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Issue Date: December 2003

The data is the business

1 December 2003

Document management systems (DMS) are often viewed in isolation from business strategy, as if the management of company data and documents is a functional task akin to the maintenance of the company building. In reality, however, the management of company data and documents lies at the core of the business, and should form a fundamental component of boardroom strategy.
While ERP systems have been widely implemented across major global and local corporations, these systems generally only manage 20% of company information. The other 80% of company information resides outside of the ERP system. What companies need to realise is that this 80% is in fact critical to the bottom line.
Despite a slow start, this realisation is finally happening - powered by four key business drivers that are forcing more and more businesses to take steps to deal with the electronic management of company information.
Driver #1 - the information explosion
The world is staggering under digital information of all sorts: from e-mails to word documents to PowerPoint files and websites... the compounding growth of digital communication is rapidly creating stock piles of information that have to be managed - as a matter of extreme urgency.
Even if it is not financially viable to do so, companies simply have to get a grip on their information. The alternative is a scenario where it becomes increasingly unlikely that the company will be able to pull itself out from under the growing pile of data. In essence, the data will start to dictate the possibilities for the business - and as any economics major will tell you, this should never be the case.
Driver #2 - the value of information
Information housed outside the scope of a conventional ERP system contains varying degrees of value for a business. In many instances, some of the information will contain little real value.
But much of this information will be extremely valuable to the business, and it is important to note that this business value can be grown through effective management and use.
Hypothetically, let us say that 30% of the business information residing outside the scope of the ERP system contains high business value. Through the use of an integrated DMS, users will add to the information. With every user having access to the information through the DMS, and with these users adding to and refining the information with every use, the value of that 30% will increase significantly. Within two years of this information being incorporated into the ERP system the company will have leveraged additional value from data that was simply lying dormant.
Driver #3 - increased revenues
CRM (customer relationship management) systems are today considered to be critical business tools, and have boosted the bottom line profitability of major companies by establishing and maintaining brand centric interactions with customers and partners.
If a CRM system is connected to an ERP system that is not backed by an integrated DMS, the operator will have access to client information, profiles and so forth. But without an enterprise wide DMS integrated with the ERP system, the operator will be unable to access correspondence and other interactions between the client and the company.
If the operator does not have access to all of the client information, the high levels of service that are so critical in maintaining good client relations are undermined. The ultimate goal of CRM systems has to be a full and comprehensive service to the client in a single phone call. If the operator does not have access to all of the correspondence between the client and the company, he will have to break contact with the client. And as we all know, this break can be the difference between maintaining brand loyalty and losing a customer, which in turn is the difference between loss and profit.
Driver #4 - compliance
The ECT (electronic communications and transactions) Act has recently seen electronic signatures and other aspects of electronic communication encapsulated in law. The result is that companies are now obliged to meet electronic communications guidelines laid down by government. And the Promotion of Access to Information Act has even deeper ramifications for the way businesses structure their company knowledge.
For example, letters of employment have to be kept on file for four years after an employee has left the company, and the company has to be able to access those and present them.
If a document is required by government or a court of law and the company cannot produce it, the penalties catered for by the legislation can run into the millions. Compliance with legislation is an issue that now affects all companies, and a fully integrated DMS offers businesses the ability to comply with legal requirements through full access to all documents and company data - now, and in the future.
If the management of all company information does not form part and parcel of the strategic work carried out in the boardroom, then the data cannot really be said to be under control. And, to put it bluntly, rogue data can impact as badly on a business as any other variable; like a schizophrenic rand or a disgruntled employee turned blackmailer. Bad management of company information may not be as newsworthy as the aforementioned, but there is no doubt that it costs a whole lot more.
For more information contact Rob Cells, Engineering Informatics, 011 791 1028.

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