Business Case

Allison Consultancy White Paper

The Business Case for Document Management

Nearly all business functions need to be documented to record and regulate the activity of the organisation. The importance of this activity was recognised thousands of years ago when marks were made on clay tablets to record sales and taxes. The fundamental technology used to record business transactions has not progressed significantly since the Chinese invented paper in AD100 - until recently when electronic alternatives have become available and mature enough for business use.

Why is it Important?

Documents are the physical manifestation of business activity and should be viewed as vital for effective management and control. However, this is often not the case and documents are regarded as a necessary evil whose cost should be minimised. The main reason for this is that paper-based documentation only records the business transactions, and does not allow Management to monitor and control the business activity.

There are a number of drivers that are making businesses examine alternatives to paper:

Increasing Pace and Span of Business

The pace of business life is increasing all the time, as is the geographical span of business operations. The speed at which paper can be mailed from point to point is becoming unacceptable as it often forms the rate-limiting step in the business process.

Customer Expectations of Quality

Expectations of quality of service have increased markedly in the last few years. It is now common for customers to insist that their suppliers are registered to BS5750 / ISO9000. Quality systems produce a great deal of documentation, and require that it be managed effectively.

Regulatory Pressures

A good example of this is the public utilities such as water and gas where regulatory bodies (OFWAT & OFGAS) demand a level of response to customer correspondence within a given time. This presents two problems for Management:

The business activities, with their associated documentation, must be dealt with efficiently.
Management must spend a significant percentage of their time monitoring the response rate, expediting late responses, and gathering statistics for the regulatory body.

Paper-based systems do not provide much scope for improving the first problem, and provide no scope for easing the burden of the second.

Threat of Litigation

There is a growing trend for individuals, pressure groups, and regulators to litigate against businesses. The damages awarded can be very large - enough to impact on the viability of the business. This trend, which started in the USA, is spreading to the UK with the increasing use of ‘no win no fee’ arrangements with lawyers. Successful defence requires keeping accurate and accessible records of business operations.

UK Filing Facts

· 10,000 new filing cabinets are delivered every month

· Each of the 13.5 million UK office workers has at least one four-drawer filing cabinet

· 95% of information is taken out once when it is destroyed

· 50% of searches fail to produce the right document

What Techniques are Available?

This bulletin is not intended to give a detailed technical description of the techniques available to help improve document management. However, in outline these include:

COLD – COLD stands for Computer Output to Laser Disc. This is a replacement for COMFiche and allows electronic management of ‘mainframe’ reports such as statements, bills and management reports. This integrates in seamlessly with other document sources such as scanned images, fax and electronic documents.

Compound Documents & Hypermedia - This is an extension of word processing, which can include photographs, video, sound, and data in a structured fashion.

Document Image Processing - Documents are electronically scanned into a computer system. They can be retrieved, mailed, displayed, and printed electronically. Documents of any type and physical size can be scanned, and the savings are in speed of access and transmission, and in space savings.

Electronic Data Interchange - The exchange of structured information to an agreed standard, either between companies or within a company. EDI has traditionally been used for data such as purchase orders, payments, etc.; but there are moves to expand its use to include documents and technical data.

Forms Removal – Where an application involves handling standard forms, forms removal can be a useful technology for reducing file sizes and improving response time. The initial processing of the form includes electronically ‘removing’ the form from the image, leaving only the data. The form template is added back in again when the image is displayed or printed.

Full Text Retrieval - Text from word-processed documents, and from OCR systems, can be held in a full text database, which allows powerful searching for words and phrases. The original document can be retrieved to show any other information such as signatures, diagrams, photographs, etc.

Internet/Intranet/Extranet – The ability to make use of low-cost web technology for secure, robust business applications is rapidly maturing. This allows document management and workflow to be made available within a business (intranet), between trading partners (extranet) or globally (internet).

Optical Character Recognition - With OCR the computer ‘reads’ the text of the documents scanned in and makes it available in normal ‘ASCII’ form. This can be used to index the documents. Bar codes can also be used for this and are especially useful if a large proportion of the paper to be scanned was sent out by the organisation for completion by its customers.

Records Management - the study of business practices and existing systems to help design more effective solutions. This need not involve the use of any of the techniques that follow. Allison Consultancy is currently working with a major public sector client for whom the best solution was to cease to file the paper!

What are the Benefits?

The benefits to be gained from the use of the techniques outlined above fall into a number of categories:

Tangible Benefits

Improved staff productivity. In highly structured clerical activities the gain can be 20-40%. Even in non-structured activities, a large percentage of staff time can be saved through reduction in information searching time.
Reduction in prime storage space through elimination of filing cabinets etc. A health authority avoided the £1 million cost of a new building to house records by installing an imaging system (at a fraction of the cost). The documentation on the flight-deck of a Boeing 747 weighs 70Kg. This prevents the airline carrying one extra fare-paying passenger per flight.
Reduction in photocopying as everyone refers to the electronic copy.
Reduction in lost file searching. It is estimated that 3% of documents are misfiled, and that the average cost of retrieval is $120 in the US (say £75 in UK). This means an average of $3.60 (£ 2.25) per document.
Reduction in telephone bills. By having near instant access to information, clients’ telephone enquiries can be answered straight away while the client is paying for the call rather than the business having to pay for a return call. One US insurance company is reported to be saving several million dollars a year from this alone.
Improved cash-flow through processing invoices etc. more quickly.

It is often found that the system costs and direct benefits more or less balance, leaving the intangible benefits as ‘free’.

Intangible Benefits

Reduced time-to-market for new products or services
Improved customer service through improved response times and greater access to customer information.
Improved business agility, which allows faster response to market pressures and opportunities.
Improved staff morale from the use of these up-to-date techniques.
Better control and monitoring of the flow of information
Improved security
Improved management of revisions to reference documents
Multiple access to documents - elimination of ‘out-of-file’ conditions
Using communications links, regional offices have full access to all documents. This allows businesses to get physically closer to their customers whilst retaining the control and co-ordination offered by centralisation.
When integrated with the existing IT infrastructure, it can add significant benefits on existing systems (leverage).

Compliance

As mentioned above, there are increasing regulatory pressures on businesses. Electronic data management can help in two ways:

It can improve the response time to customer queries through the more efficient processing of cases and enquiries
Because the documentation is flowing through an electronic system, monitoring, exception reporting, and management statistics can all be gathered very simply without the time-consuming manual procedures necessary at present.

These benefits can be summarised as improvements in efficiency, improvements in effectiveness, and business process transformation:

The Way Forward

Businesses are facing increasing competitive pressures to provide low-cost yet high quality services. A number of techniques to improve document management have now emerged and become mature enough for business use. Many businesses are gaining competitive edge through the use of these techniques, and those that lag behind will find themselves having to move very quickly to catch up.

About Allison Consultancy

Allison Consultancy is an independent organisation, which specialises in all aspects of EDM strategy, implementation and training and maintains links with all the suppliers in the EDM market. Through a network of experienced associates, we offer clients the skills of a consultant familiar with implementing EDM in similar situations to their own. We are pleased to work with clients at all stages from an initial feasibility study through building the business case, needs analysis and definition, procurement and implementation support and post project review.

Please call Dik or Joy Allison for further information: Tel 01777 871506 or e-mail info@allicon.com.