ECM: The New Strategic Imperative
There are some pundits who believe Enterprise Content Management (ECM) is just a warmed-over version of technology that has been available for years. I would argue ECM is a blend of proven technologies with newer, innovative capabilities that are solving a whole new range of content- and process-centric problems. To that end, ECM delivers real-world ROI that’s just the ticket in today’s tough economic environment.
ECM is the merging of content, process and connectivity technologies into a single, integrated solution that enables organizations to leverage their business content and automate and optimize the business processes that rely on that content. While content, process and connectivity tools have been in existence for more than 20 years, it is the recent integration of these technologies that is so powerful and can bring significant benefits to users—allowing them to make better decisions faster.
ECM accelerates productivity, reduces costs and cycle time and improves customer service, collaboration and knowledge exchange by improving critical and everyday decision-making. And it is this focus on improved decision-making in the business that is generating critical ROI and providing competitive advantage for customers in a wide variety of industries—from financial services to telecommunications to government agencies worldwide.
A Short History of ECM: Evolution and Paradigm Shift
The evolution of ECM technology can be traced to document management and workflow, which began to be adopted in earnest in the late 80s. These early software systems focused on capturing, archiving and retrieving documents—the nirvana of which was the “paperless office.” ROI was delivered in the form of less paper and storage costs and improved productivity. These departmental solutions, while serving their purpose, didn’t offer the compelling ROI to make companies view them as strategic investments across the enterprise.
In the 90s, the US saw a wave of reengineering and many organizations responded with a “rip and replace” technology investment strategy, deploying more IT systems and applications to support and manage data. In fact, worldwide information and communication technology spending nearly doubled between 1993 and 2001, reaching $2.42 trillion.1
The legacy of this growth in technology investment was content spread throughout the enterprise on Web sites, document management and line-of-business systems. As a result, supporting even the most basic business processes was a management nightmare.
In response, and as the economic environment became tougher, organizations focused on the core processes that guide how companies buy, build and deliver those products, and the opportunity at hand to automate, integrate and optimize these processes to wring out costs and inefficiencies. Enterprise Application Integration (EAI) and Business Process Management (BPM) technologies arrived on the scene to unite disparate applications and processes and connect people more effectively.
Up to this point in time, the genesis of content management and related technology purchases was tactical, aimed at solving specific business problems—Web content management solutions, for example. In 2003, customers began to approach ECM as a strategic investment, with a significant increase in enterprise-wide deployments aimed at improving the decision-making process and, consequently, organizational efficiency, revenues and customer service. And now that the economy (and IT spending) is starting to grow again, this trend seems to be increasing. Additionally, the need for ECM is being fueled by a number of key business drivers.
Business Drivers for ECM
Currently, there are three main business drivers for ECM. These include the need for: (1.) continuous process improvement to reduce costs, improve efficiency and quality of service; (2.) improved corporate accountability, risk reduction and regulatory compliance through content control and process visibility; and (3.) knowledge management and collaboration to support innovation and product development.
1. Better, Faster, Cheaper:
In every organization, business processes represent an opportunity for improvement. In today’s competitive market, organizations must eliminate all waste that the customer will either not pay for or does not value through continuous process improvement.
When companies automate processes, they reduce the need for human intervention in routine or low-risk decisions. This improves quality and eliminates both the cost and potential for errors associated with human-based workflow, enabling companies to apply expert human resources when and where they add the most value to the decision-making process. What’s more, this allows companies to realign their resources to focus on higher revenue-generating activities.
Automating processes also helps reduce cycle time. The faster you can process a business transaction, the more transactions you process. The more transactions you can process, the more business you service, and the more revenue you generate. Faster decision-making not only shortens cycle time, it reduces handling costs—and ultimately increases profitability.
No matter how well designed a process may be, there will always be exceptions to the norm. How organizations handle exceptions is a major determinant of overall quality service delivered to business partners and customers. By being exceptional at handling exceptions, companies can further differentiate themselves from their competition. But it is process optimization, which incorporates analysis and simulation, that provides an unprecedented level of operational insight needed to maximize the effectiveness of business processes. While evaluating past performance is valuable, the ability to assess the impact of future events can make the difference between success and failure. Analytics and simulation enable enterprises to test-drive “what-if” constraints and scenarios to determine the best processes to deploy as business conditions change. This allows organizations to keep processes tuned at an optimal level on a continuous basis to stay one step ahead of the competition.
2. What: Me Worry About Compliance?
Following such debacles as Enron and WorldCom, there is a heightened need for visibility and accountability at all levels of the organization, from the “shop floor to the top floor.”
ECM helps deliver operational visibility into how the business is performing. This enables businesses to track, monitor, measure and optimize processes in real-time, providing the control, visibility and agility needed to respond to changing regulations and market conditions, and minimize corporate risk exposure.
By linking processes with the creation, management and delivery of content, ECM enables businesses to accelerate information exchange to more quickly respond to business or transaction events. The right information is aggregated and delivered to the right people or systems at the “critical moment” when a decision must be made. This speeds decision-making and helps companies manage exposure to risk, first by enabling the right decision, and next by capturing how and why that decision is made.
Companies are looking to ECM in response to a raft of new regulations aimed at compliance. In today’s highly regulatory environment, just one misstep can subject your business to potential shutdowns, non-compliance fines, even devastating legal action—and it can even put your company out of business. To this end, ECM has moved to center stage as enterprises strive for improved accountability and risk reduction.
ECM ensures that content is kept for the appropriate amount of time and then destroyed in accordance with corporate policy. ECM is a critical foundation for records management and compliance initiatives because content must first be properly identified before it can be managed throughout its lifecycle. Additionally, ECM ensures business processes are automated and integrated into the fabric of the organization to ensure compliance policies and retention schedules are enforced. Without systemic enforcement, your records management program can be severely compromised.
3. Share and Share Alike:
Industry analyst firm Gartner Inc. recently conducted a survey to gauge what technologies companies plan to invest in during 2004 to support collaborative work processes and knowledge management and what they aim to achieve in deploying these technologies.
Their findings indicate companies are looking to ECM and related technologies to improve productivity and processes and improve coordination and collaboration among organizational units and partners. These organizations are deploying collaborative applications that allow geographically dispersed project teams to centralize, organize and store project-specific content, and introduce ad hoc workflow and tasks, involving team members both inside and outside the enterprise with varying levels of interaction.
ECM is uniquely suited for collaboration applications because collaboration entails content, process and connectivity. Industry analyst firm IDC offers two reasons why coupling content with collaboration makes sense. “First, content is the subject and object on which collaborative work is done. Second, collaboration generates new content that should be managed with other content for future access. When the two are supported by different systems that do not talk to one another, the result can be inefficient and ineffective content management and collaboration, particularly in day-to-day content-focused processes.”2
Business Process Management (BPM), a core capability of ECM, provides a common framework for collaboration to guide interactions among all parties. BPM also offers control of external access to internal systems, as many businesses want to collaborate with partners, yet need to protect vital intellectual property.
ECM in 2004 and Beyond
At the end of the day, talk is cheap, but ROI is everything. It’s no fluke that ECM has taken its place as a strategic investment. The reason is simple: ECM enables businesses to leverage their most important assets—content and human resources—while driving out inefficiencies and costs from processes.
Expect to see continued ECM adoption as companies tackle issues of continuous process improvement, compliance and collaboration initiatives, where the common theme is improved decision-making and the goal is continuous business improvement and competitive advantage.
Real-World ECM ROI
Standard Bank of South Africa operates 674 outlets throughout South Africa and has 35,000 employees worldwide. Through FileNet ECM, they have been able to realize substantial productivity gains and cost savings while improving customer responsiveness. Productivity has improved by 140% and turnaround on financial decisions has been reduced from seven days to an average of seven minutes. Additionally, by eliminating a majority of manual processing, the bank has been able to reduce staff by 50% to 60% in its central processing location, achieving significant cost savings.
ECM has delivered similar results for Miami-Dade County Clerk of Courts, in Miami, Florida. Serving 2.3 million citizens, the Clerk’s Office is the US’s fourth largest traffic court system, handling more than 720,000 traffic cases annually. Since implementing FileNet’s ECM technology, the office has managed a 30% increase in cases with a 15% decrease in staff, and has been able to reduce staff overtime by 50%. Moreover, the office has saved more than $1 million per year.
Atkins Nutritional Inc., a provider of products and services based on controlled carbohydrate nutritional science, is using FileNet’s ECM technology to boost the functionality of its Web site and ecommerce engine. The site attracts 1.5 million unique visitors monthly, who purchase Atkins products and support their weight-management efforts using the site’s innovative interactive tools. FileNet technology has helped boost online sales from an average of 125 to 850 per day and sometimes as many as 1,500 sales per day.
FileNet Corporation helps organizations make better decisions faster by managing the content, process and connectivity that drive their business. For more information on FileNet’s ECM solutions, visit www.FileNet.com.
1 “Background Paper on the World Trade Organization’s Negotiations and Issues Regarding Information and Communications Technology (ICT),” World Information Technology and Services Association (December 2002) 4.
2 IDC, “Documentum Acquires eRoom: Content Management and Collaboration Team Up for Customer Benefit”, Mark Levitt, Roberts P. Mahowald, Joshua Duhl, (October 2003).ECM: The New Strategic Imperative.