The real value of ECM

FST sits down with two industry insiders to discuss the need for document management solutions and how implementation can drive business effectiveness.

Thomas S. Senger is Kofax´s Senior Vice President of Applications Software & Services EMEA. Senger oversees all customer-facing sales and services functions in alignment with the company's newly-introduced hybrid go-to-market model, which supports both direct customer engagements and indirect sales through channel and with alliances partners.

Since the early 90s Fredrik Ring has worked as an advisor, analyst and project manager in major ECM related IT projects, as well as being CEO and business area manager in several consulting companies. He is currently responsible for ECM in the Logica Group.

FST. As regulations become increasingly strict, ECM and document management solutions are ever more important for financial organisations. What are the key features that such solutions should possess?
Thomas S. Senger. Traceability of the business process that a document is following is a very important element. Capturing the paper as soon as it enters the firm at branch level allows tracking of all the steps and avoids the risk of losing, altering or mismanaging paper documents. This improves compliance and virtually eliminates the risks and the inefficiencies of paper-based business process, usually started at branch level and completed at a central site. Additionally it establishes proper electronic tracking of the chain of custody of documents used in the banking process and is thus a key element for compliance.

Fredrik Ring. I believe that the key features of  document management solutions and ECM are, for example, the use of alerting functions that combine search and workflow to locate unwanted deviations from security and risk policies, in order for them to be corrected. Presently, this is mainly a (semi-)manual process, which increases direct costs for Auditing and Risk Management functions. Much time is spent on finding information rather than correcting and preventing security and other risks. And, as the volume and  complexity of documents increases, so does the need for effective alerting and search capabilities.

Monitoring features, such as dashboards, will inform management immediately about important changes, thus speeding up reaction and driving management into a pro-active role. ECM will  help with restoring confidence in the financial markets,  and also bring benefits such as  avoiding costly redesign on current information structures, leverage current investments and encourage plans for future incremental improvements.

The financial sector is vulnerable, forced to divest non-core activities to gain cash. Using ECM tools will speed up the disentanglement and are beneficial for the financial position. Also, external reporting on compliance is becoming more and more important and will ultimately influence the image of the financial sector.

I am sure these are the most important parts, because it could drive future growth and customer retention, as many financial institutions still suffer from bad investments . Those who recover quicker will have an enormous competitive advantage and may use this compliance information as a marketing weapon.

FST. Are ECM solutions as valuable to small and mid-sized organizations as they are to financial heavyweights? Can such solutions deliver demonstrable ROI?
FR. At Logica we know that small organizations do not have the possibility to spend very much money on compliance. However, the numbers of documents –volumes and complexity – they are processing are increasing rapidly and their IT budgets should be spent on both innovations and compliance. SaaS solutions, in combination with offshore and blended delivery, can bring ECM solutions to mid-sized organisations with lower costs compared to ‘traditional’ IT developments.

The financial sector can benefit from the latest technology, the best practices and professional organization skills offered by Logica. Innovations can be implemented faster, while the service level will improve simultaneously and ROI will be positive thanks to cost effective ECM and the benefits of faster innovations and cost effective compliance.

TS. We have noticed that mid-sized FSI’s are less exposed to the trash title problems that the bigger ones experience. This means that they are used to competing in a different market, much more localised and where customer satisfaction and retention is vital. To remain competitive in this environment, the small and medium companies have to innovate at a different pace than the large ones, by being more creative and capable of providing a much better service to their customers. The adoption of Intelligent Capture and exchange technology is a proven strategy to increase effectiveness of all customers facing the operational value chain. Our experience shows an average payback between nine and 12 months.

FST. How can the implementation of an effective document management solution drive productivity and business effectiveness for financial organisations?
TS. Customer churning, as stated before, is the biggest enemy today. It is important to spend quality face time with the client, delegating the procedural check and functional complexities to the technology. In this way, it is possible to free valuable employee time in order to serve the client properly: IC&E and ECM with BPM are key elements in streamlining the business process, allowing the operator to focus in providing excellent customer service rather than spending time making sure that the procedure is correctly executed.

FR. We know that Auditing and Risk Management are currently spending 50 percent or more of their time collecting information, but this can be reduced significantly by using effective document management, and a faster response to limiting risks can save large amounts of money. Furthermore, collecting management information based on content can speed up decisions significantly as information you are searching for manually often shows to be incorrect.

Using intelligent search and analysis tools, the web can be crawled to create instant reports, and, by using workflows, this can be used by management/development to take actions to enhance market offerings. In addition, the removal of old documents via a controlled disposal process leads to certain benefits such as relevancy improvements, lowering compliance costs, lowering storage and backup costs and improving response times.

Streamlining the document flow will speed up the response times and using workflow in combination with Enterprise Search will create information and actions around persons with significant benefits.

FST. What do you think the next big moves in the document management space will be? Do you have any major developments on the horizon?
FR. Our vision for the future  include single ECM suites to drive down  IT-costs, as well as the use of SaaS (Software as a Service).The demand for outsourcing ECM and various supported business processes will increase.

Pressure on delivering information flows between companies, customers and stakeholders, which are becoming bigger and more complex, will also increase, and to fulfil these needs companies must have  access to the newest technologies, which need to be future proved and scalable. It will be difficult to fulfil such needs for financial companies as they try to drive down ECM costs whilst profiting from the innovation offered by ECM-professionals.

Other important developments include Improvements of user interfaces to create personal based views, direct access to customer specific information from various sources, business process monitoring and content analytics used to predict compliance. On demand analysis that is based on enterprise search and content analytics will also increase, along with the possibility to re-engineer critical complex documents to make them manageable.

Important future trends are also the adoption of the time and place of independent working, improved integration of ECM in other applications and the use of social networking and communities.

TS. One of the most important opportunities is the right integration of multiple channels. This means having the capability to receive the necessary information and documents via different mediums (paper, e-mail, faxes, e-transactions, mobile etc.) in different times at different steps within the process. This approach has to be bidirectional by nature: it is important to provide the right feedback to the right person, via the right medium, at the right time; for example, automatically notifying the client via e-mail that his salary is not sufficient to qualify for the mortgage loan and that he should submit his last years tax declaration. The client could then send it via fax or bring it to the branch for scanning. After a short time he will receive the confirmation via SMS that the process is now going ahead smoothly.

We call this approach the ‘Single Pipe’ as it normalises the information fluxes, both in inbound and outbound communication, and can provide tremendous competitive advantage when properly used with ECM, BPM and BRM (Biz Rule Mgt) technologies.