Document Management in High Tech and Communications

  McKinsey Quarterly just published an article titled “Managing Overhead Costs”.  The message was clear.  The high-tech had telecom industry is facing a prolonged period of extreme competition.  This competitive pressure and the current economic conditions require business to implement a “new approach” to managing cost. Sustainable cost reduction should be targeted for the overhead functions i.e. finance, HR, IT and legal. Some interesting statistics were shared.  From 230 S& P 500 companies that publicly announced cost reduction programs only 10% succeeded in maintaining their improvement in cost over 2 years.  And only 25% of the companies expanded their business while improving their margins.  One of the cost programs that produced sustainable cost savings over 3 years included IT Outsourcing.

As I read CIO Magazine, E-Week, and some of Gartner’s recent publications a common theme for 2008 is cost management.  I support McKinsey’s focus on longer term programs, outsourcing as a vehicle, and targeting overhead functions because programs supported by process, metrics and contractual obligations tend to deliver sustainable results compared with episodic actions.  Cost out initiatives are not new news to IT, Finance, Legal, and HR.  However, there are new ways to find millions in savings in these areas; one new way is to outsource document processes related to these functions.   Not only can you control cost but you can also look for new ways to expand your business. Here are some thought starters on Document Outsourcing.     

Sun Microsystems acknowledges on their website the growing need for environmental leadership among all IT companies.  Leadership means championing responsible product design and instituting environmentally friendly practices for sustainable business operations. Many technology companies are demonstrating leadership by prioritizing their internal operations.  They are implementing programs to increase energy efficiency, reduce waste and protect the environment. Document management, printing and related processes are an obvious area for organizations to reduce their environmental impact.

Gartner’s article “Predicts 2008: Smart Print Management Underpins Operational Success”, clearly articulates the opportunity that document management and output provides operations to improve their carbon footprint as well as reduce cost.

Gartner stated that according to the US Environmental Protection Agency, the long-term costs of paper use (copying, printing, and mailing, storing and disposing) can amount to 10 times the original purchase price of the technology and consumables.

Printing and its related processes from hardware and supply manufacture to product disposal and business process have a large environmental impact.

So what can you do to improve your operations in this area?

• Actively manage your enterprise printing and/or engage a Service Provider to do this
• Manage and reduce printing and paper usage
• Implement printer/copier provider that supports environmentally sound products and services
• Improve document processes by digitizing paper-based information and optimizing workflow
• Measure the environmental benefits of your actions

Have you started on this journey?

We all have a corporate commitment to reduce carbon dioxide emissions.  We are all looking at our operations in a quantifiable way, for the low hanging fruit, easy wins with significant cost savings. So the popular vote goes to IT and the back office for these savings.  Reducing energy consumption in the data centers, the global infrastructure from desktop PC’s to peripherals. Consolidating systems and optimizing utilization, deploying energy efficient technology and evaluating the way IT systems and output devices are purchased, implemented and deployed are all part of the process to achieve these quick wins.

Demonstrating green leadership means our company operations should be role model for reducing energy consumption, recycling, and managing pollutants. We need to quantify the carbon footprint current state, establish goals, measure the progress and reduce consumption.  Using environmental calculators is a great way to start the quantification of your current state. Some examples include:

In the Data Centers (Servers) -  Sun’s Power Calculator

On the desktop (PC’s)  - Lenovo’s Calculator

And Patty Calkins, at Xerox in her WSJ recent article mentions a recently released  “Print calculator”.

These calculators are a great step toward quantifying the carbon footprint and potential energy cost savings.  In addition, many companies are engaging IT and Document service providers that have the expertise to assist in ”operationalizating” the reduction of the carbon footprint and deliver measurable savings to the bottom line.

This week the Wallstreet Journal had a special report on the “business of the environment”. The report summarized the messages shared by senior business leaders attending WSJ’s first annual “green” conference, “ECO:nomics: Creating Environmental Capital”.  The business leaders presented both sides of the story: Green represents an opportunity for business growth as well as risk.

The “business growth” discussions were compelling.  Several leaders representing multinational firms articulated the inconsistencies in regulations today and called for US government mandated caps on carbon emissions.  These regulations are inevitable and immediate action and will allow business to get ahead of the curve.  These regulations could be the tipping point that ignites a new market/industry that delivers clean energy technology, energy efficient devices, alternate fuels, and new services.  Multinationals and SMB’s will reap the rewards from new revenue streams and increased job opportunities.

High-tech companies can capitalize on the business growth opportunities by providing energy efficient products,  incentives to “upgrade to” energy efficient technology, disposal strategies and Services that reduce their clients carbon footprint.  Green depends on new technology, solutions, and services.  Green depends on technology companies.

The risks of inadequate energy sources, rising costs, and mounting pollution and hazardous waste were also reviewed.  Action can be taken to quantify, manage, and reduce risk.  High-tech companies must manage their own operations from their suppliers to the delivery to their clients.

The “company infrastructure” is really the first stop.  High-tech and Telco companies are at the lead edge of sustainability initiatives and managing their own environmental footprint.  They realize energy costs equate to 25% of their IT budget.   Technology companies understand the quantitative impact and potential for operational cost savings.  They are establishing goals and they are measuring their own progress in reducing consumption.  They are continuing to look for “smarter ways to green”.   It’s about finding the “easy wins” with economic payback.    Here are some great sources of information for easy wins:Podcast: Sustainability Podcast White Paper:“Smarter Ways to Green: How to Make Sustainability Succeed in Business” 

High-tech hardware manufacturers, software manufactures and IT Service Providers continue to be challenged by increasing commoditization, cost of sales, and competition, with decreasing renewal rates.  Marketing’s objective is to acquire new clients, increase loyalty and continuity of the business relationship to stimulate revenue growth. Technology marketers are prioritizing client centric marketing, deeper segmentation, and more targeted client acquisition and retention marketing campaigns and programs. 

Forrester’s article,” Predictions for Technology Marketers in 2008” provides some examples of  this segmentation:

• “Role based marketing”(key decision makers), segmenting by function/role: IT/CIO, marketing/CMO, finance/CFO
• Centralized decision making (HQ) versus distributed
• Role of procurement in decisions
• Utilization of Partners and Alliances
• Micro industry segments
• Top tier IT Services firms target existing clients for new business
• Separation of emerging markets from mature markets

 Mass media is challenged to reach customers successfully and social media is shifting some power away from brands.  So customization/personalization of messaging, value propositions, collaterals, proposals, presentations, customer communications and marketing campaigns to the individual customer, function/role, micro industry, and market maturity level will help high-tech companies differentiate products and services. 

So, how are tech companies accomplishing this high degree of customization of marketing deliverables, meeting time to market deadlines and controlling costs? Tech marketers are more aggressively embracing outsourcing and off shoring to address these requirements. From authoring to document design, content management, translation and localization, to print and electronic fulfillment.  Technology marketing departments are partnering with Document Outsourcers to deliver these services.     

There is a need to process more data, gain access to data in an easy to understand form, and to more efficiently use and present data that intersects key business processes.  This transactional information is the backbone of the operational side of our businesses.

High-tech and telecommunications companies have transactional documents that support front and back office applications to include customer service, sales (CRM systems), backend analytics, and e-discovery.  Inventory information and reports, invoices, bills and statements, back office analytics, customer support communications, and demand generation documents are examples transactional documents.

Transactional documents need to be consumed internally – cross functionally and externally with suppliers, partners, channels, and customers.  These documents need to be available through call centers, self service websites, and email and print.  “Content distribution via print remains the incumbent for business users and customers”, as noted by Infotrends June 2007,  in “Speeding your business process: Making transactional content readily available”.

High-tech and Communications companies should consider Document Process Outsourcing Services for transactional documents. These services optimize workflow, technology and processes and deliver business process improvements and cost containment.  There are many sources to find more about Document Process Outsourcing Services.  You may want to consider attending XPLOR, March 3-6 in Boston – a conference on digital documents.

The current market volatility and economic risk will require tech companies to curtail expenditures in general and administrative functions.  They will look to increase their internal outsourcing portfolio to create access to scalability without investment in labor and capital. High-Tech companies will embrace the new wave of more complex services that can deliver cost reduction and business transformation.  Phil Fersht, IT Services and Outsourcing blog  agrees.  Tech companies will target business processes that provide cost savings but also accelerate global growth (Business Week stated that tech companies with 50% of their revenues outside the US are better positioned).

I predict that in 2008 more and more CIO’s and CMO’s will collaborate and engage Document Outsourcing Providers to focus on marketing and sales document processes.  Document Outsourcing provides services in support of the entire document lifecycle from creation, to management and delivery of marketing and sales documents.

In the high-tech industry it’s about getting new products and services to market, reaching new clients with new opportunities, and finding new ways to collaborate with employees and channels. Tech companies customize client communications with industry, role based and account based messages by leveraging existing client data.  Web and print based marketing and sales materials are integral to driving client acquisition and pipeline development.

Outsourcing will improve financial transparency & engineering, speed and cost of implementation, and remove the burdens of specialized skill acquisition.  Outsourcing fosters a more controlled operating environment, improves level of service, and increases the efficiency and effectiveness of marketing spend.  The CIO’s and CMO’s can demonstrate business alignment with this strategy.  So my theme is still the same from my previous blog.  Companies need to look at cost structures and processes for marketing communications.  Customization of the message, speed of message delivery, and cost efficiencies are keys for marketing and sales to deliver “results” in 2008.  Document Outsourcing is a way to get there!

January 17th Financial Times article highlights that some tech companies are cautious due to the looming recession and uncertain financial times.   The stock market reported the tech sectors’ January start was the worst in years…During uncertain times most tech companies are looking for increased efficiency, more areas of variable cost, and to leverage the latent value of their suppliers.

Tech companies should take a hard look at marketing spend, specifically the creation of marketing and sales materials as an opportunity to improve efficiency. Marketing spend is about 2% of the companies revenues representing a substantial opportunity.

Marketing and advertising providers typically bundle costs and may lack expertise in all areas of this business process: from material development, translation, web presentment, printing, and fulfillment.  Many tech companies are engaging experts in enterprise document processes to implement assessments of these costs and processes.  They believe that this is an area to improve effciency as well as improve their communications to the growing number of clients and channels that represent their complex market.

Today companies in the High-Tech, Telecom and Media sectors change or refresh their brands to redefine their business, communicate their vision, and integrate their M&A activity. Ultimately, it’s about engaging clients, creating demand, driving revenue and profitability, and providing higher return to shareholders.  Since 2006, to name a few,  Swisscom, Nokia Siemens Networks, Alcatel Lucent, Idearc, Comcast, Business Week, msnbc, Neilsen, Intel and Xerox have all changed their brand.  This is a commitment and investment by the CEO and executive marketing team with a longer term payoff. All client and internal communications must be aligned to the brand.

Xerox unveiled a new brand on January 7^th.  Xerox is in the top 100 brands and globally recognized in the technology sector.  Angele Boyd from  IDC, in her recent article, “What Xerox’ Big Brand Change in its History Means” highlighted that Xerox’ business model has evolved from a print and copy company to a services led technology company known for innovation and client focus. Xerox is a document lifecycle solutions and services provider.  The brand communicates to clients who they are today, where they are going, and the value they bring.

So what are some of the implications of brand changes on documents and communications?  90% of client communications are documents.  Between 2007-2011 10.5 trillion pages will be printed in US offices.  A brand change has an affect on many of those documents.  Marketing materials, sales literature, statements & invoices, product service literature, user manuals, training material, recruitment documents, enrollment documents the list is endless.  Websites, social media, printed materials, email materials must all be updated and much of that begins with Marketing.  Marketing must manage the brand, implement with speed the change in client communications, manage and be accountable for spend, and simplify the process.  A huge task.

Document Outsourcing is a strategy to help make this happen!

High-tech and Communications companies can take action today that will reduce cost, improve operational efficiencies, and leverage environmentally friendly technology, processes and Services. Environmental IT policy and strategy should go beyond the data center, as described by IBM to encompass environmentally sustainable business practices around printing, MFP’s, and Copiers.  IDC concurs with this in the study: “Buyer Requirements for Green Printing, 2007”.  Areas of Green process improvement include: 

• Print infrastructure optimization
• Strategies for electronic replacement of paper
• Enablement of digital collaboration
• Leverage of operational alternatives to technology usage i.e. Outsourcing, SaaS, hosting
• Use Service Providers that are knowledge experts in the “green”  Print Managed Services space

Print infrastructure optimization reduces the number of devices, improves equipment utilization, and deploys energy efficient technology (MFD’s). A 150,000 employee company through Print infrastructure optimization can reduce carbon footprint and save 28.2m kWh of electricity or $2.7-$3.9m annually. There is a significant opportunity in consumables management. 100K prints create 150 lbs of laser waste, 100K prints create only 10 lbs of solid ink waste. Solid ink technology and reusable cartridges can reduce waste. Let’s not forget paper consumption. Reducing paper will save our forests and conserve energy used in the manufacturing and distribution processes. Using high yield mechanical paper and recycled paper is a good start. However, deploying strategies to reduce paper usage, encourage digitization of paper, and provide tools for collaboration will further the Green initiatives.

Finally, Print Services Providers should be employed to achieve these objectives.  Some are “experts” in achieving a “Green print infrastructure”.  They deploy energy efficient technology and consumables, automate services delivery, and provide proactive monitoring and management. Service Providers provide innovation to eliminate manual paper processes, increase digital collaboration, and provide document management services without increasing technology footprint i.e. hosting, SaaS, shared print services platforms.  Print Service Providers manage demand, provide change management strategies, and provide management reporting and governance around GREEN. Think about using a productivity improvement partner to reduce energy consumption through print services.