Most managers agree that documentation is a good business practice. It improves efficiency, consistency and clarity while providing a reference point for risk mitigation. Few, however, understand the power that documentation has to increase the value of their companies. Documentation, when done properly, takes ideas, processes, and practices and turns them into something tangible. In doing so, documentation becomes an asset that provides your company with future value.
If you are like most companies, you probably spend tons of money on finding, training, and retaining the best employees, hiring and training staff, and then pumping out large fees for consultants to provide new expertise. While this cycle of hiring, training, and consulting is a normal part of business, without an effective documentation system, companies lose the ideas, processes, and systems that they have already developed and are then “reinventing the wheel” in spending on new competencies. Leveraging the existing intellectual capital within your organization through effective documentation will allow you to stop this cycle of throwing away money on excessive resources.
It is important to remember that the investment your company has put into hiring, training, and consultants has generated synergies unique to your organization. Your company owns the value created by the synergies in the people that you have brought together. Through an effective documentation process, your company can capture these synergies and store them in a system that enables intellectual capital to be easily retrieved and unlocked for your own competitive advantage.
This concept of documentation increasing the value of a business is no different for individuals. Consultants who package their ideas and who take the time to write them down command higher rates in the market. Individuals who write books and articles have created a tangible asset. Every individual and every company has a unique story with its own experiences, background, training, and education. Companies that can capture this unique story are at a significant advantage over their competitors. By capturing a company’s intellectual capital, documentation provides better leveraged value, allowing you to become the expert in your own technologies, methodologies, and processes.
There are a few obvious examples of how documentation can increase the value of your organization. One example is achieving a patent, where documentation takes intangible concepts and turns them into a tangible, monetized asset. Another example is the direct sale of your company where documentation is required as part of the due diligence process. But there are many less apparent and more common areas where documentation has the potential to increase the value of your company. These areas include the following;
- Business Processes – Companies with strong business process documentation have created an asset which provides repeatability. Process documentation provides many benefits including training new employees, mitigating the risk of employee turnover, and improved process efficiencies.
- Training – Training material is an important asset for clarifying roles and responsibilities and for ensuring that new staff members are up to speed quickly and that company information is not lost in the minds of exiting staff.
- Project Documentation – Excellent project documentation systems are assets that provide companies with improved project momentum and project success.
- Marketing – Marketing is an area where effective documentation practices are often overlooked, as it is less affected by regulatory compliance. Companies should view their customer relationships as assets which needed to be managed in a documentation system. This includes managing marketing collateral to be ready to provide materials to potential clients on demand.
- Consultants – Few companies monitor the documentation of their external consultants and are thus left with little understanding and value from their work. Companies can increase their value by better monitoring and storing the documentation of their external consultants.
So, how can your company increase its value through documentation?
- First of all, your company must understand what documentation is. Documentation is not a pile of static binders and folders sitting in your backroom. Documentation is, in fact, a five-step process that consists of (1) capturing, (2) structuring, (3) presenting, (4) communicating, and (5) storing written information.
- Secondly, your organization must have management support for documentation. It must be understood that the documentation exercise is a strategic process designed to capture intellectual capital.
- Lastly, you must have the right resources, drawing from a comprehensive set of skills that includes technical writing, visualization and formatting.
Through understanding documentation, senior management support, and engaging the right people in the documentation process, your company has the ability to not only improve its efficiency and competitive advantage, but also increase its value.
Culled from: Bellehumeur & Associates