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Business Trends on Converting Paper Processes to Electronic Format

LAS VEGAS—For years, ABBYY has been bestknown as a leader in OCR SDKs, acting as an OEMpartner to many vendors in the capture space.However, over the past two years, under a newCEO and leadership structure, the Moscowheadquartered ISV has started to carve out its ownniche in advanced capture. Thiswas reflected in 40% growth inFlexiCapture sales in 2017 andan expanded group of partnersand users in attendance thismonth at the sixth annual ABBYYTechnology Summit held at theCosmopolitan.

“At the end of the day, our focusis on making the processing ofhard and difficult documents,easy,” said Ulf Persson, ABBYY’sCEO, during his keynote presentation. “Ourproducts are focused on the digital transformationuse cases that we see emerging rapidly around us.You are going to hear a lot about ABBYY’sintelligent content going forward. That’s really themarriage of AI and content with the goal of makingthat content actionable and available—makingstructured data from un- or semi-structured content,and making it intelligent.”

Persson was appointed CEO in January 2017 andhas served on the company’s board of directorssince 2002. “2017 was a year of change for ABBYY,”he told conference attendees. “We completed acorporate and management restructuring andmade some key new hires and promotions. Thathelped us grow significantly, which we expect tocontinue in 2018.”

Overall, Persson reported that ABBYY grew 26% in2017. “We had a stellar fourth quarter last yearand, continuing down that path, we expect to grow20-25% in 2018,” he said. “We’ve set a goal ofgrowing around 20% annually.”

There will be changes at the top forDocuWare at the end of the year. Lastweek it was announced that the ISV’s co-presidents, Jürgen Biffar and ThomasSchneck, will be stepping down. Biffar co-founded DocuWare in 1988 and is in chargeof product and finance. Schneck joined in1990 and runs sales. They will be replacedby Dr. Michael Berger, the current CTO, andMax Ertl, the current Chief Revenue Officer.

Under Biffar and Schneck, the companygrew to more than $50 million in revenue in2017, which represented a 20% increaseover 2016. Founded in Germany, DocuWarestrengthened its U.S. position with the 2001acquisition of a business partner—the DMSdivision of ALOS Micrographics. DocuWarepioneered the idea of selling ECM softwarethrough an MFP dealer channel and inrecent years has been very successful withcloud sales. In 2012, DocuWare receivedfunding from Morgan Stanley ExpansionCapital LP to fuel expansion, and in 2013 itacquired competitor WestbrookTechnologies.

For more info: http://bit.ly/DocuWareMgt

Fujitsu has announced the successor to itswildly successful ScanSnap iX500 model.The new iX1500 was announced earlier thismonth. At a rated speed of 30 ppm, it’sslightly faster. It also features a 4.3-inchcolor touchscreen for easy interaction withjobs. It includes the new ScanSnap Homesoftware, which features automatic filenaming recommendations based on the textof scanned documents. At $495, the iX1500carries the same list price as the iX500.

Persson noted that ABBYY is also profitable and usesthose profits to invest in its future. “We’ve had a 38%increase in development investment from 2016 to 2018and now have 315 people on our R&D staff,” he said.“We are competing in a changing market. We are nowseeing competitive threats emerging from areas like AIand other areas of digital transformation that we didn’tsee in the past. We need to develop our technologyfast, because if we don’t, someone else could beat us toit. That could make us irrelevant, and I have no intentionof becoming irrelevant.”

Persson sat down with editor Ralph Gammon anddiscussed ABBYY’s three primary areas of market focus.“First off, we have our core OCR technology, which wesell to ISVs and OEMs; that is not a business we expecta lot of growth from,” he said. “We have a high marketshare already and we keep grinding away, but it’s apure technology business, and there are all kinds ofnewer technology that chips away at the market.

“In document capture, we’ve seen very strong growth,primarily driven by FlexiCapture sales, especially forinvoices. We’ve developed a strong channel partnernetwork, and we’ve also increased our enterprise focus.We’ve broadened our global footprint and haveincreased sales in Europe, Asia, and especially NorthAmerica.

“Our third area of focus involves growing on the backour partners’ digital transformation businesses in areaslike RPA and BPM. These are slightly different use casesthan traditional capture.”

Persson discussed how cloud and mobile technologiesrun across all ABBYY’s products lines. “Our OCR SDK inthe cloud is our fastest growing product,” he noted.“With the recent release of FlexiCapture 12 2, we nowhave capture in the cloud. We do a lot with mobile bothin our applications and SDKs. Although we have goodcapabilities in both areas, in 2019, we plan to redoubleour efforts in both mobile and cloud platforms; they arevery high on our list of priorities.”

Persson also discussed how ABBYY’s NLP technology,which it originally brought to market as its own product,is now being folded into the company’s other productlines. “[The former NLP product line] Compreno was atechnology-driven development effort, which is thewrong way to start,” said Persson. “So, it doesn’t existas a product anymore. But, there are a lot ofcapabilities in NLP that can be used for indexing acrossour portfolio, primarily in FlexiCapture. It’s going tomake FlexiCapture smarter. Going forward, in thedigital transformation market, using NLP is going to bevery key.

Persson concluded by saying that ABBYY will continue

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Vol. 29, No. 13

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to focus on organic growth and that M&A is nota big focus. “We are always looking atopportunities, but we are not interested inbuying market share,” he said. “We might lookat complementary technology, products thatcan help our core businesses grow.”

We also caught up withJupp Stoepetie, ABBYY’sChief Marketing Officer andBruce Orcutt, VP ofmarketing. “We reallystarted driving FlexiCapturesales in Europe a coupleyears back,” Stoepetie told

. “We’ve now caught upin the U.S. market.”

Orcutt explained howABBYY’s partnerships with RPA (robotics processautomation) and BPM vendors are starting topay off. “One of the advantages we have overother capture vendors is that we are stillindependent,” he said. “So, we are a safechoice for our partners. There have been a lotof consolidations of our competitors, and theyare now owned by vendors that havecompetitive technology in many cases.”

It was at last year’s Tech Summit that we firstbecame aware of some of the synergiesbetween capture and RPA. At the time, ABBYYwas in the early stages of a FlexiCapturepartnership with UiPath. Last month, ABBYYannounced a similar partnership with BluePrism. This gives ABBYY advanced capturepartnerships with two of the three “leaders,” aslisted in Forrester’s most recent RPA wave.[Automation Anywhere is the other leader,and it has a partnership with IBM for Datacap.]

In addition, ABBYY has partnerships toincorporate the FineReader OCR engine inseveral other leading RPA products. “Ourconversations with RPA vendors really startedfour to five years ago, when they startedlicensing our FineReader engine,” explained BillGalusha, director, product marketing, for ABBYY.“In fact, something like 10 of the top 12 RPAvendors now have a relationship with ABBYY.They often use our OCR for digitizing documentsand screen scraping processes.

“In the last year-and-a-half, a lot of them havebegun starting to try and leverage basic OCRfor more complex document automation,around areas like financial processing. That is

where we are arriving now, where FlexiCaptureis proving to be the right solution for a lot ofthese challenges and business cases.”

Stoepetie noted that the UiPath relationshiphas already helped ABBYY get into severallarger deals. “Most of the RPA deals whereFlexiCapture is brought in areenterprise-level,” he said.“Having established thepartnerships with UiPath andBlue Prism and laid the groundwork, we are very excitedabout our growth potential inRPA deals next year.”

FlexiCapture can be appliedin a couple different ways inRPA implementations. It canbe embedded within aprocess that is kicked off bya robot, or it can incorporate robotic processeswithin its capture workflow. To date, invoiceprocessing has been the most popularapplication integrated with RPA.

On the BPM side, Orcutt indicated thatABBYY’s Pega partnership is currently moremature than its Appian relationship, but that heis expecting to see increasing revenue fromboth partnerships going forward.

Stoepetie concluded by discussing ABBYY’ssuccess with its cloud and mobile platforms.“Our OCR SDK on the cloud is primarily beinglicensed by smaller businesses; this includesmore modern buyers like internal IT shops andISVs with cloud offerings,” he said. “We are alsoseeing a lot of cloud companies looking toincorporate OCR within their own clouds, whichhas led to some strong growth for the Linuxversion of our SDK. Finally, we see FlexiCaptureon the cloud as an alternative delivery modeldriven by requests from end users.

“As far as mobile, it’s the preferred channel ofend users, and we are the only vendor thatoffers any option the customer needs. If youneed image processing tools on the device, wecan provide that; onboard automated capture,we can do that. You can also do it on the server.Mobility is so strategic to our customers, it’s animportant investment for us.”

In six years, attendance at ABBYY’s TechSummit has grown from 25 to 150. I’m notsaying the ISV itself is growing that fast, but, still20-25% annual growth in a market growing at

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not even half that rate is impressive.

ABBYY has always been a great technologycompany, and Persson’s leadership seems tohave it on the right track in terms of globally-focused sales, marketing, and organization.Acquisition-related changes that have takenplace at traditional advanced capture marketleaders over the past three years, have alsohelped open the door. In fact, ABBYY has beenon an aggressive hiring plan lately and hasbrought onboard plenty of personnel withexperience at market leaders.

In addition, ABBYY has a keen eye for thefuture, as evidenced by its being early to jumpon the potential market synergies between RPAand capture, as well as its aggressivedevelopment of cloud and mobile platforms.ABBYY is also keeping a close watch, as well asworking itself, on technologies like machinelearning and AI that can be used to furtherautomate the processes that ABBYY’stechnology is already addressing. Its advancedNLP technology is another arrow in its quiver.

In many ways, ABBYY’s positioning as one ofthe last independent capture vendors isrefreshing. It enables them to be nimble,focused, and open to partnerships that moreencumbered vendors can’t as easily embrace.ABBYY’s global footprint is also an advantagewhen dealing with enterprise customers andglobal ISVs. We will continue to look for brightthings form ABBYY in the future in markets likedocument capture and process automation, aswell related areas like mobile, cloud, AI, RPA,and whatever else should pop up on thehorizons as a natural extension of thecompany’s expertise in core capture.

For more information: http://bit.ly/TechSummit18PR

At the event, caught up with Square 9 co-founders CEO Stephen Young and CTO BrianBanet. We discussed the company’s currentmarket position, its strategy for continuedgrowth, and its long-term vision for the future.“Our growth rates have slowed a little,” notedYoung, whose company was ranked number2,387 in the 2016 list of the 5000fastest growing privately held companies inAmerica. “But, we are stillseeing double-digit annualgrowth.

“One factor has been thatit’s harder to grow by as highof a percentage as you getlarger. Another factor is anincreasing number of cloudimplementations, whichshould increase our recurringrevenue streams, but reducesour up-front income. The finalfactor is that as our functionality in capture andworkflow has increased and we’ve started todrive further upstream, we’re losing some of thesmaller customers that we used to sell to. That’spart of the incentive for us to try and createproducts that are easier to sell and deploy.”

Young noted that Square 9’s average deal sizehas doubled in the last seven years. “In ourearly years, $8,000 deals were common,” hesaid. “Now, we are looking at typical deal sizescloser to $25,000-$30,000.”

Young feels this has alienated some of Square9’s reseller partners. “The fact is that they areused to selling hardware,” he said. “They wantsomething they can include in their price books,like finishing or saddle stitching options on anMFP. They want to get an answer from thecustomer right away–so they can book the saleand get paid.”

Young noted that larger sales have also beenputting a strain on Square 9. “Let’s face it, mostof our channel partners are just not equipped tohandle complex professional servicesengagements, so they end up calling us in,” hesaid. “Our professional services revenue isincreasing 36% YOY and while we like thebusiness, it’s putting a strain on us. We want tomaintain our focus on being primarily asoftware development company.”

To address these trends, Square 9 haslaunched what it is calling a series of QuickStarttemplates. These are pre-configured solutionsaddressing common horizontal and vertical

NASHVILLE, TN—Square 9 Softworks islooking to get back to its roots. In recent years,the mid-market focused ECM and capture ISVhas seen the price and complexity of itsaverage deal increase. At its recent EncompassConference held at the Gaylord OprylandHotel, the vendor was promoting a new waveof pre-packaged offerings, as well as a newarchitecture to enable reusable configurations—designed to help simplify ECM implementations.

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processes that Square 9 has seen its customersutilize its software for. The initial QuickStarttemplates are in the horizonal areas of invoiceprocessing and HR and vertical markets ofcounty government and K-12 education. Thereis also a “Business Essentials” pack.

“We have assembled a business solutionsteam that analyzes different markets and talksto our customer base about how they are usingour products,” Banet told . “We are buildingour QuickStart solutions based on their findings.The goal is to be able to push out deploymentsto customers in a matter of hours and notmonths.”

“We want our channel to be able to take backdelivery of our products,” said Young. “We thinkthat even the good dealers only have about a1% penetration rate of ECM in their customerbases. We are trying to get deeper penetrationat the lower end.”

The QuickStart solutions were enabled by arecent re-architecture of Square 9’sGlobalSearch ECM platform. “We’ve createdtotal solution portability,” explained Young. “Youcan basically take all your indexing fields,folder structures, and workflows [similarfunctionality was due to be released inGlobalCapture shortly after the conference]and move them from one location to another.For end users, this is great for distributedapplications. For resellers partners, it createsthe opportunity to create re-usable solutionsthat they can sell to multiple customers. Ourplan is to create something like an app storewhere our partners can advertise solutions thatthey’ve created leveraging our software andtheir own intellectual property.”

Square 9’s QuickStart solutions are availablefor download or they can be run in theGlobalSearch C2 cloud environment. “Thecloud is always discussed with our customers,but we are still only seeing about 15-20% ofnew licenses being deployed on it,” said Young.“That said, cloud sales are growing at about240% YOY, and we have some large customerswho have gone with the cloud, even when itwould have been cheaper for them to go withan on premises license.”

To better enable its cloud solution, one ofSquare 9’s development initiatives has been tocreate parallel capabilities between itsWindows and Web clients. “We’ve had a three-year initiative to create like-for-like functionality

in both clients across all our product lines, ECM,capture, workflow, and Web forms,” said Young.“This is what the market has been demandingand, in the December/January timeframe, wewill have a new Web client coming out that

should close the gap the restof the way.

“That said, we remaincommitted to our desktopclient, which is reflected in ourmove to upgrade it to a 64-bitarchitecture.”

One of the ways that Square9 is able to increasefunctionality on its browser

client is through the use of what it calls its“Extension” products. “There are just certainthings you can’t do natively in the browser, likelaunch a Word document, make changes, andsave them,” said Banet. “So, we have anExtension for that. We also now have anImageExchange Extension, which basicallyenables GlobalSearch to collect data fromthird-party applications. This enablesfunctionality like key-free indexing and opensup the possibility of introducing RPA toautomate some indexing.”

Square 9 has also created an Extension toenable driverless browser-based scanning fromits GlobalForms application. This involvesintegration with Fujitsu’s new fi-7300NXnetworkable scanner. Square 9 has actuallydone two integrations with the fi-7300 NX. Thefirst is with Square 9’s capture technology andenables users to capture and index differentclasses of documents to a GlobalSearchapplication through the interface on thescanner. This is a conventional “push” scanningapplication, where the scanner is used to pushimages into the software.

More unconventional is the “pull-scanning”integration that has been created withGlobalForms. As its name suggests,GlobalForms is electronic forms software, whichis part of the Square 9 suite. Square 9 hasworked with Fujitsu to set it up so that when aform requires supporting documentation thatcan be captured through a scan, such as acopy of a driver’s license or tax return, aprocess can be launched from the form that willpull the required document through the scannerafter it has been loaded on the feeder of the7300NX.

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This is the type of application that truly unlocksthe potential of the fi-7300NX, which was onlylaunched last month [see DIR 9/28/18]. Banetstrongly encouraged resellers to consider thepotential of the integration between the 7300NXand Square 9’s products and come up withapplications that would make sense to theircustomers. He even went so far as to say, “Ifyou can sell it, I can make it work.”

Square 9 also continues to increase its cloudfunctionality. “We are going to introducetenancy into the software that we makeavailable to resellers so they can host it in theirown environments,” said Young. “GlobalSearchC2, which we host on AWS, has it now, but it’snot easy to deploy.”

Banet is also working on enabling multi-tenancy in GlobalCapture so that Square 9 caneventually deploy its capture software on thecloud. “We feel it’s cost prohibitive to run cloudcapture in a siloed environment,” he told us.This has to do with the architecture of theproduct, which runs different processes indifferent nodes. For example, classificationmight be done in one node and PDF conversionin another. “That means that each of thosecomponents would live as different services inthe cloud,” Banet continued. “They would scaleup and down based on demand. We just haveto make sure we maintain control of the overallprocessing to avoid risking impacting othercustomers.”

As we mentioned, with the release of

GlobalCapture 2.1.1, which was scheduled forearlier this month, capture templates andprocesses are going to be able to be re-used.This means that capture applications will startshowing up on the QuickStart menu. Banetindicated that some of the work that Square 9 iscurrently doing internally with technologies likemachine learning and AI could be incorporatedin pre-packaged modules.

“We could use AI and machine learning, forexample, to set up a capture process for aspecific type of unstructured document, like aninvoice that doesn’t have a template, and thenmake that process available to users orresellers to incorporate in their applications,”said Banet. “Our goal is to create discreetpieces that can empower our customers. Ourstrategy is to reduce the friction in creatingvalue with our software.”

Square 9 is also looking at creating pre-packaged functionality for compliance.“Compliance is becoming more and moreprevalent, and we are gaining a betterunderstanding of the requirements all the time,”said Young. “We’ve seen it ourselves, when wewere suddenly inundated with a number of‘vendor risk assessments,’ each of which tookus several hours to complete.”

According to Young, Square 9’s R&D team hasundertaken a compliance initiative that shouldbe available to users in 2019. This includesfunctionality like revision-controlled templatesfor creating and managing essentialcompliance policies; automation to enforcepolicy reviews; and auditing capabilities, sousers can prove that they have acted in acompliant fashion. “The goal is to createproducts that will enable our customers tobetter comply with the increasing number ofregulations in the market,” said Young. “Ourfocus is to improve the overall customerexperience and reduce users and channelpartners’ reliance on professional services.”

Square 9 seems to have a good idea of whothey want to be. Launched as a mid-tier ECMISV looking to sell through the MFP channel,Square 9 has done a good job building on thatbase, while steadily moving upstream byimproving and increasing its offerings. Capture,cloud, and potential white label offerings areall great avenues for potential growth, as wellas complementary to the ISV’s core business.

Fujitsu is not the only scanner manufacturer with an

integration into Square 9’s software. At Encompass

18, we caught up with Plustek’s Johnson Yang, VP of

sales, and Mark Druziak, sales manager, who showed

us an integration between their A250 networkable

scanner and GlobalSearch, including the cloud-

hosted C2 offering.

Leveraging a Square 9 eConnector, users can

leverage the device’s color touchscreen to select

document type, as well as enter indexing information,

which can be facilitated through drop down menus.

Individual log-ins with custom pre-sets are available.

Plustek has set up an individual SKU for the Square 9

integrated product. The 250, which is a 30 ppm/60 ipm

rated device, lists for $999, with a MAP of $899.

https://plustek.com/eu/products/network-scanners/escan/index.php

year-end filing in 2019, we will be filing as adomestic entity, so we will be required to followdomestic requirements.”

For some background, TIS was founded as acapture ISV in Tel Aviv, Israel, in 1991. In 2014, itbought Dallas-based eGistics (where Reidyserved on the board), which offered hostedremittance and document managementsolutions [see DIR 9/18/14]. Although thecompany’s headquarters remain in Tel Aviv,gradually more of the managementfunctionality has been moved to the U.S.,including Reidy being named CEO in 2016 [seeDIR 9/23/16].

Historically, TIS’ primary geographic market forits flagship capture offering, eFLOW, has beenEurope, with eGistics’ services being soldmostly in the U.S. In 2015, TIS hired a number offormer ReadSoft executives with the plan oftargeting invoice processing applications in SAPenvironments, which culminated in last year’srelease of a cloud offering aimed at mid-marketSAP Business One users [see DIR 11/3/17].

Unfortunately, the Business One space provedunable to support such an offering and TIS hassince pulled back. It is now re-engineering itscloud offering to address a more generalcapture market. “We found that the typicalBusiness One customer just does not have thecritical mass to justify purchasing thecapabilities we were offering,” Reidy told .“We had a lot of interest from SAP channelpartners, which is how we planned to go tomarket, but I’ll never forget sitting with the CEOof one of these partners who suggested that weneeded to gray-out some functionality becauseit was scaring off customers. Basically, mostBusiness One users only have a handful ofpeople in their A/P departments and only acouple may be doing invoice processing part-time. The ROI for automation is just not there.”

TIS has plans to roll out its re-architected cloudoffering by the end of the year. “It will includemore general capture and recognitioncapabilities,” said Reidy. “This will includeinvoice processing, but it will be able toaddress other types of documents as well. Also,when the offering was originally designed, weused certain tools from Microsoft that made ushighly dependent on Azure. The new versionwill be data center independent, which willopen up the possibility of having partners hostour software on their clouds.”

Reidy indicated that he wasn’t anticipating

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It has been a while since we’ve heard fromTop Image Systems (TIS). It wasn’t until Maythat the publicly-traded capture vendor finallyannounced its year-end 2017 results. Since then,it hasn’t followed up with any 2018 numbers.

recently caught up with CEO BrendanReidy, who explained the lack of filings, anddiscussed the progress TIS has been making onexecution of its growth strategies, which he laidout for us last year [see DIR 9/1/17].

“We had some difficulty complying with newrevenue recognition guidelines, which hasdelayed our filings,” Reidy told . “I takesome of the responsibility for that because I cutour financial team from 12 people to 7, andwith the onset of the new regulations, that wasprobably too deep. However, I have alwaysfollowed the words of one of my mentors whotold me that you can’t make a living onoverhead. So, I tend to run with leaner financialteams.”

Reidy added that as a foreign issuer of sharestrading on a U.S. exchange (Nasdaq), TIS isonly required to file six-month reports. Thisweek TIS announced it would be filing a reporton the first half of 2018 on Wednesday after themarket closes. “We are in full compliance withwhat the SEC requires, but we not areproviding the best optics for investors,” Reidyexplained. “That said, starting with our 2018

The QuickStart solutions are a good way tokeep pace with the market, as their primarycompetitor DocuWare has also moved this way[but DocuWare’s Kinetic Solutions are onlyavailable as cloud offerings, see DIR 6/22/18].Utilizing QuickStart to better address theunderserved lower-end of the market, and alsoserve as an easier-to-sell option for MFPdealers, could really pay off.

The latest Encompass event was significantlylarger than Square 9’s past conferences. Therewere 14 sponsors from a combination ofhardware, software, and services businesses.Square 9 is attractive to partners and end usersbecause of its consistency. As Square 9continues to attack the mid-size ECM space, weexpect to hear plenty more about its efforts inthis relatively fertile market.

http://www.encompassconference.com/2018-recap/

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any substantial revenue impact from cloudsales in 2018, so the repositioning shouldn’taffect financial projections. “Because we willnow be targeting higher volume applications,the cloud business should ramp up morequickly, as we will need fewer customers tomeet our projections,” he said.

TIS is also working on a refresh of eFLOW. “Thecapture capabilities in eFLOW have been thebread-and-butter of TIS almost since it wasfounded,” Reidy told . “Prior to my arrival,our development resources had been almostcompletely directed away from this coreplatform and into our A/P platform. I found thatthe core product was getting stale, and wehave changed our resource allocation to reallyimprove on it.”

Reidy indicated that eFLOW 6 is being targetedfor release in Q1 ’19. This will be the first new fullversion of the product in more than five years.“About a year ago, I brought in a new SVP ofengineering, Arvind Sharma,” he said. “This isthe third company at which we have workedtogether. To date, every product delivery wehave done together has been on time and onbudget, so we have a good track record. Theprimary change with eFLOW 6 will be a moremodern UI that will facilitate ease of use.”

Reidy indicated that eFLOW is already in betawith a “large multi-national customer, who iscurrently deploying it in the U.S.” TIS also has itsfirst three North American implementations ofeFLOW for A/P in production. “We are currentlyseeing strong momentum in the U.S., where theA/P market is probably the largest of anywherein the world,” he said. “We found three highlycollaborative customers that are live andgetting very good results. We feel like we haveaddressed localization issues with the productand are now ready to really move forward inthe U.S. market.”

In Europe, Reidy indicated that while sales ofeFLOW for A/P have been strong, digitalmailroom installations, a formerly big market forTIS, have been flat to declining. “Our sweetspot for A/P is typically very large customerswith geographically dispersed organizations,”he said. “That’s where our strength in multi-language, multi-currency applications reallypays off. In digital mailroom opportunities, westill win our share of deals, but we just haven’tseen an abundance of RFPs.”

TIS recently announced a win with U.K.-basedAllied Bakeries, a subsidiary of the multi-billion

dollar Associated British Foods Group. TISwill be implementing an SAP-integrated invoiceprocessing system at the company’s Liverpoolshared services center. It will initially behandling 100,000 invoices per year received ina variety of formats. “We spent over a yearpursuing that deal, and they analyzed almostevery product on the market, as well asprofessional services and the ability to deploythe software on a global basis. This is a verystrategic win for us.”

Reidy indicated that TIS has also enjoyedrecent success on the eGistics side of thehouse. “eGistics had a history of signing long-term contracts, but after it was acquired by TIS,there became a tendency to offer month-to-month or annual contracts,” he said. “Well, werecently had a healthcare customer, that hadbeen paying month-to-month, sign a renewalfor three years. We had another customer thatwas going on one-year contracts go through acompetitive bid process and select us for whatwe believe will be a five-year renewal.

“We’ve also recently added ACH capabilities,which we historically have not had. We arenow offering that as an additional service toour customers.”

For 2017, TIS reported revenue of $29.7million, $1.9 million less than the previous yearand about $10 million less than the combinedtrailing revenues of eGistics and TIS when theymerged in 2014. For 2017, TIS also reported anadjusted EBITDA loss of $2.8 million, whichbrought its cash on hand to dangerously lowlevels. TIS countered by signing an agreementwith one of its investors for up to $3 million ofsenior debt financing [see DIR 6/1/18].

With a current market capitalization of around$15 million, TIS remains very lightly valued fora business with $30 million in annual revenue,but its inability to show consistent profitscontinues to hold it back. Reidy hasimplemented some significant changes in theway TIS is doing business, and they seem to bepaying off in the invoice processing andremittance services businesses. If the cloudstrategy proves successful, perhaps that, alongwith more controlled operational expenses, willfinally drive the company consistently into theblack and get it to a market cap morecommensurate with its revenue and position inthe capture market.

For more info: https://www.topimagesystems.com/