Dakota's online outsourcing helps clients tackle paperwork

Via Internet, smaller firms can use technology to read, process documents

October 28, 2002|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

Dakota Imaging Inc. has made its business in creating custom multimillion-dollar data processing systems for large companies and agencies for which paper processing is crucial.

But the 13-year-old Columbia-based company has created technology to expand its business by offering many of those services to small companies over the Internet.

Business Process Outsourcing - the company's newest service - gives small firms and agencies that process claims, applications and other paper forms access to technology to read documents quickly, process them, and store the data. The service, introduced last year, contributed 7 percent of the company's revenue last year and is expected to contribute about 20 percent this year, a company spokeswoman said.

"We signed six contracts in the last two months," said Michael Helmeke, vice president of business development. "This has taken off like gangbusters. We've seen larger clients interested in our [service]."

An emerging trend

Dakota, with 100 employees in Columbia, Dallas and Atlanta, is capitalizing on an emerging trend in outsourcing that combines business services with online applications, said Karen Moser, a senior analyst with IDC, a Massachusetts-based research firm. In the past few years, Internet companies and service companies have found that providing customers a service in addition to access to proprietary software has helped give them an edge over competitors and opened new markets.

In Dakota's case, the firm acts as an application service provider, allowing clients access to the company's proprietary software programs, and a business processor that gives clients a choice of scanning documents themselves or sending them to Dakota. The software verifies the scanned information as it converts the papers to electronic files. Dakota also stores images of the scanned documents and the related electronic files.

"There is definitely interest [for clients] when you can tie process expertise in with [Internet] delivery," Moser said. "We found companies are more willing to part with their money when there's business service expertise or business process involved."

Varied clients

The company has clients in government, health care and private industry that need to process paperwork quickly without mistakes and be sure that the information makes sense. The company uses character-recognition software that reads handwriting and transfers the information to electronic files. But the software also sorts through the information in each field to check for inconsistencies, such as a health claim submitted for a gender-specific procedure on a person of the wrong gender.

Other software allows clients - for example, a health insurance company - to perform thousands of transfers of information at once.

These services have been valuable and have helped improve business, said Robert E. Crump, lead systems analyst with Arkansas Blue Cross Blue Shield, which bought a customized system from Dakota about three years ago. Crump said his company spent millions on the system, but that it paid for itself quickly.

"We were able to eliminate more [posts] than [expected]," Crump said. "Another tremendous benefit is, we used to average five days to receive and process a claim. We now average 1 1/2 days."

Services are specific

With Business Process Outsourcing, those services are available through a virtual private network to customers who can't afford the customized software or don't have the information technology staff to support it, Helmeke said. Clients can ship their original documents for scanning, or Dakota can provide scanners so a company can keep the originals.

Moser said the company is on the right track with its services because they're specific enough and detailed enough for companies to see the benefit of outsourcing.

"Companies are interested in outsourcing, [but] there's got to be a real trigger to get them to decide that `I really have to do this because it's just cost-effective and smarter,'" she said. "[Dakota] is attacking a particular market ... [and] they've attacked a specific problem within the industry. Paperwork has to be dealt with. People are willing to outsource that and spend money to get it off their plate."

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