The False Economy of Legacy Capture Software

Legacy Capture SoftwareIn previous posts we have discussed the latest generation of innovative, advanced capture software. At Ephesoft, these are represented by our Transact and Insight solutions, which have been described as Capture 3.0 technologies. Capture 3.0 is the state of the art in open interface solutions that go beyond scan to archive and capture to process programs. Innovative advanced capture software is characterized by several core features:

Cloud/thin client structure – the days of proprietary client server software with specific product functions has given way to flexible solutions that leverage standardized browsers and cloud backbones.

Open interfaces – Capture 3.0 solutions work with your existing software investments, often in the background, requiring limited end user training.  They leverage web service APIs to integrate advanced capture within existing LOB applications.

Scalability – With Capture 3.0, scalability is a two way street, giving organizations the ability to throttle their bandwidth up or down depending on process flow and seasonality.

Open source compatibility – Capture 3.0 flexibility means you can operate in a Windows or Linux environment and are not bound by proprietary technologies.

Machine learning – Innovative advanced capture technologies have developed beyond barcodes, templates, pixel analytics, and fixed field extraction to classify documents and extract unstructured data with few sample documents and minimal user intervention.

As the commercial and public sector markets have embraced the newer solutions, legacy vendors of older platforms have faced a two-fold problem:

  1. The skill set of their developers—who may have created the original capture application over a decade ago in 16 –bit infrastructure—do not have the skill set required to rewrite the source code needed to bring these applications up to industry standards and leverage newer n-client environments.
  2. A significant portion of the legacy capture software vendors’ revenue streams comes from maintenance and support contracts with existing customers. This “sticky revenue” is addicting, leading vendors to remain rooted to their functional (if arcane) source code.

How are legacy capture software vendors responding to the innovators that are cutting into market share? Like many retailers, they resort to clearance sales.  This is particularly acute in the advanced capture space where most legacy capture software vendors have been acquired and sometimes resold by larger companies or investment consortiums. These entities have a goal of extracting value from their acquired asset.

While it may be tempting for organizations considering advanced capture solutions to shop in the bargain bin, there are several caveats that might lead to their technology investment turning into a sinkhole project:

  1. Legacy capture software vendors typically offer steep discounts on platforms that are on the internal chopping block for future engineering and development efforts. This can be an effective short-term strategy for the vendor, as the ongoing R&D costs are minimized. For the client company, however, it can mean a soon to be orphaned product.
  2. The initial software purchase often represents a small portion of the legacy system. Client companies often need to invest multiple times the initial investment in staff training, customizations, hard-wired integrations, and ongoing support.  The initial discount may be long forgotten when the bills for professional services and third-party integration fees become routine.
  3. The legacy capture software vendor issues an End of Life announcement and strong arms their customer base to migrate to a newly developed or acquired platform, resulting in substantial license costs, larger maintenance fees and more professional services.

What are the red flags to look for to identify potential advanced capture orphan technologies? Here are several questions to ask a potential technology vendor:

  • Is the discounted software thick client?
  • Does the vendor offer other, similar solutions that are not available at the low entry price?
  • Are the discounted offerings gated for functionality or document volume (click charges)?
  • Are the discounts associated with “bundled” software, where the client may have little to no use for the added programs?
  • Is the vendor stable and able to provide a commitment to product development on the actual software purchased?
  • Is the software available in a subscription model which provides an incentive for the developer to continue feature development?
  • Does the software bundle provide an open interface (i.e. web service APIs) to streamline integration with other back office applications?

If the answer to any of these questions is less than reassuring, then the discounted entry point may represent a false economy that the client organization may soon regret.  When considering advanced capture solutions, remember that the goals of a document capture deployment are to improve organizational efficiency and reduce operational costs.  Keep the entire picture in mind as you make an evaluation of available products; you may just avoid purchasing a “discounted” leftover that turns into shelfware.