This article originally appeared in Outsource Magazine Issue #23 Spring 2011
One of the most prominent areas of growth in the global outsourcing space in recent years has been the set of activities which collectively can be considered as “document management” – a simple moniker which doesn’t really begin to do justice to the huge variety and complexity of that which it described. Since the dawn of business, companies have struggled to streamline their documentation and information management; today, incredible technological gains, a rigorous intellectual approach to process improvement and – alongside and deriving from both those – the evolution of business process outsourcing have all combined to create a rapidly expanding sector which is not only an increasingly indispensable resource for anyone concerned with chopping costs out of an organisation, but also poses significant long-term benefits in the realm of sustainability – as anyone who’s ever experienced the mailroom of even a medium-sized firm will appreciate.
As noted, document management is a very broad term which can apply to a host of processes and activities; thus the document management outsourcing space can broadly be said to encompass a huge number of tasks (some of which may overlap with other business activities) from digitisation and distribution of incoming mail to liasing with staff and customers via traditional and emerging media.
“Traditionally, companies have outsourced mailroom and CRD services,” says Helen George, Head of Services at Ricoh. “However, the market place has matured, and today services focus on the structuring of an organisation’s document workflow to ensure greater efficiency. Services now range from simple managed print services, through to document managed services – where an organisation’s complete document infrastructure is optimised, helping customers get the right information, at the right time, in the right form – to document process outsourcing, for example outsourcing the accounts receivable and accounts payable processes.”
Thomas Senger, senior VP at software and services provider Kofax, agrees that it’s the “right information, at the right time” element which is critical.
“Typically the key focus of an outsourced document management agreement is on the intake of content,” says Senger. “The provision of a hosted or client side EDRMS (electronic document and records management system) or ECM (enterprise content management) solution is critical but not the main focus. Ensuring that the right documents and data get to the right people, at the right time is the key to success.
“The intake of content needs to cover all media types from paper, email, fax, SMS, MMS, electronic documents and even through to voice. For example, a call centre manager might proudly claim that all incoming calls were answered by an agent within 15 seconds, but the average time to respond to a letter or email is five days plus. This doesn’t sit well with customers, who expect a uniform service response regardless of the contact medium,” adds Senger.
The document management space has expanded and evolved extremely significantly in what is a comparatively short period, and the reasons behind this growth are myriad. To a certain extent, of course, the drivers are similar to those propelling outsourcing generally (though one perhaps more subtle driver which should not be underestimated is the need for traditional paper- and print-oriented companies to maintain commercial viability in an increasingly electronic world).
“I think the major change is a technological one,” believes Darian Sims of Océ Business Services. “In the office the rise of cheaper faster desktop and multi-functional devices has meant there have been advances in convenient document printing; however, this has often hidden the fact that this was not as cheap or convenient as first thought. We are constantly receiving reports from our clients of relatively senior company personnel spending more time at the ‘copier’ printing off huge files or struggling to bind an important tender rather than actually doing their day jobs! We help out where we can in this situation and have programmes to help change these attitudes in the office.”
Meanwhile, business consultant and document management specialist Kulvinder Reyatt considers that standard outsourcing driver, cost-cutting, to be at the heart of the sector’s expansion – alongside the growing needs of outsourcing itself.
“Cost savings have been key in driving document management propositions as most organisations are realising the real-estate costs of holding hard-copy material in storage facilities,” Reyatt points out. “Outsourcing of business operations also now requires an organisation to be able to move documents around much faster than post, and therefore the ability to scan and deliver documents either to a captive operation or to a third-party outsourcer by electronic transmission has driven the need for a document management solution. A further area has been the speed and safety related to recovering a document digitally instead of sifting through hard-copy material that could be subject to fire, damage or loss.”
Andy Jones, Director & General Manager at Xerox Europe, concurs that cost-savings are especially key at what remains an economically uncertain time.
“The current economic climate is presenting organisations with challenges and businesses are looking for sizeable reductions to their cost base. Many companies are realising that document management is a significant area of potential cost saving and a source of significant competitive advantage. For example, managed print services can often achieve savings in the region of 250 per office worker per year… Increasing competition for wallet share means that companies are re-investing in how they market and communicate to new and existing clients e.g. through personalised communications and targeted messaging even down to the individual.”
These very obvious benefits from streamlining document management (whether via outsourcing or not) mean that buy-side organisations have been paying close attention to the field as it’s matured – and this has encouraged significant competition between providers globally, as well as a regular flow of new entrants, large and small, into the arena.
“More IT providers are looking to offer managed print services to take advantage of the market opportunity which is likely to lead to further alliances or consolidation between IT outsourcers and document management outsourcers,” says Xerox’s Jones. “Similarly, more BPO providers will look to offer document management services as part of their broader end-to-end offerings. MPS is being rolled into larger ITO contracts, and our acquisition of ACS is enabling us to capitalise on such opportunities.”
One of the attractions for providers extant and new of this industry is its relevance to pretty much every business under the sun, the universality of documentation within commerce being universal. Nevertheless, that doesn’t imply universality of product, as different sectors and activities have different specific requirements within the document management framework.
“All industries are active,” says Océ’s Sims; “however there is now divergence in what we are being asked to consult in and ultimately deliver. This is due to the differing set of industry drivers. Trends in the public sector, for example, are naturally heavily focused on cost-reduction measures, therefore require efficiency gains from us. Or there are drivers geared toward innovation, often from industries that recognise document processes are equivalent to business processes. These are often industries who service many consumers: retail, utilities, finance etc. who are keen to transform their marketing communications with providers like us publishing content not just in print, but also pushing content to SMS, web and tablets.”
Dynamic as the industry currently is, however, the future could be even more boisterous for document management provision, as more businesses – especially those increasingly far down into the SME cohort for whom new products are making document management outsourcing more and more viable – come to spend, and new technology enables more attractive offerings. Of course, the competition for such riches will be fierce…
“[An] interesting development in the document outsourcing space won’t necessarily be as a result of acquisitions but potentially the arrival of new entrants into our market,” points out Océ’s Sims. “These next big players in document outsourcing won’t necessarily be the traditional print-based organisations, but may well be entirely based in the cloud offering Google-style document-sharing and workflow-based solutions.”
Ricoh’s Helen George agrees that the fight for market-share is heating up – and becoming more complex: “We expect to see competition intensify as more players enter the space; the market will segment and different levels of document management outsourcing emerge – ranging from simple managed print services, to document management services, traditional document outsourcing (mail room and CRD) and document process outsourcing (intelligent invoicing). In the short term there will be more confusion about what providers mean by document management services. However, clarity over the different offers, and deliverables, will begin to emerge, with providers choosing to be a complete player or focus on one niche area dependent upon their client mix and business strategy.”
“The big change factor here,” believes Thomas Senger of Kofax, “is Microsoft and SharePoint – the fastest-growing ECM in the market and likely be the most widely adopted, knocking off FileNet and OpenText from the top spot. This kind of disruptive change naturally leads to a shake-up of the marketplace and most likely some consolidation. From an outsource perspective, we expect to see global DPOs (document process outsourcers) increase their share of the market space, start to take on more downstream processes and become more BPO than DPO.”
One factor which will undoubtedly, long-term, have a major impact on this space is its relevance to the developing sustainability agenda. Clearly, the automation of document-related processes has huge relevance to issues such as paper-reduction and logistical efficiency – and as governments ramp up green legislation providers in this space are in an excellent position to assist across bottom-line, compliance and CSR agendas.
“The reduction of paper delivers some obvious benefits, e.g. through agreeing print policies around duplex printing,” says Xerox’s Andy Jones, who goes on to point out that “the paper to digital migration – e.g. digital document repositories and digital document delivery – also drives paper volume down. In addition, managed print services can significantly reduce the carbon footprint of the document infrastructure, e.g. by optimising the equipment fleet. New technology such as solid-ink printing is also far more environmentally friendly compared to traditional ink. Also, effective document management can drive out waste and duplication in business processes making those process more environmentally sustainable.”