The recipe for successful enterprise content management (ECM) can include all sorts of ingredients to capture, store and retrieve documents. Because of the increasing compliance pressures faced by financial institutions and the ROI benefits they can realize from ECM, industry experts believe that banks will find ways to make the technologies not only a part of their technical infrastructure but also an integral component of their information management strategies.
John Mancini, Pres., Assoc. for Information and Image Management (Silver Spring, Md.)
Jan Scites, President,Scites Associates (Basking Ridge, N.J.)
BS&T: What is enterprise content management?
Jan Scites, Scites Associates: I would define it as the managing, capturing and distribution of the unstructured documents and content that represent the knowledge assets of the corporation. ECM technology is the set of systems that manage all the diverse forms of content that make up a corporate knowledge base (e.g., business processes, customer data, financials). This means ECM includes all digital file types and formats (i.e., text documents, spreadsheets, audio, video).
John Mancini, AIIM: ECM refers to the technologies used to capture, manage, store, preserve and deliver documents and content related to business processes. In almost any organization, 90 percent of the information that surrounds a business process is unstructured.
BS&T: What is driving banks to adopt ECM technology?
Mancini, AIIM: Unstructured information is at the heart of business processes. Processes cannot be improved until this flow of information is standardized, digitized and managed. So, within organizations there is a constant push to rapidly deploy technologies to reduce costs and improve processes.
At the same time, governments and courts at all levels are making increasing demands for the trustworthiness, accuracy and reliability of electronic information. There is a temptation to think of this as just a Sarbanes-Oxley problem or a HIPAA problem. But this is part of a long-term trend toward defining what transparency and accountability mean in an electronic era. This is creating a need to reduce the risks associated with management of electronic information. At the intersection of these sometimes conflicting demands - better, faster, cheaper versus accurate, accountable, auditable - lies ECM.
Scites, Scites Associates: Banks are rapidly adopting ECM to meet regulatory requirements. Also, given the massive amounts of information generated on a daily basis by the customer interactions inherent in banking - and the need to protect, store and monitor that information for financial, record keeping and compliance reasons - banks have to find ways to respond to this need. As part of this, they have to be able to find information and track its creation, storage and use with speed and accuracy.
BS&T: What key ECM technologies are available now?
Scites, Scites Associates: There are many technologies that are mature and can provide a full enterprise solution or a vertical component of functionality. Long-standing technologies, like workflow, imaging and document management, have been updated to integrate with today's Web-based and legacy-connected environments, and have sufficient functionality to meet ECM requirements.
New tools that in many cases incorporate integration to middleware and legacy systems include Web management tools for documents and multimedia; data repository tools for centralized content management and access; and content tools that organize and categorize information for front-end business process activities and track and store the information for back-end processes.
BS&T: Where are banks currently in terms of adopting ECM?
Mancini, AIIM: A survey by AIIM released in July 2004 offers a number of conclusions about where banks are now in implementing ECM technologies. There is clearly a good news/bad news situation when it comes to information management compliance. Bank employees believe their organizations have good intentions about managing electronic information (80.6 percent say their organization takes this issue seriously). That's the good news.
The bad news is that there clearly is a gap between intentions and performance. Only 39.7 percent say their organizations consistently enforce initiatives relative to managing electronic information. Only 44.4 percent say they have received training on managing electronic information and only 55.6 percent have a formal program for managing electronic records.
Scites, Scites Associates: Most banks have adopted early content tools, like workflow, document management and other e-services tools (i.e., e-mail, e-billing), as part of their approach to managing content. They did this for better customer service and to improve their unit cost for each customer transaction that impacts earnings per share. Currently, most banks are scrambling to meet the new regulatory requirements and adapting their existing structure/tools to fit where they can.
BS&T: What is the ROI for ECM?
Scites, Scites Associates: ROI will depend on where the bank is in its technology and business life cycles. If ECM is the first significant content tool implemented, the returns should be 40 percent for a highly transaction-based division and 25 percent for a full-scale enterprise implementation. The implementation cycle time will range from 12 months to 24 months, given the size and complexity of the organization.
It is more likely that new ECM tools will be an addition to existing structures and will have a 15 to 20 percent ROI within a division and 10 to 15 percent for the enterprise. Certainly, this is still worth doing on a unit-cost basis, given the potential improvement to customer interactions and lower overall total cost of ownership for systems.
Mancini, AIIM: Because of regulatory changes, such as Sarbanes-Oxley and HIPAA, it is becoming a business necessity to implement ECM technologies. The trend toward greater accountability and transparency of electronic information will accelerate in the next five years. But there are also distinct bottom line advantages to deploying ECM technologies. Given that 90 percent of the information surrounding most business processes is unstructured, unmanaged and costly, savings resulting from more effective management of this information drops down to the bottom line almost immediately. Pay-back periods for ECM projects are often less than 12 months.
Additionally, given the increasing focus by governments on compliance and by courts on the responsible handling of electronic information, banks must manage the risk of mismanaging electronic information. For organizations that mismanage this information and get caught in a legal proceeding, the costs of winning this "negative lottery" can be staggering.