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Document Imaging: Hosted vs. Installed Solutions

Hosted solutions are often called Software as a Service (SaaS) or Application Service Providers (ASP). Such systems offer a diverse array of solutions that can be made available quickly and with a low cost. There are many issues to consider when it comes to a document imaging and workflow solutions. Here are a few of the pros and cons.

Low Startup Cost
An enterprise-wide document imaging solution may cost you thousands of dollars in man-hours, software licenses, and hardware infrastructure. A hosted solution lets you bypass much of the start up cost and begin reaping ROI faster.

Total Cost of Ownership
Most hosted solutions charge based upon volume – based either on page count or disk space utilization. You will also be charged depending on how long you need to retain your documents (often called a retention schedule). There may be charges for the number of users that access you documents. Depending upon these factors, you may reach a tipping point where the installed solution has a lower TCO.

Shorter Project Schedule
The initial time taken to launch a hosted solution may be a fraction of the time needed to organize and implement an installed solution. Generally, hosting providers have the infrastructure in place to quickly launch a project. You could be searching for documents online in a few days. An installed solution may take weeks or months to implement.

Anywhere – anytime – anyone. Hosted solution has the benefit of being available to all your people, regardless if they are in the home office or abroad. Most are available from a web browser. Others may offer dial-in access via terminal services or Citrix. An installed solution may offer this benefit, provided your company has the infrastructure in place. Of course, such an infrastructure will add to the total cost of ownership.

If you are taking advantage of workflow in addition to document imaging accessibility could be even more important. Getting the right information to the right people becomes easier when your people can get their information from anywhere.

Depending upon the nature of our documents, compliance issues might make the decision for you. No hospital will be comfortable archiving medical records with a hosted solution. The demands of HIPPA require such organizations to keep tight control over such sensitive documents.

Even less sensitive documents require some level of security. Invoice, purchase orders and human resource documents all contain sensitive information. Most reputable hosting providers have secure, locked, facilities. Not to mention technical staff that maintains needed security patches. Considering that usually these documents are kept in simple file cabinets, it is easy to argue that a hosted solution is far more secure.

You might be able to reduce operating cost by letting others process your imaged documents. An interesting solution is to allow the hosting solution provider to receive your documents via fax. They could then provide your ERP system with the required data and a URL to the associated document. Workflow could allow outsourcing personal to easily communicate with your team members to resolve problem transactions. I am not a proponent of outsourcing office jobs overseas. However, I know of a few well qualified office workers in middle-America that would be more than willing to do your data entry work!

A hosted solution may be more difficult to integrate with your installed solutions. A useful trick is to streamline data capture by auto populating some data with a lookup. For example, while data entering the information from an invoice the operator may enter the purchase order number. The P.O. number could then be used to lookup the associated vendor. Since a hosted solution is not installed at your location, the lookup would be more difficult to accomplish. This problem can be resolved; however, such scenarios should be taken into consideration.

There is not just one simple answer as to which solution is right for your company. Consider how both flavors may benefit your company. A hosted solution might allow you to start using the system in a few days and opens the possibility of outsourcing to reduce cost. However, an installed solution might allow for tight integration with all your legacy application or give you more control over your information. Feel free to contact me if you need help making these decisions. I’d be glad to help.

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