How a Mid-Market CEO Is Using the Cloud to Make a Once Dying Business Thrive

We sat down with Suriyakumar of ARC Document Solutions to talk about his transformational business experience.

For anyone considering moving a portion of your business to the cloud but aren’t sure what the benefits are or how to go about it, perhaps Suriyakumar’s experience may help answer some of your questions.

“The cloud is substantially reducing ARC Document Solutions’ costs.”

Q: Why are you going digital?

A: “Architectural drawings get changed at every turn; hundreds or even thousands of changes have to be communicated to everyone. There are 200 different trades that may have to come together. If you take a stadium or a large office complex, you could have as many as 1,000 original drawings, or 2,500 for a big ballpark. The drawings have to come together for a building to come together.

“An intermediate digital step was to make changes to drawings on the web, but then you had to notify everyone via email. So the cloud is the perfect way to transform communications in the construction space. When someone makes a change now in a drawing, they only need to post it on the web. And it takes hours for everyone to be clued in instead of weeks.”

Q: How were you able to calculate a projected return on the shift?

A: “We already had invested in the technology. As years went by, we realized we had to have a better way of storing documents, so we had software developed that would store, manage and distribute documents digitally—not on the cloud but via servers. We spent something like $100 million or more on the software over 10 years. And now we’re converting it to the cloud in-house in an ongoing process that costs several million dollars more.”

Q: What type of metrics are you able to track, and will your customers be able to track their own metrics?

A: “It’s purely based on time and efficiency, and the cloud substantially reduces the costs. Because we did this before using paper as a medium, we have a base to figure out over a period of time how what we do has changed. We still handle and distribute and manage and store documents; we haven’t changed what we do, just how we do it.”

Q: How long will it take ARC to recoup the cost of the technology/installation move to the cloud?

A: “We have already begun to recuperate our technology investments. Our recent study (June, 2015) revealed 72% of AEC professionals believe technology will have the biggest impact on the future of North America Construction, and 93% of AEC professionals believe increases in productivity and decreases in cost are related to new technology tools.”

Q: You haven’t terminated employees for several years  as a result of your acquisitions. Will digitization change that?

A: “In 2008, we built the company to $750-million-plus and had a footprint and customer base of 160,000. Then came the financial crash and Great Recession. Our business was down 45%, to $400 million, and we had to downsize from nearly 6,000 people to 2,400 people. We had to shed the weight at that time because we didn’t need all the capacity. The downturn forced us to restructure our organization purely to survive.

“Now, however, we can continue to grow because software is more scalable. We go where our customers go, and that has included a lot of international places lately, including London, China, Hong Kong, India and Australia. But almost all of our information is in English.”

 

Dale Buss :Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other business publications. He lives in Michigan.