High times for document management

You'll note in the chart on page 1 that the future looks rosy for document management service providers, according to a study from Ralph Gammons of Document Imaging Report and AIIM President John Mancini. The survey is the industry's most comprehensive to date and is a reliable crystal ball for this key component of any knowledge management initiative.

Conducted in September 2005, this is the third annual AIIM Industry Watch: State of the Document Management Service Providers Industry and indicates that more than three-quarters of those surveyed anticipated either an "increase" or "significant increase" in revenue from this year to next (240 companies participated this year, 158 in 2004 and 78 in 2003). Further, that growth was seen in virtually all company types: value-added resellers (VARs), 77%; service companies, 77%; system integrators, 79%; and consultants 66%.

As expected the top three vertical industries served by the participating DM companies were, first, the trinity of banking, finance and insurance--those three always lead the pack in document imaging. Healthcare, previously a somewhat "also ran," is surging forward, due in large part to the HIPAA compliance mandate, and steps up to number two. Third is government at the local/provincial level. The federal government ranks high, as well. Education, transportation/logistics and utilities are important markets for VARs, and service bureaus are seeing a jump in professional markets such as legal and accounting. Manufacturing is another strong sector, as is architecture, engineering and construction. Utilities, oil and gas form another important market, the study finds.

When it comes to the products and services provided by these document management companies, professional services tops the list, followed by document/content management software and then scanning services. It comes as absolutely no surprise that records management/archiving tops the key business application list to customers. Seventy-seven percent of the executives surveyed cite it as number one, followed closely by document control (76.9%) and information capture (76.2%). At the bottom of the list are enterprise resource planning (19.3%), supply chain management (14.7%) and collaborative commerce (12.6%).

Let's take a look at the respondents' total revenues by company type. The survey found that the median for VARs is around $5 million, $4.3 million for system integrators, $2 million for service company/bureau and $700,000 for consultants. And the profit picture for those companies was consistent by type--77.4% report they were profitable the past year. Only 6.2% say their revenues dropped. Plus, 38% expect the number of their employees will grow by 10% or more in 2006--the same rate they reported for 2005. Further, 20% say their profits were 20% higher than in 2003. And, nearly 37.5% of the companies expect their total customer base to increase by more than 10% in 2006.

Although these finding won't likely promote "irrational exuberance," they point to a very sound industry, one whose growth the authors believe will thrive beyond 2010. And, because documents are at the heart of so much of what we do, that's very good news for all of us.