AIIM Knowledge Center Blog

Metrics for Evaluating the Value of Implementing ERM

This presentation by Mark Giguere, co-Program Manager of the President’s Electronic Records Management (ERM) Initiative, and Dr. Rick Klobuchar of SAIC, provides you with several metrics for evaluating the value of ERM.  The Office of Management and Budget request this study in an attempt to define metrics and best practices which would be used to evaluate deployments of ERM systems.

By Atle Skjekkeland.

   

Resources for Developing a Business Case

I just came across a presentation that Bill Neale from IBM did for the AIIM William Penn Chapter February 2007. Bill is on the AIIM board, and the presentation contains some interesting metrics but also the below resources for developing a business case:

• Guidance from Federal CIO Council on value measurement methodology (VMM) for Section 300.
• OMB Circular A-11, Section 300.
• Guidance for coordinating the evaluation of Capital Planning and Investment Control (CPIC) proposals for electronic records applications.
• Useful templates and checklists for business case and cost/benefit analysis
• Explanation of all financial ratios and cost/benefit best practices.

I will also recommend you to take the AIIM training programs for a step-to-step approach for developing a business case. You should also check out our previous blog posts about how to develop a business case.

By Atle Skjekkeland.

Including Non-financial Benefits in a Business Case for an ERM System (Part 4)

In addition to financial benefits, non-financial benefits need to be targeted for realization - you have previously seen three different categories of benefits, along with benefits that can be quantified in financial terms and those that can be quantified in non-financial terms and non-quantifiable or intangible benefits.   Indirect measures can be used to track progress against achievement of non-quantifiable benefits.  Besides benefits quantified in financial terms, there are many potential benefits that can be realized from an ERM Program and they are located in three main areas:

The area of “Information sharing and access” provides a number of potential benefits including:

• There will be no ‘lost records’, as no correctly-indexed record is ever lost. 
• An ERM environment also allows any authorized user to find any record, easily and quickly.
• There will be faster information retrieval, since an ERM environment allows the quick and efficient retrieval of information stored in it.  Typically, any record can be found and retrieved within seconds.
• Information can be shared efficiently.  Records can be distributed to recipients, and unlimited numbers of users can refer to the same record simultaneously.
• Files stored in electronic format facilitate individual and department, moves and other re-organizations.
• If required, information can be retrieved at any time - 24 hours a day, 7 days a week.
• Remote retrieval is facilitated.  If a suitable infrastructure is available, records can be retrieved from or added to the ERM environment from remote locations.
• Integration with e-mail has two potential benefits.  Firstly, information retrieved from an electronic system can be forwarded to other parties by e-mail within seconds.  Secondly, e-mail messages can be stored and managed properly.
• With simultaneous access, an unlimited number of authorized users can read, refer to or print any electronic record at any time.
• Finally, users will find their jobs easier and more fulfilling as they are able to search for and obtain information faster and more easily. 

The second area of consideration is “Decision-making”, where the benefits include:

• With an ERM environment, records presented as evidence in litigation will be complete and completely credible and reduce the likelihood of criminal penalties and/or regulatory fines.
• Many benefits of an ERM environment combine, to facilitate the taking of decisions which are completed more quickly, and based on better information.
• A properly-configured ERM environment provides information on which users can rely. Records are up to date and complete.

The final area of consideration is “Management of Information”, where the benefits include:

• Increased confidence from comprehensive audit trails and access controls as a correctly-filed record can never be lost.
• By default, backup copies of the ERM records will be kept.  As long as an effective business continuity plan is in place, these backups can be used to recover records from any disaster which affects the ERM environment.
• An ERM environment can be configured to provide exceptional awareness functionality by circulating new or incoming records according to specified rules.
• By default, an ERM environment implemented to the expected standard will keep a complete audit trail for every record, which may prove valuable in the event of audit or other investigations.

By Carl E.Weise.

Including Non-financial Benefits in a Business Case for an ERM System (Part 3)

Non-financial benefits can be categorized as: 1) those quantified in non-financial terms and 2) those that are non-quantifiable or intangible.  Whether benefits can be quantified, or not, will partly depend on the organization systems and processes, so there is no hard and fast rule.

There is a range of benefits where an indication will be given of whether the benefit can expect to be quantified in non-financial terms or is generally expected to be Non-quantifiable.  Organizations should seek to realize these benefits and set targets to achieve them.  Measurable targets can also be set for the non-quantifiable benefits by using indirect measures or ‘shadow’ metrics that provide a guide that the benefit is being achieved.

Improved Management of information.

These non-financial benefits need to be included as part of the business case economic assessment.  The various alternatives for undertaking the ERM implementation are evaluated across a number of non-financial criteria, such as non-financial benefits, fit with strategic objectives, and risk associated with implementation.

These non-financial criteria are usually assessed by experienced individuals, who score them against a subjective scale (for example between 1 and 10) to indicate whether the non-financial benefits are low, high or somewhere in between.

Increased confidence from comprehensive audit trails and access controls. In properly configured ERM, a correctly-filed record can never be lost. A paper file store cannot reliably provide either of these.  Non-quantifiable, but can be measured indirectly by sampling the completeness of audit trails.

By default, backup copies of the ERM records will be kept.  As long as an effective business continuity plan is in place, these backups can be used to recover records from any disaster which affects the ERM environment.  Non-quantifiable, but can be measured indirectly as the forecast time taken to recover from a disaster.

An ERM environment can be configured to provide exceptional awareness functionality by circulating new or incoming records according to specified rules. These rules can specify that new records can be made known to all recipients simultaneously, to unlimited recipients in unlimited locations, or to a selective readership.  Non-quantifiable, but can be assessed through a survey of users.

By default, an ERM environment implemented to the expected standard will keep a complete audit trail for every record.  This will far exceed the level of control possible over paper records, and may provide a valuable resource in the event of audit or other investigations. Non-quantifiable, but can be measured indirectly by sampling the completeness of audit trails.

By Carl E.Weise.

Including Non-financial Benefits in a Business Case for an ERM System (Part 2)

Non-financial benefits can be categorized as: 1) those quantified in non-financial terms and 2) those that are non-quantifiable or intangible.  Whether benefits can be quantified, or not, will partly depend on the organization systems and processes, so there is no hard and fast rule. 

There is a range of benefits where an indication will be given of whether the benefit can expect to be quantified in non-financial terms or is generally expected to be Non-quantifiable.  Organizations should seek to realize these benefits and set targets to achieve them.  Measurable targets can also be set for the non-quantifiable benefits by using indirect measures or ‘shadow’ metrics that provide a guide that the benefit is being achieved. 

Improved Decision-making

These non-financial benefits need to be included as part of the business case economic assessment.  The various alternatives for undertaking the ERM implementation are evaluated across a number of non-financial criteria, such as non-financial benefits, fit with strategic objectives, and risk associated with implementation.

These non-financial criteria are usually assessed by experienced individuals, who score them against a subjective scale (for example between 1 and 10) to indicate whether the non-financial benefits are low, high or somewhere in between.

• A higher weighting as evidence given to records in litigation, can minimize the likelihood of criminal penalties and/or regulatory fines.  With an ERM environment, records presented as evidence will be complete, and completely credible.  By comparison, collections of paper records are often incomplete, unreliable or lost entirely.  Whether the record is complete cannot be quantified.  The benefit may be quantified indirectly through measurement of percentage of litigation cases won.  It may even be quantified as a financial benefit because an organization with an ERM environment may be able to negotiate more favourable terms with its insurers.
• Many benefits of an ERM environment combine to facilitate the making of decisions which are completed more quickly, and based on better information. These improvements in decision-making can be extremely valuable, though the value is difficult to quantify.  Non-quantifiable, but may be measured subjectively through a survey of management opinion.
• A properly-configured ERM environment provides information on which users can rely. Records are up to date and complete.  Non-quantifiable, but could be measured indirectly by the percentage of external requests for information (for example arising under the requirement to provide information under Freedom of Information legislation) that can be satisfied immediately.

By Carl E.Weise

Including Non-financial Benefits in a Business Case for an ERM System (Part 1)

Non-financial benefits can be categorized as: 1) those quantified in non-financial terms and 2) those that are non-quantifiable, or intangible.  Whether benefits can be quantified, or not, will partly depend on the organization systems and processes, so there is no hard and fast rule. 

There is a range of benefits where an indication will be given of whether the benefit can expect to be quantified in non-financial terms or is generally expected to be on-quantifiable.  Organizations should seek to realize these benefits and set targets to achieve them.  Measurable targets can also be set for the non-quantifiable benefits by using indirect measures or ‘shadow’ metrics that provide a guide that the benefit is being achieved. 

Improved Information sharing and access

These non-financial benefits need to be included as part of the business case economic assessment.  The various alternatives for undertaking the ERM implementation are evaluated across a number of non-financial criteria, such as non-financial benefits, fit with strategic objectives, and risk associated with implementation.

These non-financial criteria are usually assessed by experienced individuals, who score them against a subjective scale (for example between 1 and 10) to indicate whether the non-financial benefits are low, high or somewhere in between.

• There will be no ‘lost records’, as no correctly-indexed record is ever lost. In every paper-based environment a small percentage of records are lost, and finding misfiled paper records is both expensive and slow.  Quantified, for example, as number or percentage of lost records.
• An ERM environment allows any authorized user to find any record, easily and quickly.  Also, an ERM environment typically allows content searching (for text records) and may include a thesaurus which allows searching with synonyms and related terms. Quantified, for example, as the average time taken to find a record.
• There will be faster information retrieval, since an ERM environment allows the quick and efficient retrieval of information stored in it.  Typically, any record can be found and retrieved within seconds.  Quantified, for example, as the average time taken to retrieve a record.
• Information can be shared efficiently.  Records can be distributed to recipients, and unlimited numbers of users can refer to the same record simultaneously, all without the photocopying cost which paper records require.  Non-quantifiable but can be measured indirectly through the time taken for a related task.
• Files stored in electronic format facilitate individual and department, moves and other re-organizations.  Non-quantifiable but can be measured indirectly by a subjective assessment undertaken by those involved.
• If required, information can be retrieved at any time - 24 hours a day, 7 days a week (so long as this is recognized as a requirement at time of procurement).  Quantified frequently through a service standard which defines the percentage of time the system will be available.
• Remote retrieval is facilitated.  If a suitable infrastructure is available, records can be retrieved from, or added to, the ERM system from remote locations (for example, international offices, supplier premises, and workers’ homes).   Non-quantifiable, but users can be surveyed to determine whether remote retrieval is easier.
• Integration with e-mail has two potential benefits.  Firstly, information retrieved from an electronic system can be forwarded to other parties by e-mail within seconds.  Secondly, e-mail messages can be stored and managed properly, something which is often difficult with fundamentally paper-based environments.  Non-quantifiable but may be measured indirectly by the amount of storage occupied by e-mail messages.
• With simultaneous access, an unlimited number of authorized users can read, refer to or print any electronic record at any time.  Non-quantifiable, but the time taken to undertake a related task may be measured.
• Finally, users will find their jobs easier and more fulfilling as they are able to search for and obtain information faster and more easily.  Non-quantifiable, but may be measured indirectly through a survey of job satisfaction or the level of staff turnover.

By Carl E.Weise

Link tactical problems, consequences and strategy in your ERM Business Case

In developing a Business Case for ERM Implementation, it should show clearly how the ERM Program will help to achieve one or more of the organization’s strategic aims and objectives.  It is, in fact, essential in the Business Case for a move to ERM to link tactical problems with consequences and through to strategy.  A major change program will not be endorsed if it relates only to tactical problems.  It must relate to, and show that it will deliver benefits towards the organization’s overall strategy. 

Meanwhile, an ERM Program has 'control' over only the tactical benefits that can be delivered, mainly time to save and time to retrieve.  It has rapidly diminishing 'influence' over how benefits can be realized at the operational and strategic levels. 

This diagram attempts to convey the situation.  There are the three levels – strategic, operational and tactical.  Different ‘levels’ in the organization are generally interested in these different levels of benefits:

• The Management or Executive Board are interested, primarily, in the strategic benefits;
• The Business Area Managers are interested, primarily, in the operational benefits; and
• The users and other stakeholders are interested, primarily, in the tactical benefits.

Most organizations have their strategic performance measures captured in their Balanced Scorecard.  These drive the performance measures and targets at the operational level. 
And these, in turn, drive the performance measures and targets at the tactical level.

The reverse direction is the case when it comes to contributions to benefits.

The benefits that are achieved at the tactical level contribute to the performance measures and targets at the operational level.  And the benefits that are achieved at the operational level contribute to the performance measures and targets at the strategic level.

The important considerations are that:

• Management or the Executive Board must drive the agenda for ERM, with the heads of the business areas (the key stakeholders) at the operational level 'demanding' the benefits that they require from the investment in ERM - and thereby setting the objectives for the ERM Program;
• The Business Case must reflect this situation and explain, convincingly, how the benefits will be achieved at the tactical, the operational and the strategic levels.

By Carl E. Weise

Is your organization wasting 10% of it salary bill searching for information?

A new report by Datamonitor argues that many organizations waste 10% of their staff costs because employees can not find the right information to do their jobs. Over 50% of staff costs are now for employees performing “information work”. But the employees are suffering from both information overload and information underload, and as a result they spend up to 25% of their day searching for the right information. Datamonitor argues that this why some organizations could be frittering away as much as 10% of their staff costs on wasted effort. The report goes on to say that ineffective search and discovery strategies are hampering business competitiveness, impairing service deliver, and putting companies at risk.

I addressed a similar survey from Accenture in my previous post "Cost of Retrieving Information", and it is nice to see that both Datamonitor and Accenture are now saying the same as we have been arguing for years…

By Atle Skjekkeland.

Do ECM projects still require ROI justification?

James R. Dukart had an interesting article about the move from ROI to VOI in the January / February edition of AIIM E-DOC Magazine. VOI stands for Value of Investment, and the article includes comments by many industry experts, including Dan Elam, Founder and Vice President of eVisory, Toby Bell, Research Director at Gartner, and Carl Frappaolo, executive vice president of Perot Systems Innovation Lab (formerly Delphi Group).

I agree with many of the comments; you need to look at a lot more than ROI to understand your benefits of ECM. I recommend that you analyze and link the tactical, operational and strategic benefits of ECM for your organization, but also the negative implications of keeping your existing environment. For more information about how to do this take a look at my previous posts “What are your benefits of ECM?” and “The Business Case for ECM – Linking Tactical, Operational and Strategic Benefits”

Eat the elephant one bite at a time

I ended up discussing a few days ago how to implement ECM for an organization that has approx 100Tb of content. Some of the content is in databases but most of it is in fileservers with little or no control. Where do you start?

First step should be to develop a corporate information management strategy. We usually start this process by developing a Concept of Operations document that describes your current situation, vision, and the new environment that needs to be in place to support the vision. I described this in my “What are your benefits of ECM” post, and I would also recommend you to take a look at my previous post “What are the necessary components of ECM”.

As with most large projects or initiatives, we propose then that you ‘Eat the elephant one bite at a time.’ Go for specific projects, one at a time, say every couple of years, each one to address a portion of ECM and produce business value. Start with something nutritious, not small and convenient, and produce a business case for each of these projects separately. And I would also suggest that you take a look at my previous posts “How to implement ECM” and “Why go for ECM instead of point solutions”.