Is it always a no-brainer to outsource your DM needs?
I don’t think anyone would deny that outsourcing isn’t a mature aspect of the Document Management market. But things have definitely moved on.
Just 20 years ago, the service would have been around third-party scanning by specialists of documents in bulk, with CDs getting handed back to clients with a basic search facility tagged on at the front. Now, DM outsourced services have become more responsive and sophisticated, in terms of both breadth and depth.
The next step’s already happening, as the cloud is letting the industry work in much higher volumes, with customers able to consume outsourced DM services at a larger scale, with more functionality and more flexible, tailorable service level agreement options. That clunky CD has been replaced by access to documents in the cloud via an iPad, a different continent away from the source.
All of this is great progress. But this is real life, not a marketing brochure. The reality is, outsourced DM is not always the best option for each and every organisation, and it’s always worth casting a cold business eye on the pros and cons of the approach to make sure you’re not wasting your money.
Let’s review the four advantages of outsourcing your content and documents versus keeping them in-house. One, it’s very convenient. Purchased as a turn-key solution with all the software and hardware in the cloud, your physical documents get automatically indexed, stored and administered by dedicated staff, specifically trained for the task.
When this works well, it’s going to be up and running much faster than an on-premise solution that you will have to buy, bed in, get to work and maintain. And on paper at least, this can offer your team secure access to enterprise content anywhere where there is a connection to the internet.
Two, on paper, you can get real economies of scale. All your current files can be scanned in bulk, with your new specialist partner using the latest high-volume kit. This is worth noting, as if you didn’t do it this way, you have to absorb large capital costs and personnel training effort yourself. As for all those basements filled with paper from past business, large paper archives can also be scanned on demand by the outsourcer, saving you hassle and freeing up valuable office space.
If only directly useful content needs to be stored for real, or near real-time, access, that’s going to save you many thousands of pounds in service costs by you not imaging redundant or time-expired content. That’s important, as a good outsourcer shouldn’t be interested in simply hosting everything – they will want to work out with you what is important, a useful rationalisation exercise in its own right. Our experience shows that you only really want between one and five per cent of all the documents you have in the filing cabinets, after all.
Admin you never see still happens
Three, if run by a competent outsourcer, a lot of the system maintenance that you have to do will disappear. That’s the beauty of the cloud: IT upgrades and back-up gets done invisibly, while the cost of hardware refresh and system technical administration is handled by people whose sole focus is on the software. A real added bonus is that the chances of ‘unplanned outages’ – crashes, downtime and lack of system availability – also goes away with a good third party, as its business continuity resources are dedicated to keeping businesses up and running, as that’s the source of its credibility. And four: it’s in the outsourcer’s interest to spot ways to improve the way you work together. It will want to enhance the service, and will look for ways to deliver the information back quicker or more safely using approaches such as business continuity.
Most of us would recognise these as strong arguments in favour of outsourcing document management and in particular using the cloud. However, what are the downsides to consider?
One, the reality is for compliance or policy reasons, the cloud isn’t for everyone. Some sectors and some organisations are constrained by compliance or regulatory strictures, to the level of government mandates that say that data can’t be held outside of such and such an area, and so on. They might well be strategic, national utilities, defence and healthcare records, and these restrictions are understandable. It does, however, act as a brake on any claim that outsourcing in the cloud is a ‘one size fits all’ solution.
Two. Earlier, I discussed how organisations can achieve a rationalisation of their data by a good outsourcing agreement. However, that’s only true if firms are prepared to do the work. Some customers expect the other party to do all the rationalising themselves and to establish what matters, what’s highly sensitive and what the regulator will need to see, and so on.
But passing over the responsibility in this way is actively counter-productive. Think of it like this: do you need to send all the thousands of phone bill call pages, or would it be worth stripping out the page that you really need to keep? By the same token, might it not be a good idea for HR to delete the records of disciplinary items that should not still be on file and which could potentially embarrass both you and the employee.
The principle here is that cleansing of data before delivery makes a lot of sense for both sides. But it just doesn’t always happen, and can lead to issues. And, this is certainly something that can come back and bite the unwary outsourcing customer. Next, a third point to consider. Your procure-to-pay cycle or order-to-cash processes may well link to both central and local business apps, so you need to share the documents that sit behind both ends of that process, or it may get confusing and problematic if there are problems. You can therefore end up with hybrid deployments with some elements outsourced, some kept in-house. This is not impossible to run well, but you need to get a mechanism in place to make it work effectively.
Finally, while an outsourcer is good at economies of scale, nonetheless, not all of them are IBM Global Services-level players. You need to do due diligence and check that they really can process ten million documents overnight, say. They need to have the right, top-level infrastructure in terms of connectivity and storage to do the job that you’ve asked them to do.
Don’t rush into a decision
Outsourcing is a great business tool, but it’s always important to evaluate all the above points to get the right solution for maximum business advantage. While many standard business processes such as finance, accounts payable, contract management, or HR records management have become commoditised and are eminently suitable for outsourcing, especially in the cloud. However, those of a more risk-averse disposition can still consider hybrid deployments until their confidence in the technology and service provider evolves in partnership. The lesson is, buyer beware – never do something just because it’s fashionable business thinking.
About the Author
Howard Frear, Sales & Marketing Director of DM leader EASY Software UK, believes that the decision to outsource Document Management (DM) or Enterprise Content Management (ECM) services to a third party isn’t always black and white. He has been at the forefront of major trends in the software industry for close to 18 years. He joined EASY Software in 2001 and during that time he has been instrumental in developing and overseeing a highly successful strategic partnership with SAP, a relationship that today accounts for more than 50% of EASY UK’s software sales. Howard is also attributed with many of EASY’s largest customer wins including Serco Group, Cable & Wireless and Barclays Capital.