With the release of UnForm 7.1 in December 2007, SDSI has positioned itself as a provider in the document management solution marketplace.

If document management is now on your radar screen, as it very much appears to be for many new, existing, and prospective end-users and resellers of UnForm, then likely you need answers to the following questions:

• what constitutes a document management solution (DMS), and what does it do;
  
• what is the major significance of "documents" in an organization;
  
• how do you or your clients go about justifying the investment in a DMS, and
  
• what are the benefits of implementing a DMS with UnForm versus some other solution.

This article should start you on the way to considering and finding answers to these important questions.

The answers to these questions can signify opportunities for the organizations that want to employ a DMS in their organization, as well as for the individuals and companies who recommend, provide and implement the adopted solutions.

Let's keep it that simple, for now. We'll elaborate further below.

• Documents play a central role in the activities of organizations.
  
  The roles of documents in an organization are both strategic and tactical, and cannot be ignored for long without crippling some aspect of the organization’s overall mission or objective.

Another way of looking at it is, simply:

Documents are the life-blood of an organization.

Making improvements in the management of documents can have a significant impact on efficiency, employee morale, and the bottom line.

Justifying the Investment: Improved Efficiency

Most organizations are looking for a document management system because of the potential for improved efficiency.

A recent survey on the state of the ECM industry (enterprise content management) published by AIIM-ECMA (footnote 2), discovered that, among the “most significant business drivers” behind organizations' current interest in ECM technology as cited by respondents, improving efficiency was number one, out of a total of eight other business drivers listed.

As a group, organizations classified by their survey responses as “Cost-Driven Users”, because they chose as a main business driver either

• improved efficiency,
• reduced costs, or
• increased profits/improved performance,

outnumbered those classified as "Customer-Driven Users" and "Compliance-Driven Users".

Compliance-oriented issues probably occur more frequently in much larger organizations, while efficiency-oriented and customer-oriented issues are shared by all sizes of organizations.

But the reason for citing these survey results here is to emphasize the fact that EFFICIENCY is usually the PRIME motivator and common denominator shared by organizations that are seriously contemplating ECM or DMS solutions, and as such, should be the primary focus of a strategy to approach either the marketing or the implementation of a DMS.

In our 3Q 2006 NewsPages article on UnForm 7 Document Management we identified a number of reasons why organizations electronically archive documents. We prefaced the list with the observation:

                “ … they all boil down to EFFICIENCY ”  

To recap, the main reasons given and elaborated upon in the article were:  

• Lower paper usage, eliminate physical handling steps  
• Enhanced security over document resources  
• Streamlined organization, minimization of clutter  
• Lower storage costs compared with bulky filing and storage systems  
• Relegate paper to a backup position  
• Work-flow improvement with document matching  
• Ease, speed, and flexibility of document access  
• Reduced overhead  
• Address environmental concerns  

The hidden costs of document handling are an area where an organization can often quickly identify whether there are efficiencies to be gained from electronic document archiving and management.

Our 3Q 2006 article also defined the characteristics of trade versus non-trade documents, with an emphasis on the fact that UnForm processes trade documents for laser printing and e-delivery purposes, and so is in a prime position to extend its functionality into the archiving and management of those same documents.  

A document-based work-flow analysis is in many ways an inherently “accounting-centric” process, to the extent that a majority of an organization’s key legal and trade documents are accounting-related, and often produced and processed by an accounting software system, or accounting-intensive ERP solution.  

The size, complexity, and even the culture of the organization will determine the type, nature and extent of a work-flow analysis, but it is always a process that is designed to determine efficiency, and improve efficiency where possible.  

I.T. personnel, especially managers, often need to understand how to measure efficiency and be in a position to advise line managers and executives on the efficiency gains which can be expected from implementing I.T. solutions.  

Independent consultants, integrators, and resellers also need to be in a position to assist clients and prospects determine their needs, and this often involves helping to measure expected efficiency gains from a technological solution.  

Those inside an organization who are tasked with improving efficiency or providing analysis support for that process often have a good grasp of the mathematical and financial approaches to quantifying efficiency improvements.

But let's review here some of the basic concepts of efficiency analysis.

• The Efficiency Equation
  
  Efficiency is the ratio of output to input:
  Holding input constant and increasing output increases the efficiency ratio.
   
• Holding output constant and reducing input also increases the efficiency ratio.
   
• A combination of lower input and greater output increases the efficiency ratio more than when holding either factor constant.

Relative labor cost is often the most obvious measure of efficiency in an organization when it comes to analyzing business or department performance.

In this scenario, labor cost is usually an input factor, and the output is a certain level production, like customer orders serviced.

Since labor cost is an input factor, we are looking for a reduction in it to increase efficiency. So we might assume that orders serviced will stay constant. Alternatively, if we want to keep our same level of staffing, keeping labor cost constant as an input, then we would need to measure efficiency by any change in volume of orders able to be serviced, the output factor.

In the sample below, we make a quick measure of a process efficiency by looking for a reduction in the labor cost while holding orders serviced constant.

Sample Efficiency Analysis - Part 1, the Savings

5 people spending 5 percent of their workday handling questions and problems which require retrieving a document from a physical, centrally located file cabinet. In this case the "5 percent of the workday" comes from 12 documents per day per employee taking an average of 2 minutes to retrieve.

IF electronic retrieval of the same document can be achieved on the desktop in an elapsed time of 15 seconds, instead of 2 minutes, and the administrative employees involved earn $25 per hour, and do NOT work overtime, the electronic solution can save almost $17,000 per year.





The daily labor savings using an electronic solution, with an efficiency factor of  60/$9=6.67, far exceeds the efficiency factor of 60/$75=0.80 for manual retrieval. The sixty in the numerator is the number of order documents, five employees times 12 per day. Notice that this is a numerical factor or ratio, and is NOT expressed as a dollar cost per document.

Inverting the equation would express the efficiency ratio in terms of cost per document, which would be $9/60=$0.15 for the electronic solution, and $75/60=$1.25 for the manual solution. When inverting the efficiency equation and expressing it in terms of "cost per", the lower value obviously expresses the more efficient solution.


Sample Efficiency Analysis - Part 2, the Comparison of Two Electronic Solutions

Here we use the cost savings of an electronic solution over a manual solution from part 1 as our output, and then compare it with the input, which is the investment needed to produce the savings.

If the electronic solution costs $100,000 then the annual investment efficiency is $17K/$100K=0.17, versus an annual investment efficiency of $17K/$30K=0.57 for an electronic solution which costs $30,000. The higher efficiency ratio indicates the more efficient solution.

Investment efficiency is usually expressed taking into account other additional financial factors like corporate income taxes, the time value of money, interest rates, years of service, etc., so that it can be expressed as an ROI, DCF (discounted cash flow), or a payback period. But the base ratio mathematics of investment efficiency as illustrated is a quick, useful benchmark when two or more solutions need to be compared.

The inversion of the annual investment efficiency ratio above is a simple payback period: $100K/$17K=5.88 years for the higher cost solution, versus $30K/17K=1.76 years (21 months) for the lower cost solution.

Six years is considered a little long for a payback period on an I.T. project, whereas 21 months is well under the 3 years that many accountants use as a payback benchmark.


ECM concepts help further define what constitutes a DMS

The AIIM-ECMA has put forth a model for depicting ECM and its activities and technologies which it makes available to members. It uses the following high-level outline of functional areas to organize the activities, methods, technologies, and tools which together comprise the model. The AIIM-ECMA "ECM 101" model, depicted in the simplest of formats, stripped of a great many technology options and considerations, can be boiled down to this:





So let's call this what a DMS does:

        A software system that captures, stores, delivers, manages, and preserves electronic documents.

Note that ECM is considered to be a much broader content "umbrella" that classifies document management as a subsidiary component technology. But it seems pretty clear that this same functional outline can be used to describe document management in a narrower sense, as well.

ECM concepts help further define what constitutes a DMS

The AIIM-ECMA has put forth a model for depicting ECM and its activities and technologies which it makes available to members. It uses the following high-level outline of functional areas to organize the activities, methods, technologies, and tools which together comprise the model. The AIIM-ECMA "ECM 101" model, depicted in the simplest of formats, stripped of a great many technology options and considerations, can be boiled down to this:





So let's call this what a DMS does:

        A software system that captures, stores, delivers, manages, and preserves electronic documents.

Note that ECM is considered to be a much broader content "umbrella" that classifies document management as a subsidiary component technology. But it seems pretty clear that this same functional outline can be used to describe document management in a narrower sense, as well.

DM versus ECM

We have positioned Document Management as distinct from Enterprise Content Management, but also acknowledged that DM is claimed to be a subset of ECM in a modern conceptual view of the technology marketplace.

When considering DM solutions an organization may run into proposals for full ECM solutions, or at the very least, be faced with the need for knowing the distinctions between the two, and filtering out technology which could be "over-kill"  in addressing the particular, specific needs an organization has identified.

Strategy Partners International Ltd, an ECM consultancy firm cautioned against such over-kill in a 2005 whitepaper: 

"Bottom Line:  Users should focus on Applications, NOT Infrastructure.

The change that has been taking place in the past two years is that users can buy the CM solution that meets   their business goal, rather than acquiring an expensive CM infrastructure and then hoping that they can use it to build a series of applications."   (footnote 3)

This especially dovetails with the concept of focusing on the efficiency equation: remember the impact of a lower cost as an input factor in the efficiency equation. If an organization has identified specific efficiencies to be gained from an electronic solution, they may be far better off purchasing a system which addresses the specific identified efficencies at a lower cost than  spending a lot more money on an entire "infrastructure" solution with features that may or may not fit the organization, or may or may not continue to add efficiencies down the line.

Accounting-centric Document Management

A useful distinction has arisen in the marketplace by referring to certain solutions as being "accounting-centric".

This seems like the most useful distinction to make regarding the marketplace that SDSI and its channel partners operate in with UnForm software. By and large we are dealing mostly with transactional content and its related documents in support of accounting activities, and in support of access to trade-oriented, or transaction-oriented documents on the part of internal and sometimes external entities.

SDSI's Implementation of Document Management:  An Accounting-centric Implementation

The logic of SDSI’s move into the document management arena is clear when you consider SDSI’s underlying assumption about document archiving, especially as it relates to existing users of UnForm in its capacity as a Laser forms and E-document delivery tool:

• UnForm has intimate knowledge of an organization’s mission-critical trade document data stream through its base print-stream filter technology.
  
• If archiving and document management solutions can be said to "live and breathe" by the efficiency of their retrieval indexing and other meta-data property creation systems, then a tool already acting as a print-stream filter is in a unique and primary position to be tasked with the function of archiving the output, since it already has access to  most or all of the information that is critical for proper indexing and meta-tagging.

A whitepaper is available from our website, www.synergetic-data.com/UF7_whitepaper.pdf , which further discusses the full breadth of UnForm's document management features and capabilities.

Conclusion

Recommending or implementing a document management solution requires some level of understanding of the overall marketplace for related technology. But more than that it requires an understanding of the efficiencies to be gained from electronic archiving, retrieval, and management. Every organization has a different and unique set of efficiency equations which need to be compared with those which will result from the use of an electronic solution.

UnForm 7.0, because of it's inherent design as a filter for capturing, enhancing and delivering accounting system content as a forms and report processing tool, is unique in the document management solution marketplace.

Those who implement UnForm with a strategy of maximizing efficiency based on a clear understanding of the work-flow and document handling issues which are unique to their own environment, are choosing a solution with a long history of automating accounting-oriented forms and processes.

UnForm has and will continue to evolve its document management capabilities along with the needs of our users, and with feedback from our channel partners.

Document-centric management solutions are clearly where client-server component software technology can contribute significantly to improving organizational efficiency.

With the central role that documents play in any organization, efficiency improvements that target key documents are sure to pay ongoing dividends.

Footnotes:

1  Kevin Craine, Designing a Document Strategy (MC2 Books, 2000).

2  AIIM - The Enterprise Content Management Association, www.aiim.org,
    State of the ECM Industry, Moving from Why? to How?: The Maturing of ECM Users, AIIM Industry Watch Survey, 2006

3  Strategy Partners International Limited (Rory Staunton), European Content Management Update, 2005. p.14.
    www.startegy-partners.com

UnForm and sdOffice are registered trademarks of SDSI. General, MailCall, sdStor, and dServe are trademarks of SDSI. Other product names used herein maybe trademarks or registered trademarks of their respective owners. Site design by ZiMDesign.