With the dawn of the Internet era, many tech pundits predicted
the demise of paper in enterprise sector. The logic—once most
of the information is available on the computer, the need for
physical copies will decline. On the contrary, the use of paper has
increased exponentially ever since. This has paved the way for
Document Management Systems (DMS), which can help solve issues of
managing physical documents and reduce the need for physical
storage to a large extent.
Drivers for document management
According to IDC, executives spend 45 percent of their time working
with documents. About 610 billion e-mails are sent each year, out
of which about half are printed. More than 7.5 billion new
documents are created in an office, resulting in more than 1
trillion pages each year. Managing such large volumes of data is
one of the top priorities of organizations today. Also, high
volumes of physical records lead to a large number of problems
including irregularities, loss of data, duplication etc.
DMS can help organization to manage voluminous data growth and
compliance and regulatory issues more effectively. This, in turn,
will help in a faster decision-making process, in addition to
ensuring a contingency plan for any disaster and security
issues.
Other aspects driving the DMS market are automation, virtualization
and integration. The need to share information and documents with
globally dispersed teams, improve collaboration and enhance the
effectiveness of various organizational functions is fueling DMS
growth globally.
But DMS is not something new. Its roots can be traced back as far
as the 1940s, when newspapers and print media companies applied
imaging techniques to preserve physical paper-based documents for
posterity. The enterprise adoption, however, only came about in the
late 1990s when companies, particularly those in the BFSI and
telecom segments, began implementing specially designed DMS to
automate paper-based functions and streamline workflow-related
processes.
Factors driving organizations to deploy DMS are: acceptance of
digital documents, regulatory compliance, tagging and capturing
data via Optical Character Recognition (OCR), and the technology
advancement in multifunctional devices. The next step in this
transition would be the integration of DMS with an existing
ERP.
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Analyst View
Vishal Tripathi, Principal Research
Analyst, Gartner
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 With DMS, enterprises are looking at streamlining and
simplifying everyday processes such as customer communications,
billing, training and records management.
Verticals such as telecom, healthcare, manufacturing,
government, PSUs, IT/ITES are opting for DMS. While multinationals
are re-looking at their licensing policy for the Indian market, DMS
providers are reworking their pricing and go-to-market
strategy.
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Spending priorities
Given this scenario it’s not hard to guess where the money is
being spent. There is demand for technologies such as data
deduplication, thin provisioning and storage virtualization (refer
to the story ‘Storage technologies to beat the
recession’ in Network Computing, May 2009). But with the
shift to the OPEX model organizations are seriously considering
other options.
“CFOs are looking to decapitilaze IT. More customers are
considering options like IT leasing, virtualization, capacity on
demand, managed services and SaaS,” says Anand of
CommVault.
Krishnamoorthy of HP observes customer spending in four areas.
“The first part of the investment is on storage arrays. The
second part goes towards the infrastructure that you require to
support storage networks. Thirdly, they are spending on data
protection. People invest in backup and in making it seamless.
Customers are also spending on replication. They spend on platforms
to build host-based applications.”
Adds EMC’s Rawtani, “We see investments going towards
the tiering of storage (ILM). Customers are also spending on
deduplication. They are also looking at deduplication at the
source. Thirdly, there is spending on server
virtualization.”
IP Storage
Benefits such as
cost, capacity, scalability and manageability make IP storage
attractive, especially in the SMB sector. Industry observers expect
higher adoption rates soon.
“In the next few quarters we’ll see increased
penetration of IP SANs. [Technologies like] iSCSI and IP-SAN
simplify deployment. The cost of infrastructure to support IP-SAN
will also come down,” says HP’s Krishnamoorthy.
“The technology to support IP SAN has matured. Earlier you
had point devices. Now we have virtualization of storage in the
IP-SAN market. All the benefits of FC-SAN are now available with
IP-SAN.”
Emerging opportunities
To stay
competitive businesses need high availability and uptime. They also
need to improve operational risks. So businesses will spend more on
backup and recovery solutions, perhaps choosing to outsource the
management of these services.
“We see a huge opportunity for Business Continuity and
Disaster Recovery solutions, especially in the government sector.
Three-way DR in a star [topology] will become common,” says
EMC’s Rawtani.
Says Krishnamoorthy of HP, “We observe that 80 percent of an
organization’s data is actually outside the data center. We
see the next big opportunity in managing unstructured
data.”
Physical security is also gaining importance in the country and the
demand for IP-based surveillance systems will grow. Because of the
high volume of data generated by this application one would require
NAS boxes that offer high scalability and performance.
The digital entertainment industry will also have a high
requirement for scalable NAS solutions. Animation production
companies, for instance, generate enormous amounts of data.
The demand for storage is also picking up in the SME sector where
businesses are looking to deploy scaled-down versions of ERP and
PLM. Vendors anticipate a demand for SANs even in the SMB
segment.
Growth amid downturn
With the print hardware market in the country dipping, vendors are
now focusing a lot on their DMS offerings—especially since
cost cutting is the new mantra for all enterprises today.
There is an increase in the demand for DMS from businesses that aim
to cut costs and gain competitive edge through better management,
and sharing of information and documents. Says Vishal Tripathi,
Principal Research Analyst, Gartner, “Organizations are fast
realizing that efficient management of documents and content is
critical to their business. Failure to effectively manage content
can lead to a significant loss of time and money. Once the
statutory requirements are implemented in India, there will be a
sudden spurt in demand for DMS. As compliance requirements will
come into the picture, it will be important to maintain regular
records and security.”
With business expansion and mandatory regulations such as the IT
ACT 2008, SEBI’s Clause 49, Basel II and the SOX act etc
(where organizations need to ensure that they store and manage data
for a specific time period), the need for DMS will be further
bolstered. However, it will also mean that the need for paper-based
documents will increase.
The flourishing e-Governance projects in India too will fuel the
growth of DMS. The system can help government organisations to
function efficiently aided by advanced file approval, management,
tracking and intelligent search.
A Case Study for DMS
Stressing on the integration of effective DMS with stringent
Know-Your-Customer (KYC) norms (required by the BFSI sector) is
Ketan Shah, Associate Director-IT, Angel Broking. One of the early
adopters of DMS for his company, Shah says, “We developed an
application in-house almost five years ago, when we realized its
need at an early stage. Our complete KYC process is managed using
this application, as it enables us to search through any document
easily. If it were managed physically, it would have been almost
impossible to search through such a huge repository of
documents.”
Shah’s Angel Broking has now incorporated various other
applications such as workflow management, procurement and inventory
management.
From Vanilla DMS to ECM
Many DMS vendors are tying up with ERP vendors like SAP and Oracle
to sell their offerings. Gradually, DMS is becoming an integral
part of enterprise workflow for functions such as inventory, HR
etc.
The demand for DMS is going beyond the traditional buyer segments
like those in the BFSI sector. Industries where paper volumes are
high, for example, the government, education, healthcare and
insurance companies, are keen to implement it too.
In such a scenario, integration with third party applications and
adherence to compliance requirements also becomes extremely
important. As a result, there is a gradual shift from plain vanilla
DMS to Enterprise Content Management Solution (ECM), wherein the
latter not only manages documents but all the content generated in
an enterprise including e-mail, reports, Web content, records,
etc.
Collecting information electronically lets you validate
information, customize content delivery and add context in real
time. According to Gartner, only 1 percent of archived paper
documents are ever accessed. Electronic documents are a lot easier
to find and access and are therefore more likely to be
accessed.
What Lies Ahead?
While paper is not going to be replaced immediately, most
organizations have tried to actively go digital as far as they can,
as part of their Corporate Social Responsibility (CSR). Workflow
tools that automate and standardize routine procedures, with a
consistency to achieve regulatory objectives, have also been
incorporated. Going forward, it is likely that we would see a
tighter integration of these workflow tools with other enterprise
applications like ERP.