Evolution of the ECM Sector

The term ECM (Enterprise Content Management) was first coined by the AIIM Association in 2000 to cover the technologies used to capture, manage, store, preserve and deliver content and documents related to organizational processes, with a focus on unstructured information. The market has proved highly dynamic, continually evolving and consolidating, which has meant that, over the years, ECM has been repeatedly redefined and now encompasses a much broader Information Management market.

ECM covers a broad spectrum of information and data management solutions and incorporates Document Management (DM), Capture and Scanning, Web Content Management (WCM), Search, Collaboration, Records Management (RM), digital asset management (DAM), Workflow & Business Process Management (BPM), Analytics & Business Intelligence (BI) as well as Document Automation & Output Management technologies and services. ECM technologies & services manage the complete information lifecycle from creation to archiving or disposal. Delivery of such solutions is via three means - on-premises software (integrated within an organisation’s own network), Software as a Service (SaaS) – Where the client has web access to information that is stored on the software manufacturer’s system, or a hybrid solution comprising elements of both on-premise and Saas.

Broad Spectrum of ECM Solutions Driving Efficiency

ECM aims to make the management of corporate information easier through simplifying storage, security, version control, process routing and retention. The benefits to an organization include improved efficiency, better control and compliance, and reduced costs.

Nowadays, ECM is defined as a multi-purpose, multi-functional cross-platform, used to manage both structured and un-structured data (Text, and increasingly, audio and video – link to DB article) for businesses of all sizes across the globe.  The previous norm of companies having silos of inaccessible information has been replaced by a new era of data driven discovery, work flows and collaboration, enabling organisations to harness the value of their data anywhere, anytime on any device. Today, organisations utilise their ECM solutions to render their data more secure, immediately accessible and informative. The disruptive impact of SMAC (Social, Mobile, Analytics & Cloud) technologies over the past 2-3 years has resulted in a paradigm shift in how information is captured, processed, analysed, stored, shared and delivered in the new digital economy.

Evolution of the ECM Sector ​- A Fragmented Industry

During the late 90s/early 2000s a number of medium sized companies dominated the ECM sector. They included Web Content Management (WCM) companies, Interwoven, Vignette and Stellent as well as Document Management (DM) organisations, Laserfiche, Saros, Documentum, docStar, OpenText, and DbTechnology. Larger players, IBM and Oracle, also had overlapping technologies but the market was highly fragmented.

Throughout the first decade of the new century, the ECM industry was characterised by convergence and consolidation as larger players jostled for supremacy via tactical acquisitions that would diversify their offerings. Whilst existing competitors, Documentum, Vignette and Interwoven, indulged in competitive acquisition rounds, buying eRoom, Intraspect and iManage, respectively, in 2006, larger players, OpenText, IBM and Oracle also made strategic acquisitions (Hummingbird, FileNet and Stellent, respectively), with Adobe joining the fray with their acquisition of Day Software and, more recently,  HP’s acquisition of Autonomy.  The impact of the Enron scandal of 2004 and the resultant need for organisations to be compliant with new regulations saw a flurry of acquisitions of Records Management Software companies such as IBM of Tarian, Documentum of TruArc and HP entering the market with their acquisition of Australian RM company, Tower Software. Competition was no longer solely the domain of existing industry players and estimates by Gartner that the global ECM software market would be worth in the region of $4.2 billion by 2010, only served to whet the corporate appetite for acquisition.

Extensive Choice for Customers but Challenges Remain

Compliance, business efficiency and cost continue to be the primary drivers for the adoption of ECM technologies, solutions & services.  It has been, by and large, a recession-proof sub sector of the IT industry.  Over the past 15+ years, the ECM market has been greatly consolidated via acquisition by the traditional players. However, new entrants and convergence with ERP, CRM and Customer Communications technologies have dramatically broadened the scope of what had hitherto been a well-defined niche. 

As a backdrop to the convergence and consolidation taking place in the ECM space, in 2007, a number of credible open source ECM vendors, (including Knowledge Tree, Nuxeo and Alfresco), were beginning to emerge, whilst a plethora of Software as a Service (SaaS) offerings from a variety of sources was also extending the number and variety of solutions available to customers - Choice for buyers had never been broader.

The ability to automate the capture of information as the ‘on ramp’ to a business process has also seen traditional (box) storage records management outsource service companies such as Iron Mountain, The EDM Group, Crown RM, Recall and others, adopt new, higher value, BPO offerings via strategic acquisitions of both software & scanning service companies.
Read: Document Outsource Service Providers - Market Trends and Drivers          

Shifting Focus of MFP Vendors

In parallel with this trend, multi-national scanning & printing hardware (MFP) vendors such as Ricoh, Canon, Lexmark and others, have shifted their focus to providing software and services in the document & content management market. Increased competition, declining hardware margins, a shift to managed print services and a new breed of customers, seeking the ability to scan & print anywhere, at any time on any device, has given rise to a flurry of acquisitions in this sector.  Most notable has been Lexmark with their initial foray into the applications software market via their acquisition of Perceptive Software in 2010, followed by Brainware, Pallas Athena, Readsoft and Kofax, among others, culimating in their being acquired by Apax Technology & PAG Asia Capital for $3.6bn earlier this year. Both software & services acquisitions have driven significant changes to the MFP market. Read: Software & Services acquisitions drive changes for the MFP market

Despite the proliferation and rapid deployment of ECM solutions, as recently as 2011, AIIM conducted a survey of the industry and concluded that a good proportion of its members had yet to successfully manage all aspects of their data across the enterprise in a single ECM system.  4% were using SaaS or Cloud for ECM or document management, and this was set to double in the following year, whilst 6% were using internal, corporate clouds, with fewer than 3% using external (public) clouds. Trust was definitely an issue. Despite this, the report concluded that use of outsourced, corporate clouds was set to treble.

Market Drivers towards a Rosy Future

During Document Boss’ 17 years in the ECM industry, we have spoken to many senior executives in organisations which supply ECM solutions. The consensus throughout, has been that the biggest drivers to uptake of such solutions are the desire to “tame” content, integrate silos of information, facilitate collaboration and, of course, improve business process efficiencies – all, whilst driving down costs. It is no surprise then, that spending on ECM solutions is forecast to continue on an upward trajectory.  Indeed, a report by analysts MarketsandMarkets, quantifies this forecast, stating that the ECM market will grow from $24.61Billion in 2015 to $59.87Billion by 2020.

Prominent among the challenges many such suppliers now face is how to differentiate their solutions offering in a much broader, and increasingly competitive, Information Management market. Which markets and geographies to target? Whether to build or buy? Whether to sell direct or via business partnerships - or a combination of both? - Whether to grow organically, or via funding or acquisition and, how to get the timing right for the successful sale of their business.

Document Boss’ Evolution in the ECM Sector

When we founded Document Boss in 1999, our focus was on senior management recruitment but, over the ensuing years, our business model metamorphosed into its current format, providing M&A (Merger & Acquisition) and exit strategy services to our clients. However, in the perception of some companies, the legacy of recruitment remained with us for a number of years, long after we were solely focused on M&A. 

Despite struggling a little to remove the recruitment label, we ultimately found that it had, in fact, served us well. With our early focus on placing senior executives in the ECM/Information Management sector, we were able to demonstrate our sector knowledge to them and, in treating them with respect rather than trying to pigeon hole them into available positions, we created a great foundation network of future business decision makers.  This “apprenticeship” in recruitment also gave us skills in the people / human aspects of deal making - a critical factor in all M&A transactions.  Over the years, we have witnessed the failure of many M&A advisors whose origins lie in accountancy, the financial or legal professions; their emotional IQ and people skills are sometimes lacking and their ability to empathise with business owners is often hampered by their lack of first hand, practical understanding of the situation.  Conversely, at Document Boss, we have all sat in the business owner chair and know what it is like - on both the good and the bad days.

Moving towards a bright future

As the ECM/Information Management sector has evolved, so has Document Boss. We are now moving into a new era, rebranding and renaming the company in line with modern trends, client demands and what we have learnt over the past 17 years.  Our NEW EVA (Equity Value Accelerator™) Service is unique and adds value that makes engaging with us a win-win for both ourselves and our clients, creating alignment for both parties as we unite in working towards a common goal of increased value for your business. 

Too often, we see company owners who have engaged in one - and sometimes even two - failed M&A assignments. Firstly, they have not been able to recognise what they need to change in their organisation in order to bring their M&A efforts to a successful conclusion. Secondly, even if they have been able to determine what needs to happen/change, they don’t have the in-house skills or resources to make those important changes happen. 

Does Your Business Have Buyer Appeal?

Such necessary changes are often not solely about making the business perform better, but also, about making the business more attractive and presenting it for greater appeal to buyers and investors.  Businesses need to be up-to-date with current market drivers and be able to articulate their value in the prevailing market climate. This is where our decision, some 17 years ago, to specialise in the ECM/Information Management sector, was the correct one.  We have, of course, made a number of mistakes over the years, which time, experience and determination have corrected.  We will probably make a few more mistakes in the future.  All companies do – Just ask Richard Branson about “Virgin Cola” and “Virgin Vodka”.  It’s the ability to identify mistakes, learn from them and move on undeterred that is important.

by Isabel Ross-Edwards