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IBM Captures Datacap for Content Management
In what one industry analyst calls a "good move and a very good choice," IBM expands its content management and business workflow capabilities by purchasing data-capture vendor Datacap.
Posted Aug 18, 2010
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With so much emphasis on "going green" — see CRM's April 2010 issue for more on the topic — you'd think that organizations still relying on paper documentation were on the endangered species list. Not so fast. The cold, hard truth is that most companies are still swimming in a sea of paper, partly because of the difficult and manual chore of converting existing paper documents to online files. With that reality in mind, IBM — a company known for its "Smarter Planet" green messaging — recently acquired Datacap, a provider of software that captures documents and data. (Terms of the deal were not disclosed.) IBM executives say that they'll be able to apply Datacap's sophisticated capabilities to help IBM customers in the daunting task of paper-to-digital conversion.

"People talk about 'paperless offices,' [but] there's still an enormous amount of paper flying around in business and government agencies today," says Paul Vandenberg, IBM's program director of content management products and strategy. "In CRM, a lot of that is correspondence, feedback, complaints, and applications for services." According to a company statement, IBM acquired Tarrytown, N.Y.–based Datacap for its "sophisticated data-extraction technology," known in particular for its strength in handling information from forms, email attachments, and faxes. Vandenberg says that Datacap's technology crosses all verticals, but a perusal of Datacap's Web site indicates particular progress within four sectors:

  • healthcare,
  • insurance,
  • government, and
  • financial services.

"The quicker and the more data you can extract from information, the faster and higher quality of service you can provide to customers," Vandenberg says, adding that the financial services industry seems to have come to this conclusion already, but this will bring new value and shed new light to some traditionally slow-to-adopt industries such as healthcare and government.

Melissa Webster, program vice president for content and digital media technologies with analysis firm IDC, notes that, prior to the acquisition, IBM had a dual data-capture strategy:

  • a partnership with Cofax for IBM Content Manager; and
  • a product called FileNet Capture for IBM FileNet. 

There were a few gaps in that strategy, Webster points out, and the Datacap deal should aid in plugging those holes. "IBM has recognized that they need to have a solid and competitive offering in this space — especially when they are up against EMC, Captiva, Oracle products, and Open Text," she says. "Owning its own capture solution end to end is an important strategic move for IBM."

[Editors' Note: For more on Open Text, one of the companies named as a Rising Star in the 2010 CRM Market Awards (in CRM's August 2010 issue), click here.]

According to Vandenberg, the Datacap technology will sit within IBM's enterprise content management (ECM) division -- but he insists the product will play well with other IBM solutions. "This technology we found generally to be applicable across all industries dealing with information coming into an organization in paper form," he says. Fortunately, he adds, Datacap has long been an IBM ECM partner, so its products are compatible with the IBM technology stack. "[Datacap] already has integrations to a number of [enterprise resource planning], CRM, and other applications," Vandenberg says. "Making this technology available for use with those other applications, including use within IBM itself, is a great opportunity." Datacap, he adds, can either run as a standalone product or integrate with software such as Microsoft's SharePoint or even offerings from other ECM vendors.

Webster remarks that data-capture technology represents a "very high-value opportunity" because the converted processes bear directly on revenue. "Document-intensive business processes tie up a lot of time," she says. "Manual processes are fraught with error, they're slow, and there's no visibility into the process — which means there is less business agility." Capture, Webster insists, offers tremendous potential for high return on investment. "All in all," she says, "this is a good move and a very good choice for IBM."

[Editors' Note: IBM's press release for the acquisition can be found here.]

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine.

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