The meeting of the presidents: Big guns of imaging consider their competition
The meeting of the presidents: Big guns of imaging consider their competition
March/April Edition, 2008: Sweden has half the population of Australia, yet sports an accounts payable imaging market eight times the size of what we can boost locally. ReadSoft asks with its imaging partner bureaus by its side, what’s the deal with the imaging market in Australia and why are customers so slow to pick up on the benefits of document automation?
Frank Volckmar, managing director at Readsoft, opened the company’s regular ‘President’s Club’ meeting with some of Australia’s leading service bureau providers by reflecting on the past. “BPO software revenue declined from being 62 percent of our business sold from 1998 – 2006, to being just 22 percent of it in 2007,” he said.
At first glance, not all looks healthy in the market. But more than enough is accounted for with ReadSoft declaring that 2007 also saw them double their accounts payable customers, a feat they’re also on track to achieve in 2008. “Accounts payable automation is the killer application,” said Volckmar.
For the representatives of imaging bureaus including SEMA, Computershare, Converga and Decipher in the room, the news from ReadSoft is not necessarily reflective of their experience with the market. “I haven’t actually seen any changes,” said Fernando Manrique general manager of IT services at Converga.
“We find there’s been an increase in tendering, but often a number of players will get talking to a third party and then back off because they gets scared of the workflow,” said Lee Bourke, Director of business transformation services at SEMA.
Workflow, some members agreed, seemed to be a dirty word in the minds of end-users that ultimately hold back on imaging solutions. “Once you get into small organisations and start talking about their workflow, you hit pot holes,” said Bourke.
Kevin Prior global product manager at Computershare put it down to language. “Maybe the term ‘workflow’ is actually scaring people off,” he said. It was a statement backed up by Manrique: “We find that as long as it’s not called ‘workflow’ customers are happy.”
Still, Volckmar puts it down to a lack of education in the market. “We see awareness as a problem and we need to work with partners more to deal with it. CFOs and finance managers are going to get hit by this accounts payable message from a number of different sources.”
The ReadSoft club comes off a 2006 initiative to promote the significance of the service bureau market segment and its contribution to the market as a whole. Recognising the customer base existing in some of the market’s major bureaus, ReadSoft anointed the Service Bureau Partner Program as a means to assist in developing a marketing strategy built around the relationships of service delivery partners.
Australia’s largest bureaus were invited to join the club, and plenty came to the table. Now with regular meetings, the club puts what many might consider competitors in the same room to discuss the essential issues facing the market. For an outsider, the conversations provide an interesting look into the concerns, the successes and the means for shaping an imaging market.
Initially, many of the concerns raised revolved around offshoring, a common problem facing Australian imaging bureaus. “In discussing this we were all able to understand the issues because we’re all involved,” said Prior. A fair enough debate, but why have it with competitors? “It’s not like we’re selling retail products here so it really is not a highly competitive space,” he adds.
Offshoring is quickly picking up momentum given the cheaper labour overseas, and its ability to get past previously hindering language barriers. Communication technologies have also contributed, by offering an easier means to the transfer of information.
“Realistically though it’s the less value added work that’s going offshore,” said Bourke. “For things like trigger based marketing, we need to be able to get that information back to the client immediately, so it needs to be done here and checked everyday.”
Volckmar believes avoiding the offshore threat comes down to technology: “If we try and compete head to head without technology we will lose, because labour costs are just so much lower. But if we use technology, we can also get smart about how we handle the process and become more competitive.”
Still, back at accounts payable, Volckmar sees a significant opportunity for imaging bureaus locally off the back of ReadSoft’s success in Sweden. “I don’t believe Australia is all that different from Sweden. There’s a process that’s broken, and we have an opportunity to fix it.”
It’s an opportunity that requires a little bit of cooperation. Awareness of just how processes can be improved is not high, yet easily obtainable. Volckmar maintains that it’s not only up to vendors like ReadSoft, but all stakeholders in the chain including BPOs and consultants. The message needs to not just hit the IT managers, but also those on the financial side of the business, interested in the cost savings.
Aside from promoting awareness, the recent change of Government could also be the final push the industry needs to get process improvement on the agenda.
Delayed payments hinder the economy and for small business, become a particularly difficult challenge in remaining competitive. Some countries have moved to legislate around accounts payable processes, including e-invoicing and payment periods. In France for example, a 30 day limit for invoices in currently in affect within the transportation system. The 2006 law basically requires all invoices to be paid within 30 days, enforced through penalties.
Kevin Rudd has already shown interest in regulating the payment of invoices. In his then opposition address replying to the budget in May 2007, Rudd spoke of the productivity challenge, urging for a better use of technology in the workplace to maintain long-term prosperity in Australia post the mining boom.
Rudd used the address to promise small business the right to charge Commonwealth departments and agencies on bills not paid within thirty days. Rudd noted the impact on cash flow for small business from late payments as well as the time wasting that occurs in ‘badgering’ government for payment.
It seems the opportunities are available, and likely to be even more so open for the taking in the coming years, but a change of mindset is required for both end-users and vendors alike. As noted by Volckmar: “We vendors have been guilty of selling software rather than process improvement.”