DMS: truly multi-functional

Priya Jain analyses the opportunities for vendors of document management solutions

The DMS market has a lot to offer to the Indian marketplace. The rationalisation of paper usage is the new mantra in documentation; it means a balance between the use of paper and e-documents. This not only helps in keeping paper costs down but also provides a sophisticated archival system for organisations.

The Document Manage-ment Solutions (DMS) market includes the range of hardware and software solutions including printers, scanners, projectors and MFDs which cater to the communication needs of offices of all sizes. They are enterprise tools meant to aid information management in a manner which increases efficiency and cuts costs.

MFDs have made inroads into the market that was dominated by standalone devices ever since they first hit the shelves back in 1999. These devices have been successful in the enterprise segment.

According to IDC, the laser MFD market will have a CAGR of around 40 percent during 2004-2006. In terms of value, laser MFDs cornered a bigger share of the pie with the ratio of laser to inkjet being 60:40 in a nearly Rs 600 crore market in 2005.

Factors driving the market

"Businesses want information access to be quick and easy, which means taking control of document workflow" -P G Kamath General Manager Lexmark

The need for DMS stems from the need to increase efficiency and productivity. There is increasing pressure on organisations to optimise efficiency at decreased costs. They need to communicate with customers, suppliers and employees across multiple media. The need to integrate resources across business destinations and adhere to regulatory requirements is contributing to the growth of the DMS market in India.

Organisations want smooth workflow processes that enable easy information access. P G Kamath, General Manager, Lexmark says, “Businesses want information access to be quick and easy. Taking control of document workflow is more important than ever, especially when they consider how document workflow can impact bottomlines.”

The sectors that will drive the growth of DMS include banking, finance, insurance, BPO, software, education, telecom, government, construction and utilities. These verticals offer tremendous opportunity for growth.

Says Som Gangopadhyay, Marketing Head, Office Systems and Solutions, Canon India, while explaining the need for the increasing emphasis on DMS: “A significant amount of time is spent in searching for the correct document. The average worker has 36 hours of work stacked up but only 90 minutes to handle it.”

According to Gartner, though DMS has been given a push by regulatory requirements, the major reasons for adoption are based on the following data: productivity gains to the tune of 42 percent, increase in document access and movement by 44 percent, and employee headcount going down by 24 percent.

Shift to services

"Print on Demand allows print providers to quickly turn around short, economical print runs of a precise number of documents" -Natesh Mani Executive Director New Office Group Xerox India

In terms of trends, 2005 saw the adoption of colour in MFDs. Though the adoption was not high, 2006 will see the segment do better. For two reasons. Costs have come down considerably and organisations are increasingly looking at features that can increase productivity.

The other trend that this segment has witnessed is the shift from products to services. For instance, companies such as IBM, Xerox, Canon, HP, Samsung and Toshiba are integrating hardware and software and offering it as a single solution.

Natesh Mani, Executive Director, New Office Group, Xerox India says, “Besides evaluating hardware assets, organisations should also evaluate the software element of document management. An efficient DMS is one that will enable an organisation to store documents electronically, and facilitate the process of retrieving, sharing, tracking, revising and distributing documents efficiently.”

Moving to colour

Colour in office is becoming a common occurrence; till a year back its use was governed by the price factor. The ratio of colour to B&W printing has come down to 1:4 from 1:20.

Also, colour lasers are the order of the day in corporates. Their prices have almost halved since their launch a couple of years ago. Today, an entry-level colour laser printer can be made available at a price of Rs 25,000 to Rs 30,000.

IDC reports that cost is no more the key factor in colour adoption. It says that quality, availability and a competitive need will help colour laser shipments grow by 50 percent in 2006 over 2005.

Over the past two years there has been a concerted attempt by the industry to develop and enhance the range of colour laser devices that they offer. The CAGR for the next five years is predicted to be about 40 percent, while 2006 is likely to witness an increase of about 50 percent over 2005 shipments.

IDC also states that there are an increasing number of devices that employ technologies to deliver colour output to businesses, and there is an awareness among organisations that colour can bring great benefits.

Gangopadhyay feels that acceptance has increased now that organisations have realised the value of having the ability to produce colour documents onsite and on demand. Until recently, high-quality colour documents for business requirements were outsourced to the graphics industry, namely printers, designers, desktop publishers and advertising agencies.

Colour not only makes a document visually attractive but also highlights important sections of the document. In India, colour laser printers are being increasingly used for printing documents. Moreover, graphic art applications across different industry sectors are gaining ground. This is particularly true of advertising and other marketing communications.

Mani believes that colour lasers will be widely adopted by businesses in 2006 and beyond as printing in colour becomes more affordable and innovations in technology continue to bridge the gap between colour and B&W equipment. Business analysts predict double-digit figures for production of colour documents.

Upcoming trends

Mani highlights some interesting trends in this area. According to him, Print on Demand (PoD) allows commercial printers and other print providers to quickly turn around short, economical print runs of a precise number of documents. The digital printing industry thrives on PoD for quick printing solutions to meet their business needs. Other interesting applications for PoD are menu cards, marriage invitations and business cards. Laser printers are being increasingly used to support these PoD applications.

"Due to regulatory requirements, there arises the need for audit trails. The need for disclosure can be fulfilled through automation" -Diwakar Nigam Managing Director Newgen Software Technologies

Dramatic changes in the business landscape will require the DMS market to constantly innovate both in terms of technology and customer offerings. The concept of smart document management will take centrestage as the information management needs of enterprises multiply especially with increased diversification of business units and the concept of multiple offshoring. DMS will be increasingly tailored to meet the demand of organisations to accelerate their work cycle. The solutions will be tailored to connect critical business processes. Also, there will be a growing application of laser and colour technology  

Diwakar Nigam, Managing Director, Newgen Software Technologies adds, “There has been a need for process automation and centralisation. Moreover, businesses are moving towards business process outsourcing which also calls for process management initiatives. The current usage is typically for customer record management in telecom, centralisation of paper-intensive processes for banks and insurance, file tracking initiatives for e-governance, and image-enabling of some solution packages in ERP.”

Kamath informs, “There are many new trends such as the flexible document-routing application which accepts information directly from a Lexmark MFP, end-user workstation or from other Lexmark document servers such as Lexmark Document Producer and Lexmark Document Portal.”

Take Xerox Global Services, the consulting-led services division of Xerox. The division has offerings in three areas: office services, business process services and production services (or document outsourcing and customer communication services).

The focus on office services is helping customers reduce their overall costs in the areas of printing, copying, faxing, scanning and imaging. These are value-added services aimed at solving the client’s document-intensive business problems.

Business process services assess, digitise, streamline and outsource document-intensive processes. The application areas under them include imaging, archival and client account lifecycle management.

Production services improve the effectiveness of customer documents in production areas such as customer data centres, central reprographics and printing departments.

The MFD advantage

A crucial factor that has fuelled the growth of MFDs has been the features and functionality a single machine allows. Most MFDs can replace scanners, copiers and fax machines. For instance, Lexmark colour laser printers have features such as mono/colour lock, different toner saving settings, confidential printing, reserve printing, verify print, poster printing, 1200x1200 dpi resolution in some models, and 100 percent scalability. Some of the models can be converted into multi-functional peripherals.

Canon’s IRC 3100 offers features such as 31 ppm (B&W), 7 ppm (colour), wide-range zoom from 25-400 percent in 1 percent increments, photo mode for a brighter copy, Ethernet 100 Base-TX/10 Base–T, and much more.

Comments Mani, “Earlier, colour printing was 20 times more expensive than black and white MFDs. But now, despite the high costs, MFDs have been accepted due to their features. High-end MFDs start from 35 pages ppm and go up to 105 ppm; they cost between Rs 55,000 and Rs 25 lakh. These machines are typically equipped with functions like document storage, integration of scanned and printed data with other documents, e-mail alerts, and password protection.”

Trends in MFDs

Document management is not just about printing. With the MFD as the primary communications hub, a trend emerging is that of Java-based solutions which extend network capabilities into the wireless frontier.

States Kamath, “This current MFD trend has actually increased the need for distributed printing and the placement of printers especially in workgroup locations. Today, the print/fax/scan/copy MFD is as much a conversion device as an output device for converting paper to digital or vice-versa.”

Mani adds: “Going forward, as this market matures colour laser MFDs are going to become popular as they provide customers colour solutions at effective price-points. Another factor that is expected to drive the adoption of laser MFDs is their ability to deliver customised applications based on the individual document management workflow requirements of customers and business verticals.”

"Security is always a concern, so we have provided mailbox security through passwords. Users can designate passwords for accessing their individual mailboxes on the device" -Som Gangopadhyay Marketing Head Office Systems & Solutions Canon India

Further, as the market for laser MFDs evolves, the focus will shift from solutions being provided to delivering on CXO evaluation criteria such as Life Time Value and Total Cost of Ownership.

The next thing to watch out for in high-end MFDs are features such as digicam card slots, photo colour reproduction, and superior scanning facilities in the inkjet segment. Also, attributes like wireless printing will fuel the growth of these devices.

With more enterprises going in for MFDs, security on these devices becomes important. Says Gangopadhyay, “Security is always a concern, so we have provided mailbox security through passwords. Users can designate passwords for accessing their individual mailboxes on the device.”

Mani is in agreement. “Corporates are stressing on security so that printing of important business agreements and documents is restricted to a select few. By using a personal identification number for confidential print jobs, menu lockouts, printing lockouts, access tools such as a document portal or document distributor, and document accounting technology, vendors are making printing a more secure activity.”

Another feature that vendors are building is workplace collaboration that allows virtual teams at onsite and offsite locations to use a common virtual docking place for posting project status. Taking into consideration the needs of mobile users, companies are including remote access that allows instant delivery of a scanned document.

SMB focus

Vendors feel that MFDs, which till now were restricted to the enterprise, will slowly move into the SMB segment. With most vendors providing feature-rich and solutions-bundled MFDs, the SMB segment might find value in this.

“According to AMI Partners’ research, Indian SMBs will be investing $7.7 billion in IT solutions in 2006, which will be primarily spent on infrastructure and solutions. We are confident that with such a high level of spending, office solutions and more specifically MFDs will form an essential core of this spending,” Mani explains in detail. “The SMB segment will substantially contribute to the growth of laser printers and low-end MFDs. The SMB buying pattern is centred on current and future printing requirements, the cost of printing, the option of networking, and sturdiness and performance,” he adds.

“The users of this segment, besides looking for low-cost printing, also demand a number of in-built features such as multiple card readers, network capability, and, to a certain extent, security. In laser printing SOHOs and SMBs are standardising on entry-level standalone and MFD models. This is primarily driven by low acquisition costs and low costs per page.”

In addition, it is important to note that SMBs are spending more on IT solutions and office automation devices. The SMB market is also expected to be a big contributor to the growth of the IT industry as more small and medium companies adopt information technology.

CIO concerns

“For a long time now, enterprises have had a sporadic approach to printer purchases leading to a proliferation of different models using different toners in a single organisation. There was also a lack of value-added software features in the older models. [As a result], CIOs have had to succumb to buying standalone printers for the confidential printing needs of certain executives,” says Kamath.

“Our challenge now is to make them understand the total cost of ownership as against acquisition cost. Modern laser MFDs with customised software solutions assist CIOs in meeting various printing needs within their respective organisations, as also in cutting down processes in specific tasks. MFDs have increased printing efficiency, cut print-related costs, and added to overall efficiency within enterprises.”

But Kamath also points out that “Printers cause IT managers more frustration than any other device. A recent study by Gartner found that they account for about 46 percent of all help desk queries and 3-5 percent of their budget is taken up in maintenance.”

Nigam highlights another aspect: to derive benefits from a DMS solution, substantial investments are required. Typically it involves the cost of scanning of a large number of documents and training of people to work with digitised documents. For these reasons, the adoption of these solutions in SMBs has been slow.

An enterprise should keep in mind the RoI, cost per page, maintenance, and ability to share over a network. Along with this, the CIO or IT manager should know the inner workings of the product. Whether it is a standalone or an MFD, the RoI is based on the needs of the enterprise. Since networking technology increases office output, there are implications of the trend that businesses must contend with, chief among them being maintenance and printing costs. Over the life of an average printer, its cost of acquisition is only 5 percent of the total cost of ownership.

Nigam points out that due to regulatory requirements there now arises the need for authorisations and audit trails. This need for disclosure can be fulfilled through automation.

Meanwhile, vendors are taking a careful line when it comes to positioning their products since they also have a presence in the standalone segment. Most of the vendors that we spoke to said that there needs to be a balanced approach to the same. Depending on the user and the capacity required, vendors suggest a roadmap to the client.

priya@expresscomputeronline.com