I don’t think anyone can deny that outsourcing isn’t a mature aspect of the Document Management market; I have been involved in the sector for over 20 years, and it was a well-used business tool even 20 years ago.

At that time, the service would have been around third-party scanning by specialists of documents in bulk. I am sure I am not the only one who remembers the days of CDs being handed back to clients with a basic search facility on the front end – which seems a bit primitive today.

Now, DM outsourced services have become more involved and sophisticated, in terms of breadth and depth. We are able to work in much higher volumes, as hosting has morphed into the Cloud, and customers can consume services at a larger scale and with a greater set of functionality and service level agreement options. The CD went out with the Ark; now, I can access my documents in a Cloud based in North America on my handheld device, while travelling between Europe and Asia, if I so choose.

Which is great progress. But this is real life not a marketing brochure, and as business people we have to make judgment calls about when any kind of service, outsourced DM versus any other sort of function, actually makes sense for an organisation.

In the spirit of aiding the cause of efficient business, I want to review what most commentators would objectively agree are the four big advantages of outsourcing your content and documents versus keeping them in-house. In so doing, I am going to try and be as objective as possible about what works and what might not work for everyone.

Let’s consider the plus-points of outsourcing first.

Technical expertise

It’s very convenient. You can buy this as a turn-key solution with all the software and hardware in the Cloud. All at once, your physical documents get indexed, stored and administered by dedicated staff, specifically trained for the job and who don’t do anything else – that’s their specialism, and they’ve seen your problem in other situations and they know what to do.

When this works well, it’s simply going to be much, much faster than an on-premise solution that you will have to buy, bed in, get to work and maintain. And on paper at least, this can offer your team secure access to enterprise content anywhere where there is a connection to the Internet.

No job too big

You can get real economies of scale. All your current files can be scanned in bulk, with your new specialist partner using the latest high-volume kit. The business model depends on them being able to do this fast and well – which translates to very cost-effective, pence versus pounds, costs.

Face it: if you didn’t do it this way, you’re just going to have to eat (potentially large) capital costs and personnel training effort. And as for all those rooms and basements filled with your paper trail from past business, large paper archives can also be scanned on demand by the outsourcer, if you pay for it.

Again, that’s a highly cost-effective option for you, as only directly useful content needs to be stored for real-, or near real-time, access. That’s going to save you many thousands of pounds in service costs by you not imaging redundant or time-expired content. That’s an important point, as a good outsourcer shouldn’t be interested in just hosting everything – they will want to work out with you what is really important, which is an amazingly useful rationalisation exercise in its own right. Our experience shows that you only really want 1 to 5% of all the documents you have in the filing cabinets; a lot can be deleted, and a lot archived after seven years.

Admin you never see still happens

In a Cloud-based service run by a competent outsourcer, a lot of the system maintenance that you have to do if you keep this all in the building, just goes away. Upgrades and back-up gets done by them, invisibly, while the cost of hardware refresh and system technical administration is handled by people whose sole focus is on the software. You would have to do all this yourself, running your own internal IT Company, effecitively – to keep all this running.

Ownership of the important content and information assets, however, and user management of it, can still get done by the business through simple but powerful browser clients that hide the complexity of the underlying physical storage, offering structured access to the data. I probably don’t also need to say that your chances of ‘unplanned outages’ – crashes and lack of availability – pretty much goes away with a good third party, with its vast business continuity resources compared to yours, looking after your assets over the Web.

Doesn’t have to be static

Use an outsourcer, and it’s in the outsourcer’s interest to spot ways to improve the way you work together. They will want to enhance the service, and will look for ways to deliver the information back quicker, or safer, using approaches such as business continuity. What’s effectively happening is that they are doing what your IT function would be doing, if it had all the time and resources that it wanted, and wasn’t engaged in fire-fighting; namely, improving the functionality of the system. They also don’t need to worry so much about internal politics! So, continuous improvement and state of the art technology are reasonable expectations here.

Most of us would see all of the above as strong arguments in favour of outsourcing and in particular using the Cloud. However, what are the downsides to consider about outsourcing and the Cloud?

Not an option for everyone

Some sectors and some organisations just won’t ever be able to follow an outsourcing route. They are constrained by compliance or regulatory strictures, and even government mandates that say that data can’t be held outside of such and such an area, and so on.

The organisations in question encompasse strategic, national utilities, defence and healthcare records, and so I don’t think most of us will complain about these restrictions. It does however act as a brake on any claim that outsourcing and the Cloud is a ‘one size fits all’ solution.

Garbage outsourced is still garbage, my friend

Earlier, I said that you can achieve a great rationalisation of your data by a good outsourcing agreement. However, that’s only true if you do the work. Some customers simply expect the other party to do all the work – to know what matters, what is sensitive, what the regulator will want to see and so on. Passing over the responsibility like that and then having a knock at the supplier when they can’t find item xyz that you need now – but didn’t tell them to keep it safe – is not helpful.

Think of it like this: do you need to send all the thousands of phone bill call pages, or would it be worth stripping out the items that you really need to keep? Might it not be a good idea for HR to delete the records of disciplinary items that should not still be on the file?

The principle here is that cleansing of data before delivery makes a lot of sense for both sides. But it just doesn’t always happen, and can lead to issues. And, this is certainly something that can come back and bite the unwary outsourcing customer.

Do they know what LOB means?

As a business, some of your business processes happen in central ERP, but a lot probably happen in line of business (LOB). This kind of internal complexity can throw an outsourcer if they aren’t properly informed what’s what. Integrated line of business systems can present technical challenges to outsourced approaches leading to possible hybrid deployments. Your procure-to-pay cycle or order to cash processes may well link to both central and local business apps – and you need to share the documents that sit behind both ends of that process, or it may get confusing and problematic if there are issues. You can end up with hybrid deployments with some elements outsourced, some kept in-house. This is not impossible to run well, but you need to get a mechanism in place to make it work.

Enter more coins to continue?

While I was right to say an outsourcer is good at economies of scale, nonetheless not all of them are IBMs. You need to do due diligence and check out that they really can process ten million documents overnight (for example). They need to have the right, top-level infrastructure in terms of connectivity and storage to do the job that you’ve asked them to do. Yes, this could happen internally, of course – but the point remains that the right tool for the job needs to be provided, so make sure it is.

The verdict

So how to go from here, now we’ve laid all the pluses and the possible minuses? Outsourcing is a great business tool, but it’s going to be important to evaluate all the above points to get the right solution for maximum business advantage.

Many standard business processes such as finance, accounts payable, contract management, or HR records management have become commoditised and are eminently suitable for outsourcing, especially in the Cloud. But, those of a more risk-averse disposition can still consider hybrid deployments for different scenarios until their confidence in the technology and chosen service provider evolves in partnership.

Howard Frear is Director of Sales & Marketing at EASY Software UK