers that serve midsize and large enterprises help their customers to develop custom solutions to route documents into their ECM systems or into other systems of record. Customers may request this help to implement projects for which they already have determined the need. Ongoing MPS engagements can also drive MCS, as the printing-related needs assessments help customers to identify business processes that are ripe for automation or optimization, and help them determine the goals and desired outcome for what are sometimes termed "value-added solutions" – so-called because they are added to the original MPS engagement. Most of the providers have solutions for scanning printed invoices that will be archived and then linked to the accounts payables system record for the disbursement to the vendor. If the vendor should later contact to ask why the amount paid differed from the printed invoice, the accounts payable clerk can view the document and see why the amount was altered, such as marginal notes about a discount that the vendor forgot about. Another off-the-shelf example is a solution to scan the customer's identification and signature card as the customer applies for a new account while visiting a bank branch.
MPS providers have been carrying out document-process-related projects for their customers for many years, but some now have methodologies and tools for identifying customer needs and for mapping out their current state, including such parameters as the extent and pace of change they are prepared to undertake. In some cases, this stage can involve time-and-motion studies of the existing process so as to reveal the steps that consume the most labor or cause the most delays. The largest MPS and MCS providers have refined their needs assessment methodologies to more effectively identify where customers' processes lag in efficiency or in other aspects, such as security, and to explain to customers how they will close the gaps. They then report on their progress against those expectations in the quarterly or annual business reviews.
Most MPS providers are also expanding their business process automation from general competencies, such as records management or scan-and-capture to solutions that are applicable to specific processes, such as invoice documentation for accounts payable, or benefits enrollment in HR. They are also launching more industry-specific solutions, usually for the industries in which they already have MPS customers, such as legal, healthcare, manufacturing, government and financial services. Customers benefit from this kind of maturation as the MCS providers bring the best practices that they learn elsewhere into your business process optimization. Since many organizations process documents in similar ways, customers can also get improvements without spending money for custom development.
In recent years, MCS providers began to reveal more about their business process automation solutions on their websites, suggesting a growing commitment to business process automation solutions. There is still a long way to go, though, since customer-facing websites that explain MPS still often omit specific descriptions of the business process automation solutions. This is unfortunate, because customers often use these sites to orient themselves to MPS, and may judge the different providers by what they read. Documentation of the business process optimization is even thinner. Beyond presenting an incomplete picture, these omissions may also cause customers to question the provider's commitment to business process solutions that their sales representatives later propose.
Business process automation and optimization are two related, but different services. There are opportunities for each, but they are not identical in terms of the skills you must possess to provide them or the relationship that you need to have with your customer. Providers must understand the differences.
Business process automation and business process optimization are two related service categories within MCS, since in both cases, the business processes in question are usually paper-intensive. The difference between the two is that the automation solutions rely mainly on applying technology to the business process, whereas business process optimization means analyzing the process itself and eliminating or reordering steps. From the optimized starting point, the process can, of course, also be automated. Some providers offer specific optimization services, such as Ricoh's business process optimization service, which includes a videotaped time-and-motion study to explore the process in the most granular way. Though business process automation solutions often include some optimization, and vice versa, the two categories presume different buyer agendas. Buyers who just seek a technological fix may see optimization as beyond their mandate and fear giving up too much information and influence to an outside provider. To them, automation is less intrusive. Buyers who see the process itself as broken may reject an automation solution as doing the job the wrong way, but faster.
MCS providers sometimes ask us what new solutions and services they should add to their portfolio to grow, and to position themselves for the future. As a starting point, Table 1 helps you determine how wide a mix of solutions you currently offer. The idea is to develop a range of ideas for which you then validate the interest of your MPS customers. The solutions are organized according to their focus (business versus infrastructure) and their substance (software, service or consultation). Most of the business-process centric ones consist of tools for automating entire processes, such as initiating mortgages and loans based on the application forms and documents provided by borrowers. Some are more general, such as capturing data from structured forms, or scanning lightly structured documents, such as letters, and converting them to searchable ASCII text through optical character recognition (OCR) and manual cleanup. Most are guided by software that is embedded in an MFP or on a local server. As Table 1 shows, fewer than a dozen MCS solutions are widely marketed, suggesting further opportunities. Only a few are consultative in nature. Understand that as you develop new solutions, you are also building the competencies of your company, so explore solutions of different types so as to keep your options open. For example, some of the gaps identified in Table 1 are best addressed with business process optimization, rather than automation.
Table 1. Examples of Business Process Solutions Gluts and Gaps
| Most Common | Less Common | Underserved or not served |
| Invoice processing | HR forms | Military sector |
| Account origination | Redaction for compliance with Freedom of Information Act | Courts and criminal justice |
| Loan origination | Shipping documents | High tech |
| Test and quiz scoring | Retail inventory | Scientific and academic research |
| Healthcare admissions | Sales | Administration of class action awards |
| Case management (such as human services) | Consignment notes | Compliance audits |
| Legal discovery | Compliance documentation | Broadcast media |
| Claims management | Contract administration | Political campaigns |
| General cross-industry document capture | Trademark and copyright administration | Journalism |
| Manufacturing | Advertising | |
| General cross-industry process optimization |
Source: Gartner (April 2015)
Customers automate and optimize their business processes in different ways. Some develop their own solutions, contributing to the 9% compound annual growth that Gartner has seen for ECM software. Whether deployed on-site or as part of a cloud service, ECM provides workflow and repository components. Organizations that optimize their office printer and MFP fleets often tell us that they see optimizing their business processes as part of a larger effort to eliminate paper, or at least reduce their dependency on it. MPS providers have offered solutions of this kind for years, with varying degrees of acceptance. In our work helping Gartner's mostly midsize and large enterprise customers, and also in our interviews of MPS customers since 2005, we see customers approaching business process automation in one of three ways: aggressive buyers, explorers and cautious buyers (see Figure 1).
Figure 1. Three Kinds of Technology Buyers
Source: Gartner (April 2015)
Aggressive buyers develop their own definition of MPS and MCS independently, often with senior management involvement, and then seek providers to match their requirements. Those requirements may stretch or surpass what MCS providers are actually able to deliver at the moment, and since aggressive buyers are often very large enterprises, their thinking may end up shaping vendors' service offerings and set the overall market direction for other customers to follow. For example, some large banks were among the first to adopt solutions to automate paper-intensive processes in their branches. The goals of aggressive buyers are sometimes sweeping, such as removing on-site paper storage or even taking their offices paperless. Although business process automation solutions can help them, they may really need the consultative, project-oriented services that business process optimization can provide. Of the three types of MCS buyers, aggressive MCS buyers are the most eager for help, so long as it fits their objectives.
Explorers keep their MCS choices open as they select the provider so they can later adopt the services in their own good time. Explorers want the benefits of print and process optimization, but they are wary of the providers' ability to satisfy their needs, and of their own ability to change how they handle printing and documents. When selecting the provider, they may not ask for MCS at all and instead will emphasize MPS basics. They are likely to implement MCS when, and only when, the provider has proved itself worthy of their trust. For example, a legal firm introduced a scan-to-search solution featuring OCR for its attorneys and staffers only after the provider first took over the firm's printers and MFPs. Many midsize and large enterprises fit the MCS explorer model.
Cautious buyers mostly seek help with their printer fleet, but they may end up using MCS over the course of the three- to five-year engagement. Although buyers of this type tend to keep their MPS providers at arm's length, they may accept solutions that they can readily understand and that address their specific needs. For them, prepackaged, self-contained business process automation services may seem sufficiently limited from mission creep. For example, a travel expense paperwork solution can help a large consulting company reduce paperwork time for its highly-paid consultants, who could instead be doing billable work or wooing new customers. The way business process solutions are typically limited to a narrow scope also reduces their vulnerability in case the vendor should disappoint them. Since their other MPS goals tend to be modest, cautious buyers may be ready to pick up such solutions without first waiting for a lengthy printer fleet optimization to be completed. Just because cautious buyers start out with a printer-centric scope doesn't mean they don't need help with processes. Just as a human-services agency may be struggling with aging printers that stretch its budget, and thus ripe for MPS, it may also be overwhelmed with paperbound processes. The MCS provider that can make its services directly relevant may be able to remain in place as a key part of how the customer operates.
MCS is part of a broader landscape of technologies and services. Business process automation solutions tie into both the established ECM solutions and the newer cloud versions. MCS Business Process Automation Augments Traditional ECM
Starting as far back as the 1980s, some organizations began to use ECM software to provide reliable access to the company's business documents. Decision makers tend to choose software that can accommodate large numbers of users and documents and that complies with relevant regulations or standards for the industry in question. Since top-down ECM projects tend to focus on the most important and visible company processes, though, they often fail to automate the many departmental processes upon which the enterprise's success also ultimately depends. For example, a contract manufacturer deploys ECM software to track, store and retrieve documents generated by its ERP software, together with ones received from its customers and from its own suppliers, as well as regulators and shippers. As new requirements come from departments to automate a wider range of second-tier departmental and workgroup processes, the MCS provider identifies new needs and adapts the existing workflow software, repositories and search/retrieval engines to meet them. An example is a temporary-worker hiring system to catalog past performance and then rapidly identify and onboard temporary factory workers who are not part of the HR system used for tracking permanent employees. In other cases, a self-contained solution using the MCS provider's own workflow software is sufficient, such as a sales productivity tool that helps salespeople in a midsize company respond to RFPs in a timely way.
In many cases, what midsize companies and departments within larger companies lack is not so much tools as the expertise in deploying them successfully. Midsize organizations and departments in large enterprises might be expected to assemble the solutions they need from ECM providers, such as Hyland, that specialize in subenterprise customers, or to deploy cloud ECM services on a pay-as-you-go basis. The value MCS providers add here is their expertise in designing a workable solution, in choosing the right tools for the task at hand, in supporting the solution they create, and in extending it further as new needs arise. Providers with enough experience in a specific process or industry can also introduce best practices. For example, an MCS provider that developed a solution to share scanned laboratory reports across departments later offers a very similar solution to a different hospital network as a free trial offer of a solution that might be too costly or complicated to justify developing solely for its own purposes, and the customer would not even know to ask for it.
Printer manufacturers have been trying to reduce their dependence on paper for years, but a contrarian might question how they are going about it. The contrarian might argue that if the printer manufacturers want to move to ECM technology, they should simply acquire companies in that space and forget about trying to tie ECM to their printer and MFP business, lest they confuse customers or even alienate ECM proponents.
A customer CEO who championed a centralized ECM strategy might fear overlap with existing ECM solutions that are also supposed to automate business processes. Departmental leaders who are supposed to be the internal customers could use MCS as a faster way to the business process improvements they need, but with the side effect of a proliferation of ECM vendors and platforms that IT and executives fear. In particular, they might back away from the engagement with the MPS provider, fearing it is being turned into a back door for MPS providers to circumvent the careful product and vendor selections they have made for ECM software and other technologies, or even a Trojan horse to give the provider an uncompetitive advantage to propose something like business process outsourcing after MCS gave it an intimate understanding of the company's processes. The acquisitions that MPS providers, such as Lexmark, HP, Ricoh and Xerox, have made of ECM software products and business process outsourcing practices, and the way they often leverage those products in their MCS solutions could add fuel to that suspicion. Even if CEOs and IT executives are open to those kind of changes, business process optimization may be more than they expected to get from an MPS engagement. Just to be clear, IT leaders responsible for their companies' ECM decisions do not overwhelmingly push back on MCS projects today, but that could change if they perceive that outside vendors or internal operations managers are using business process automation solutions to sidestep their authority.
Just as business process automation and optimization solutions run the risk of going too far for some providers' comfort, they also risk not going far enough. Most process automations and optimizations reduce labor or save money, and they may also help advance other goals, such as safety and compliance, but they do not provide the top-line revenue increases that CEOs still prioritize above savings. (A Gartner survey of CEOs in late 2014 found that growth is the No. 1 priority and cost management is No. 7. Looking ahead to the new style of digital business, the CEO's priority is to disrupt the prevailing business model in a way that favors his or her own organization over competitors. Even CEOs who cannot initiate such disruptions must still protect their own organizations from competitors who might do the same, and both initiating technological disruptions and responding to them can be a drain on IT resources. CEOs who think in this way may reject MCS as a way to free up some resources for Mode 2 IT projects at best, or at worst, no more than a new kind of service Mode 1 IT.
The following companies provide business process automation or optimization solutions as an extension of their multiregional MPS:
- ARC
- Canon
- HP
- Konica Minolta
- Kyocera Data Systems
- Lexmark
- Ricoh
- Toshiba
- Xerox (sold and provided by Fuji Xerox in Asia/Pacific and Japan)
