Is Compliance The Main Reason Driving ECM Adoption?

With regulators making it mandatory, installing document management systems seems to have become a necessity rather than a need.

Companies today are faced with difficult decisions regarding proper management of company documents. It’s a common conundrum that CTOs and CXOs constantly face. On top of that, companies have to comply with a barrage of laws and regulations that make it absolutely critical for them to manage and archive documents as per the laws and regulations of the region they do business in.
Compliance factors and regulations have got companies worked up and paranoid about the ramifications of not implementing an ECM or DMS solution. Essentially, ECM as a solution empowers an enterprise to manage and control all its documents. But with regulators making it mandatory, installing document management systems seems to have become a necessity rather than a need. There is a growing demand for enterprise content management systems that will help companies cope and comply with all of the said regulations. What is worrying is that companies seem to have developed a mob mentality rather than weighing their requirements and choosing a solution that, in the long term will, not only meet their requirements but be a justifiable return on investment.

I am in no manner discounting the importance of compliance. However, what I am suggesting is that the ECM solution be selected with care and after due diligence. The decision makers need to take into consideration the business needs of the organisation, the cost and features that are offered, and the long-term goals of implementing such a solution and if it figures into the broad enterprise goals. The decision is as much operational as it is strategic.

An effective ECM solution should ensure that users have secure, reliable and uninterrupted access to documents and content. All documents generated by the company and its personnel like E-mails, Word documents, Spreadsheets, Presentations and transactional documents need to be carefully recorded, archived and made available when needed. Systems chosen for document/content management have to be secure. The solution must not only ensure proper control over the use of classified and critical data, but also guarantee that users don’t have to wait very long for important documents that they need. The user interface also needs to be intuitive, responsive and, easy to use and navigate. The ECM solution must also meet auditing standards.

When information is easily available to users in real time, it improves their efficiency and allows them the time to focus on their core tasks. Operational efficiency is also enhanced. An effective solution allows users to make informed decisions and prepare documents that are compliant to all regulations and policies that govern them. An effective ECM solution helps independent directors fulfill their responsibilities by enabling instant access to information, reports and documents. This makes them more effective and gives them the ability to play an inclusive and participative role in company affairs. This has become even more of an imperative since the Securities and Exchange Board of India amended Clause 49 of the Listing Agreement on 8 April 2008, to extend the 50% independent directors rule to all Boards of Directors where the Non-Executive Chairman is a promoter of the Company or related to the promoters of the company.

A good ECM solution helps bolster and supplement the compliance strategy of a company. It reduces regulatory as well as litigation risks that the enterprise faces. It additionally ensures reduced mismanagement of data, and lays the foundation for companies to secure their information and utilise it wisely.

The Forrester ECM report 2010 says that a whopping 72 percent of those surveyed would like to increase deployment or usage of enterprise content management products. It’s more heartening to note the break-up, where half of the respondents said they would invest in Web Content Management, Records Management and Digital Asset Management. So clearly, the industry should be delighted with the predicted demand for ECM solutions and the positivity in the market.

However returning to the argument I was making - Will compliance be the sole reason for companies to hop on to the ECM bandwagon? Or should there be a long term objective? If industry insiders are to be believed, Compliance, risk mitigation and eDiscovery are some of the biggest drivers for ECM. There are of course others who disagree and believe that although compliance is important, it’s not the primary driver for companies implementing ECM strategies. The enormous volume of growing data is forcing companies to look for solutions. Also by not nipping the problem in the bud, companies run the risk of projecting themselves as inefficient. That would be disastrous in PR terms for any company, no matter how indomitable their credibility in the market may be.

Whatever the reasons behind companies adopting ECM, whether they are paranoid or control freaks, no one can argue with the fact that ECM presents them with the right tools to reduce storage costs, reduce operating costs, increase productivity, increase customer satisfaction and ensure business continuity. That in my opinion makes a good case, any day!

The author is the Senior VP, Newgen Software.