ECM Report

The recent and continuing convergence in the ECM industry while certainly interesting for vendors, analysts and investors has managed to leave potential customers dazed and confused. The activity undoubtedly bodes well for the future but what about the present? If you have been contemplating various ECM-related initiatives you are probably wondering if now is the time to get in, get out, or wait. Well, I would say to you, buy buy buy buy and buy. Now. Here’s why…

Your Competitive Landscape

ECM tools in general can have a serious impact on your business. They can help increase employee productivity, reduce costs, improve customer relations, provide competitive advantage and, if applied in a mission-critical environment, can contribute to your bottom-line. The ROI on a carefully thought-out initiative can often be realized in a staggeringly short period of time. Look closely and you will see it. Through natural growth and maturity as well as through mandated regulations such as Sarbanes/Oxley, the industry is poised for significant growth. MetaGroup estimates the ECM market will reach $9.3B by 2007 and that by 2006, approximately 60% of G2000 organizations will standardize on a strategic ECM framework. I believe ECM has the potential to be the next ERP or CRM and may very well create the next behemoth. In fact, don’t be surprised if they and/or others enter the mix for this reason. In any case, you get the idea. This is BIG. The market is starting to see this and rightfully so. The benefits of ECM are real. If you are a consumer, take notice and act because your competitors most certainly are.

State of the Industry

Despite the major question marks regarding where the products themselves will end up, at least one thing is perfectly clear - the industry appears to have finally agreed on what it takes be considered an ECM vendor. Look no further than recent acquisitions for proof. It is obvious that everyone is taking a “me too” sort of attitude. Formerly disparate technologies are being acquired and/or built and brought under the umbrella that is ECM. The fact that there is some agreement is a very good thing for the consumer. It will, finally, bring a certain level of predictability to what was traditionally a mish mash of solutions being provided by an uncountable number of providers. We know where the industry is headed and that is a very good thing.
 

ECM’s Competitive Landscape

The market has gotten so competitive in the last year or so that market and mind share is at the forefront of most vendor’s initiatives. They are going to be trying very hard to validate their message to their stockholders. Signing up a new customer is a way for them to say “See, we did a good thing by acquiring so and so. Our messages and philosophies are working.” This is a critical juncture for most vendors. They have a serious need to be able show proof that their dealings were better and will have a longer term impact than their competition. To the consumer, the vendor’s fervent desire to see their efforts endorsed by the market means that there are good deals to be had. Right now, they want validation and doing deals is how they will get it. Down the road, when the dust has settled and they know their place, the same deals may not be around. We all know what happens to prices when the word “Enterprise” is added to a solution. They accelerate at warp speed. If you act now, the confusion and the uncertainty can actually be used to your advantage.
 

Mature Technology

Forget the hype and the future potential and look closely at what exists today. The reality is that the components that make up ECM, whether integrated or not, are a set of valuable and proven tools that have been around for a long time. There are happy customers all over the world. What we are seeing is an evolutionary process not a revolutionary one. If you remember to keep focused on the business problem, the technology will take care of itself. Now more than ever, buy based on the return on investment and gains in productivity. Decouple the state of the market from the solution itself and lots of headaches go away. This is not new, this is how you should be buying technology under any circumstance. Buying technology for the sake of the technology does not make much sense. It will either solve an issue or not. If it does, ask yourself if futures really matter. What’s the worst case scenario? If it doesn’t solve a problem, why are you even looking at it? Keep it simple, solve a problem, buy it.
 

Feeling Better About Uncertainty

In a contracting market like we are in, buyers tend to focus on “Why we shouldn’t” instead of  “Why we should.” Consumers feel a bit like a deer in the headlights - frozen, confused, and not sure which way to go. Prospects that were previously working with one of the vendors that acquired another company, are probably not affected significantly. They may now just have a few more things on the menu to choose from. On the other hand, prospects of a vendor that just got acquired face a far more difficult dilemma. The due diligence already performed on the vendor must start over again. And rightfully so. You are going to want to know who you might be buying from. But, generally speaking, you will likely be satisfied. The new players are established companies with lengthy histories and track records. Determining whether a vendor is a strategic fit for your organization should not be difficult.
 

Middle Market

For consumers that fit the “middle market” demographic, determining the vendors with which to create strategic partnerships can be of critical importance. Many in this group feel the need to receive a little extra TLC than the typical big, corporate software vendor generally provides. At least, for the price. One offshoot of the recent industry convergence is the widening of the middle market. In other words, vendors that traditionally played in the mid-market are now gone. They’ve been swallowed by the bigger fish. Some of those smaller, newly acquired companies had long standing and successful traditions of filling the needs of the middle market. This dilemma is real and one that mid-market consumers are struggling with. But there really is no need to fret. There are plenty of capable solutions still in the mid-market and plenty more ready to fill the void. In addition, the bigger, enterprise-focused solution providers would be silly to abandon the mid-market completely. There’s just too much history and too many happy customers for them to do that. Besides, as I mentioned before, as the market sits right now, successful new case studies and happy new customers are highly sought after.
 

Product Integration

Another major issue that buyers are hesitant about is product integration. The natural instinct following a major acquisition or product set overhaul is to want to wait and see how things shake out before making a decision. Every vendor in the industry has been through an acquisition of one sort or another so they are all in the same boat. Regardless, I wouldn’t worry too much about it. My reasoning is rather simple.

You need look no further than the actual definition of ECM - “Extremely Cannibalistic Market” - errrrr - “Enterprise Content Management”. Underscore the Enterprise. The reason there has been so much cannibalism is because the product functionality that define ECM are, in fact, very synergetic with one another. The real value that the service provider adds is through exposure and enhancement of these synergies, not ignorance of them. ECM, by definition, mandates that these areas of functionality be brought together. Two separate products that happen to come from the same company does not an ECM vendor make. So whatever the vendor might be saying to you, forget about it. It’s going to happen. It has to. They know this.

Besides, actual, true, seamless integration is many moons away. It is a very complicated proposition and one that will likely take years to fully materialize. Frankly, I would be more worried if I heard a salesperson actually attempt to explain an integration plan in great detail. It’s too early to really know for sure, it’s going to take a long time and will likely change anyway. They may have a conceptual plan, that’s fine. But I would never base a decision on futures. Focus on the individual pieces and how they will solve an immediate problem and leave the issue of integration alone. Consider integration to be gravy and it will make your evaluation much simpler.
 

Summary

The market is certainly interesting and a bit confusing right now but don’t let that detour you. ECM is an established technology that can deliver real and tangible money savings to your organization, today! The primary vendors are established and successful companies and, especially right now, care very much about your success and are willing to go out of their way to help you. Take advantage of this unique opportunity. It may not last forever.