August 1999
Editor's Column:
Focusing In On Outsourcing
You’ve no doubt heard about the growth in outsourced services over the past few years. Businesses and government agencies are recognizing that document and information processes aren’t “core competencies.” If this is the case, then perhaps these functions (or at least some of them) should be handed over to service providers.
At this year’s AIIM show, we partnered with IKON Business Imaging Services, a leading service provider, to delve deeper into conversion and outsourcing. We did this in a focus group that brought together a dozen executives representing the healthcare, banking, financial services, insurance and government sectors as well as the developer, integrator, analyst and consulting communities.
Our panelists said they’re performing more electronic-to- electronic, rather than just paper-to-digital, conversion projects. Examples included migration from older optical formats and conversion of images and electronic documents for Web publication.
While Web and e-commerce initiatives are very hot, in some cases bureaucracy has yet to catch up. “Quite often, the technology can do whatever you envision, but the more difficult challenge is dealing with antiquated policies and restrictive civil service environments,” observed a prominent government systems integrator.
Several panelists said they’re still struggling with the question of just what and how much to convert to digital. And as in government, corporate bureaucracy sometimes complicates or delays decisions.
Some managers said they have shied away from service providers. They cited “much cheaper” internal costs and an obvious interest in leveraging company investments in technology and staffing. In at least one case, this attitude seemed to backfire.
“We went in-house because we felt the quote from the service bureau was astronomical,” said the imaging manager for a national mortgage lender that took on a 40,000-file-box project. “As it turned out, the conversion took much longer than we expected. We were running 15-hour days, and overtime and repair costs probably wiped out the savings we anticipated.”
If service providers hope to win over customers before they learn the hard way, they have to do a better job of comparing their estimates to what companies would face internally. Those cost-per-page quotes really stuck in the minds of our panelists.
There was also a lack of familiarity with some of the quality and security procedures that service bureaus can bring to bear. The healthcare records manager on our panel rightly wondered, “How can I be sure I’ll get all my data back?”
IKON, for one, employs safeguards including shipping manifests, conversion checklists, automated and manual tracking reports, and quality controls for document preparation, scanning and indexing. These measures go beyond what many firms practice in house.
Another misperception was that “outsourced” means “off site.” Several panelists said privacy policies, legal restrictions, internal deadlines and concerns about shipping costs prevented them from outsourcing. Actually, service companies routinely work onsite. IKON is even contracting out entire departments; they do the hiring, training and HR admin for mail rooms, copy services and records rooms, but these people work onsite and report to the client.
Outsourcing is not for everyone or for every function. You have to figure out what makes sense for you. While information management is rarely a “core competency” for anyone but a service provider, certain tasks are mission critical. Where there are business risks, you have to find your comfort level.
Doug Henschen, Editor-in-Chief
