Kofax Moves Toward an Integrated Invoice Processing Offering
webadmin 18 Oct 2009Recently Kofax acquired privately owned 170 System. This will allow Kofax to offer a complete invoice processing system from invoice capture all the way into to the accounting system. The move makes a lot of sense.
When automating their invoice processing solution the AP users first must think about their workflow and financial system and later about how to capture their document. Invoice capture automation comes as an afterthought to workflow automation. This is created by the separation of interest. Workflow implementations are more profitable for technology providers to sell, so it is logical they start with workflow and address capture at a later stage.
The result is that most workflow customers still make use of the manual key-entry process with late scanning and only 20% make the move toward the OCR-IDR technology. This new marriage will allow Kofax to propose integrated solution at selling time and will significantly rise the percentage of integrate installations. Another plus for the users is having a single vendor solution covering the paper scanning to the financial handling, resulting in a single point of support and better service.
Historically we have seen that upon implementation, the workflow company gets 2 to 3 times the revenue of the capture company. However, the technology in automatic data capture is by far greater than the workflow technology. This price contradiction is due to a greater ROI traditionally coming from workflow solutions. Workflow solutions include the matching step that has been the most costly manual process in invoice processing, requiring knowledge workers. Invoice capture solutions, however, compete with the key entry process that is usually done by lower paid key-entry operators or overseas for less than a dollar.
PayStream Advisor’s sees that capture and workflow integration will facilitate the merging of paper and electronic invoices, since both paper and electronic are processed by the same workflow. Recently Kofax has announced an electronic invoice solution that could seamlessly integrated with the new workflow from 170. Kofax could now offer a hybrid paper-electronic solution allowing the user to transparently move from paper to the less costly electronic invoice.
For over a year now, Kofax has promoted its 5 steps approach towards invoice automation, starting from the front end capture, i.e. scanning the invoice before it is being captured to the release of ready-to-use data to the ERP system, the 170 system acquisition allows Kofax to fill the gap of the data matching and correction that has traditionally been part of the workflow and integrates the matching and extraction in a single step. This should significantly increase the invoice straight-through-processing and bring the paper invoice process to the smaller burden that the users want.
PayStream Advisors also sees technical advantages when you integrate the invoice capture and workflow process. It gives a better testing platform and simplifies some of development especially for the validation and database interface. In the Kofax-170 system case, 170 is based on a solid J2EE platform something that Kofax has promoted for several year now, this marriage will make a reality of the thru enterprise J2EE invoice capture system that Gartner consultant have promoted for the last 4 years.
Basically, the merging of Kofax and 170 System will make Kofax the 800 pound gorilla in the room and will trigger other capture and workflow merging.
