Planning for success

Penny- and pound-wise is the best motto for IT decision-makers in the current economic climate. The budget squeeze is tightening and organisations need to spend wisely, and dedicate time to ensure they get real value for the money they spend.

New legislation and corporate governance issues have placed increasing pressure on companies to manage their corporate records more effectively and openly.

Paul Mullon, Marketing Director, Metrofile.

SA is in the same boat as the rest of the world and facing similar economic pressures. South African companies therefore also need to be certain that any business initiative provides real value. Local businesses are also faced with the depreciated value of the rand against major currencies. This means software prices and maintenance costs are disproportionately high. We must focus on getting the most out of every tool at our disposal to remain competitive.

Content management (CM) is one way in which corporates can gain measurable returns on their investments in terms of money saved in the long-term, improved productivity and compliance with legislation and industry-wide best practices. The catch, however, is that CM needs to be very carefully planned. Gartner estimates that planning and development will account for at least 65% of the start-up costs for a typical enterprise CM system.

Gartner research also shows that the second highest priority for CIOs in 2002 is CM, not because it is the latest fad, but it is one market segment producing real, tangible benefits. Another reason for its high priority is that the volume of content in paper and electronic format is increasing significantly and becoming impossible to manage without a formalised CM system. In addition, new legislation and corporate governance issues have placed increasing pressure on companies to manage their corporate records more effectively and openly.

This all suggests organisations need to implement CM, but at the same time, they need to justify and validate the costs. Planning according to measurable business outcomes (MBO) is the only way to do this effectively.

MBO is not merely another measure of return on investment (ROI). As the name suggests, companies need to define exactly what it is they are trying to achieve by implementing a particular solution. In some cases the benefit will be financial and ROI will be a useful measurement; in other cases it could be improved customer satisfaction or productivity improvements, which are harder to measure. Nevertheless, before a cent is spent, the desired outcome needs to be specified, benchmarked and then continually monitored once the project is completed. In many instances there could be more than one benefit - all need to be identified and tracked.

The first step in this process is to identify the business issue. This could be the cost of administration in a department, poor customer service, poor productivity, lost documentation, legislative pressure or business risk.

The second step is to identify the costs of the current process - in other words, the costs of not implementing a CM plan - and other associated problems within the identified area of business. These must include content-specific costs, including the time wasted on document-related tasks.

Gartner estimates that the amount of time wasted by knowledge workers on document management-related tasks ranges from 20% to 30% of their time. It expects this to increase to 30% to 40% by 2003.

The next step is to identify the opportunity cost of doing nothing: risk of litigation, the cost of lost clients, delayed payments and rework all need to be factored into the equation. As an example of direct money loss, assume an average worker`s compensation is R55 000 per year. Even if only eight hours a week was wasted (Gartner`s 1997 estimate of wasted time), this would come to R11 000 wasted per year - or R11 million per year for an organisation with 1 000 users.

Finally, Gartner suggests organisations identify the specific benefits a CM system will deliver by asking a number of questions:

• .         What is the current volume of documentation?
• .         At what rate is this volume increasing?
• .         How are the documents created?
• .         How are the documents delivered?
• .         How many people must access, edit or view the document, and at what intervals?
• .         How often are the documents updated and by whom?
• .         What is the role of the documentation in any compliance or quality assurance processes?
• .         What is the business value of the document?
• .         What are the document`s workflow requirements?
• .         How is it used, or could it be used across business processes?

Only once the MBO planning has been done should the project start in earnest. This process will assist decision-makers in understanding what their current costs are - and this will act as a benchmark. All future measurements will be held up to this figure to identify exactly where benefits have been delivered and if they are according to expectations or not. The business will then have the basis from which to determine whether the MBO have been achieved or not.

Critical to the success of this process is executive ownership. The MBO must be owned at executive or steering committee level with representation back to the board. Palming the process off to a project manager or IT manager without direct access and input from the management executive will almost certainly result in a project hamstrung by penny-wise and pound-foolish decisions.