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No one cares about compliance

September 8, 2013

At least not enough to pay for it, it seems to me.

Here’s where I’m coming from: I’ve been at Doculabs helping clients for a little over six years now. In that time, I’ve worked with something on the order of 120 Fortune 1000 organizations directly and had substantive discussions with probably four or five hundred others at conferences, through marketing events, and doing general business development. And I can count on one hand (with some fingers left over) the number of organizations I’ve seen fund any kind of enterprise content management (ECM) initiative based on risk or cost avoidance alone.

Look at it this way: every Fortune 500 company has a substantial e-discovery problem, big time compliance constraints, and a serious over-retention problem. And lots of them will tell you that they are “very, very concerned” about these and that they have the support to do something about them (or at least are getting close to getting that support). And, imagine this, they may even have the money to hire a strategy consulting firm to help them build out the business case and roadmap for solving these problems. But no matter how good that strategy and roadmap may turn out to be, when the chips are down and their CXOs have to decide yea or nay, I’ll always put my money on a nay—especially given the current economic climate.

Why’s that?

First, cost and risk avoidance are always less attractive than direct cost savings or revenue generators. And in any given budget cycle, it’s a 100% certainty that your CXOs are reviewing a portfolio of projects that include a good many that drive direct cost savings or revenue generation. Next to them, your ECM initiative to avoid cost and risk will pale in comparison.

Second, consider the organizational change management required. Let’s assume that you make the cut and survive the first round against all those direct cost savings and revenue generating projects. Shortly thereafter, your CXOs will calculate the change management required to achieve the return your project promises. Here’s where things get really bad for ECM, because it order to impact e-discovery, compliance, and over-retention in any meaningful way, ECM requires that pretty much every knowledge worker has to change the way they work every day, day in and day out with every document they touch. That’s a big deal at no matter the organization and will make your CXOs pause, because I can bet you that almost no other proposal they’re considering will have quite so big an organizational change management price tag.

Third, and finally, consider the riskiness of the proposed initiative, i.e., how likely is it to succeed (or fail)? To answer this, your CXOs are going to look into two things:

  1. How many successful ECM programs have they seen in their travels in the wider world of business? (Answer: not many)
  2. How often has their organization succeeded in this kind of initiative? (Answer: not often)

On the flip side, they’re going to ask, how would we be better off funding the ECM initiative rather than doing more of what we typically do in our operations, e.g., building another cell tower, bringing another crusher on-line, drilling more wells, hiring more financial advisors, standing up more factories, etc.?

Answer: we wouldn’t be better off, because the huge increase in cost savings, revenue, or margins due to these projects will more than offset any e-discovery, compliance, or storage cost and risk we currently face.

The result? Unless you can argue successfully for a direct line to revenue, savings, or margin, don’t hold your breath to get your ECM initiative funded.

The Final Word

So much for my admittedly biased perspective. Have a different one? Been part of an ECM  initiative that was funded based on cost or risk avoidance alone? Think I’m crazy in general? Great! Jump in, and let’s get the conversation started!

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8 Comments leave one →
  1. September 9, 2013 8:53 am

    Why I left FileNet/IBM ECM……nobody cares!!

  2. September 9, 2013 5:04 pm

    Hi Joe & Dave,

    I think the future of ECM and EDRM is not in big-bang projects, but as a platform for incremental, ongoing improvements where the platform supports rapid, near IT-deptless creation of lightweight business processes that often centre around documents.

    This is bad for big-bang, high-end vendors because the RoI of projects can only stack up through a theoretical roll-out across the whole organisation. Until 20-30 of these agile deployments happen, RoI will remain negative.

    I think both of these factors, along with the tight Office integration, explain SharePoint’s rise in popularity. But I suspect that the move towards SaaS in SharePoint 2013 is largely aimed at competing with online DM platforms like Huddle and Dropbox, who do DM at a fraction of the cost.

    Personally, if these platforms took recordkeeping even a little bit seriously (it wouldn’t take much; just inhibit deletion and add a robust version history and audit log), I would be recommending them to my clients today. But for whatever reason they seem a bit tone-deaf towards compliance as well. Perhaps even *their* clients aren’t asking for compliance as a high-priority feature!

    • September 10, 2013 5:56 am

      Stephen,

      I couldn’t agree more about vertical (departmental application) versus horizontal (enterprise big-bang) approaches. And while it’s true that traditional ECM platforms have been way skewed towards the latter, of late I’m seeing that shift a bit for a couple of reasons.

      First, organizations are getting more mature about ECM and are doing a better job linking it to direct business results, rather than ECM for its own sake.

      Second, the vendors themselves are beginning to develop their products this way, i.e., more along business application verticals (e.g., asset management, contract management, etc.) than purely as a platform.

      And third, as you mentioned, cloud DM has come in at a fraction of the price and a fraction of the effort and has the potential to eat a good portion of their lunch if they don’t do something about it–and Microsoft is doing something about it in a big way with how they’re going to market with SharePoint/O365 right now…we’ll see if it works.

      Thanks for taking the time to jump in and join the conversation!

      Cheers,

      Joe

  3. Wouter van den Heever permalink
    September 10, 2013 11:45 am

    Hi Joe
    My company’s ECM journey started in 2004 and will forever be evolving as technology and business requirements change. We started an ECM programme for empoyee efficiency and business continuity. It has been an uphill battle, but today our ECM solution set is well entrenched and adopted. There’s however still pockets of the business that requires ongoing change management

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