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Is It Time To Consider On-Demand ECM?

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  • 1. Is It Time To Consider On-Demand ECM? Vendors explain why deploying ECM (enterprise content management) through SaaS (Software as a Service) may be right for your company. Integrated Solutions, May 2008 Written by: Fiona Branton SaaS is gaining a lot of ground among companies looking for lower-cost ways to deploy and manage a variety of business applications. SaaS, often referred to as on- demand software, is simply a different way in which software is developed and delivered. In this case, a third party hosts the software; users pay a monthly fee to access the features of the software on a service basis rather than investing in an on- premises infrastructure to support the application. It can be a low-cost way for businesses to obtain the benefits of commercially licensed, internally operated software without the associated complexity and high initial cost. Many software manufacturers are beginning to offer their applications based on the SaaS concept, with SaaS versions of CRM (customer relationship management) software (e.g. Salesforce.com), in particular, finding a high degree of acceptance by the business community. SaaS versions of ECM applications, on the other hand, have been somewhat slower to catch on. According to a 2007 Gartner study, only about 3% of the roughly $2 billion ECM industry is using SaaS. At least part of this is attributable to the fact that much of the information contained in content management systems (i.e. general ledgers, balance sheets, purchase orders) is especially sensitive, as well as being vital to company operations. Many companies are wary about storing this valuable content outside of their organizations and having it managed by third parties. That said, the demand for ECM SaaS applications is on the rise, especially with small to midsize businesses. According to Nucleus Research, 12% of the companies it surveyed in 2007 are considering adopting on-demand content management applications because they are faster, cheaper, easier to deploy, and provide businesses with greater flexibility than traditional on-premises solutions. With the continuing growth in the volume of electronic information, the introduction of new online collaboration techniques, and the increasing need to comply with tighter regulatory requirements, more organizations are starting to look at affordable SaaS- based solutions to meet their content management challenges. Ron McClellan, director, OnBase OnLine & Hosted Services, Hyland Software, says demand for SaaS-based solutions crosses all enterprise sizes, vertical markets, and
  • 2. geographic characteristics. “The decision to use a hosted deployment typically comes down to one of several factors: resource constraints, either budgetary or other IT- related limitations, such as not enough staff, knowledge, or time,” he notes. “Often, it is a philosophical approach to doing business; many companies are outsourcing more and more of their IT tasks. In many ways, SaaS is an extension of that philosophy.” According to James Till, chief marketing officer for Xythos Software, the fundamental SaaS benefits of not having to own, install, or manage software and related hardware are the primary reasons organizations are choosing the SaaS option. “In addition, customers have stated a desire to improve the security and their ability to track the use of vital organizational content as reasons to begin using a SaaS solution,” he adds. “The appeal of being able to select an ECM service online and begin using it instantly has also been compelling. Our SaaS customers often seem surprised at how simple this process can be when compared with implementation requirements for traditional ECM deployments.” ECM SaaS Solutions Offer More Than Just Cost Savings ECM SaaS solutions typically deliver comprehensive content management functionality out of the box, including the ability to share documents securely among personnel both inside and outside the organization; the ability to easily incorporate e-mails and attachments into document repositories; document version control via check-in and check-out functionality; shared task lists and other collaboration capabilities; and routing and approval workflows. ECM SaaS solutions can certainly help companies save money related to how they manage and store documents, but that may not be the greatest benefit. “Our on-demand clients report that their ability to easily locate content and swiftly respond to customer opportunities has helped them win new business and stay ahead of their competition,” notes Till. “In addition, businesses without dedicated IT staff to back up and protect their file servers report that using ECM SaaS has helped them improve organizationwide storage practices and even help advance their disaster recovery plans.” HK Bain, CEO of Digitech Systems, notes that a SaaS solution works well for organizations that have multiple locations or that choose to exchange information with business partners. “These types of users will choose a SaaS model to accommodate varying degrees of IT infrastructure and support, while allowing for the greatest number of users,” he says. “This would include, for example, hospitals that routinely exchange information with clinics, off-site doctors’ offices or insurance and
  • 3. billing providers, and financial institutions with branch locations spread across a geographically dispersed region.” What Should You Look For In An ECM SaaS Provider? So if you think a hosted ECM service might be right for you, what should you look for in a provider? According to McClellan, one factor to keep in mind is the degree of flexibility you will need in your use of the ECM solution. “Can the solution grow and change with you? Does it offer you flexibility as your needs change?” he asks. “For example, can you add features like workflow or ERP (enterprise resource planning) software integration? Or, what if you would like to bring the solution in-house? Or, going the other way, what if you can no longer support your on-premises solution and would like to have it hosted?” Bain cautions that some ECM SaaS providers offer only limited functionality in their SaaS products, so if you are looking for specific features and functions, make sure the service model you are considering provides everything you need. “Certainly, the importance of the vendor is magnified with a SaaS solution,” he continues. “Not only are you connected to the vendor as a software provider, you are also dependent on the vendor for the quality of your software’s deployment, maintenance, and availability on that vendor’s network. That magnifies the importance of choosing a vendor that has a proven track record with service and long-term financial viability. Otherwise, if the vendor goes away, you have no software available, you have no infrastructure, and getting your data may prove to be difficult.” Bain offers the following checklist of features to look for: • An easy-to-understand pricing model that offers a lower point of entry for small and midsize businesses • A flexible product that scales to any size organization so it will grow with your business • Out-of-the-box integration with Microsoft Office and simple tools to facilitate seamless connections to a wide variety of other line-of- business applications • A full suite of integrated ECM components, including solutions for distributed capture, print streams, e-mail, and workflow • Live customer support with an excellent satisfaction rating • A strong availability history for its product over a period of years
  • 4. • The option to receive a secure backup of all your online data delivered as frequently as you desire Don’t make the assumption that a good ECM vendor necessarily makes a good SaaS operator. “In fact, the skills needed to run a successful SaaS operation are quite different from developing enterprise software,” Till says. “Potential clients should expect to be able to review service-level agreements and disaster recovery plans and understand clearly how service providers can guarantee delivery on a 24/7/365 basis. Redundant, geographically separated data centers, real-time data backup systems, and the ability to swiftly migrate data from the service provider at the customer’s request should be minimum service selection requirements. Ideally, ECM SaaS solutions should also include a provision for offline file access when subscribers do not have Web access.” Scrutinize ECM SaaS Security Arrangements Perhaps the most important issues when looking at SaaS options are reliability and security. Just as with on-premises ECM solutions, on-demand ECM systems should include security tools and features that enable administrators to put custom security policies and procedures, such as customized passwords, in place. “Among other things, buyers should only do business with SaaS providers that maintain their on- demand systems on a completely independent network, verify security through an independent third party, and offer flexibility in providing a copy of their own data for disaster recovery purposes,” says Bain. “In addition, look for a vendor that offers the option to encrypt data both during transmission and while at rest in the system.” “Typically, business processes that depend on the secure exchange of content between organizations appear to be most likely to benefit from ECM SaaS solutions, as they can easily be managed on the Web, while complying with sometimes different security requirements and, often, different technology standards,” Till explains. It should go without saying that entrusting vital business documents to an ECM SaaS provider is something you should consider very carefully. End users should be particularly mindful to match their security requirements to those available from the service provider. “Many organizations considering ECM SaaS are new to ECM altogether and can benefit by keeping the process simple,” concludes Till.