For many companies, investing in an enterprise content management (ECM) solution means a significant capital investment. And like any capital investment, you want to know that what you’re purchasing is going to pay for itself. You know, produce a return on investment (ROI).
With an ECM software solution, there are some fundamental cost savings that quickly rise to the top, including reduced paper consumption, reclaimed floor space once you ditch your “physical document storage” (your filing cabinets and cardboard boxes), and elimination of other services like offsite storage, courier and shipping fees, microfiche and film creation and so on.
For example, Moen, known for its elegant selection of kitchen faucets, sinks, bathroom faucets and accessories, implemented Hyland Software’s OnBase software solution by integrating it with its SAP solution and supporting its AP needs. Beyond increasing invoice processing speed and faster problem resolution, Moen reduced paper, manual processing and storage costs to the tune of $8,000 in monthly savings.
Other ways ECM can make an impact:
- Capturing early payment discounts on AP invoices
- Ensuring that previously negotiated contract discounts are applied throughout the contract term
- Elimination of duplicate payments to vendors
- Issue resolution on the first call, often an inbound call, without the need for inefficient research methods and a return call for resolution
- Demonstrable, documented compliance with industry regulations that otherwise carry financial penalties for nonconformance
But wait. What about Total Cost of Ownership? While price is a major factor, but how do you determine the overall cost for your solution?
It’s not just about what that ECM solution will cost you today (to implement). How much will it cost you tomorrow (to change, maintain, integrate, upgrade)?
Business software applications (ECM, ERPs, CRMs, etc.) are highly-valued assets. They are typically used every day throughout an organisation for as many as five to 15 years.
Basing your ECM solution’s total cost of ownership (TCO) on initial implementation costs is like estimating the cost of raising your child based on the initial hospital bill. This one-time event cannot indicate overall total cost.
When purchasing an ECM solution, value must be based not only on what it takes to get the solution in the door, but what it will take to make sure that solution provides long-term value. Ask yourself:
- What kind of resources will the solution require to operate at full potential?
- As I expand my ECM solution to other departments and my organisation grows, will I have the ability to grow my own solution or do I need to pay the vendor to make changes?
- How much customisation will it take to make changes or upgrade the solution? To integrate with my other applications?
When determining the total cost of ownership you should also consider product depth. An ECM solution that is flexible, has a wide-range of functionality, and is easy to configure with little or no custom coding is much more cost-effective to maintain. It provides more long-term value because, when you want functionality, it’s there. You don’t have to spend time and money customising a solution or researching a new product to fill the gaps.
Technology decision-makers are responsible for not only finding the right solution, but the one that doesn't drain the budget over time. An ECM solution with a low total cost of ownership frees up spending for other projects instead of just paying to maintain existing applications.