Fujitsu DIR 9 21 07 FCPA Upgrades Dept. Scanner 092107 Review

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Document Imaging Report
Business Trends on Converting Paper Processes to Electronic Format
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September 21, 2007
THIS JUST IN!
FCPA UPGRADES DEPT. SCANNER
Fujitsu Computer Products of America
(FCPA) has upgraded its departmental line with
this month’s introduction of the fi-5530C2. The
sheetfed-only model is rated at 50 ppm/100 ipm
and offers a 43% speed increase over the original
fi-5530C, which was introduced two years ago.
The new scanner also features an upgraded
software pack, including Kofax VRS 4.1 Basic
and Adobe Acrobat 8 Standard. It carries the
same list price as the original fi-5530C, $3,995.
This is the same list as the competitive Canon
DR-4010C, and Kodak i160 models.
Analyst Susan Moyse has projected a 25%-35%
CAGR for the departmental ($2,000-$6,000)
segment of the market from 2007 through 2011.
FCPA and Canon are the leaders for traditional
sheet-fed models. However, the departmental
segment is also where most network scanners
fall. At AIIM 2007, FCPA introduced its first
network offering, the fi-6000NS [see DIR 5/4/07].
Hyland Software recently became the first ISV
to write a direct integration from the fi-6000NS
to its OnBase ECM system.

NSi introduces invoices app
Speaking of network scanning integration,
Notable Solutions, Inc. (NSi) recently
announced that its invoice processing
application, AutoStore for Accounts Payable is
available. The application was previewed at
AIIM 2007. Rockville, MD-based NSi is the
developer of the AutoStore capture platform,
which has been integrated with MFPs and
network scanners from HP, Kodak, Kyocera,
Ricoh, Sharp, Xerox, and Canon. AutoStore
for Accounts Payable is based on the Océ
Document Technologies’ DOKuStar toolkit.
For more information: http://www.nsius.com;
http://www.fujitsu.com/us/services/computing/peripherals/scanners/
http://www.onbase.com/english/interior.aspx?pageID=102161&newsID=131450

Capture Conference Breaks New
Ground
GLEN COVE, NY—Harvey Spencer Associates’
annual Capture Conference continues to push the
envelope. At this month’s third annual event held at the
Glen Cove Mansion and Conference Center, in addition
to discussing proven trends such as the migration of the
market toward transaction processing and away from
batch capture and the advantages of electronic bill
payments over paper checks, more cutting-edge topics
were also covered. These included exporting captured
data to XML standards, the importance of meta data, the
evolving Indian market, and the importance of voice
recognition technology in the emerging e-discovery
market.
DIR Editor Ralph Gammon presented his rundown of
the hottest topics in the document capture market and
hosted a panel on “next-generation” distributed scanning
solutions. Other conference highlights included a
presentation by Eric Cohen, the XBRL [eXtensible
Business Reporting Language] global technical leader for
Pricewaterhouse Coopers. Cohen repeated one
theme throughout his presentation—albeit one that was
delivered with sarcasm. His mantra was “What’s the
great thing about standards?” To which the answer is,
“There are so many of them.”
Cohen’s directive was to get the audience to throw
their support behind a limited number of influential
standards rather than supporting the continued dilution
of potentially powerful frameworks like XML. XBRL
International, Inc. (www.xbrl.org) consists of more than
500 organizations worldwide working to create XMLbased vocabularies for business to simplify data
exchange. XBRL is currently being adopted as part of
financial reporting standards in the U.S., Japan, Canada,
and Germany. It is also being adopted as part of pangovernmental reporting initiatives in the Netherlands
and Australia.
“XBRL is gaining some real international momentum,
and should pick up even more as organizations like the
SEC start to push for its adoption,” Spencer told DIR.
“Because capture vendors are releasing information into

financial systems, standards like XBRL are going to be very
important to them.”

India fertile ground for capture
The discussion on the potential of the Indian market drew
some of the greatest audience response. Imaging systems
integration specialist Prakash CV, founder and CEO of
Gradatim IT Ventures (http://www.gradatim.com/), portrayed
India as a rapidly growing economy with a population of 1.1
billion—half of whom are under the age of 25. “India is a
very technology-savvy country, which is evidenced by the
fact that it represents the fastest growing mobile phone
subscription market in the world,” Prakash told the audience.

“With e-discovery...it's not a question of 'if'
they get caught, it's a question of 'when' they
will become involved in a lawsuit.”

Document Imaging Report
Business Trends On Converting Paper Processes To Electronic Format

DIR is the leading executive report on
managing documents for e-business.
Areas we cover include:
1. Document Capture
2. Image Processing
3. Forms Processing/OCR/ICR
4. Enterprise Content Management
5. Records Management
6. Document Output
7. Storage
DIR brings you the inside story behind
the deals and decisions that affect your
business.
Vol. 17, No. 18

– Priscilla Emery, ECM Scope

Prakash noted that the tremendous opportunity for imaging
in India lies in three basic markets: The first is government,
where there is national initiative that dictates 3% of
government budgets must be used on e-government. He
noted that microfilm was not legalized in India until two years
ago, which creates a tremendous backlog of paper to be
scanned. “E-governance initiatives are creating large scale
projects for everything from passport applications, to
complete birth and death records, to education
management,” he said.
Not surprisingly, Prakash listed the second big market in
India as financial services, where a rapidly growing economy
has driven an explosive growth in the demand for loans and
other banking services. Insurance is also a growth market.
Government and financial services/insurance were also two
of the largest early U.S. markets for imaging. Related to
banking, check imaging is also an emerging market in India,
as the use of paper checks continues to increase and the
Indian central bank has initiated a movement toward
electronic check truncation.
Prakash noted that a third big opportunity lies in capturing
the paperwork associated with the growing mobile
communications market. He added that the legal services
and transportation industries are also ripe for imaging
applications.
Addressing these opportunities appears to be a fairly wideopen game, as Prakash said there is only one major imaging
distributor in the country, Redington (http://redingtonindia.com),
which reported 47% overall growth in 2006. For anyone
interested in doing business in India, Prakash stressed the
importance of providing solutions and offering local support.

2

Document Imaging Report

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Larry Roberts
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September 21, 2007

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Spencer noted that increasing labor costs are
creating opportunity for automated data capture in
India’s services dominated economy. “It used to be
that you could count on inexpensive labor for data
entry,” he said. “However, as the Indian economy
improves, there are more higher-paying job
opportunities, and it’s becoming harder and harder
for service organizations to hold on to their trained
personnel. This has them increasingly considering
automation.”
Spencer is currently exploring plans for an enduser focused conference in India. Vendors interested
in participating should contact Erin Dempsey at
erin.dempsey@hsassocs.com.

Spencer predicts strong growth,
verticalization
As always, Spencer presented his annual state of
the industry address. He reviewed his 2006
numbers, which estimated the worldwide market for
document capture software at $1.3 billion, which
represented 17% growth. He also predicted a CAGR
of 16.5% through 2010. “That’s greater than the
overall IT market, which is growing at about 8%
annually,” Spencer noted. “It’s also greater than the

ECM market, which is growing 5-12% annually,
depending on whom you talk to. It’s my opinion
that, as capture moves closer to the point of origin,
where it has more value, it will increase as a
percentage of overall IT spending.”
Spencer noted that the growth in the first half of
2007 was not quite as strong as first-half growth in
2006, which was buoyed by huge growth (over 20%)
in the second quarter. “I’ll temper this by saying that
I do not include smaller companies in my quarterly
updates, and that most of the smaller companies I
talked to seem to be doing well,” he said. “I’ll also
say that the big second-quarter growth this year was
more in services than products. This means we are
starting to see more customized solutions. I think this
is indicative of increasing demand for vertical
market capture solutions. In fact, next year, I plan to
break down the market more into vertical solutions.”
Along those lines, Spencer did note there seems to
be a direct correlation between adoption of ebusiness in a vertical and the adoption of automated
capture solutions. “For years I’ve been saying that
capture helps brings paper processes up to the
speed of e-business,” he stated. “I don’t think it’s a

BANCTEC FILES S-1
Last month, BancTec filed an S-1 with the SEC, registering some 46.5 million shares of common stock with an eye
toward an IPO in the upcoming months. The S-1 lists a proposed maximum offering price per share of $8, which would
give the company a valuation of $372.6 million, approximately equal to BancTec’s reported 2006 revenue of $379.5
million. 2006 represented a year of 10% growth for BancTec, which had seen its revenue decline by a total of 9% over
the previous three years.
Through the first three months of 2007, BancTec reported $92.7 million in revenue, or a 3% increase over the first
quarter of 2006. The company showed a slight loss last year, but that was with an interest charge of $20 million, which,
from what we understand, has been eliminated through the sale of the company earlier this year, as the proceeds from
the sale were used to pay off the debt that produced the interest [see DIR 7/6/06].
As BancTec has increased its BPO (business process outsourcing) holdings through some recent acquisitions, the
“maintenance and other services” portion of its business has grown to where it represents almost two-thirds of the
company’s current revenue stream. This increase has been tempered somewhat by a decline in maintenance revenue
related to BancTec’s high-end sorting equipment. BancTec also has a significant third-party service agreement with Dell.
The other third of its revenue is generated through sales of hardware and software solutions, primarily for document and
remittance processing.
In 2006, U.S. sales made up approximately 60% of BancTec’s revenue, down from 65% two years earlier. During those
two years, U.K. sales increased 21% and other international sales increased 23%, while U.S. sales declined 4%. From
what we understand, in the U.K. and other parts of Europe, BancTec has been enjoying tremendous success with its
document processing operations using a business model it is now attempting to duplicate in the U.S. Currently, in the
U.S., BancTec still relies more heavily on revenue from the check sorting and remittance markets, which are in decline
due to the implementation of electronic payments. To bolster its U.S. revenue, in 2006, BancTec bought several service
bureau sites from EDS [see DIR 8/18/06]. At AIIM 2007, BancTec debuted its new IntelliScan high-speed scanning
hardware and software line [see DIR 6/15/07].
http://www.sec.gov/Archives/edgar/data/318378/000104746907006209/a2179097zs-1.htm

September 21, 2007

Document Imaging Report

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3

coincidence that manufacturing, which, according
to the U.S. Department of Commerce has one of
the highest rates of e-business adoption, is also
leading the way in the adoption of automated
invoice processing.”

The procure-to-pay solution
Spencer did a separate presentation on the most
attractive quadrant of the document capture
market—transaction processing. According to
Spencer, as this segment moves from templatebased to free-form applications, it will offer higher
margins and faster growth than the rest of the
market. Currently, as we detailed in our last two
issues, invoice processing is emerging as the first
killer app utilizing IDR (intelligent document
recognition) for transaction processing.
Spencer discussed in detail a trend that we
introduced last issue. That is the emergence of
document imaging-driven procure-to-pay solutions.
Up until recently, the term “procure-to-pay” was
mainly the property of vendors with electronic
payment initiatives. But, like the rest of the world,
these vendors, as well as their customers, have
come to realize that it’s very tough to eliminate
paper. Hence, document capture is now being
looked at as an integral part of these procure-to-pay
systems, which address both AP and AR needs and
potentially offer some tremendous cash
management benefits.

a “hype cycle” graph presented by meta data expert
Seth Earley. In the hype cycle, a peak of inflated
expectations is followed by the “trough of
disillusionment,” before things even out and a
technology starts to get adopted. We definitely
remember invoice processing going through this
cycle, and suspect procure-to-pay will follow a
similar path.

E-discovery, voice capture, emerging
opportunities
The conference featured a segment on e-discovery,
presented by Priscilla Emery of the consulting firm
ECM Scope (http://www.ecmscope.com). “With
regulatory compliance, businesses are doing a lot of
weighing of the cost of getting in compliance vs. the
risk and cost of being fined,” she said. “With ediscovery, however, the need is more urgent,
because, especially with large companies, it’s not a
question of ‘if ’ they get caught, it’s a question of
‘when’ they will become involved in a lawsuit.”
Emery noted that classification is the key to
creating an effective records management system
that can be leveraged for e-discovery. “It’s not just a
matter of putting things into your records repository,
it’s being able to find them,” she said. “To
accomplish this requires consistent methods of
classification and taxonomy across all of a user’s
document types.”
Emery acknowledged that the e-discovery market

Spencer showed a chart linking everything from
CRM systems for order management to ERP
systems for accounting management with capture
systems, which are conceivably picking up
information from a combination of purchase
orders, invoices, payments/checks, and shipping
documents. “When you put all this data together,
it gives the CFO visibility into funds they have
coming in vs. the funds they have going out,
which enables them to optimize investments and
payments,” said Spencer. “In a large organization,
this type of optimization can create some
significant increase in cash flow over the course of
a year.”
Of course, Spencer acknowledged that not all
end users are quite prepared to deal with such an
increased influx of data. “I was talking to one
company that had set up a capture system to
improve invoice processing, which would
conceivably enable them to take better advantage
of early-pay discounts,” he said. “However, they
told me they needed to go back to their vendors
and negotiate some discounts.”
One of our favorite slides shown at the event was
4

Document Imaging Report

HP OFFERS NEW EMBEDDED PLATFORM
HP has introduced a new platform for embedding
applications in its MFP units. DXP is an XML-based platform
being made available to ISVs for no charge. It is replacing
HP’s earlier Java-based effort known as Chai.
“DXP is designed so that one development effort will allow
ISVs to integrate with our entire line of network MFPs and
Digital Sender network scanning devices,” said Phil Mount,
partner development manager for HP image and printing
group capture solutions. “The interface should look the same
no matter which device a DXP application is being deployed
on. We have begun working with all the folks we consider to
be middleware providers, as well as some of the ECM
vendors that want to reach down into the device.”
“There is no charge for ISVs to license the DXP SDK, or
participate in the program, just a nominal fee for training
materials. We do screen applicants to ensure they are
substantial firms with sufficient resources to develop
applications without extensive support from HP.”
Mount can be reached at phil.mount@hp.com
September 21, 2007

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is very much still emerging, and to DIR, this means
there is tons of opportunity for capture and
document management vendors to establish
themselves as early leaders. We plan to have more
on this topic in upcoming issues.
Robert Weideman of Nuance co-presented with
Emory and touched on the potential of adding voice
data to ECM and records management applications.
“When Nuance decided to expand from its original
business in document imaging and OCR into speech,
we saw a direct correlation between speech
recognition and scanning,” he said. “Recorded
speech is like text on a page. Both are data that
users are trying to capture.”
Weideman noted that the market for transcribing
recordings onto paper in the U.S. medical industry
alone is worth about $12 billion per year. “Nuance
generates about $300 million annually in this market
with voice recognition software,” he said. “It’s
important that capture vendors don’t isolate their
thinking based on media type. The value proposition
of capture goes across media. The workflows for
capturing voice or video data are similar to those
utilized for paper capture. It’s just that the adoption
of speech recognition is about 4-5 years behind the
adoption of OCR/ICR for paper capture.”
Weideman gave demoes that showed how Nuance
software can search audio recordings for specific
keywords and even find the specific spots in an
audio file where those keywords occur. Example
applications included storage of audio and video
training materials for compliance with human
resources regulations, and storing recordings of
customer phone conversations for improved service,
as well as discovery.

The new wave of distributed capture
The distributed scanning panel focused on the
potential for tighter integration between capture
software and hardware devices. The panel featured
representatives from scanner vendors Kodak and
Visioneer, as well as MFP vendors HP and Ricoh.
Each is currently offering some sort of platform that
ISVs can leverage to create simpler interfaces for
launching document processes from the hardware.
The panel concluded that the market is
transitioning from “push scanning” to “pull
scanning.” Push scanning requires less effort on the
part of the end user, which is indicative of
distributed capture becoming a front-office-oriented
application. The biggest stumbling block to adoption
of this new paradigm is the fact that each hardware
vendor offers its own platform for integration. So,
unlike TWAIN and ISIS drivers, which enable ISVs
to integrate their applications tightly with multiple
September 21, 2007

hardware brands, the new breed of push-scanning
platforms are mainly proprietary to a single vendor.
The answer may lie in utilization of a middleware
product by the likes of eCopy, NSi, Omtool, or
even Kofax to go across platforms, but these
vendors’ business and/or pricing models would have
to be adjusted to make this happen. This is still very
much an evolving discussion.

The payoff
HSA Capture 2007 once again proved a great
professional networking event with enough new
educational material to give attendees plenty to talk
about. Overall, more than 70 people attended,
including a good number of C- and VP-level
executives from all over the globe. Spencer is
already making plans for next year’s event.
For more information:
http://www.hsassocs.com/documentcapture/index.html

CVISION Upgrades
Compression
QUEENS, NY—Compression specialist CVISION
Technologies continues to upgrade its product line
and is currently preparing to release version 4.0 of
its PdfCompressor software for creating optimal size
PDFs. CVISION, which has a rich legacy in JBIG2
technology, has improved its JBIG2 compression
30% in the latest version. It has also added improved
segmenting and more capture options.
“"Our JBIG2 compression technology has
improved significantly in this latest release," noted
Ari Gross, president and CEO of CVISION. "For most
documents, where the previous JBIG2 release
created files 65% to 90% smaller than the Group 4
compression used for most TIFFs and PDFs, the
v.4.0 release offers an additional 30% file size
reduction. The new release also features processing
speed enhancements, with full support for multithreading across multi-processor machines,
improved OCR recognition rates, support for bar
codes and ICR, and output to PDF/A.”
CVISION has introduced an auto-segmentation
feature with the ability to segment text and picture
regions in full color scans, compressing each region
type at different resolutions. "To preserve quality of
text, a user might want to capture it at 300 dpi,
while capturing photos at 150 dpi to create smaller
files," said Gross. "We've employed the same type of
segmentation technology to enable us to introduce
background dropout in 4.0 as well."
CVISION, which was founded in 1997, has
approximately 500 customers, including 100 Fortune
500 companies. One of the company’s biggest deals
Document Imaging Report

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5

was an OEM partnership with Adobe, which
packages CVISION’s technology in its PDF Scan
Library [see DIR 2/2/07]. “Adobe is a great partner,
for a couple reasons,” said Gross. “First of all, their
customers are the large MFP vendors who create
PDFs in real time, not a batch-processing mode, so
do they don’t cannibalize our business. Adobe’s
customers are also very demanding and give Adobe
great feedback, which they pass on to us. This has
helped us improve our technology especially in two
areas: the way it runs in an embedded environment
and the quality of our segmenter.”
CVISION also has an OEM relationship with EMC
Captiva and offers a module for integration with
Kofax Ascent. “Captiva has been a very strong
reseller,” said Gross. “We are looking to form similar
reseller agreements with other capture vendors.”
CVISION, which is on pace for 30% growth this
year, recently launched a professional services
division. “CVISION's professional services are
designed to integrate our technology tightly with
existing document imaging workflows," said Gross.
"For example, we see opportunities in areas like
automated processing of semi-structured and
unstructured documents, particularly where high
recognition rates are required to replace current
manual coding. We are primarily focused on markets
for which automated recognition solutions are
complex and some engineering may be required."

somewhat when we spoke to Kofax reseller ISC
Micro, which was rolling out a hub-and-spoke
capture solution at UniGroup. UniGroup is the St.
Louis-based parent company of movers like
Mayflower and United Van Lines. “UniGroup works
with about 800 privately owned agents nationwide,”
said Bob Fortner, a senior account executive with
ISC Micro. “For each move, these agents have
several documents that have to be completed and
signed. These include order cover sheets, inventory
checklists, and invoices, to name a few.
“Historically, the movers would put this paperwork
in a drop box or fax it to UniGroup’s corporate
headquarters, where it would be picked up by a
centralized Ascent Capture implementation that we
installed in 2003. UniGroup wanted to give its agents
a third option of actually scanning the paperwork
themselves.”
The solution developed by ISC Micro leverages
Kofax’s Capio desktop document imaging software,
as well as the Ascent Collection Server (ACS) to
import documents into Ascent. “Agencies like this
solution better than the drop boxes, because it
enables them to maintain control over their
documents, without having to make copies and give
them to someone else to scan,” said Fortner. “It also
offers a faster turnaround time. While fax is also
quick, it often results in poor image quality, which
means documents have to be refaxed or data
clarified over the phone.”

For more information: http://www.cvisiontech.com

Kofax Reseller Deploys
Innovative Distributed App
In the early days of distributed scanning, we liked
to talk about the potential of the hub-and-spoke
model. This involves businesses that have branch
offices or agents in the field who have to send
documentation to a central office (the hub) but also
want to store their documentation locally (at the end
of each spoke). This model seemed like the ideal
place for the burgeoning desktop document
management market to collide with ECM.
A few years ago, Merrill Lynch implemented just
that sort of system at 800 branch locations utilizing
Nuance’s PaperPort desktop document
management software and a Documentum ECM
system. Since then, however, we haven’t heard
much about this type of implementation, and quite
frankly, we’ve found it a bit annoying, as we hate to
point out a market trend and see it go cold.
Last month, however, our hopes were revived
6

Document Imaging Report

Capio utilizes Kofax VRS to ensure higher quality
images. Capio is also designed so meta data
captured in Capio can be transferred through ACS
to Ascent Capture and leveraged downstream.
“We’ve designed the application, so it can be
implemented in two ways,” said Fortner. “If users
have already invested in MFPs that they want to
leverage for scanning, they can capture their images
to a network folder and then import them into
Capio. Even better, we are offering a Fujitsu fi5120C workgroup scanner that utilizes Capio as the
driver.”
ISC Micro has set up a Web site specifically for
UniGroup agents. It offers both a standalone version
of Capio and a fi-5120C bundle. Both options come
with phone support for the installation and future
technical issues. Fortner estimated an installation
takes about 20 minutes.
“We ran a pilot last year, in which we invited about
100 of UniGroup’s largest agents to participate,” said
Fortner. “We now have about 70 agents on board
with about 100 total installations, as some have
multiple sites.”

September 21, 2007

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The potential of ICE
We view this UniGroup installation as a great
example of some of the potential Kofax’s ICE
(intelligent capture and exchange) suite. The
application leverages several components of Kofax
technological portfolio, including image processing,
distributed capture, and enterprise integration. It
was also put together by a member of Kofax’s
reseller channel. It recent weeks, in fact, we have
seen a number of announcements coming out of
Kofax that indicate the company is succeeding in its
efforts to move upstream and offer more
transaction-oriented solutions.
For more information:
http://www.kofax.com/company/press_releases_details.asp?id=484

Conversion Services Support
Canon’s Solutions Business
It’s no secret that the copier business, once known
as the realm of “box movers” is transitioning to a
solutions-based approach. In addition to hardware
that has evolved from analog copiers to digital multifunction peripherals (MFPs), software is part of this
new solutions strategy. In 2005, in an effort to make
sure their customers were getting the most out of
their integrated hardware and software, MFP market
leader Canon introduced a professional services
portfolio. This summer, as part of that portfolio,
Canon USA introduced data conversion and capture
services.
“Our initial thrust into professional services focused
on solutions design and implementation, like
delivering workflow analyses and document
management systems, mainly to our national
accounts,” explained Dennis Amorosano, director
and general manager of Canon USA’s integrated
business solutions division. “We found that we had a
number of customers that rearchitected their
workflows to drive departmental or organizationwide document management initiatives for dayforward documents. However, many had years
worth of paper backfiles they also wanted to digitize.
We launched our data capture and conversion
services offering to fulfill their needs.”
According to Amorosano, Canon has no plans to
roll up a major service bureau business and will
work primarily with partners for its document
scanning needs. “We have some pockets of
conversion services capabilities that we picked up in
past acquisitions, and we will leverage them when
we can,” he said. “Generally speaking, we will work
with a number of third parties who provide
conversion services. This is not a core part of our
business; it’s more of an add-on, so we can offer our
September 21, 2007

customers a total solution. For Canon to pursue
conversion services through acquisition, we’d have
to see a huge market opportunity.”
Initially, Canon’s data conversion and capture
services will be available to its national and
government accounts. “National accounts represent
about 100 of our select direct customers,” said
Amorosano. “National accounts and government
are the two areas where our professional services
offerings started out. Now, many have started
trickling down and being sold through our dealer
channel.
“Delivering services initially to direct accounts
helps us better understand what our customers
need, so by the time we roll them out to the dealers,
we have perfected the offering. It’s still too early to
tell if conversion services will be widely used, or just
a nice-to-have option for a limited number of
customers.”
Canon’s professional services portfolio includes
document production and workflow analysis,
implementation, security, and customization
services; and software development and support.
For more information:
http://www.usa.canon.com/html/canonindex.html

New CEO Vows Growth For
Scan-Optics
Scan-Optics is in a growth mode according to
new CEO Gideon Agar. Agar, who works for
Patriarch Partners, the private equity firm that
foreclosed on Scan-Optics in 2005, replaces
Ramkumar Rajagopalan. Rajagopalan, who had
been acting as CEO since the departure of Paul
Yantus last year [see DIR 10-6-06], has joined Yantus
at Captaris, a Seattle-based fax server and imaging
and workflow software firm.
“Patriarch controls more than $6 billion in assets,
and we are sitting on a significant amount of cash,”
said Agar. “My role is to provide leadership for
companies that fall into our information technology
group. As part of this role, I have previously been the
CEO of three other companies. I have also worked
for large corporations like Oracle and Cisco.
“Scan-Optics has been reinventing itself over the
past couple years. It’s profitable, and it’s my
intention to grow it in a number of areas. Patriarch
has some great resources and deep pockets. We
plan to increase our investment in Scan-Optics and
add some senior executive leadership. My focus is
on the strategic planning needed to encourage
Document Imaging Report

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7

invest in.”

growth, and determining where the investments
need to be made.”

As part of the management reorganization, Richard
Lieberfarb has been promoted to senior VP and
COO. “I took a look at the existing management
team and had to make a decision whether it was
something we could build around,” said Agar. “I had
to question whether it had the energy and creativity
to make it through the transition phase and into the
growth phase. Or, had this team received so many
body blows over the past few years that it had
become unstrung?

Breaking down the business lines
Historically, the largest segment of Scan-Optics’
business has been high-speed scanning solutions,
which include hardware and software. This segment
waned, however, during the company’s final months
as a public entity (prior to the foreclosure.) In the
meantime, Scan-Optics’ third-party scanner services
business, Access Services, maintained its steady
revenue of $2.5-$3 million per quarter and
surpassed the hardware and software business.
Under Yantus’ leadership, Scan-Optics also launched
a full-fledged BPO operation, which was on target
for some $6 million in annual revenue in 2005.

“I came to the conclusion that we have a very
creative team with a lot of energy and ideas they’d
like to see implemented. Richard and those under
him in the financial area are very knowledgeable.
Management in other areas is strong. We are only
looking to fill a couple key roles in sales and
business development that can help us accelerate
our growth. Operationally, I think we have the
infrastructure in place to scale the business.”

Through the first six months of 2005, BPO and
Access Services accounted for more than two-thirds
of Scan-Optics’ business, which represented a
significant change from previous years, when
hardware and software made up at least 50% of the
company’s revenue. At AIIM 2007, there were signs
that Scan-Optics could be turning its solutions
business around, with the launch of a new scanner,
the announcement that its revolutionary Onyx
scanner was shipping, and the signing of a reseller
agreement with AnyDoc [see DIR 6/15/07].
However, Agar would not offer any more insights
into the current financials.

Ram moves on
We asked what type of hole Rajagopalan’s
departure would leave, as he was the VP of
technology and frontman for the company over the
past year. “Ram was a great VP of engineering,” said
Agar. “He was brought in by Paul [Yantus], who had
worked with him at previous companies. He and
Paul had teamed up before, and I think they wanted
to continue their partnership. We still have a strong
engineering team at Scan-Optics and have been
partnering recently to fill some of those needs as
well, which we will continue to do.”

“Patriarch Partners tends to play its cards pretty
close to the vest,” he explained. “We are currently
going through our planning for the next three years
and determining where we need to make our
investments. We’re not ruling out anything, and
there may be parts of Scan-Optics we decide not to

For more information: http://www.scanoptics.com

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September 21, 2007

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