Companies Slow to Kick Paper Habit, But E-Docs Making the ROI Case

Published: July 15, 2008

by Dan Burger

During the past five to 10 years, the talk about offices going paperless has exceeded the reality. I guess you could say that about a lot of things. We live in hype-infested times. Still, we would like to think digital technology would have all but eliminated paper shufflers, paper cuts, and forests of file cabinets. Why haven't digital documents taken over? In the IBM System i ecosystem the document management software business is very competitive, keeping prices low and providing plenty of options.

Maybe the idea of completely "paperless offices" has set the bar too high. Many companies have completed projects that have reduced, but not eliminated, the reliance on paper. Their return on investment (ROI) seems to have hit or exceeded expectations, and often a single completed departmental project has led to expansions in other departments or company-wide deployments that move toward the gravitational pull of paperless.

The Association for Information and Image Management produced a survey that was brought to my attention by Daniel Kuperman, director of marketing at Quadrant Software, a paperless process management vendor in the System i market. The survey included a question regarding the responsibility for managing electronic records in the respondents' organizations. Twenty-five percent of the survey takers said no one has responsibilities for managing electronic records in their organizations. See last week's story "Coming to Grips with Your Digital Landfill" for more on the AIIM study.

"If no one is responsible," Kuperman notes, "no one takes action."

It's hard to argue with that. Without some leadership and direction--someone who brings together business users and IT staff to set goals and get a variety of people involved and committed--projects never get off the ground. In a recent implementation that Kuperman recalled, success could be attributed to the director of customer care realizing that the problems he wanted to solve in his department would have an impact on several other departments and therefore he gained the cooperation of other department heads to make this project fly.

The AIIM survey also identifies problems with document management implementations that have failed or were significantly scaled back. The top reason for this were attributable to process and organizational issues, lack of knowledge and training, internal politics, and poor procedures and enforcement.

Kuperman says the software vendors, his company included, have to take the blame for this.

"We say we are the experts and we have the experience with software implementations, but still we see how companies are doomed from the get-go because there is no senior management support, or because the implementation focuses on the technology and not the business processes that will utilize it."

Everyone can agree that weak or non-existent project management sinks a lot of IT ships. But whose fault is it? The vendor can take charge to some extent and facilitate the discussion of goals, processes, and maybe even internal politics, but someone inside the organization usually needs to be riding point or company executives are going to keep their feet on the brakes.

"A lot of the foot-dragging is due to office politics, and people working 9 to 5 and not having time for any projects," says Richard Schoen, president and CEO of the information management company RJS Software. "Technology projects get pushed out and so do changing procedures."

Reluctance to make changes is a difficult weed to pull out by the roots.

What works in favor of document management, Schoen believes, is that companies are continually squeezing to do more things with less people. Document management projects that pertain to report delivery and workflow fit in well with the do-more-with-less squeeze play.

"You might think that after all these years that everyone has report delivery software, or report download and conversion software," Schoen says. "That market is still remarkably fresh. We see a lot of people who haven't done anything with that yet."

"It's not that the paperless office never happened. It's still happening," says Dan Forster the president of inFORM Decisions, a document automation software company. He says the expectation that offices would all be paperless by the late 1980s was quite obviously optimistic, but that advancements have been substantial and will continue to grow.

"It has been a constant progress," Forster says. "Companies see the marketing. They read articles. They see their competition being able to pull up invoices online. There is a barrage of things that factor into people realizing that running to the file cabinets on the second floor is not getting it done. We talked to our customers five or six years ago about electronic documents and they are just now coming around to doing something with e-mailed documents and archived electronic documents."

The shift to electronic documents certainly hasn't been a tidal wave, but based on the number of software companies that are active in the small to mid size portion of the System i market, there continues to be enough projects going on to keep the lights on for most of the ISVs.

Angela Doolittle, corporate product manager at the document management company ACOM Solutions, says that, despite the competition, "companies are still finding business . . . there's opportunity for all of us."

The competition tends to keep a lid on prices, and that benefits organizations that do their homework and comparative shop. This has been going on for five years or more and has forced some vendors to look elsewhere for business. The price-shaving battles have also prevented software vendors entrenched in the large enterprises from making headway in the SMB. In general, it's fair to say they don't like selling smaller deals and they struggle to scale down their software for the average SMB shop.

Competition brings out the best in companies. (It can bring out the worst, too, with dubious comparisons and half-truths. Research means getting your information from more than one source.) What often happens is that companies rely on what they do best to win the business. In the System i market there are companies that have built their product lines around accounting software, report and workflow management, imaging, and EDI. Therefore, differentiators exist when comparing vendors.

There's also the overlap in the terms document management and content management. The term paperless process management better describes the goal of electronic documents, but definitions vary so as a buyer you have to make certain you are comparing apples to apples.

There's no single answer for what companies are looking for in document management and content management. "It's a wide variety of things," says ACOM's Doolittle." It's not like everyone is saying, 'I have to have a workflow module that will integrate with my CRM package and my accounting package.'"

Companies are looking at electronic documents as a way to improve their processes. Where they begin varies from company to company based on who the "take charge" person is for the project.

Because ACOM originally developed its software around accounting functions and financial applications, they tend to use that as a starting point. "As we talk with accounting folks, they say they have to be very reactive to customers," Doolittle says. "They want a solution that begins with a purchase order request and turns it into a purchase order, routes that internally, attaches all the incoming documents (invoices, packing slips, bill of lading), and puts the whole transaction history in one electronic folder."

Schoen sees the demand from a different angle.

"We see most companies wanting report management as a starting point with electronic documents," he says. "They may want to scan records and eliminate the filing cabinet as a frequently used repository for documents. In terms of report delivery or forms, they want to streamline the generation of documents and the distribution."

Companies that are researching electronic document solutions are much more focused on integrated business solutions than they used to be, Schoen says. There's a much greater emphasis on return on investment as well.

Document management and content management is gaining momentum in the IBM System i marketplace, says Quadrant's Kuperman. "The technology is not new and outside the System i market it has already been adopted by major companies. There's a lot of discussion surrounding it especially after HIPAA and SOX were passed into legislation."

Business managers are learning about the potential impact document management and content management can have on operations and they are comparing this technology with the traditional way of conducting business with fax machines, manila folders, and filing cabinets.

The environmental aspect to going paperless is having some effect on companies as well. It has increased awareness of going digital, even if the green factor alone doesn't drive the decision-making process.

"Thinking green is important and it will have an effect," says inFORM Decision's Forester, "but bottom line savings is what makes a difference. The two will be tied together. I'm not sure how the legislation will come down, but I'm sure that in the coming years there will be measurements for carbon footprints and taxing based on that. Companies will get credits based on reducing carbon footprints. But will companies call me because of a desire to be green? Probably not. They will call because they are going to save time and money and be more competitive."

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