ECM in the Eye of the Beholder

I once swore on everything I hold holy that I would NEVER resort to the “10-blind-men-describing-an-elephant” cliché.

Ah, what the hell. I can’t think of any other way to talk about the current state of Enterprise Content Management—ECM. If ever a blind man needed an elephant, it is now. Content management is at an awkward stage, somewhere on the adoption curve between “have to have” and “nice to have.” “There is no simple answer,” agrees Lubor Ptacek, Director of Product Marketing for Documentum. “There are several factors driving ECM adoption. One factor is compliance—and that falls into the category of ‘cost of doing business.’ You simply have to do it, you have no choice. Half or more of the buying decisions right now are compliance-driven.

“At the same time,” Ptacek continues, “many customers deploy content management in places such as customer service, where the goal is to gain an advantage over the competition.” So the answer, as so often happens when you talk about elephants, is “it depends.”

One thing that sets this year apart from last, in terms of market acceptance of CM, is that “enterprise content management has established itself as a line item on the IT budget,” according to Ptacek. “We don’t have to knock on the door as hard now. We don’t have to convince them. They know they need ECM.”

The only remaining question for many organizations is “where” and “how much?” “Just as there are two types of customer, there are also really two kinds of content management,” says Mark Myers, Vice President of Strategic Alliances at Convera. “There’s the type that meets the necessary administrative performance requirements—ensuring that the proper processes, workflows, business rules are followed and that the versioning and security aspects are all covered.

“Then,” he adds, “there’s the type of CM that allows the repurposing of content that leverages the knowledge worker.”

The degree to which a single vendor’s product can provide both is unclear. Connie Moore, in a recent Forrester report, suggests that the “administrative” function of the CM application is heading toward consolidation into the operating infrastructures, and it will be the specialized, high-value aspects that Myers describes that will remain as viable standalone applications in the marketplace.

For much of the market, that’s the billion-dollar question.

The Value Question

Andrew Pery, Chief Marketing Officer and VP of Hummingbird, echoes Connie Moore’s belief. “The enterprise content management space is going from $1.3 billion this year to $3.5 billion in 2005. There’s plenty of room. It’s just a question of where the vendors see themselves in that market.

“There has been unprecedented consolidation in the ECM space, and that’s a leading indicator of the importance that clients are starting to place on the management of unstructured content,” continues Pery. “There are so many disparate technologies that address some of the parts that there’s a great incentive to coalesce it all into a shared single repository. That’s why you’ve seen the integration of records management technology in the past 12 months. And now, the large infrastructure vendors are beginning to recognize the tremendous business value of managing content.”

But the question goes back to the value proposition: WHY do companies find ECM so valuable? “Companies adopt content management for ALL the reasons they should—administrative as well as for innovative and competitive goals,” states PG Bartlett, VP Marketing at Arbortext. “They are trying to gain not only control over their content, but mastery over it.

“The more innovative companies—the Type-A enterprises—tend to be the early adopters anyway,” says Bartlett. “For them, the management of content is self-evident—‘Of course I need to get control of content, and of course I need to do it across all departments at an enterprise level.’ But the real Type-As take it another step—beyond merely wanting to know where their content is, they look for ways to use technology to gain competitive advantage.”

For the portion of the population who are not quite Type-A, there usually is a “Step-A” that gets them headed on the path toward ECM. For example, take that most humble of information tools—the form.

“Forms have dramatically increased in importance in the last 12 months,” believes Documentum’s Ptacek. “As customers attempt to automate their business processes, they realize very quickly that data collection at the beginning of the process is often the bottleneck.”

Mark Royle, Senior Product Marketing Manager of Adobe, agrees that starting at a fundamental point of pain, such as forms processing, makes a lot of sense. “To solve real-world problems, we’ve got to be careful about not doing too much revolution, but instead trying to evolve people. There are still a lot of cost-savings to be had, and we’ve barely touched the tip of the iceberg.

“But,” Royle adds, “you can only squeeze so many efficiencies out of a business before you have to start increasing your earnings-per-share by increasing revenue. So value creation is, in the long run, the more important benefit of ECM.”

“There’s a class of customer that is truly knowledge-driven,” insists Convera’s Myers. The classic case is life sciences. They’re engaged in creatively repurposing knowledge and information, and are constantly under huge pressure to innovate. So they do view CM as creating value.

“This type of user also deploys technology very aggressively,” continues Myers. “For them, content management is thought of as the back-end to their ‘knowledge’ system. It might be the front-end for those who are doing administrative work or workflow, but it’s in the background for the individuals doing knowledge discovery.”

This recent shift in the “perceived” versus “true” value of ECM is echoed by most of the market leaders. Martyn Christian, Senior VP of Industry Marketing at FileNet, sees a pyramid-shaped adoption trend. “There are three key drivers. 1. Whether they’re investing in ECM by the drop, or by the gulp or by the bottle, the main driver is competitive advantage. That’s coming from the CEO’s office across the board, a little more aggressively by the early adopters.

“2. Increasing efficiency and improving service. This tends to be a more point-solution-type approach. In this group, dynamics surrounding the cost of the technology, the deployability, the awareness and acceptance are on a positive trend. Not where we’d like to see them ultimately, but there’s a trend toward viewing content management as a core component that adds value to their businesses.

“Lastly, there are things I have to take care of, such as compliance. A customer who moved a huge amount of documents from laptops and desktops to network services a few years ago is now wondering: ‘What’s in those documents? When do I delete them? SHOULD I delete them?’

“But to solve this problem—which is strictly a cost of doing business—they’re looking at technology they already have in the organization. Compliance is important, but it is not the key driver in the market today. Everyone is aware of it, but very few people are spending significant sums of money on it. They’re trying to do it at the minimum cost.”

Shari Shore, Vice President of CleverPath Marketing at Computer Associates, identifies the value question as being directly proportional to the size of the company, and the size of its problem. “The perception of value depends on the business, and the amount of content they don’t currently have a handle on,” she says. “A smaller organization may be concerned with legal documents, and whether they can produce what’s necessary for Sarbanes-Oxley, for example.” A potentially big problem for a smaller company. “But,” she adds, “a really big company like GM has millions of documents, plus untold numbers of pictures and movies of plants and cars ... They have invested tens of millions of dollars in these assets. Or an ad agency, for example, that deals in pictures and PDFs that they have to share internally and with clients...for them, the content they’re managing is their business.” And the success with which they manage it has tremendous implications.

“There are certain industries where content management is an absolute requirement for doing business. Pharma is a great example, because keeping documents well-managed is a regulatory requirement without which a pharmaceutical company cannot operate,” explains Documentum’s Ptacek. “That’s why they were the first to adopt ECM.”

Stepping Up To The Enterprise

It’s all relative. To GM or Disney, the problems with things like rich media are, well, a rich man’s problem. And they’re solved using a rich man’s tools. For most of the world, the issues are somewhat more mundane. Edna Edelman is the Director of Content Management for Fujitsu Consulting: “In the last three years, it’s been all about operational cost cutting, distribution costs and—in a flurry in the last six months—the management of paper.”

It may not be as glamorous as rich media, but Edelman says it’s a dominant factor. “The paper capture and integration with the document management side of the business is huge. Content still comes into the organization as paper. It’s difficult to get away from that, in some industries in particular, such as healthcare and insurance. Most of the proposals I’ve responded to in the last three months are identical: They all have a very large paper capture component to them.”

Somewhere along the way, customers began taking a long view of content management. It begins with a simple problem—such as paper or forms—but its deployment is executed with a larger picture in mind.

Take the forms processing example again. “Forms are just yet another type of content,” says Ptacek, “and therefore it makes sense to leverage the same infrastructure they already have to manage documents, Web content, etc. Then by using the same infrastructure, customers can combine content of different types in a larger business process—that’s almost always the requirement now.”

Arbortext’s Bartlett sees it as a “cake-and-it-it-too” proposition: “There’s still enough productivity benefits to be gained by getting control of content that you can justify investment. But you can justify by getting an ROI and by gaining competitive advantage. One is the way you justify it. The other is the way you justify it now.”

“Efficiencies and productivity are still the meat in the sandwich, no doubt about that,” admits FileNet’s Christian. “But customers are now laying out a long-term strategic vision when they start these individual projects. Phase one might be in a specific department where they have the biggest problem. But, the driver wasn’t to solve the service-level problems; the driver was the big picture first.

“Here’s an example. A regional bank applied content management and a large dose of business process management and reduced their costs of providing a typical loan by 75%.” That’s good, but there’s more. “That 75% reduction in costs has allowed them to enter markets and take share, and THAT has allowed them to grow significantly over the last three or four years,” relates Christian. That’s the difference between short-term and long-term vision, and strategic executives are taking notice.

PG Bartlett puts it quite eloquently: “The difference I see in customer perception is they want to look beyond just managing content to making the content itself more manageable. They’re aware of the entire content lifecycle.”

The Problems with Deployment

All the vision in the world won’t help you if you can’t get the stuff deployed, rolled-out and accepted by your user community. This is a critical reality when considering how to expand content management into the enterprise.

“We almost always start with a burning problem,” explains Ptacek. “It might be a compliance problem, or a marketing issue, or the Web group ... there are plenty of possible first drivers. We start with that department. But once they bring in IT—which is well-tuned to having a platform to leverage investments from—within 12 months we are usually talking to the company about an enterprise solution.”

Mark Royle adds: “When the business problem is compliance, the drivers are the executives, who bear the risk. But the implementers are IT and LOB managers. So, ultimately we have to deal with those departments to help them understand the greater business requirements and guidelines they’ve been mandated to meet.”

Whether CM is rolled out departmentally or enterprise-wide, once again, depends, says Edelman at Fujitsu Consulting. “It depends whether it’s a large or small enterprise, first of all. Then the culture of the enterprise is another factor, and can be the largest impediment. The common way to overcome a cultural impediment is to put together a committee whose job is to purchase technology. That sometimes works, but sometimes just adds another bureaucratic layer. Another way to do it that works is to assign responsibility for certain technologies to particular organizations. These groups have purchasing responsibility, and they have to defend their decisions in front of the businesses involved and other technology groups. The result—when it works right—is not only to defend the decision, but to also organically spread the solution throughout the company.”

Sometimes there’s a tough choice, says Edelman. “You either buy one technology for multiple applications, and some departments will live with less functionality, but you minimize support and maintenance costs. Or you buy best-of-breed for each department, and you hope and pray they are compatible.”

Mark Myers concurs that the initial deployment strategy can make all the difference in the world. “Document management-centric systems are set up in a folder hierarchy. When users go to the system, that’s what they see. But the problem is, in most organizations, that folder system is set up by an engineer or technician administering the system. It’s unfortunately not done by a taxonomist or corporate strategist who’s plugged in to the needs of the users.” But no matter how carefully you set up a system in the beginning, says Myers, “organizations change and evolve. Folder systems aren’t able to change with the organization, nor adapt to the changing perspectives of the individual users.”

Even if they were adaptable, who would manage the system? “In the world of corporate governance,” Myers continues, “no single business unit or class of user will be given control over an asset that spans the enterprise. So it defaults to the IT organization to ‘be in charge’ of the CM system. They are the only group that reaches across all the various departments, unless the organization has a chief knowledge officer or other executive with organizational responsibility for this kind of decision.”

Shari Shore at CA agrees that the designation “enterprise” in front of a software application is a matter of reach, but that control usually comes down to a very select few. “Is a portal an enterprise application? There are some examples you can name for which access to content in a portal is important to everyone within the organization, as well as to channel partners, distributors, etc. All the people who are part of this channel need access to, say, the price list for a product.” But no matter how many people can view it, “you should have only one group permitted to change it.”

The deployment issue, says Shore, can be greatly mitigated by keeping in mind the basic functionality of the CM system. “The difference between a portal and a document management tool is just a matter of vocabulary. We’re saying the portal’s role is to isolate the user from the source of the content. This is where the decision point is: Do we have one repository for the whole corporation, or multiple repositories? Do I have one view of the repositories? Do I share repositories? Then you have the distributed versus replicated question...it goes on and on. The portal says “put it wherever you want. I don’t care.”

The Market Condition

These speakers, being a group of vendors after all, have various opinions on “where the market is going.” Having a crystal ball is very handy for customers who are taking a long view of ECM, and Hummingbird’s Andrew Pery sums it up nicely:

Despite less than complete assimilation so far, Pery insists that eventually, “there will be a certain level of content management that will become a commodity. And you can expect small- to medium-sized companies to take advantage of that.”

The industry is polarizing, says Pery. “On one end of the spectrum, you’ve got the basic infrastructure. On the other are the high-end, highly complex content-centric enterprise solutions. At this level is the convergence of different types of media, not just software and content, but rich media and archival- and content-addressable storage. You’re going to see different players addressing these different segments.

“Then there are the traditional enterprise vendors. SAP, for example. There’s a high degree of interdependence between structured information and unstructured content. For every transaction, there are 8-10 interactions that occur—documents have to be exchanged, contracts have to be examined, policies and procedures have to be put in place, regulatory compliance has to be met. There’s going to be a high degree of bridging that happens between structured and unstructured content.

“In between those two extremes are those vendors who are going to have to make choices. Are you going to compete against Microsoft at the low end? Or are you going to compete on the basis of value? This is where you’ll see the emergence of highly verticalized CM solutions. There’s an enormous amount of repositioning going on in the market.”

Best advice? Look for low overall cost-of-ownership, out-of-the-box integration, a bridging of structured and unstructured content, more knowledge management and, finally, more specialized line-of-business solutions, such as contract lifecycle management, compliance management, etc.

And, of course, read on.

The Cast

Thank you to the thoughtful individuals who helped with this article:

PG Bartlett, VP Marketing at Arbortext

Martyn Christian, Senior VP of Industry Marketing at FileNet

Edna Edelman, Director of Content Management for Fujitsu Consulting

Mark Myers, Vice President of Strategic Alliances at Convera

Andrew Pery, Chief Marketing Officer and VP of Hummingbird

Lubor Ptacek, Director of Product Marketing for Documentum

Mark Royle, Senior Product Marketing Manager of Adobe Systems

Shari Shore, Vice President of CleverPath Marketing at Computer Associates

Andy Moore is a 25-year publishing professional, editor and writer who concentrates on business process improvement through document and content management. As a publication editor, Moore most recently was editor-in-chief and co-publisher of KMWorld Magazine. He is now publisher of KMWorld Magazine and its related online publications.

As Editorial Director for the Specialty Publishing Group, Moore acts as chair for the “KMWorld Best Practices White Papers,” the “EMedia Innovation” series and the “EContent Leadership” series, overseeing editorial content, conducting market research and writing the opening essays for each of the white papers in the series. Moore has been fortunate enough to cover emerging areas of applied technology for much of his career, ranging from telecom and networking through to information management. In this role, he has been pleased to witness first-hand the decade’s most significant business and organizational revolution: the drive to leverage organizational knowledge assets (documents, records, information and object repositories) to improve performance and improve lives.

Moore is based in Camden, Maine, and can be reached at andy_moore@verizon.net.

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