Mike Steinmann doesn’t even have a contract with the National Geospatial-Intelligence Agency, but the agency’s commitment to St. Louis helped convince him to make a $10 million investment.
Steinmann, 38, is chief executive of HITS, a data management company that just announced it is building a new facility in Hazelwood. It will be the only private facility in the region that meets National Archives & Records Administration standards for storing records.
HITS is spending the extra money to meet those standards because it sees the federal government as a big potential customer. After all, Steinmann said, government agencies lag behind the private sector in the transition from paper to electronic records, a process in which HITS specializes.
Still, the project is a big bet for a 50-employee company with annual revenue of less than $5 million. Only after NGA committed to build a $2 billion western headquarters north of downtown did HITS decide the risk was worth taking.
“It’s ‘Field-of-Dreams’-ish — build it and hope the business will come,” Steinmann said. “If the NGA weren’t going to build here, would we be able to do this? I think the answer is no.”
The super-secure facility, scheduled to open next May, is the latest step in the evolution of HITS, which started 27 years ago as a microfilm company. By the time Steinmann joined in 2001 as a student working his way through St. Louis Community College and then Lindenwood University, its main business was scanning paper documents.
Steinmann’s first job was removing staples and paper clips to prepare documents for scanning. He was promoted to warehouse manager and then moved into sales, where he led a push into the health care industry at a time when hospitals were being required to adopt electronic records systems.
By the time Steinmann bought the business with his wife, Carol, in 2015, most of its revenue came from health care and the company was named HITS Scanning Solutions. The initials, somewhat redundantly, stood for Health Information Technology Solutions.
Having talked to many hospital executives in his sales role, Steinmann knew they needed help tracking all the data they were creating. He led the development of HITS’ first software product, a medical records management program called Str8view.
The company would later create another software product, DocuMiner, for digitizing, organizing and eventually destroying paper documents.
“We had to get into the technology side to find some recurring revenue,” Steinmann said. “Too many times we would get a project and when the documents were scanned that was the end of the project.”
With DocuMiner and the new facility, HITS hopes to diversify its customer base not only with government agencies but with law firms and other businesses that need to transition away from paper.
“The building costs a lot to build, and there’s risk in anything, but it’s a calculated risk,” said Pat Crane, a retired business owner who has been a consultant to HITS. “It will enhance their attractiveness to their current customers, and it expands their capabilities. They become much more of a regional company.”
In its pursuit of business from the NGA and its contractors, HITS has opened a small office downtown in the T-REX building, a nerve center for the local geospatial industry.
According to the region’s GeoFutures plan, that industry already employs more than 15,000 people and has a multiplier effect on the growth of firms that supply and support the location-data specialists. As construction begins at HITS in Hazelwood, we have an example of that multiplier effect in action.