IBM (NYSE:IBM) announced the acquisition of Datacap Inc., a privately-held company based in Tarrytown, NY. Datacap is a leading provider of software that enables organizations to transform the way they capture, manage and automate the flow of business information to improve business processes, reduce paper costs or manual errors and meet compliance mandates. Financial terms were not disclosed.

The acquisition strengthens IBM's ability to help organizations digitize, manage and automate their information assets, particularly in paper-intensive industries such as healthcare, insurance, government and finance. Additionally, regulations such as HIPAA and Sarbanes-Oxley have demanded new standards and now legislation is encouraging the adoption of new records management solutions, including scanning and capture to increase accuracy, lower costs and speed business processes to meet these regulations.

Datacap customers are among the most visionary organizations, using document capture and Enterprise Content Management (ECM) solutions to streamline and transform their businesses. More than 200 clients across a variety of industries are using Datacap software to help capture and manage their data. These include the Chicago Department of Public Health, Virginia Department of Taxation, BlueCross BlueShield of Arizona, Goodyear Tire & Rubber Company, The Dutch Tax Office, Dow Jones & Company, California's Orange County Superior Courts, Hawaii Department of Taxation, and St. Vincent Hospital and Health Care Center.

Companies today are grappling with managing unstructured data while trying to reduce costs at the same time. It's estimated that 15 petabytes of new information is being generated daily, and 80% of this new information is unstructured content. Recognizing this challenge, Datacap software supports image and data entry automation for most types of documents and forms, including medical claims, tax returns and highly variable documents such as invoices and shipping documents for more precise business outcomes.

As businesses seek to transform and simplify their business processes, extracting meaningful information from unstructured content — both paper and electronic -- is critical. Datacap dramatically speeds up this process by automating the conversion of both structured and highly variable formats -- email files, JPEG and GIF image files, and PowerPoint presentations -- into actionable insight in seconds. This capability, which accelerates the dissemination of information throughout an organization by helping to eliminate the physical handling of information, makes it easier for small-to-medium sized businesses, small departments or global organizations to extract analytics faster and transform their business processes.

For example, an increasing number of accounts payable departments are receiving invoices not just on paper, but also via fax or as email attachments. Now they can quickly and reliably apply data extraction without the cost and labor of printing and scanning documents. Additionally, healthcare providers looking to implement an electronic health record (EHR) system can replace inefficient manual processes for capturing images of medical claims, correspondence, medical reviews and enrollment forms with an automated input system that improves accuracy, while reducing manual labor. The ability to capture and store medical records, encounter forms, and lab results in electronic form is a key factor in the modernization of healthcare.

Datacap further extends IBM's industry leading set of solutions to help companies make better decisions faster by managing content, optimizing processes and enabling compliance through ECM solutions and advanced case management.

Datacap's client and partner investments in existing IBM and Datacap technologies will be preserved, allowing customers to take advantage of the broader set of capabilities without the need to replace existing systems.

"Transforming the way organizations do business requires not only a powerful and flexible technology platform to accommodate the wide range of business requirements, challenges and goals, but also a deep understanding of the processes of the industries in which our clients operate," said Ron Ercanbrack, VP of Enterprise Content Management for IBM. "We've chosen to make Datacap's approach the foundation of IBM's document capture strategy. Datacap's approach to image capture, using sophisticated business rules management, sets it above the rest in the industry and provides the most complementary capabilities for IBM."

"Datacap has developed the most advanced and flexible document capture platform on the market today. By teaming with IBM, we will now have the reach to satisfy customer demand around the globe," said Scott Blau, former CEO of Datacap and now Director of Enterprise Content Management for IBM. "After fifteen years partnering with IBM, we'll hit the ground running with products that are tightly integrated into the IBM ECM offerings and can compete across the board in document capture."

IBM intends to integrate Datacap within its ECM business, which is part of IBM's Software Solutions Group.

For more information on IBM ECM visit www.ibm.com/software/data/content-management.