Ephesoft ANZ looks ahead to magical year

Russ Hubbard is Chief Revenue Officer at Ephesoft, the enterprise content capture and data solution provider. At the opening of Ephesoft's new ANZ HQ in central Sydney's Martin Place, IDM sat down with Russ to learn more about the company's local operations and global strategy.

IDM: Russ, Ephesoft has had a dedicated ANZ operation for around two years now, has the market reception been what you expected?

RH: We started with ANZ as a one-man show at first (namely Andrew Rootes, Vice President, Asia Pacific & Japan at Ephesoft) and Andy has built out from there and we had some very good opportunities arising in Asia-Pacific. ANZ is a conservative market where you have to show dedication over time, so probably it's been on par with what we expected with new market openings, Typically, what we seen with most markets is the first year or two we’re doing a lot of heavy lifting without all of the results you want - and somewhere in year three, magic happens. All of that work starts to pay off. Our ANZ operation’s going to be entering its third year around mid-year ’19, so we expect ‘19 to be a good year. It’ll be when we start seeing some of the benefits really pop out – and I think you can see that from our investment. We’ve increased the size of the team, we’ve hired several people just since Christmas and we have a new Sydney office - so a lot of the investments, I think, are starting to come to fruition because we’ve developed the relationships we need.

IDM: As one of the younger players in the global capture market, does Ephesoft face unique challenges? There are some very established players and some large players that are growing ever larger every acquisition.

RH: We have to play differently, I think that’s the short answer. We’re never going to – I shouldn’t say ‘never’ but it’s unlikely - out-invest some of those larger players or have the sheer horsepower in terms of the number of people. What we’ve tried to be is provocative and thoughtful in how we differentiate ourselves in the market. And I think one good example of that is, as we look towards the cloud and everything that happens in the cloud, nobody really established a leadership position there.

Just last month we introduced the first cloud hyper-extender – which allows us to offload a lot of heavy lifting from the OCR processing into the cloud and that’s a way for us to differentiate ourselves in the market. It’s a hybrid approach and nobody else has done it. Those are the types of things that we’re able to do that I think are sometimes tougher in large organisations with all the burden and technical debt you have across a broader customer base.

IDM: Since you came on board last year, Ephesoft has launched its ‘expanded global partner program’. Can you give us an update on how that has impacted locally and also your partner network in ANZ?

RH: On a global level, we have always been a very partner-centric type of company. That being said, we didn’t always have an agreed-upon management methodology and belief system around what different types of partnerships meant. So, launching that program was really our effort to take the universe of partners, break it down into the logical categories and engagement models and delineate investments and intentions. It's very much succeeded from that perspective.

In ANZ the impact has probably been less than it has in other regions because it’s an emerging market so the fact that all of the partners are walking in as this is coming through, it’s actually been quite easy. In other parts of the world we had to unwind some relationships, but we didn’t really have that issue in ANZ - so it’s been great from that perspective.

IDM: Are you happy with the number and level of partnerships you’ve got at the moment? Or you could do better with that?

RH: The goal has never been to have a huge number; the goal has been to have the right market coverage for the right kinds of opportunities. So, we spend a lot of time trying to think about market segments – what do we need for RPA, what do we need for traditional ECM, what do we need for modernised collaboration tools? Our markets have been changing and I think as we’ve gone through that we’ve recognised that the solution mix is changing quite significantly.

So, it used to be that just anybody that we felt was a good partner for us, we would sign up with. Now, we actually look at the eco-system they embody – what other partners do they have, are they working with workflow tools that work well with us, which ECM vendors are they tied into or not tied into, which RPA vendors are they tied into? So, we've never had a number target. It’s more a coverage target.

IDM: Is Ephesoft planning any application-specific products?

RH: The obvious one is invoice processing. We are continuing to make some advancements in that solution set for us, adding some enhancements to our machine learning around invoices, specifically. There are tweaks around the globe due to value-added taxes in Europe and other different kinds of tax elements that you have to bring in there, and we’ll continue to build upon that incrementally. The AP and invoice market is a very busy one with a lot of entrants.

IDM:  RPA (Robotic Process Automation) is one of the hottest sectors of the tech market. How is Ephesoft responding to this growth

RH:  We’re not going to cover all of the market, I think that's probably impossible for anybody. But we have identified a couple of key partnerships and we’re looking at it as we have two or three different ways to play in that market and one is, obviously, capture the ingestion point for any robotic process. But once you’re in the RPA process, there are points where you have to send out for validation and extraction of information and there's a secondary play there. We view it as a very complimentary piece. We are not going to build our own RPA tools. We see no need to be number 8 or 10 or 12 in a thriving market. Most of the money that RPA companies are making is by just automating an existing process. They’re just taking cost out. I think the next wave is going to be really in eliminating certain processes, eliminating or redesigning. And that's when I think AI will really start to suggest better pathways for the processes. That’s going to be an interesting evolution.

IDM: Ephesoft has stated that it’s no longer ‘business as usual’ for enterprise content management customers which have been forced to move towards agile content services and a content modernisation strategy. Can you explain what that means, from an Ephesoft perspective?

RH: I think if you look at the roots of traditional ECM, it had to do with legal disposition and risk management. There was always a promise of operational efficiency but, for the most part, it really came down to a strong legal need for content management. When you look at how the world has modernised, now I think there really is an operational imperative to share and collaborate in a different way.

Some of it’s generational. Some of it’s just the fact that millennials and digital natives have a completely different mindset around how they want to work together in distributed teams across continents. The ECM market has a tremendous opportunity to refresh their content in ways that is consumed by that generational shift. This has been validated by the rise of Box and Dropbox and many of these non-traditional ECM vendors. They are starting to nip at the edges of ECM changing the way that content is accessed and used across organisations. Regardless of that, there’s still a massive amount of paper out there and there are countless mountains of undigitized documents remaining to come into the light. That is a liability but probably more important than a liability, it’s a tremendous opportunity for the people who can harvest that information the right way. I think some of the newer content management players have a unique look at how they might try and do that. And that’s good for all of us. I think it helps us evolve.

IDM: What are some of the key areas where you see growth or potential in the enterprise capture market?

RH: We had a very strong year for growth last year and we see that continuing. As a newer player, obviously, without as large of a global footprint as some of our more embedded competitors, the good news is I think some of them have taken their eye off elements of the market. Others have not. But, regardless, none of them had really tapped all of the market. We’ve seen tremendous opportunities in healthcare. We’ve seen it with RPA. Even in what are considered, ‘tapped out’ industries like AP and invoicing, we did an amazing number of invoicing projects last year for an industry that’s been picked over for two decades. So, it’s kind of shocking, in this day and age, that despite decades of companies whacking away at that mountain, there's a lot of ore that's left unmined.

Cloud migration is a huge part of the data story right now. Everybody is very protective of their data and recognises it’s the new gold but that’s directly juxtaposed with security and privacy concerns. And then the other layer is that nobody wants to be in the infrastructure business any more. Watching those come together is a pretty fascinating scientific experiment.

For data sovereignty with governments, it’s a challenging issue. For banks and financial institutions, across territories and jurisdictions, it’s a big issue. And for many reasons, I think the traditional players in our market have not really worried about cloud for that reason. Over that past few years, I feel like that's started to change and you're really starting to see even some of the most conservative financial institutions, they're really starting to acknowledge that – maybe not everything – but some part of their strategy has to include taking advantage of cloud. And we have an opportunity to really leapfrog and lead in that area because cloud is a great democratiser and companies like AWS and Microsoft with Azure, they’ve really allowed cloud infrastructure to be available for anybody and it just changes the dynamics. So, I think that's a new lease on the market, if you will, where a lot of the old rules go to the window and it’s certainly a window of opportunity.