World Wide, FileNet Offer Solutions, Services
World Wide, FileNet Offer Solutions, Services
By Nick Wakeman, Staff Writer
World Wide Technology Inc. of St. Louis is banking on a partnership with work-flow and document management software maker FileNet to make a bigger splash in the solutions and services arena.
The partnership with FileNet of Costa Mesa, Calif., was strengthened in late summer when World Wide became the exclusive holder of FileNet's General Services Administration schedule.
With FileNet on its schedule, World Wide can use the GSA schedule to offer agencies turnkey work-flow and document management solutions that combine information technology products and services, said Mark Thompson, World Wide's account executive for imaging and conversion services.
Developing solution sets and increasing its services offerings are important strategies for World Wide, because the company saw margins tightening for its value-added reselling business, said Joseph Koenig, director of federal sales for the company. "You can't bank your future on that part of the business," he said.
The partnership with FileNet also will help World Wide move away from 8(a) status as it prepares to graduate from the Small Business Administration program in 2001. For FileNet, the partnership is an integral part of its new strategy to go after the federal government market, company officials said.
In 1998, World Wide Technology expects to make about $175 million, up from $136 million in 1997. The company's goal is to hit $300 million by 2000.
About 70 percent of the company's revenue is from the federal government. The rest is from commercial customers. The company lines of business include value-added reselling, document conversion services, professional services and electronic commerce.
"When you are providing solutions, you also are providing better margins for your company," said Thompson. His unit, which was formed about six months ago, has garnered about $8 million in business so far.
"If we can contribute 20 to 30 percent, that would be fantastic," he said.
World Wide Technology officials want to parlay the successful implementation of a system the company developed for the Agriculture Department's Rural Development Agency using FileNet technology, Koenig said.
Rural Development processes about 630,000 loans a year and handles 40 million pieces of paper, he said. The $4 million system World Wide built includes scanning of documents, routing and work-flow applications so the entire loan process is electronic, he said.
World Wide also is working with FileNet on a $800,000 pilot project for forms and applications processing for the Bureau of Land Reclamation, which manages dams in the United States. That project could turn into a $5 million deal if the bureau rolls it out across the entire agency, Thompson said.
While the market for these types of systems is relatively small in the federal government, it is growing and could reach hundreds of millions of dollars a year in a few years, he said.
Larger projects that could be worth $25 million and above are being talked about among agencies such as the Defense Department, he said.
"I think once the government gets beyond the year 2000 [problem], they are going to rush to this," he said.
FileNet also sees growth opportunities in its future, said Ron Campbell, who is manager of FileNet's six-month-old federal solutions group.
Since working together on commercial projects, World Wide has been pushing FileNet to look at the federal market, he said. "They have been as active or more active than us in getting us to look at the federal market," Campbell said.
World Wide was an attractive partner for the government market because it has developed a high level of expertise in FileNet offerings through commercial projects, plus the company has strong Internet and extranet skills culled from its value-added reseller business, he said.
Picking World Wide to be its GSA schedule holder also allows FileNet to go after the market quickly and with less expense, Campbell said.
"We looked at getting our own schedule, but we recognized that World Wide already had the infrastructure to take orders, track them and analyze ordering patterns," he said. "We would have had to make a lot of investments to do that on our own."
FileNet had to move quickly to expand its presence in the market because competitors such as Documentum Inc. of Pleasanton, Calif., Eastman Software of Billerica, Mass., and PC-Docs Inc. of Toronto have been making strides in the government area as well.
"A lot of vendors are having success in the government market, but there is no one, clear, dominant player," said David Hilal, an analyst with investment banking firm Friedman, Billings, Ramsey & Co. of Arlington, Va.
The U.S. commercial and government markets for document management software are exploding, he said. In 1997, the overall market was $750 million; by 2001, it is expected to reach $2.5 billion.
In its first year with a dedicated government unit, FileNet expects to have about $5 million in revenue from the government, and annual growth between 70 percent and 100 percent, Campbell said.
In addition to World Wide, FileNet also is working with other partners, such as American Management Systems Inc. of Fairfax, Va., Science Applications International Corp. of San Diego, KPMG of New York and Unisys Corp. of Blue Bell, Pa., to go after the government market. All of those partners can use World Wide's GSA schedule to access FileNet's products, Campbell said.