Uncover New Demand For File Management Software Leveraging the asset tracking capabilities of records management software has helped this VAR earn $3 million in new revenue during the past two years. Business Solutions, October 2006 Written by: Ken Congdon

When Business Solutions first covered Southwest Solutions Group in October 2004, the records management VAR was steadfast in its commitment to providing clients with sound paper management processes despite the influx of all-electronic records management software solutions to the market. Little has changed with the VAR over the past two years — except the company’s bottom line. Southwest Solutions Group earned $17 million in revenue in 2005, more than a $2 million gain over 2004’s closing figures, and the VAR anticipates to close 2006 with more than $18 million in sales. While the VAR incorporates imaging technologies into its solutions where it makes sense, the bulk of Southwest Solutions Group’s success can be attributed to its ability to help customers better manage their existing paper files rather than eliminating them.

So how has Southwest Solutions Group continued to be so successful selling paper-based solutions in an electronic age? Well, one reason is the VAR’s ability to find new, and sometimes unexpected, ways to expand a solution into other departments or divisions in an organization. A prime example of this is the way the VAR has begun to leverage the asset management capabilities of the file management software it resells to uncover new opportunities, outside the records room, with existing clients.

Don’t Ignore The Asset Tracking Capabilities Of File Management Software

Many file management software packages come equipped with bar code tracking capabilities that allow organizations to track the movement of important paper records throughout their office environments. By scanning bar codes on file folders, an audit trail can be established that shows where documents have been, which personnel have reviewed specific documents, and who may currently be in possession of a file in question. This audit trail provides a system of accountability and protects files from being lost and misplaced.

While intended for records management, the bar code tracking technology in file management software doesn’t have to be reserved for paper records alone. The technology can also be configured to track company assets such as furniture, fixtures, and equipment. The ability to track assets using file management software isn’t new. It’s been a capability of the software for decades. However, many records management VARs neglect to identify the additional business opportunities this software feature can create, which can prove to be a costly oversight.

“Asset tracking has always been something file management software could do, but the feature was the afterthought records management VARs seldom told their clients about because it wasn’t part of the file management methodology,” says Troy Menchhofer, VP of Southwest Solutions Group. “However, we’ve recently found that many of our clients have a strong need to track assets in other areas of their businesses. We have begun to implement the software outside the records room to address these asset management projects and have profited greatly as a result.”

Williamson County in Round Rock, TX was one of the first clients for which Southwest Solutions Group installed an asset management solution. The VAR originally installed a hybrid electronic and paper file management system, complete with bar code tracking, for the Williamson County Juvenile Services Center. While working with Juvenile Services in a records management capacity, Southwest Solutions Group was informed that Williamson County was replacing 3,500 to 4,000 analog car-mounted and handheld radios with new digital units for its police, fire, and EMS (emergency medical services) departments. The county wanted a way to effectively track these new radios, and the asset management solution pitched by the radio supplier was going to cost the county $15,000 per month. That’s when Southwest Solutions Group realized that the asset tracking capabilities present in the file management software used in the Juvenile Services Center would likely fulfill Williamson County’s radio tracking needs at a much lower price point.

The VAR sold additional seat licenses of the file management software to the EMS operations manager in charge of the project and worked with his department to create bar code labels to attach to the new digital radios. A bar code label was placed on each car-mounted radio and on the inside of the door of each squad vehicle. When scanned, the software would tie each new asset to a specific county vehicle. Bar code labels were also placed on the new digital handheld radios and replacement batteries, linking the assets to the individual county employees to which they were assigned.

The bar code capabilities of the file management software also came in handy for redeployment of the old analog radios that were being replaced. Bar codes were placed on each of the old analog assets which are deployed to EMS, police, and fire department volunteers who assist the county in emergency situations, such as Hurricane Katrina. Volunteers have to sign for an analog radio, and the bar code tracking system helps trace which radio is with which volunteer. This helps ensure all assets are accounted for and returned to the county.

In addition to tracking which radio is with which individual, the file management software also helps generate reports that can be designed to provide detailed information about each asset such as value, warranty information, and repair history. In its entirety, the asset tracking solution installed for Williamson County earned Southwest Solutions Group an additional $14,000 in immediate sales revenue plus annual recurring revenues of 18% for ongoing system maintenance.

Lead With Records Management To Maximize Asset Tracking Success

The asset tracking capabilities of file management software will be most attractive to organizations already using the software for records management purposes. Leveraging an existing investment allows an asset management solution to be implemented for a lower price point and accelerates the implementation cycle. Furthermore, it gives the customer the ability to standardize separate applications on a single software platform. However, the asset tracking capabilities of file management software are limited and not a fit for all clients.

“Most file management software packages lack intelligent accounting features, so they are not the best solution for clients that wish to manage the inventory of their assets,” says Menchhofer. “Given these limitations, we rarely lead with the asset tracking capabilities of file management software. We are most successful when we lead with the core records management capabilities of the software, earn business in that capacity, and then look for ways to expand the software to address asset management requirements in other departments.”

Target Government Entities For Both Record And Asset Management Opportunities

Like its install for Williamson County, Southwest Solutions Group has had the most success earning additional asset management projects with clients in the government vertical. “All government entities — whether they are federal, state, or local — have a plethora of departments aimed at providing very different services,” says Menchhofer. “Many of these departments, such as economic development, city council, or the clerk’s office, have a need for records management solutions. Others, such as EMS, police, and parks and recreation, also have a need to track the mobility of assets. This organizational structure makes government an ideal vertical in which to pitch the asset management capabilities of file management software.”

Using this approach, Southwest Solutions Group has won asset management deals with several government agencies including the Texas Department of Transportation, the Texas Commission on Environmental Quality, and the Texas Department of Public Safety. Each of these asset tracking projects typically earns Southwest Solutions Group an additional $5,000 to $20,000 in revenue above and beyond the cost of the file management solution the VAR initially implemented for these agencies.
Moreover, these asset management projects are typically more profitable than the original records management initiatives because they are easier to deploy. “When designing a records management application, we typically need to spend tens of hours with a client to identify, detail, and categorize different record series, subseries, document types, and indexing fields,” says Menchhofer. “An asset management project, on the other hand, is not nearly as involved. Only 5 to 10 fields need to be identified to describe and generate reports for specific assets. In most cases, we only need to conduct a 90-minute initial consultation with a client before beginning the implementation process. Since less of our time is consumed, more of the cost of these ancillary asset tracking opportunities becomes pure profit for our business.”

Gain Government Clients With Integrated Document Management The file management software used exclusively in the systems Southwest Solutions Group designs is Smead Software. Smead Software provides integrated document management that accommodates all types of documents, including paper, digital images, PC-generated files, e-mail, and faxes and makes them available to users through one interface. Physical files are managed through automated creation of color-coded labels with bar codes for tracking of files through a check-in/check-out system. These bar code tracking capabilities have also allowed Southwest Solutions Group to leverage the software to gain additional asset tracking projects with clients already using the system for records management purposes.

All of these capabilities are attractive to government clients, given the vertical’s need to track different records, in various mediums, across several different departments. Furthermore, considering most of Smead’s VARs sell their solutions heavily to the government space, the vendor has made a focused effort to better understand the needs of this vertical and adjust its product to better meet these demands.

“Traditionally, Smead Software focused on managing paper from creation through scanning and archiving, regardless of vertical,” says Troy Menchhofer, VP of Southwest Solutions Group. “The software works well in these niches, but now Smead is reinforcing its software with features that address specific government records requirements, such as retention schedule support to aid in compliance with government regulations. The company has engaged its existing government clients as well as government-focused VAR partners, such as Southwest Solutions Group, to aid in the research and development process to enhance Smead Software’s appeal to the government market. We believe the end results of this initiative will help us make many more government sales.”