The Evolution of Two Converging Technologies

Electronic Document Management (EDM)

EDM can probably be traced to the first use of computers to process invoices and other financial data in the 1950s. Early efforts of Optical Character Recognition to convert documents to ASCII files were tried almost at the same time. But the use of raster images to store documents did not become practical until the late 1970s when optical laser storage technology became commercially available.

The AIIM show during the mid-to-late 1980s was filled with AOptical Disk@ systems while those same systems were dubbed AImaging Systems@ during the early 1990s. All possessed some amount of EDM to control the images that were captured from scanned paper and microfilm documents.

Simultaneously, some CAD vendors and some independents were delivering systems to manage CAD files which later became product data management (PDM) systems. This kind of EDM system is more tightly integrated with the CAD file structure but performs the basic release control and configuration management functions of some other EDM systems.

Today=s EDM systems control electronic documents of all kinds whether created online or offline (and scan-captured as images). Compound documents, virtual documents, customized documents, electronic forms, are all kinds of electronic documents controlled by these systems. And based on studies by AIIM, these systems are employed in every department of an enterprise, from accounts payable to engineering and manufacturing documentation, from claims processing to customer service records.

Enterprise Resource Planning (ERP)

Inventory control systems were the early implementations of computers to aid the manufacturing process, dating from the 1960s. IBM was one of the first companies to provide a product called APICS (automated process and inventory control system) but generically the systems were called MRP (materials requirements planning). As process plans were incorporated with the bills of material (BOMs) during the 1980s, the systems were dubbed MRPII.

While MRP systems were penetrating the manufacturing departments, CAD systems were penetrating engineering departments. Therein developed one of the key problems for many manufacturing organizations that still exists today: Who controls the BOM?

Also during the 1970s and 80s, separate software packages were developed for other departments of an organization including human resources, order entry, purchasing, manufacturing process planning, etc. In the 1990s, some user companies and vendors began to integrate some of these packages with MRPII to create what is now known as ERP systems. ERP systems tend to be modular, allowing a company to tailor a system to address the business-critical functions such as:

1. Ordering - Sales Representative takes an order and checks price including any customer discounts. If appropriate, credit history of that customer can be checked.

2. Availability - The Inventory module checks stock and notifies sales representative that one-half of the order can be filled immediately from an overseas warehouse. It also tells the representative that the remainder of the order can be supplied from one of their factories within 2 weeks.

3. Production - The Production module schedules the production and notifies the warehouse to ship the existing stock to the customer. An invoice is automatically printed for the quantity shipped.

4. Human Resources - The Human Resources module identifies a shortage of workers needed to fill the remainder of the order and alerts the personnel manager to the need for more workers.

5. Purchasing - The Materials Planning module notifies the purchasing manager to reorder components needed to produce the product.

6. Order Tracking - Order tracking can be performed online by the customer, eliminating the need for customer service to become involved unless there=s a problem.

7. Planning - Based on data from the forecasting and financial modules, the CEO may learn that certain products are in demand and are also highly profitable. He or she can decide to offer some complementary products.

You will note that ERP functions tend to be transaction-based while EDM functions are document-based.

Supply Chain Management (SCM)

One of the highest payback areas of ERP is Supply Chain Management. More manufacturing companies are using outsourced suppliers to deliver just-in-time components and products. The problems in controlling these suppliers may be similar but different than globally distributed manufacturing facilities. ERP modules can be implemented and structured to empower the supply chain with current corporate manufacturing and process information needed to perform JIT deliveries.

Working Together

Some of the ERP vendors are working aggressively to provide EDM and PDM functions with their systems. And since user organizations prefer to deal with one vendor, an offering from the ERP vendor even though weak by comparison, may be chosen.

According to the recent AIIM study on the state of the document management industry, EDM and imaging systems are being used for many of the same applications covered by ERP. Many of the ERP modules require documents from an EDM system. For example, an ERP Financial Module requires contract documents, invoices, and purchase orders; a Human Resources Module requires resumes, training records, job posting and time sheets; a Maintenance Module requires contracts, purchase orders, work orders and training records, in addition to plant drawings, etc. In the case of a customized product manufacturer, tight linkage with a PDM system controlling the CAD drawings, is a requirement.

To provide the total enterprise resources needed, tightly integrated systems with both capabilities are needed. That we define as Enterprise Resource Management (ERM).

Is Succumbing to the ERP Vendors the Only Answer?

One of the solutions of course is to closely align your company with an ERP company. This can take the form of integrating or interfacing your products with one or more ERP products. But which ones? At the high end of the ERP market is the 800 pound gorilla, SAP, followed by BAAN and about six others. If you approach SAP, you will find that company touting its own DMS. Under duress, they may concede to some existing partnerships with Documentum and FileNet. But there are many mid-range market players that could be possible partners. The question is, which one?

Richard N. Stover is Editor and Publisher of Document Management Magazine, and Senior Consultant with ERM Advisors. He may be reached at 602-585-5580 or email: document_management@compuserve.com.