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Local firm fights for a slice of the document mangement business, pushing from scanning into data hosting.

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - Scott Stevens, director of business development at Novitas, in front a pile of papers which his colleagues have just scanned and digitized for a law firm. They represent about five percent of the total job.

In the quest for the paperless office, some people are in the field tent playing with their phones, and some people are on the front lines.

Marc Andrews, Scott Stevens and Chris Torrey all work in sales or management at Novitas, a company that has been digitizing documents for two decades. On the second floor in an unassuming building on Southwest Broadway Street, the three men ply their trade, persuading the big paper users — construction firms, laws firms, school districts — to get their mountains of paper scanned, character-recognized, indexed and hopefully destroyed.

When a big job comes in, the 25-person firm has up to six people per shift (three shifts) in the second-floor production

room, feeding papers into Panasonic KVs 4065C scanners and bopping to the music

on their headphones. It takes hand-eye

coordination, focus and patience. They check the results on a screen, while left-hand flipping through the original papers to make sure no single page is askew, blurred or incomplete.

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - Novitas Data account manager Chris Torrey has to fight national size corporations such as Ricoh adn DTI to win document mangement work, selling them on the strenght of local customer service and high quality control. Missing pages in a legal folder can have very bad outcome.

What makes a good scanner?

"It's very repetitive, it becomes muscle memory," says Scott Stevens, Novitas' director of business development. "They're not moving much."

The workers are paid between $12 to $18 an hour with benefits.

Marc Andrews, 50, has been with Novitas 18 years. He jokes that it's such a niche industry that he wouldn't know where else to work. He recounts a colleague a quit after nine years, only to pop up at another Portland firm doing the exact same thing a few months later.

Asked if the work is on a par with being a barista doing the same skilled task over again, he says "You have to have some technical skills. I don't want to put baristas down but its above that. You have to be OK with extreme redundancy. It's the same all day, every day." He agrees it's a bit like long distance truck driving — boring but requiring long bouts of concentration. And no playing with phone screens.

Andrews started with Night Rider, a Houston firm that was early in on the digitizing game, which flourished in the legal field. Since he moved on to Novitas, which is a relatively small company, another service provider ICON bought Night Rider, then Ricoh acquired ICON.

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - Stevens says growth areas for Novitas are backfiling, or digitizing entire corporate archives, and data hosting, which they outsource to data centers. Clients dont want to pay for basement storage any More, but they will pay for instant, searchable access to the digital files. (Below) A worker scans a document. Workers feed papers into $5,000 Panasonic KVs 4065C scanners then check every page against the image on the screen. The work is repetitive but demands sustained concentration. Staff are paid $12 to $18 an hour and can listen to their phones but not look at them.

Competing with those big fish and other legal support companies such as DTI, keeps the crew at 615 S.W. Broadway on their toes.

Litigation is their bread and butter. Typical work for a long time was digitizing legal records. They'd pick up a dozen boxes of papers from a Portland legal firm, and digitize and index them. If the papers were to be destroyed, they'd take them to a firm that dissolved them to a pulp in chemicals or mechanically shredded them. The client got a Certificate of Destruction at the end, but the work came in fits and starts.

Then they started getting into back filing, when companies had a huge paper archive. They might need to store it to comply with HIPAA or Sarbanes Oxley 2002, or so the IRS or the SEC could access it.

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - Chris Jensen has been collecting and delivering documents for Novitas around Portland for a decade and a half. He usually deals with paralegals, asking a series of questions about what they want done with the files, before double checking them with a quick look inside before bringing them into HQ for scanning.

Coffins

They worked with Hoffman Construction who have their own warehouse along Columbia Boulevard and two full-time employees just for documents. "They built their own wooden boxes to hold the papers and call them coffins." He likens the scene to the last shot of Indiana Jones and the Temple of Doom, where the camera pans back from the Ark to show thousands of other treasures in storage. Only in this case they were boxes of blueprints and other papers.

Chris Torrey, a Novitas salesman, said he would drive out to Hillsboro almost daily when a chip fab was being built, hauling back papers to be scanned on their large format scanner, a Canon ImagePROGRAF 765. It was important to capture the colors and the signatures on blueprints.

"Construction is almost still all paper because it's the General Contractor and several subcontractors. To have hundreds of subs all on the same technological page, it's not likely."

They found that dentists and lawyers would retire with 40 years of paperwork in their basement — usually a heated basement in a downtown building — that they suddenly wanted dealt with. And firms would want their entire archive digitized so they could stop paying storage fees for boxes.

"We discovered back-file conversions, nobody was asking for it," says Torrey. "It's now a nice thing. If a law firm asks us to scan eight boxes, that's transactional, like car sales. Now we get jobs like 10,000 boxes over six or eight months of work, with rolling delivery and rolling invoices. It's nice because it keeps everybody working. And I form meaningful relationships with my clientele because I'm dealing with them for so long."

Currently he's pitching for the work of a certain school district. "They have almost 50 years and 20 campuses with student records and random paperwork that has just built up to this beast that is no longer manageable," he says. "I don't ask how did this happen. My job is to find work that assists my clients' ultimate needs while generating revenue for the business."

MARC ANDREWS - Hoffman Construction's custom made document coffins, taking up space in their warehouse on Columbia Boulevard. Novitas digitizes them, including large format blueprints.

Suits

But there are still the big fish. He knows they will try and undercut Novitas with short term discounts to lure his clients away, so customer service is key, and having a good relationship. "Yes, I've played golf, he says with a laugh." I've done breakfasts, lunches and dinners."

Sometimes a deal will be made at a national level that will trickle down to hurt his firm. Say Ricoh does a deal with an insurance giant. All Ricoh's local offices might start getting document management work that might have gone to local firms.

How does that happen?

"Some guy in a $5,000 suit in New York meets another guy in a $5,000 suit and they have lunch and make a contractual agreement."

A piece of paper on the Spartan walls at Novitas shows how work is graded and how quickly it can be done and checked. 'A' rated work is flat one sided black and white documents with no staples or clips. It feeds quickly though the machinery. After 'B' 'C' D' and E there is EE work, which can have strange formatting, or be delicate, like carbon copies or 100-year-old maritime documents. A work can proceed at 3,500 pages per hour, but EE work can be just dozens.

Having bid on government work, such as a job in Alaska (they would have brought the files to Portland) they got to see what others are trying to charge.

"D grade work used to be 19 cents a page. Nowadays we've gone as slow as 5.5 cents a page," says Andrews. "In Alaska, I saw prices like 3 cents a page for D work, and I can't figure out how they're making money."

He says they'll do anything — from digitizing a single folder — but they need volume work to bring in money.

"What's driven down the cost of labor is competition," adds Andrews. Ubiquitous scanners and the Internet marketplace have made it so anyone can have a go.

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - Documents are graded by how hard they are to handle and digitize, from A (easy) to EE (fragile, stapled, illegible.) Scanning time and quality control are factored into the price, but prices are falling as technology become cheaper and the Internet brings in competition.

"Our industry is just like a TV," adds Stevens. "They used to be rare, now at Costco you can get a giant TV for $500. It's become a commoditized industry, like everywhere else."

He says they try to compete by customer service and accuracy.

"Attention to detail. We cost more a page to scan than Kinko's, but with that comes quality. And if we can't delivery that quality, if a document is missing in litigation, that's very problematic. Or if half an insurance ledger is missing, that's very problematic.

COURTESY: NOVITAS DATA - Documents are graded by how hard they are to handle and digitize, from A (easy) to EE (fragile, stapled, illegible). Scanning time and quality control are factored into the price, but prices are falling as technology become cheaper and the Internet brings in competition.

Air conditioning

That's not to say they won't use cheap foreign labor too, for jobs like coding.

This is adding metadata to documents,

typing in fields by hand. They turned to Asia.

"We started to offshore a year ago, if a client asks for it. (Some documents may not be serviced outside the U.S.) The pay difference is unbelievable: we pay full benefits and give lunch and our people cost in the Philippines is $9 a day."

The growth area they are eyeing now is document hosting. In Novitas' previous production center they had their own data center on display in the reception, with blinking lights and the hum of fans.

It was cool at the time, but unnecessary now. And the air conditioning bill was $3,000 a month. The cloud has scaled well, such that firms don't need their own server closet "run by Scary Steve who never sees sunlight," says Stevens.

Now Novitas rents space in a data center in Hillsboro. "It's really cutting edge, with lasers and thumb print recognition, very secure," says Stevens.

The new frontier is unstructured data. This is mostly video and still pictures, files that come with little more meta data than a timestamp. The storage of hundreds of hours of security camera video can be essential in a slip and fall lawsuit, says Stevens, who came out of the forensic discovery field. Andrews says Artificial Intelligence will do a better job of searching it than the receptionist or paralegal pausing and fast forwarding through it.

"A couple of years ago a 200-gigabyte case was big. Now we regularly see multi-terabyte cases," because of video, says Stevens.

"Five gigabytes now cost them $125. It used to be $8,000," chips in Andrews. He is interested in the forensic chain of custody for collecting data from phones and social media, and who can collect and manage data.

And Novitas is banking on being a trusted source.

"Now a judge can ask, 'Where did it come from?'" says Andrews. "The legal system requires that you deal with data correctly: How was it collected? Who collected it? Is Scary Steve reliable? It forces people to use us."

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Novitas Data

Type of Business: Litigation Support, Electronic Discovery & Computer Forensics

Number of FTE: 35

Annual Income: Undisclosed

Owners: Rob Oliver

Services: scanning, OCR, coding,

Electronic Discovery/Data Hosting,

Computer Forensics

Address: 615 S.W. Broadway, Portland, Suite 200

Phone 503-595-9487

Web: novitasdata.com

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Joseph Gallivan
Reporter, The Business Tribune
971-204-7874
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