Making the in-house or external CM choice

“The ability of organizations to identify and successfully automate or outsource their low-valued-added processes is emerging as a best-practice differentiator for leading e-businesses…Organizations that can adapt quickly to new requirements for dealing with content will have a distinct competitive advantage.”

That was the overall message from Uwe Helmer, vice-president, Consulting, META Group Inc. Speaking at the Information Highway conference in Toronto on March 25, Helmer reviewed issues relating to whether or not to outsource content management (CM). He noted that in the context of Internet presence, Internet commerce, other Web applications, enterprise portal and enterprise content management, organizations face problems relating to content usability, faster content updates, multi-channel delivery and Webmaster bottlenecks.

“Disparate tactical systems are the rule for most organizations, but they want strategic systems,” he noted, citing that about 60 per cent of Global 2000 firms have a content management system (CMS) with less than five per cent being strategic.

META Group predicts that outsourcing – using an outside firm for ongoing operations of major IT functions – will broaden this year to encompass commodities and value-added services, with service quality and value creation driving most sourcing decisions. Helmer added that by 2005/6, nearly every North American IT organization will outsource at least one strategic operational function. Also by then, experience will improve the average success rate of outsourcing, he predicted.

Further, he noted that META Group predicts that by 2003, 95 per cent of Global 2000 organizations will deploy some type of XML-based CM infrastructure across the Internet, intranets and extranets. CM outsourcing will grow by greater than 35 per cent compound annual growth through 2003 and beyond.

Helmer cited a META Group study that found that more than 70 per cent of North American IT departments already outsource between 10 per cent and 50 per cent of their operations.

He described META Group’s content supply chain model and recommended firms look to paper-intensive operations as good candidates for outsourcing.

He suggested that the most appropriate ‘content’ for CM outsourcing is: scanning and indexing, data entry, wholesale departmental processes, mailing and electronic bill presentation and processing, and backfile or data conversions.

He advised that reference data is okay for outsourcing, but “keep close to home” business relevant, daily needed data.

Four processing models

“Outsourcing possibilities along META Group’s content supply chain model can provide organizations significant cost savings and efficiency gains,” he noted. “Understanding what options exist and how to take advantage of them are becoming increasingly important.”

He reviewed four processing models – on-site, regional, national and off-shore – in terms of where they are appropriate and the various options.

On-site processing is geared to dealing with information that cannot leave the premises. He said options here include: their staff with your/their equipment, in your facilities, or in their mobile facilities such as a fully functional processing facility in a truck.

Regional service bureaus can be found close to most major markets, he said. “Providers are increasingly being acquired by large organizations looking to expand their reach and processing capabilities.”

High information volume situations, i.e., more than10,000 pages per day processing, and where no local data access necessary are typically handled at a national level. Helmer noted that the national model offers significant cost savings over regional providers, but warned that one might be trading off the trust factor for economies of scale.

The fourth processing model he cited was off-shore with its cost benefits from third-world labour markets. While recognizing that cost savings can be significant, he noted that information being processed needs to allow for flexibility, there needs to be a risk assessment for storage of originals, and a hybrid model should be evaluated.

Data delivery options

Helmer also reviewed three options relating to data delivery: electronically delivered data, hosted and using an ASP model.

Regarding electronically delivered data, he noted that processed images or data can be returned in multiple formats, including CD, tape, and actual downloads to key systems or clients. He cautioned against a lag time and incidents – i.e., is paper returned, stored or destroyed?

He cited the hosted option where there is occasional access to information over Web (images, content, and data), as having the advantage of immediate access to information, no internal maintenance and speed. However, it has drawbacks relating to security, additional costs and loss of control by the client, he added.

Finally, he noted that the ASP (application service provider) model provides services plus all components of the operation including full responsibility. He sees an ASP as most appropriate for smaller organizations that cannot afford the upfront costs, need a trusted intermediary and can benefit from tactical portals.

“Organizations will be increasingly driven to empower their business users with content creation tools and processes,” he said. He urged firms to treat content as a strategic organizational asset and seek to consolidate existing systems where possible. He said new users should seek “leverageable” platforms.

He counseled attendees to replace ‘one size fits all’ interfaces with portals that display in-context content for the individual. “Consider collaborative tools as a means to drive additional ROI by making content actionable and leverageable.”