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Alan Pelz-Sharpe

ECM Technologies and Recession

3-Apr-2008

Tags: Document Management (ECM), Building Business Case, Marketplace at Large, Vendor Viability & Financials

One topic that keeps coming up in conversations with buyers of content technologies -- and of course those that sell content technologies -- is the topic of a looming recession. It's something that casts a shadow over everything, and impacts almost every major decision-making process. Let's all hope a recession is not with us, but assuming one may arrive imminently (U.S. Fed Chairman Bernanke hinted as much yesterday), how can you best prepare and potentially thrive in such circumstances?

Those contemplating big-ticket implementation projects will likely endure a longer time-lag to get approval and budget, and more scrutiny of the business case. You'll also see pressure to reduce project costs, leading to tougher negotiations with suppliers. On the one hand such circumstances are a bit depressing and certainly frustrating, but looked at another way, they can push you to achieve more with less, and ultimately deliver better value.

Recall that the roots of ECM are document management and workflow: two functions that were originally designed to automate manual processes. They played a key role in the downsizing/rightsizing change-management area of the late 80's and 90's. In other words they were originally designed to reduce costs and increase efficiencies -- strong factors in a recession.

The other side of ECM is long-term content management and archiving, something that can also offer major cost-savings. Reducing the volume of content to be managed, freeing up precious server and network resources, and facilitating more cost-effective storage are all winning strategies. And remember that during a recession, lawsuits fly fast and loose (particularly in the U.S.), as grudges are settled, arguments flare, and perceived injustices challenged. Here again ECM and Archiving technologies prepare companies to fight such attacks, and deliver evidence when required, cost effectively. So, legal preparedness is something all firms need to consider as times get tough.

Hence, your business case and general justification for your ECM project needs to focus more on hard cost savings -- and making more of your existing resources -- rather than providing wish-lists and nice-to-have scenarios. Note that ECM systems -- in contrast to many other IT investments - typically offer a solid return on the investment when executed well. In fact, ECM is one of the few areas of IT where ROI calculations can have a modicum of reality about them. (Note: We provide some detailed advice on how to build an ECM business case in the ECM Suites Report)

In discussing ROI, though, I'm referring to that part of ECM that emphasizes structured processes and management, rather than a general collaboration service (the SharePoint phenomenon perhaps excepted). And this is why I think good old-fashioned ECM will remain center stage, with a push to automate existing manual processes growing stronger.

Some ECM vendors will suffer for sure, but the smart ones will turn the current economic climate to their advantage. They will focus far less on new fads and trends, and get back to basics: reducing paper mountains, automating processes, mitigating against risk, and playing a key role in archiving and storage optimization. Expect to see their focus shift increasingly to e-mail. The volumes, cost, and risks here have become so acute that any firm looking to tighten their belts and prepare for tough times may well need to prioritize e-mail archiving and management.

I am no economist and I have no special insight on whether we are heading to a recession or not. But it's surely preying on peoples' minds. From my point of view, many of the things we may focus on in a recession are things that we should focus on at any time -- it's just that the downsides are more severe. Hence we take more time to build solid business cases, justify our investments carefully, and use ECM tools to bring about real business change -- good things to do in any economy. At CMS Watch our goal is to help you through the difficult projects and decision-making that lie ahead.