Dynamic Document Automation in EMEA and the US

Transcription

1 Market Briefing Paper metagroup.com META [6382] October 2004 Dynamic Document Automation in EMEA and the US A META Group Market Briefing Paper Sponsored by EMC/Documentum and Thunderhead and Organizations will spend vast amounts of time, money, and effort to implement the transactional systems that provide an internal record and account of actions taken with customers, suppliers, and partners and even more money on developing these personal relationships through their salespeople, marketing efforts, and buyers. However, they spend comparatively little on what the customer, supplier, or partner actually sees (that is, the documents themselves).

2 Contents 1. Introduction Executive Summary... 2 Summary What Is Document Automation? Current Systems Used by Organizations Market Drivers and Needs... 5 Document Volume...5 Document Generation Cost...5 Marketing...5 Document Effectiveness...6 ECM Integration...7 Operational Agility...8 Document Recipients Demands...9 Regulatory Compliance Technical Issues Considered by Organizations Bottom Line

3 1. Introduction This Market Briefing Paper investigates organizational drivers and needs with regard to dynamic document automation for the production of high-volume, highvalue personalized communications. The source data prompting this paper was gathered from a survey conducted by META Group for EMC/Documentum and Thunderhead. To conduct the survey, META Group interviewed senior-level executives within large enterprises to better understand their intentions and needs. The interviews were conducted in local languages in the UK, Germany, France, and the US. Those interviewed were senior individuals who had responsibility for or intimate knowledge of the processes associated with their organizations personalized document production. 2. Executive Summary One of the most obvious paradoxes within organizations is the disparity between their spending on transaction management/relationship development and their spending on the primary medium by which they are judged by their customers, suppliers, and partners that is, the documents and related communications that are actually received by those customers, suppliers, and partners. Organizations will spend vast amounts of time, money, and effort to implement the transactional systems that provide an internal record and account of actions taken with customers, suppliers, and partners and even more money on developing these personal relationships through their salespeople, marketing efforts, and buyers. However, they spend comparatively little on what the customer, supplier, or partner actually sees (that is, the documents themselves). For many organizations, these documents will be the primary interaction between themselves and the outside world. This imbalance is clearly displayed by META Group research that shows only 20% of organizations use specialized, commercial software in their document generation and production, implying that 80% use manual processes, homegrown software, or outsourced third-party document production. Cost (or perception of cost) is a primary reason for this situation. Managers generally see transaction management as an absolute requirement for business, while better communication is nice to have. Although transactions unquestionably are vitally important to enterprise operations, better presentation of information in the form of documents can have a significant impact on relationships with customers, suppliers, and partners. To drive down cost and improve efficiency, organizations need to automate more of their processes (including document production), which are often done manually now. 2

4 In the survey undertaken by META Group, 70% of respondents cited document production cost as being an organizational challenge. When asked why they were considering multiple delivery channels, 86% indicated they would be used to reduce cost. This focus on document generation and production cost is compounded by the amount of time (plus related cost) it currently takes organizations to perform critical but, in theory, simple tasks. Actions such as obtaining approval of regulated document content and ensuring that the correct version of that content was going into new documents took either days or weeks for 65%-70% of organizations surveyed. This indirect cost is often not fully identified by organizations, but is one of the greatest cost issues that they face. Emerging drivers like compliance, straight-through processing initiatives, rising expectations with regard to personalization, ease of use, attractiveness, and level of detail will mean that users must put more resources into document automation (DA) efforts. In the survey, 61% of respondents considered document quality to be an organizational challenge, while 51% thought the same about the personalization of documents. Unfortunately, standard documents and manual efforts will not be enough to respond to these requirements. In particular, the need to support multiple delivery and consumption channels will make it necessary to do this better. In the survey, 82% of respondents thought it was essential or advantageous to be able to format output for multiple delivery channels. For some, the perceived problem looks like a chore that they just have to get through, so they look for ways to get the chore done faster, rather than better. However, the truth is that the emerging force of these drivers and expectations means that there is competitive advantage to be gained by organizations that can see the strategic advantages of personalizing content more closely, rather than treating the subject as a pure production problem. It is noticeable that in the survey 74% of respondents stated they planned to use multiple delivery channels to develop competitive differentiation. Summary One of the more encouraging results from the survey is that, while at an early stage of adoption, users generally recognize the issues that are facing them. However, the survey also indicates that they are not yet thinking deeply about the solutions or potential benefits to be had. Although it is doubtful that there will be a sharp increase in attention in DA, we believe that regulatory compliance, changing infrastructure standards, acceptance of mobile devices, and changing user requirements and expectations (e.g., personalization) will increasingly force firms to address such areas during the next three to five years. META Group s 3

5 expectations are that most organizations will either purchase packaged solutions or outsource these areas by What Is Document Automation? The term document automation (DA) refers to IT-based systems that generate outbound correspondence in any document format from various data sources using formatting and process rules. Examples include legal documents, mortgage contracts, transaction confirmations, client correspondence, direct mail marketing, insurance policies, sales offers, etc. in essence, any document that can be generated from existing data sources using defined rules. Traditionally, many IT products and services in the DA space come from the output management market that is, tools that take printed report output and combine it with other data, and then reformat it into better-looking or more useful documents. The generated documents typically are formatted for additional delivery channels such as or the Web, contain more or less detail as appropriate, or link output from different reports. New-generation DA tools look beyond the print stream as a primary source of information and go directly to the source application or repository that would otherwise generate the report. These new-generation tools will come from new entrants, the enterprise content management (ECM) and customer relationship management (CRM) spaces, as well as some redesigned or expanded output management tools. 4. Current Systems Used by Organizations META Group estimates that the current DA market is only 20% penetrated by commercial software, implying that 80% is either homegrown (mostly) or outsourced. Most organizations using home grown capabilities rely on a combination of manual processes, custom-built software, and several different standard modules to generate their documents. This situation will be unsustainable for most organizations with any kind of volume, either in terms of numbers of documents or (especially so) in terms of the complexity and volatility of the documents generated. The survey data supports this assessment with a significant percentage of the survey group stating that its document production was not automated completely. Penetration of DA is particularly low in the UK and Germany, a surprising result given these countries normally high adoption of new technologies. Even in the US, the survey indicated that almost half (48%) of respondents had less than 60% of their document production completely automated. 4

6 5. Market Drivers and Needs Organizations are looking for more power to generate documents to customers, partners, and employees. They need this for a number of reasons. Document Volume The volume of document-based information that needs to go out is increasing. META Group research indicates that organizations are generating approximately 200% more content annually. Despite the growth of other online systems, documents remain the most frequent communication medium with customers, and most critical business decisions are driven by document-centric information and processes. Document Generation Cost Organizations have a basic business requirement to drive out the associated costs from internal and external reports and other document distribution. In the survey group, 70% of organizations cited document production cost as being a challenge they faced. In fact, cost was the most significant challenge identified by the survey group, beating document quality (61%), the time taken to develop documents (57%), and personalization (51%) as organizational challenges. Cost is also a function of the ability of an organization to efficiently implement certain operational document functions. The figures in the Operational Agility section (later in this document) show that, within the survey group, there would appear to be significant opportunity for users to make cost reductions and improve customer service, customer responsiveness, corporate agility, and hence associated revenue and profit levels by reducing the time scales needed to achieve a number of key activities. Marketing Organizations have a growing need to turn what is perceived as a cost-related function into a marketing-related function where profits or some other business benefit can actually be achieved (e.g., campaign management). The survey clearly identified this increasingly important driver when interviewees were asked to rate key criteria for selecting a document generation system. Their responses for the prompted, market-related functions appear in the following table. 5

7 Has the ability to format output for multiple channels Leverages user-defined business rules to assemble content Enables business users to create and change templates independent of IT Supports advanced personalization (e.g., by language) An Absolute Requirement Very/Slightly Advantageous 22% 60% 18% 18% 50% 32% 15% 61% 24% 10% 40% 50% Irrelevant or Don t Know Document Effectiveness Because people get so much information, each document needs to be more effective to get the receiver s attention. Effectiveness is a function of two primary factors document content and delivery channel. From the table above the survey indicated that 82% of respondents thought it was essential or advantageous to be able to format output for multiple delivery channels and that 50% of the surveyed companies looked to advanced personalization to ensure effective document content. The importance of being able to use the most effective delivery channel was also highlighted in the survey results through the current and planned use of a range of delivery channels. In addition to the highly used, standard print and voice channels, the surveyed companies also indicated the following usage: Delivery Channel Used or Planned Within 12 Months Web 89% 87% XML 37% PDA 35% SMS 30% Interactive TV 20% The use of many of the above channels also contributes greatly to the demand to reduce the costs of document production. Of the surveyed companies, 86% indicated that multiple channels were being used to reduce costs. However, effectiveness was the prime positive driver, with 71% of respondents citing to 6

8 meet demand, 69% to develop competitive differentiation, and 74% to improve the customer experience. ECM Integration DA projects seldom exist in a vacuum. They build upon and rely on other ECM initiatives. The following table shows responses to a question asked about whether the subject includes several ECM components in DA activities. If there is no need for integration, respondents were asked to specify whether the requirement was now in place, planned for the near future, or simply wanted but not planned. Now Planned Wanted Now/Planned/ Wanted Not Wanted No Response Workflow 28% 15% 11% 54% 40% 6% Document 26% 8% 16% 50% 44% 6% version control Document 52% 10% 8% 70% 24% 6% security Storage and 44% 7% 9% 60% 34% 6% management of content Check-in, 38% 9% 14% 39% 33% 6% check-out Annotations 18% 6% 9% 34% 60% 6% (sometimes called redlining) Web-based 15% 18% 11% 44% 50% 6% collaborative tools Records management 34% 10% 15% 59% 35% 6% Although significant numbers (35%-60%) apparently do not see the need to integrate ECM capabilities with DA activities, most respondents recognize how these areas are inter-related. The highest perceived need was to make use of ECM document security, storage, and records management capabilities, with only one-third looking to use annotation systems in DA. We believe that, through 2007, DA will increasingly become part of the ECM marketspace. 7

9 Operational Agility To make their operations more agile and reduce time to market, business planners and analysts need to be able to define what goes into documents with minimal IT involvement. META Group s belief, supported entirely by the survey results, is that organizations lack agility and take far too long to get effective document changes implemented. When we asked how long it took organizations to perform three critical but, in theory, simple tasks, the following delays were indicated by the survey group: Engage and attain compliance as well as legal department s approval of regulated content Ensure appropriate versions of regulated content are inserted in finished documents across your enterprise Check and correct errors and inconsistencies in transactional documents and correspondence Within Minutes Within Hours Within Days Within Weeks Within Months Unable No Answer 5% 14% 48% 22% 5% 4% 2% 7% 15% 57% 9% 7% 2% 3% 18% 38% 32% 6% 0% 4% 2% Such delays are simply not acceptable within a modern, market-led organization. The involvement of the lines of business (LOBs) within the document life cycle (definition, implementation, and maintenance) is also a key ingredient in the operational agility and effectiveness of an organization. Operational agility and effectiveness require that the management of the LOB have high levels of involvement in and control over the document life cycle. It is META Group s view, supported by the survey data, that currently this involvement and control are much too low for organizations to gain the optimum commercial effect and cost structure from their document generation capabilities. 8

10 The survey results indicated the following percentages where LOB managers were either completely/highly involved or in control of the three stages of a document: Document definition 75% Document implementation 46% Document maintenance 44% Again, such levels of LOB control or involvement are simply not acceptable within a modern, market-led organization. Document Recipients Demands Recipients demands and expectations are getting higher in terms of the following: Attractiveness: They want a document to have color and images, to be easily navigable, and to have corporate branding. Targeting: They want to receive only the information relevant to them. Channels: They want to receive consistent information via print, , PDA, digital TV, and Web pages. Level of detail depth: Can they choose to view deep details, or can they see a summary? Completeness: Is all the information they need in the one document, or do they need to reference several of them? Easy navigation: Can they move through the document easily to find the information they need? Is it easy for them to take follow-up actions? Regulatory Compliance Regulatory compliance dictates what kind of information needs to go in to the documents. The organization must be able to prove that it is following these rules and document why each recipient got what they did. The time taken for an organization to engage and attain compliance and the legal department s approval of regulated content has been dealt with above. From the survey data, the delays associated with being able to track content usage are as unacceptable as the other delays encountered. Of surveyed organizations, 32% were unable to track content usage, and 26% said it would take them days or weeks to accomplish such a task. 9

11 6. Technical Issues Considered by Organizations LOB managers are now working with their IT departments to actively address issues that they are aware will underpin their ability to successfully deliver the expanding objectives that they have for document production. The most significant among these issues are as follows: Open standards: Does a solution conform to currently accepted views on open standards, thereby establishing long-term agility for the solution s development? Data sources: Does a solution link automatically and seamlessly with existing organizational databases, ERP systems, print streams, and document repositories? Rules engine and syntax: Is a solution powerful, but easy to use and understand? Development environment: Is a solution easy enough for business analysts to use and powerful enough to handle complex document generation? Scalability: Can a solution cope with the volume that is needed? Archiving: Are the generated documents stored effectively? Records management: Can we prove that each document has been created correctly and has not had any unauthorized modifications? Channels: Can a solution support output to , Web, print, PDA, etc.? Analytics: Does the solution generate reports on the documents generated? Delivery: Does a solution manage printing or online delivery of the documents, or does it have to link to systems that manage that delivery? 10

12 7. Bottom Line Traditionally, organizations have been loath to spend in this area, and many firms are running the same core programs for generating output built on pre-1990 criteria. Moreover, such groups have been largely disconnected from core businesses and, in many cases, strategic IT projects. Although it is doubtful that there will be a sharp increase in attention in such areas, we believe that compliance, changing infrastructure standards, device obsolescence, and user requirements and expectations (e.g., personalization) will increasingly force firms to address such areas during the next three to five years. META Group s expectations are that most organizations will either purchase packaged solutions or outsource such areas by Organizations that address DA from a strategic point of view are much more likely to realize important benefits beyond the expected time and cost savings. DA can help organizations with business process stages that are usually done manually, can communicate better and more useful information to clients and suppliers, and can generally make better use of their document resources. Jeffrey Mann is a vice president with Content & Collaboration Strategies, and Robert Redgate is a director consultant with META Group Consulting. For additional information on this topic or other META Group offerings, contact info@metagroup.com. 11

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