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|
 Services
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Business Services
About AUXILIO, Inc.
(AUXO-OTC: BB)
226 300 La Alameda, Suite 100
Mission Viejo, CA 92691
Phone: 949-614-0700
AUXILIO, Inc. is the nation’s pioneer and
leading Managed Print Services company that is health care exclusive and
vendor neutral. The Company provides transformational customized solutions,
a risk free program with no upfront costs, and guaranteed savings for its
customers. AUXILIO Inc. centralizes print infrastructure cost centers at
fixed rates through streamlined and seamless integration of copy, print, fax
and scan services. Its distinct program provides print strategies that
result in optimized process improvement, maximized savings and guaranteed
results, while supporting health care IT e-communications and systems
connectivity that prepare hospitals for Electronic Records Management.
AUXILIO, Inc. is the only Managed Print Services company with proprietary
information and data systems that enable hospitals to benchmark improvements
per piece of paper, per individual, per device, and per hospital unit.
Its services include print infrastructure and
vendor monitoring, management, and contract negotiation; change management
and end-user training programs; utilization management; financial reporting;
workflow efficiency management; information systems integration,
connectivity, and document migration strategies; and strategy execution
working with the customer to execute a long-term document management
program. AUXILIO, Inc. provides full-time, on-site print experts for
hospitals and health care systems who educate and initiate sustainability
programs that reduce print volume and costs. The company is headquartered in
Mission Viejo, California.
 Joseph
J. Flynn
President and CEO
Joseph J. Flynn
is the co-founder and President & CEO of AUXILIO, Inc. Under Flynn’s
leadership and strategic direction, the company has experienced continued
and successful growth since its inception in 2004. He is an accomplished
business leader in the IT, media and market research industries with over 20
years of international and domestic business management experience with some
of the world’s largest global companies such as; the Nielsen Corporation and
Advanstar Communications. Flynn is fluent in Spanish, French and Portuguese
and earned a master’s degree in foreign language education from the
University of Rhode Island. He is a graduate of the Catholic University of
America in Washington DC with a BA in international affairs.
Interview conducted by: Lynn
Fosse, Senior Editor
CEOCFOinterviews.com, Published – September 24, 2010
CEOCFO: Mr. Flynn, will
you give us a little history of AUXILIO?
Mr. Flynn:
I founded the company in 2004 along with a partner of mine as well as a
group of venture capitalists based out of Salt Lake City. We actually bought
a business that became AUXILIO. We bought a company that had a few contracts
at hospitals. They were doing something similar to what we are doing now,
but not as involved. I essentially spent from 2004 to 2006 raising money and
honing the business model to what it is today - a much more complex and much
more involved Managed Print Services program. In a very short time, we went
from two hospitals in 2004, to about fifteen in 2007. I then left the
company for two years, stayed very involved as a Board Member, and my
partner took the CEO job. He had previously been COO. In August of last
year, the board invited me back as President & CEO. My partner subsequently
left the business.
CEOCFO:
Would you tell us about Managed Print Services and what differentiates
AUXILIO?
Mr. Flynn:
AUXILIO is unique in the Managed Print Services market. As you may be aware,
there are some large players in this industry. However, we provide a unique
offering. We are vendor neutral and health care exclusive, as well as we
place our employees on-site at each one of the hospitals we service. One of
the things that is happening in health care right now is a rush towards
paper volume stabilization. I don’t want to call it “going paperless”,
because that is really a myth. It is actually the volume stabilization of
the production of documents in the hospital. Hospitals are very complex
places, very busy places, and they are huge producers of documents. The
average 360-bed hospital produces over 2.5 million documents every month.
More so than not, that document process is fragmented, the costs are
decentralized, the volume goes unmanaged and the control factor is
non-existent. AUXILIO comes in and provides a service that allows hospitals
full transparency on costs and volume and takes charge of the processes. It
guarantees savings up to 30%, full visibility on volume and efficient
process improvements that lead to end-user satisfaction. The issue is that
hospitals are often times left to the mercy of equipment vendors whose sole
purpose really is to sell equipment and not really manage the process. This
is where we are unique. We do not sell equipment – hardware or software.
Being health care exclusive is also important because we understand what the
hospital environment is all about, including the culture and the urgency of
caring for patients. We know the issues that exist in different departments.
We understand how to work with hospital IT managers on special projects and
initiatives related to print management. Bottom line, we become an essential
part of their culture and their business organization.
CEOCFO:
What is an example of some of the simple things that hospitals don’t realize
that you can come in and focus on, and then maybe something that is more
complicated that your people would pick up?
Mr. Flynn:
I was talking earlier about the volume of paper being produced at hospitals.
What often happens is that one department in the hospital, maybe the
purchasing department, might do copier leases and they might know some of
the volumes coming out of the copiers. On the other hand, IT is handling
printed documents coming out of the printers. What happens is neither knows
what is taking place in the other’s department, which means the true print
volume, and cost is lost. We come in and do an assessment at no cost. In two
days, we let them know the exact print volume that allows them to understand
the costs. Without knowing the volume, they cannot manage the cost. This
example is a simple thing that we do. It gets more complex when you are
dealing with the shift to electronic medical records in health care and the
push from paper to digital record-keeping that is on every IT directors’
radar today. Taking paper processing and making it electronic is a more
complicated, involved process. Our teams work closely with IT to transform
the print infrastructure of the hospitals to save millions of dollars that
is then re-directed to cover investments into electronic records and quality
patient care. Our full-time, on-site print experts are advising on what
types of software are compatible with the different output devices. We are
getting involved with project planning, and all sorts of projects that
without us there, it would be very difficult for them to do in a
cost-effective manner. We also perform more routine tasks. For instance,
when a printer is broken we have technicians there fixing the printer, to
more involved processes like electronic medical records readiness projects.
CEOCFO: Are
you working on the medical records side with the hospitals you are in now or
is that going to be a separate offering?
Mr. Flynn:
Yes, it is part of our current offering. We do not sell equipment or
software, what we do is recommend the best print or software solutions for
these types of initiatives. Some of our hospitals are further along in terms
of their development or their investment in this area. The ones that are
further along have expressed great satisfaction in the fact that we are
there to help them along on the print side of the ‘house’. Some hospitals do
not have the funding or the personnel or staffing, so they are a little
further behind. The health care electronic medical records meaningful use
mandate is going to force everybody’s hand, so to speak. We are certainly
experiencing that more and more of our company’s role is to be the critical
support needed for hospitals preparing their print infrastructures for
efficiencies and cost-effectiveness.
CEOCFO: Do
more hospitals today understand that this is an area that they should be
managing or is it still education on your part?
Mr. Flynn:
Interestingly, when we first started I would say we were inventing a
problem; one that they hadn’t considered. Now our services are absolutely
part and parcel of their agendas. Hospitals are under tremendous financial
pressure right now, so they are looking at every dollar they spend. The
discussions that I am having now with the larger institutions like Johns
Hopkins Healthcare System in Maryland or Saint Barnabas Healthcare System in
New Jersey are very much at the C- Suite of the hospital administration.
They now consider managed print services to be a major and worthwhile
initiative. I am very pleasantly surprised having been away for a while and
then coming back and realizing that there is a clear understanding by health
care executives as to the value and benefit of executing a print strategy
program to contain costs and reduce volume
CEOCFO: Is
the green factor a nice additive or is it more of a focus?
Mr. Flynn:
Sustainability programs are a focus that we take very seriously for our
customers. We have a direct impact on the amount of paper that is wasted in
a facility. It has definitely become a big selling point for us. This is
because our print volume reduction programs work. There are many success
stories in place that truly demonstrate our capabilities in this area. So in
our company’s case, it is not as fluffy as it sounds in perhaps other
industries because we have a direct impact on a very environmentally
unfriendly process. Overall and most importantly is controlling the volume
and making sure that volume is not going up. As I mentioned 2.5 million
documents a month can be managed down by our campaigns. By the way, that
number is on the increase of 10% to 15% per month. We are able to stabilize
and draw that volume down and really have an impact. Our view is that our
managed print services strategy has a positive impact on the environment,
and I think our customers agree with that.
CEOCFO: So
once you get in there, look it over and you start to do your management, is
it technology or the personnel, or a combination that bring the cost
savings?
Mr. Flynn:
It’s a combination. We are a services business yet incorporate technology
into our offering by providing techniques and tools that have a significant
impact on our program strategy. In terms of actual software technology, I
would say that although there are good products in the market, if they are
not deployed properly by experienced and knowledgeable people they might
become worthless. We really pride ourselves on the service our on-site teams
bring to the table. They have an astute knowledge of how to manage and
monitor print environments in hospitals. I would definitely say this is a
position of power for AUXILIO.
CEOCFO:
Since you have been in a number of hospitals and are continually growing,
how can you be sure that your people on the ground are doing what you want
and keeping the level of service that you want?
Mr. Flynn:
We have a comprehensive customer satisfaction survey process that each of
our customers take part in on a quarterly basis. My senior management team
places great emphasis on making sure that they are checking in weekly, even
daily with our on-site leaders. The leader of our hospital teams are
referred to as Resident Managers. These folks are in daily communications
with their supervisors, and our senior managers are in the hospitals pretty
regularly themselves. Customer service is the most important component of
service excellence to us. I think the fact that we have 100% customer
retention demonstrates how involved we are in the day-to-day operations of
our on-site teams. The most important thing quite honestly, is to hire
independent self-starter people who have a desire to help others and who
want to succeed. We are very careful about identifying good hires that fit
into the culture of our company and the hospitals that are dedicated to the
delivery of patient care to the public.
CEOCFO:
What is new in the industry?
Mr. Flynn:
The best news is that the industry of managed print services is gaining
steam and traction across industries and around the world. For our company,
the industry of health care in the United States is absolutely intent upon
cutting costs, reducing print volume, becoming more streamlined for the sake
of efficiencies and is shifting to electronic management of patient records.
This is all new and exciting for us. Another interesting element as a vendor
neutral managed print services company is the consolidation of hardware
and/or software companies. Recently, Ricoh bought IKON, which was a big, big
shakeup because IKON was the largest distributor for Ricoh’s biggest
competitor. That has shaken the industry up a bit. From a Managed Print
Services standpoint, there is a lot of talk about this new development, and
the fact that equipment vendors are promoting MPS as an offering of service.
I don’t think there is a lot of meat behind that message though. I think
they are really trying to spin a story and have very little in the way of
actual demonstrated Managed Print Services ‘boots on the ground’ kind of
customers. Fundamentally, there is a heightened awareness of the
capabilities of MPS, but there are very few companies actually practicing it
in my view.
CEOCFO:
What is your revenue model?
Mr. Flynn:
We charge by what we call a utilization rate. We figure out what the cost is
to produce a printed document as part of our assessment analysis for
hospitals and we guarantee a pricing model that is 20% to 30% less.
Essentially, the hospitals pay for what they produce. It is a simple, easily
understood model that includes all expenses related to production of the
document. That is the printer, the ink, machine, leasing, labor; all that is
included in that price per cost.
CEOCFO: Do
you find you need to be gentle around the people who are making the copies
and the hospital staff when you come in, or are they fairly receptive in the
beginning?
Mr. Flynn:
They are very receptive. They see it as their administration stepping up to
help reduce costs, improve processes and increase their personal
satisfaction levels within the print environment. You have probably been in
hospitals, Lynn and witnessed how unbelievably busy the staffs are;
especially inner-city hospitals such as Los Angeles, where we are working.
They are used to a minimum of four or five hour turn-around times to solve a
print problem, which is probably the best they are going to get from an
equipment vendor. However, our people are there within twenty minutes. They
are taking time-consuming problems off the plates of hospital end-users. It
doesn’t get any better than that. For sure, hospital staffs are very
receptive to us coming on board to help.
CEOCFO: How
are you reaching new hospitals?
Mr. Flynn:
We are reaching new hospitals through a couple of different ways including
developing unique marketing platforms and listening to our customers. In
addition, we have a very strong alliance with one of the largest service
companies in the world that does not offer managed print services. It is
Sodexo. Sodexo is a French-based company with major operations here in the
United States. In fact, they are the largest service provider for food
service, environmental service and plant maintenance for hospitals across
America. Through this partnership with Sodexo, we become an extension of
their portfolio service offering. That has become a main source of new
business. In addition, I’m proud to say that our customer referrals from our
existing hospitals are excellent, and we have several other channel partners
that really serve up opportunities to us. It is important to us when we go
in that we talk to the C-Suite and it is not always easy to get access to
that level of executive. When we started six years ago, the biggest
challenge was really getting access to the market. Having strong partners
and a solid foundation of customer referrals as our ‘door-opener’ to new
business makes it easier. We have the credibility at the get-go. Our growth
over time has resulted in more business and our reputation as the go-to
managed print services company for health care precedes us. In the early
days, it was friends and family walking us through the door.
CEOCFO:
What is ahead in the next year or so for AUXILIO?
Mr. Flynn:
We anticipate this is probably the strongest growth year since we started.
My personal goal is to try to secure 200 hospital contracts in the next five
years and really expand the company. This means we are working hard at that
expansion goal, yet making sure we grow at a rate that is manageable. That
is the most challenging thing for a CEO of the company; to manage your
growth properly.
CEOCFO:
What is the financial picture of AUXILIO today?
Mr. Flynn:
The financial picture for AUXILIO is very healthy. We have no debt and
plenty of cash to operate; $2 million cash in the bank and we are profitable
from operations of existing customers. We paid off all our debt last year
and the company is in very healthy shape. We have a great platform to grow
this business. I’m trying to get to $100 million by the time I am fifty
years old which is 5 short years away unfortunately!
CEOCFO: Do
you do much outreach to investors; is that an area of focus for you?
Mr. Flynn:
Yes I do. We also have an investor relations firm that works on that.
CEOCFO: Why
should potential investors take notice of AUXILIO?
Mr. Flynn:
This is a great company and we have demonstrated that we have a solid
business model. In addition, we are in a niche industry where there is a
real need. We have demonstrated that our customers like what we have to
offer. We are in a recession-proof market, as the health care market and the
hospitals will always be open and always be busy. We have no debt, plenty of
cash in the bank, all of our contracts are three to five years recurring
revenue. So it is a good story, it really is. I am beginning to do more
investor relations work and I am starting to see a lot of interest.
CEOCFO:
Final thoughts, what should people remember most when they read about
AUXILIO?
Mr. Flynn:
People should remember that we are a unique, vendor-neutral, and health care
exclusive print management services company with committed people on staff.
In addition, we are in a niche market that we have truly pioneered the
concept of managed print services for; so much so that it has become a part
of our corporate brand. It may have been overlooked in the past but it is
now very much front and center. They should remember the fact that no other
company specifically does what we do, and it is comforting to realize the
fact that AUXILIO created a niche and is growing in success stories every
day. As an entrepreneur, I know that creating a value proposition, carving
out a niche market, hiring the right people, building the strategy and
fulfilling the need in the marketplace are marks of success. I believe we’ve
corner this market for health care.
disclaimers
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