Approaching ECM/BPM

Enterprise Content Management and Business Process Management are not merely IT projects. Ascending on an ECM/BPM path requires meticulous planning, execution, and measurement. For all stakeholders, it is essential to internalize that such an initiative will definitely alter the way the organization executes its business, positively.

ECM/BPM is about business transformation. It is about aligning people, process, and content with business priorities. So, it is essential for an organization to define how this alignment can be achieved. Any organization that is serious about content and process management must define an ECM/BPM program.

ECM/BPM Program

A program is mandatory for any organization contemplating ECM/BPM. Putting a program in place does not mean that the organization should look at executing the program in a massive way. The organization need not, and in many cases should not, proceed with a big bang approach to ECM/BPM. At the same time, projects should not be executed in isolation thus creating silos within the organization. Defining a program helps the organization in setting the direction of the ECM/BPM journey. Even if the execution approach is small and tactical, a program will let the organization align such steps in the same strategic direction.

An ECM/BPM program involves four steps:
• Articulating the objectives
• Planning
• Executing the plan
• Measuring the program itself

Objectives

It is essential that the organization understand what the objectives of this program be. Such a program will be deemed to fail unless there is buy-in from all key stake holders in the organization. The top management, functional heads, line managers, and all employees of the organization should be prepared well for the change and its benefits.

The commonly achieved benefits of such a program are:
• Improved organizational efficiency and effectiveness
• Better control of the operations
• Increased collaboration between functions
• Better customer satisfaction levels
• Ability to scale up operations better
• Cost reduction

While all or many of these benefits can be achieved in an ECM/BPM program, it is paramount to identify the primary potential benefits. The goal for potential benefits is unique for an organization, so the first step of such a program is to identify them. The most important potential benefits will be the objectives of the program.

Defining the objectives will be an exercise where representatives from all key stakeholders participate. Potential benefits can be defined only if current pain points are enumerated and analyzed. This is a vital exercise since a solution cannot be arrived at before understanding the problem in detail.

The outcome of this step will be clearly articulated organizational objectives for the ECM/BPM program that are endorsed and internalized by the key stakeholders.

Planning

The previous step defined what the program will bring to the organization. The planning step will define how the objectives will be met, who will make it happen, when and where the benefits can be realized.

The first step will be to put together a team who will manage and monitor the planning and execution of the program. The proposed team should have representation from the top management, business units, user community, information technology, compliance group, and other support functions.

This phase will flush out more details about the individual group pain points and areas of improvements. Besides, the step will define tactical and strategic approaches in dealing with the problems in hand. The most significant part of the planning process is to put together a potential organization-wide roadmap for achieving the objectives.

The last priority for the planning phase will be to prioritize the tactical initiatives that are achievable in the shorter timeframe and identify potential execution plans.

Execution

The execution phase will focus on identified and approved tactical plans. It will involve looking at these tactical plans, defining the problems in detail, identifying potential solution, identifying necessary technological improvements, getting internal or external teams to bring execution capabilities, and finally carrying out solution projects.

Execution phase is a long-term process and will involve a multitude of internal teams, technologies, vendors, and administrative functions. The program team will play a significant role in this phase to ensure that each tactical plan execution is fully aligned with the organizational objectives defined for the program.

Measurement

The most important and the most neglected step in an enterprise wide program is measuring. An organization should have a clear understanding of the ROI (Return On Investment) at every step of the program. ROI is nothing but a quantification of the objectives. Objectives are easy to enumerate, but difficult to quantify. In most cases, measurement and monitoring are lost in the execution step.

The program team will need to define measurable matrices for each tactical plan. These parameters are to be reviewed during and after the execution of the tactical plan. The findings are then to be incorporated into future tactical plan execution and approvals. This will ensure that the ROIs are accrued in the right direction throughout the program.

The Great Divide

IT and business groups within big organizations haven’t had the best cohesion ever.  This is a much debated topic in various books, blogs, discussion forums, seminars, and workshops. The existence of such a divide is well acknowledged and accepted. Why do I want to talk about it again? I believe that many of the discussions around this topic were too theoretical. But it is time we look at the issue through a much simpler pair of lenses. It is important for this blog because, any discussion about enterprise BPM or content management will not be complete without understanding this particular issue.

Why don’t IT and business groups talk to each other in the same language? I would say, in many organizations:

• They don’t take the trouble to understand each other
• They have their own respective priorities and budgets
• There may not be anybody whose job is to ensure that these groups talk to each other
• The thinking is so compartmental that people fail to see beyond their immediate problems and tasks
• Bridging this gap is pretty lower in the priority lists of the executive management

There could be another hundred such reasons that can be enumerated. The simpler fact is, we are talking about people! They like to be in their comfort zones, as long as there are no major incentives to break through them.

Historically, companies created innumerable inefficiencies within their four walls. The hierarchies, process controls, policies and the bureaucracies associated with them hamper the smooth sailing of organizations. They could afford to ignore such issues till recently. But, times are changing. The current economic scenario puts a lot of pressure on organizations to cleanup their acts. With the workforce shrinking and pressure to perform in difficult market conditions increasing, businesses have to look at better and smarter ways of doing things. So, it is paramount that companies try to bridge this divide.

Is there some magic to solve this issue? If there were, somebody would have succeeded by now. I have more questions than answers:

IT is a support group within companies. So, why do they need separate budgets? Should they derive their revenues from their internal customers? Why would a company year on year set aside x amount of money only as a cost budget? If there is a customer-vendor relationship between IT and business groups, will there be improved interactions between them? How many companies out there tried and tested such a model?

Do companies follow a process of discussing about newer IT initiatives to all business groups within the company? Are there initiatives to share learnings from one group’s experience with the rest?

Did anybody try to create a bridge group with leaders from IT and business, thus forming a small team with the sole responsibility of formulating IT solutions for business problems?

Has any organization tried to utilize the skill levels of IT services vendors in bridging this gap?

ROI for ECM Implementations

ROI is the most important criteria for any enterprise project initiatives. It is all the more important for ECM/BPM projects. This is because ECM/BPM will definitely alter the way a company is carrying out their operations. So, it is essential for companies to understand ROI before deciding on an ECM/BPM course. Most organizations actually carry out an ROI calculation exercise to arrive at the feasibility of the initiative. But these calculations are seldom revisited after the implementation of the systems. There can be three potential outcomes of the decision to go ahead with the project: Success, failure, something in-between. If the project is successful, the organization do not see a need to waste time on re-looking at the ROI calculation, unless the vendor wants to come up with a case study. Even in cases where case studies are made, the ROI part of the case study is arrived at more to sustain the feel-good-factor of the vendor and customer. If the project bombs, there are no discussions on the ROI because it is evident that there are no returns at all. If the outcome is something in-between, the debates will be on how the system handles the business requirements sufficiently, how this could have been better, whose fault it is, and what are all the reasons why the system is like this and not better. In my experience, ROI is often a forgotten term post technology and vendor selection.

How do we arrive at the ROI for a potential ECM/BPM implementation? I don’t think there is a straight forward answer to this. I have been searching for years to find out whether there is a spreadsheet out there which will churn out the ROI for a FileNet implementation, and as you might have guessed, couldn’t locate one. ROI calculation is never a straightforward exercise. It depends on a lot of factors.

ROI is nothing but a quantification of the benefits the system provides the organization. The benefits are easy to enumerate, but are hard to quantify. For example, any ECM/BPM implementation will provide many of the following benefits: Cost reduction, improvement in efficiency, increase in control, ability to scale up operations seamlessly, better disaster recovery capabilities, and improved end customer satisfaction. How do we quantify benefits like improved end customer satisfaction or better disaster recovery capabilities? It becomes all the more difficult to this exercise upfront and as part of the decision making process!

One needs to start somewhere. I believe that the first step has to be prioritization of the potential benefits of the proposed system. The priorities could change significantly from one organization to another. Prioritization becomes easier if there were a goal with which the whole thinking process started. Ideally this is an exercise the organization needs to do by itself without involving the vendors. Then convert these benefits to numbers!

As an example, consider an insurance company with about 100 branches across the country considering an ECM/BPM solution. At an average, this organization processes 50,000 new life insurance policy applications per month. They have two employees per branch to process the applications at the branch level and a team of 60 employees to process the application at the central office including the underwriters.

Assume that the goal for an ECM/BPM implementation is set as increasing efficiency of operations The next level benefits are of importance are ease of scaling operations, cost reduction, and increased control of operations.

Here is a sample back-of-the-envelope type calculation.

Assumptions
Monthly volume	50,000
No of branches	100
No of processing employees per branch	2
No of application processing employees in all branches	200
No of processing employees at HO (Head Office)	60
Average time required to process one application in minutes	8
Average number of productive hours per day	7
Average number of days per month	22
% of processing which can be automated using workflow rules	25%
% of HO processing that can be pushed to the branch users	40%

Calculations
Average Daily Volume	2,273
Average Daily volume per branch	23
Average no of applications processed by branch employee	11
Average no of applications processed by HO employee	38
Average no of applications that should be processed by an employee per day	53
Average no of applications processed/employee/day	8.74
Average processing efficiency of an employee	17%
No of applications which can be processed at HO/hour manually with current staff	450
No of applications which can be processed at HO/day manually with current staff	3,150
Volume/month which can be handled	69,300
Volume that can be handled/month with automation	92,400
Volume that can be handled/month by pushing work to the branches	154,000
Increased efficiency in terms of processing volume	208%
Average no of applications that can be processed/employee/day	27
Average processing efficiency of an employee after ECM/BPM implementation	51%

Similarly, one can come up with calculations for other benefits. Take the same example above and look at it from a cost reduction perspective. Assume each policy application set consists of 20 pages at an average, and the set is photocopied 6 times during processing. Xerox charges are X per page and the total amount spent in one application processing for photocopying alone is 6 x 20 x X = 120X. The monthly average photocopying bill is about 50,000 x 120X = 6 Million X.  Once the organization implements an imaging solution, the savings will be 6 Million X – scanning cost.

Assume that the organization has decided to keep 4 months of current processing applications at the HO before sending them to archive. It amounts to about 200,000 applications which will consist of about 4 Million pages. These records are kept in a records room in the HO which is about 1000 square feet in dimensions. If the per sqft rental is Y per month, the organization will be spending a total of 12000Y in a year to keep the records for reference, before sending them to archive. With an imaging solution, this cost can be eliminated and all the physical records can be sent for archival from day one onwards.

This exercise goes on like this until the organization quantifies all the potential benefits. Once it is done, we have one side of the ROI equation. Next is to figure out the cost of the ECM/BPM solution. That is an involved exercise, and let us look at it next time.