December 20, 2016

The 5 major costs of poor document management


Managing electronic documents incorrectly can cause your company a number of problems, the most serious of which is that you may even be breaking the law…

The vast majority of things that happen in an organization originate with some kind of document being created, modified or shared. Emails, project plans, contracts and meeting memos are just some of the many documents used by organizations on a daily basis, and the valuable information they contain is essential for decision-making and good governance.

It’s therefore surprising that many organizations are underinvesting in their Electronic Content Management (ECM) capabilities. ECM basically refers to the tools, methods and strategies for capturing, managing, storing and delivering the content and documents required for an organization to run its business processes.

According to findings published by the Association for Information and Image Management (AIIM) in 2016, less than 25 percent of the organizations they surveyed capture data from paper (i.e. emails, contracts, etc.) directly into their business processes. There are multiple ways an organization can get itself into a mess with this lack of due process, but five in particular stand out as worthy of mentioning…

#1: Document chaos

The foundation of a solid electronic content management platform is a clearly defined set of document categories (sales contracts, quotations, project plans etc.) and context-specific tags. This categorization provides a shared understanding of what types of documents the organization uses and for what purposes. It’s also the starting point for designing and applying rules specific to each document category.

Without a defined collection of documents and associated contextual tags, a document has little meaning to anyone who is not directly involved with it. The result is that documents end up being handled in as many ways as there are users. In a medium to large organization this quickly translates into chaos, which is often managed in a haphazard fashion by locally administered, isolated document repositories. Instead of an organization-wide ECM platform, there are multiple disconnected islands of content.

#2: Wasted time and money

Every minute spent on searching for a document is one minute less time for actually using that document. Yet deadlines and schedules are not set according to the time required for searching for documents, but rather for the time required for using them…

Studies have shown that employees can spend up to 25 % of their working time on searching for documents. Put another way, inadequate or absent electronic content management can force, on average, up to one out of every four employees to work as a full-time document hunter!

#3: Poor cross-functional collaboration

An organization that lacks an appropriate electronic content management platform risks falling into the trap of running multiple business-unit or business-function-specific content management platforms for handling documents. This inevitably hinders collaboration, as a result of separate systems that each have their own access restrictions. Collaboration is no easy task under such conditions, and change management within such an organization is nothing less than a nightmare.

Some of the quotes collected by AIIM in a survey for the white paper “Content Management 2020” (2014) reveal the extent of the problems caused by a lack of content management: “Quit making us enter the same information in five different spreadsheets.” “We’re drowning in information but thirsty for knowledge.”

#4: Damage to customer relationships

A dysfunctional or non-existent electronic content management platform can increase the risk of customer relationship failures at critical junctures and hit a company where it hurts most: client satisfaction. On the other hand, an organization can reap incredible synergy benefits from a well-defined and managed ECM system that works seamlessly together with the CRM process. Being able to make better quality decisions in less time, and collaborate smoothly across business units, is crucial to delivering excellent customer service.

#5: Failure to comply with regulations and meet quality standards

Industry regulations and a company’s own mandated quality system are two frameworks that each require – without exception – for content to be managed in such a way that there is a defined document lifecycle, that document versions are tracked, and that there is a defined workflow for handling content. For instance, the ISO 9001:2008 quality standard specifies that “documents required by the quality management system shall be controlled.” This means that the controlled documents are managed in such a way that they are accessible, usable and secure. This is a tall order in any modern organization without an adequate Electronic Content Management system.

Furthermore, information security requires that access to content is managed based on a managed set of permissions and that all content inherits permission settings from its classification. An organization that fails to implement sufficient electronic content management processes will ultimately fail to meet its own quality standards, let alone best practices in its industry. In the case of listed companies, lack of ECM with regards to certain documents may even go so far as to violate financial regulations. In short, defined and managed document processes are no less than essential for any organization to excel.

Where to from here?

An organization that has implemented an adequate electronic content management platform has taken a major step towards making its information easily accessible, creating a shared platform for collaboration, meeting excellent standards of customer service, and adhering to defined rules and regulations. Taken together, this creates an environment that is conducive to better quality decision making, because the information is up-to-date, correct and readily available to whoever needs it.

If you are still not convinced that not managing your documents will put your organization in peril’s way or you want to find out more about how you can take the first steps to transforming the way you manage content, we welcome you to sign up for our upcoming webinar, ”Document management: the danger of chaos and the journey to order” !

Amir Hassan

Amir Hassan has over 10 years of experience in management consultancy with a strong competency in business process analysis, modelling and development using the Business Process Modelling Notation (BPMN) standard. In his previous consultancy work Amir has helped clients align their processes with their business strategies and redefine their strategy to deliver better processes. Amir has worked with clients from various industries, such as manufacturing, construction, healthcare and professional services.