Craig Le Clair By Craig Le Clair

Kofax announced yesterday the acquisition of 170 Systems. Why did Kofax do this? Well, good acquisitions have a mixture of tactical and strategic complements — and this one is long on both. With over 800 invoice processing customer using Kofax for front-end capture they now can add invoice workflow — exception management and payment for full invoice processing solutions. Add in the purchase of a Swedish EIPP provider 18 months ago and this indeed covers all bases. The 170 Systems customer base alone is a gold mine: 40% have no automated capture.  There’s plenty here to give ReadSoft a run for their money. 

But, really this acquisition is about moving up the value chain. Customers are looking for more complete solutions, and this deal underscores the trend by the larger capture, imaging, and ECM companies to move further into the business process applications markets.

In addition, Kofax gains better visibility into the economic buyer, and picks up a solutions-oriented sales force and the platform to grow their top resellers into top-notch integrators of supply chain and ERP financial deals, not to mention 170’s existing partners.

Also, they are primed to go into to other un-tamed processes, such as sales order processing and contract management.  All in all, it’s thumbs up for this bold move by a company that has historically been timid about venturing from its paper roots.