Digital Mailrooms: Fixing Your Weakest Link in the Customer Value Chain
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Digital Mailrooms: Fixing Your Weakest Link in the Customer Value Chain

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This paper makes the case that sluggish, error-prone mailflow processing suppresses revenues from both new and existing customers, diminishing overall satisfaction, brand equity, and loyalty....

This paper makes the case that sluggish, error-prone mailflow processing suppresses revenues from both new and existing customers, diminishing overall satisfaction, brand equity, and loyalty.

The digital, online, pan-regional processing of customer-generated paper-based communications—a function of DIGITAL MAILROOMS—speeds an organization’s overall time to satisfy customer criteria for timely and more personal service fulfillment.

Faster time to satisfy customers unlocks revenues already in engagement-revenue pipelines, adding the equivalent of 2.9 days of revenues to the firm.

This paper demonstrates how other productivity dividends (cost and labor savings) fund enterprise wide digital mail processing and paperless business processes.

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Digital Mailrooms: Fixing Your Weakest Link in the Customer Value Chain Digital Mailrooms: Fixing Your Weakest Link in the Customer Value Chain Presentation Transcript

  • ........................ .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... .......... Executive White Paper Digital Mailrooms: Fixing Your Weakest Link in the Customer Value Chain Business case for the centralized digital processing of paper- KEY TOPICS ADDRESSED • Lifecycle costs of paper-based mail and customer-generated based mail, business forms, faxes, and email, speeding an documents organization’s overall time to satisfy customer requests for • Exhaustive inventory of compound documents by industry • Distributed fast-cycle collaboration with virtual customer information, order processing, and service fulfillment engagement files • Featured use-case productivity models: - Loan processing Business process benchmarks analyzing faster cycle-time contributions - Order processing to the customer engagement and revenue pipeline of new customers - Accounts receivable and existing accounts - Mortgages TABLE OF CONTENTS PAGE 3 Summary 4 Executive Primer: Digital Mailrooms 11 Digital Mail Processing 19 Strategic Use Cases and Payback Scenarios 34 Enterprise Content Processing Infrastructure
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWho helped produce this white paper? Who is GISTIcS?AuTHor coNTrIbuTorSmIChael moon alex marTInezPresident, CEO Product Marketing ManagerGISTICS Incorporated Open Textmoon@gistics.com amartine@opentext.com THINK TANK For EArLY STAGE-MArKETS mIChael Cybala GISTICS constitutes a think tank that speeds the adoption of new technology and disruptiveANALYST Director, Program and innovations among enterprises and consumers. Founded in 1987, GISTICS Incorporatedjoel warwICk Product ManagementPrincipal SAP Solutions Group minimizes the risk of potential buyers through the following:JAW Consulting mcybala@opentext.com • Interviews with successful early adopters of new technologiesjoel@joelwarwick.com • Definition of the critical success patterns of successful early adopters roland jaGerDESIGN, LAYouT, Product Manager • Activity-based analyses of adoption benefits on supply chains, workflows, and userEDITING, ProDucTIoN Open Text activities rjaeger@opentext.comlIanne mUeller • Visual explanations of how new technologies produce economic valueArt Director johanneS SChaChT • Investment analyses that justify the purchase of new technical systemsFly Design Media Director of Marketing Open Text Document Technology • Project roadmaps that break down large-scale organizational changes into smaller two-lianne@flydesignmedia.com johannes.schacht@opentext.com week to two-month projectsIrIS alroy • Practitioner portals that clarify the next steps in rapid deployment and paybackProduction Artist Gerhard deTzelGISTICS Incorporated Strategic Planning • Certified consultants that provide essential skills and resourcesresearch@gistics.com Open Text GISTICS drives the emergence of shared vocabularies, the adoption of effective problem- gerhard.detzel@opentext.comkaThleen mCFadden determination methods, and the development of unassailable investment analyses that justifykmcfadden@writetools.com jaSon weIr purchases of new technologies or disruptive innovations. Senior Manager, Product MarketingSTeve TUrner Open Text GISTICS attracts early adopters and pace-setting solutioneers, demonstrating how they canTurner Associates jweir@opentext.com use new technologies or disruptive innovations to make money by delivering new complex,steve@turnersf.com integrated solutions to enterprise or consumer clients. GISTICS develops breakthrough market-making strategies for vendors of new technologies or disruptive innovations, using industry thought leadership, executive white papers, Webcasts,GISTICS InCorporaTed4171 Piedmont Avenue, specialized Websites, and a global trust network of advanced project managers within largeSuite 210 enterprises, independent consultants, and small master-class solution providers.Oakland CA 94611 USAwww.gistics.com+1.510.450.9999 tel+1.510.450.0954 fax WHAT’S IN THE NAME? gist ’jist n -s [AF, it lies (said of©2009 GISTICS Incorporated. All a legal action), fr. MF, 3d pers.rights reserved. Printed in the U.S.A. sing. pres. indic. of gesir to lie, fr. L jacére to lie, fr. jacere to throw — more at jet (to spout)]GISTICS and its agents have used 1: the main point or material parttheir best efforts in collecting andpreparing information published in (as of a question or debate) : thethis executive white paper, Digital pith of a matter : essence (the ~Mailrooms: Fixing Your Weakest Link of a question) <the ~ of all thatin the Customer Value Chain. GISTICS can be said upon the matter—R.does not assume, and hereby dis- L. Stevenson> 2: the ground orclaims, any liability for any loss or foundation of a legal action withoutdamage caused by errors and omis- which it would not be sustainablesions in this white paper, whethersuch errors or such omissions —Webster’s Third New Internationalresulted from negligence, accident, or Dictionary Unabridgedother causes. GISTICS | EXECUT IVE W HITE PA P ER | Digit al Mailroom s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 2
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat summarizes the business case for digital mail processing and the deployment of digitalmailrooms? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedWEAKEST LINK OF CUSTOMER ENGAGEMENT SERVICE-FULFILLMENT CYCLES TIME TO SATISFY CUSTOMERSMost large business-to-consumer and public In the course of interacting with customers, This paper makes the case that sluggish,sector organizations seek better and less hundreds to thousands of organizational staff, error-prone mailflow processing suppressescostly ways of serving customers, growing as well as partners, must satisfy a diverse revenues from both new and existingrevenues, and reducing exposure to risk. range of customer criteria for information customers, diminishing overall satisfaction, or service fulfillment, using all available brand equity, and loyalty.This paper makes the case that automating information sources, including paper-basedphysical mailroom operations supports all three The digital, online, pan-regional processing correspondence, forms, and documents.strategic aims, shoring up one of the weakest of customer-generated paper-basedlinks of customer engagement: cycle times and The inbound handling and distribution of communications—a function of DIGITALmistakes in physical mailflows. individual pieces of mail—letters, orders, MAILROOMS—speeds an organization’s contracts, etc.—often represents the weakest overall time to satisfy customer criteria forCUSTOMER ENGAGEMENT link in the customer value chain, adding timely and more personal service fulfillment.The growing preference of customers for significant time delays, paper management Faster time to satisfy customers unlocksonline, interactive services continues to drive costs, and barriers to fast-cycle collaboration revenues already in engagement-revenueoverall expectations of value and satisfaction, among decision-making teams. pipelines, adding the equivalent of 2.9 days ofdemanding that enterprises improve all The manual, duplicated, and physical revenues to the firm.customer-facing business processes. logistics workflows or mailflows consist This paper demonstrates how otherThe relatively new term, customer of receiving, sorting, distributing, and productivity dividends (cost and labor savings)engagement, conveys a new strategic priority using customer-generated paper-based fund enterprise wide digital mail processingand operational capability of the enterprise: communications. and paperless business processes.how to attract, serve, and keep customers for Mailflow processing that includes orders,life. change orders, complaints, requests for SUMMARYNetworked customers demand faster, information, and contract amendments Digital mailrooms increase revenues,more cogent, and transparent fulfillment of (especially compound, multipart documents speeding an organization’s overalltheir requests for information, service, and that require two or more people to review and contribute to an appropriate response to the time to satisfy customers in thesatisfaction. customer) slows an organization’s overall time engagement-revenue pipeline and,Digital mailroom processing marks the next to satisfy customers and potential buyers. thus, funding enterprise wide digitallogical step in improved customer engagement. mail processing. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 3
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systems Section 2 Executive Primer: Digital Mailrooms PAGE ESSENTIAL QUESTIONS ADDRESSED 5 What’s the strategic case for Digital Mailrooms, automating the digitization and process orchestration of in-bound physical mail, email, business forms, faxes, and compound documents? 6 What assumptions support the case for digital processing of in-bound mail, business forms, compound documents, and emails with attachments? 7 What areas of a customer value chain benefit from digital mail processing? 8 What constitutes a service-fulfillment cycle, framing the productivity contribution of digital mail processing? 9 What types of mail drive the business case for digital mail processing and centralized digital mail rooms? 10 How do faster cycle-times of digital mail processing contribute to major launches, customer engagement, and revenue pipelines? GISTICS | EXECUT IVE W HITE PA P ER | Digit al Mailroom s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 4
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat’s the strategic case for digital mailrooms, automating the digitization and process orchestration of inbound physical mail,email, business forms, faxes, and compound documents? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedLIFEBLOOD OF ORGANIZATIONS Greater asset-utilization rates FASTER CYCLE TIME INCREASES SALES, LOWERS COST, AND ADDS represent handling higher PROCESS AGILITYFinding and serving customers define the volumes of more diverse andpurpose of all organizations, commercial or complex interactions with buyers TIME TO SATISFY CUSTOMER REQUESTS FOR SERVICE OR INFORMATIONpublic sector. and customers—how firms satisfy Manual Mail Processing 4.5 Days Days 4.5If customers represent the lifeblood of evolving customer requirements,organizations, then communication serves as especially among networkedthe heart and workflows as the arteries. buyers. DIGITAL MAIL PROCESSINGALL ABOUT CYCLE TIME Greater business process transparency gives management 1.6 Days 2.9 Day Cycle-time GainThis paper makes the case that digital new operational and data-basedprocessing of inbound mail, customer insights—how firms can focus on Productivity Drivers Productivity Dividendscorrespondence, and compound documents higher value-added opportunities • Centralized mail-item processing: • Sales pipeline accelerationspeeds the fulfillment of requests for service and challenges. -Extended operation hours / shifts -Peak level loading with subcontractors • Incremental closings of opportunistic dealsand information, creating productivity • Faster processing of complex • Lower lifecycle costs of business records,dividends. Better visibility of high-priority workflows: forms, and compound documents accounts means senior managers -Loans • Greater asset-utilization rates through -Leases consolidated mailrooms and teamsPRODUCTIVITY DIVIDENDS can track and expedite delays in -Multivendor systems • Greater business process transparency establishing new major accounts -Statements of work and monitoringThis paper shows that greater productivity in or the handling of nonstandard • Faster problem determination: -Customer complaints • Better visibility and handling of high-mail workflows returns its investment in several customer requests—how firms can -Change orders and expedited priority accounts and situationsareas: backorders make their quarterly goals without -Disrupted vendor supply chain flowsSales pipeline acceleration represents faster creating a big mess or breaking • Faster receivables workflow: -Outstanding item resolutionbuying cycles—the result of faster, more the system. -Proof of receipt or acceptance • Instant multiparty collaboration: -Subcontracted work -Instant bill presentationinformed interactions with new and existing Digital mail processing can deliver • Instant online status: -Multiproduct / multivendor configurationscustomers. additional dividends, emphasizing -Rerouting -Ad hoc “Huddles” -Risk, compliance, or clearance -Remote office / call centerIncremental closings represent opportunistic the particular aspects of individual -Peer-to-peer handoffs -Quick approvals decision makingsales—often the result of faster approvals and organizations, industry norms, and -Fast escalation / triageexpedited order processing. statutory requirements. Time_to_Satisfy_RFI.A.1.5 © 2009 GISTICS All rights reserved.Lower lifecycle costs represent going digital Faster processing of inbound physical mail and documents saves an average of 2.9 days in the time it takes to receive,earlier in the document lifecycle, lowering costs sort, and route customer communications to the appropriateof administrative labor, interim paper storage, internal staff or department, producing a number of immediateand long-term business records archives. economic benefits and longer term process management options. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 5
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat assumptions support the case for digital processing of inbound mail, business forms, compound documents, and emailswith attachments? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedNEXT STEP IN THE JOURNEY OF AUTOMATION Faster cycle times in customer- FIXING THE WEAKEST LINK OF CUSTOMER VALUE CHAINS facing communications, interaction,Business IT history reveals that automation and handoffs accelerate the coreof seemingly small units of work throughout a Digital business process of finding and Maillarge organization often produces significant, keeping customers. Processinglong-reaching effects. AUTOMATES Time to SatisfyThe figure to the right depicts the core TIME TO SATISFY REQUESTS Requests for Service SPEEDINGassumptions that support the case for digital Centralized mailroom operations Centralized or Information Mailroommailrooms, emphasizing three immediate, speed the routing of digitized Operations BY WAY OFlong-lasting benefits: items, using workflow engines and Handoff Delays, Monolinear Queues, REDUCING • Increased productivity of frontline business records managers—how and Manual Searches knowledge workers and trade partners— firms integrate digital mailflows into especially those parties that contribute to their core business applications and Throughout a Customer Value Chain revenues and customer satisfaction business records management. Communications, Interactions, and Handoffs among • Improved satisfaction of customers Staff, Trade Partners, Customers, and Regulators Digital mail processing automates through faster service-fulfillment cycles and Greater the digitization, profiling, and better, more informed answers by frontline ADDING ACTIVITIES PRIMARY VALUE- Manufacturing MA cataloging of all inbound mail and Development New Product Service and Distribution Operations/ Leadership workers Marketing DIF F ERENTIATION Logistics/ and Sales Logistics RG Inbound Support faxes, including email with attached Digital_Mailroom_Case_A.2.3 ©2009 GISTICS Incorporated, All rights reserved. IN • Enhanced orchestration of complex, pan- R&D documents or images, business regional business processes—important in Organizational Infrastructure SUPPORT ACTIVITIES forms, and complex multipart Finance and Legal the era of consolidation and globalization of documents. Human Resources a workforce ICT Infrastructure Procurement and Vendor Management Lower This paper explains each of these IT THEN FOLLOWS THATSERVING CUSTOMERS key assumptions, quantifying D I G I TA L MAILROOMS PROVIDE THE MISSING LINK, the business value of bottom-upAs wryly noted by Peter Drucker, the guru automation.on management and knowledge worker INCREASING IMPROVING and ENHANCINGproductivity, “A firm has no other purpose thanto find and keep customers.” Digital mail processing Productivity of Front Customer Satisfaction, Orchestration ofCustomer value-chain models depict the constitutes the next logical- line Knowledge Workers Loyalty, and Share-of- Complex, Pan-regionalprimary and support activities of a firm, step in enterprise automation and Trade Partners Wallet Revenues Business Processescalling attention to the central role that and business process • Customer service • Better informed answers • Innovating new services management, speeding the • Account development by staff • Launching new offeringscommunications, interaction, and handoffs play time-to-satisfy requests for • Contract administration • Risk or compliance • Faster fulfillment of customer needs • Processing new accounts and complex ordersin finding and keeping customers. • Fewer defects, mistakes, • Servicing customer requests service and information by and do overs customers and trade partners. • Greater visibility of priority customer accounts GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 6
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat areas of a customer value chain benefit from digital mail processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedVALUE-CHAIN INTERACTIONS SERVICE-FULFILLMENT CYCLES It then follows that faster inputs to those service-fulfillment cycles, coupled with moreEach organization within an industry or Over the span of any business day, a larger complete and accessible “answers” increasesbusiness ecosystem incorporates the value- enterprise will start and complete a multitude of overall productivity in the customer valueadded products or services of upstream tasks in service of customers. chain: increased revenues!suppliers, adding distinctive value to its Service fulfillment describes the basic workown products or services that downstream of serving customers and serving those whocustomers incorporate and pass along to the service customers. The faster a firm completesend-chain customer. service-fulfillment cycles represents a primaryThe figure on the right depicts a value-chain source of revenue: satisfied customers.business entity, suggesting how digital mailprocessing might spread throughout many ANY AREA THAT RECEIVES EXTERNAL MAIL OR DOCUMENTS BENEFITS FROM DIGITAL MAIL PROCESSINGareas of the enterprise. Communications, Interactions, and Hand offs among Staff,VALUE CHAIN BUSINESS ENTITY Trade Partners, Customers, and RegulatorsMichael Porter, the international authority oncompetition, first introduced the concept of avalue chain business entity, emphasizing the Greater ADDING ACTIVITIES PRIMARY VALUE-value-adding activities of the firm. Manufacturing Marketing and MA Development New Product Service and Distribution Operations/In the example shown to the right, the higher Leadership Logistics/ DI FFERE NT IATI ON Logisticsvalue-adding activities start with R&D and RG Inbound Supportnew product development and conclude with Sales IN R&Dservice, support, and leadership.However, every firm must build and maintain Organizational Infrastructure SUPPORT ACTIVITIES SERVICE(or access a partner’s) organizational FULFILLMENTinfrastructure—support activities. Finance and Legal CYCLE SS F E ASS In particular, the ICT infrastructure UL Human Resources FILL(computers, telecommunications, data centers,etc.) supports digital mailrooms, integrating ICT Infrastructureautomated mail processing with existing or PLAN Procurement and Vendor Management Lowernewly developed workflow platforms and Value_Chain_Entity.E.1.2 © 2009 GISTICS Incorporated, All rights reserved.records management systems. The elimination of one communication or interaction cycle (follow-up telephone call, fax, email) in the time to satisfy ALL paper-based requests for service or information can add up to tens of millions of dollars in savings and increased revenues. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 7
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat constitutes a service-fulfillment cycle, framing the productivity contribution of digital mail processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedSERVICE-FULFILLMENT CYCLES BRAND VALUE • Permanent collections of all related information objects and feeds—digitalIndustry benchmarks of business response Customer satisfaction represents many customer files—enable faster completion oftimes to customers using telephone, email, aspects of a complex business operation service-fulfillment cycles.website, online contact center, fax, and coming together to meet or exceed thephysical mail services reveal significant delays customer’s expectations and criteria for value • Online service-fulfillment cycles enablefor physical mail and faxes. and quality. account managers and executives to monitor the number of completion rates of service-The figure on the right depicts the common Fast, courteous, well-informed, and effective fulfillment cycles by account, workgroup, andelement of all customer requests, a service- answers, fulfilled correctly on the first time region—a way to manage by exception andfulfillment cycle. represent the ideal. marshal resources to achieve a strategicCurrent condition represents a status quo Digital mail processing moves an win.until a precipitating event occurs, initiating a enterprise closer to that ideal in four FASTER TIME TO SATISFY REQUESTS CREATES NEW BRAND VALUEservice-fulfillment cycle. ways:The clarity, succinctness, and form of requests • Digitization of physical mail, Current Condition B ra n doften vary, ranging from hysterical complaints forms, faxes, and compound REWORK START HERE documents creates more SUB-CYCLE(S)(weak, ill-formed requests) to well-reasoned ! 1 potential answer-making 2and comprehensive descriptions of the 3 PRECIPITATINGproblem, likely causes, and possible solutions. resources. Affirm Equity INCIDENT • Secure, searchable, onlineAssessment may entail a single staff member global repositories enable Detract Complainresponding to a customer’s need, applying a any number of authorizedknown policy (or policies) and resources at participants to use answer- Satisfaction Requesthand (information and applications) to satisfy making resources.the customer—clearly the ideal situation. Insufficient Keeping customers AssessHowever, many service-fulfillment cyclesrequire internal or external multiparty, entails answering Confirm S questions and TION Smultistep workflows, delaying cycle IE RT provisioning PA ORA ALtimes and contributing to the heightened services. Faster RN LAB E INT OLdissatisfaction of customers. service-fulfillment YC RT PA cycles of customers’ LTIThese multistep workflows may include requests increase EP, MU TIST S IEmany iterative cycles and a changing cast of satisfaction and Fulfill MUL RT PA Plan NA Lworkflow participants across the phases of the likelihood of EX TE Rassess, plan, fulfill, and confirm of the service- retaining loyal customers. SERV ICE-FULFILLMENT CYCLEfulfillment cycle. Service_Fulfillment_Cycle.A.2.2 ©2009 GISTICS All rights reserved GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 8
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat types of mail drive the business case for digital mail processing and centralized digital mailrooms? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedCRITICAL MAIL ITEMS IN COMPLEX MAILFLOWS TIME TO SATISFY CUSTOMER REQUESTS Complex workflows also emphasize what we call service-fulfillment cycles—demand byHow many important pieces of mail get lost The bottom figure on the right depicts a customers for information related to a buyingin the daily shuffle of mailrooms and Website category of critical mail items in complex decision, support related to using a product orcommunications, delaying sales cycles, workflows—a small, often quite diverse, and service, and service of an account or program.creating higher-cost personal interventions meaningful portion of all inbound mail thatby field sales or customer service staff, or represents considerable value: new accounts, High volumes of inbound mail can obscureputting the firm at risk of noncompliance with orders, and service requests. critical mail items. Complex workflowsregulations? with multiple parties and hand offs entail The number of decision-making variables additional risks: delay, mistakes, and customerThe sheer volumes of mail and the diverse or items to consider in taking well-informed dissatisfaction.types of mail make it difficult to answer that actions and the number of participants whoquestion. engage in two or more decision points all contribute to the complexity of core businessIn this paper, we make the case that the digital processes.processing of higher added-value mail willdeliver sufficient short-term value that the firmwill recoup the total investment in a centralizeddigital mailroom.The top figure on the HIGH VOLUME MAILFLOWS OFTEN HIDE CRITICAL MAIL ITEMSright depicts how greatervolumes of mailed and GREATER GREATER GREATER GREATERemailed items and a greater High-risk Critical Mail Number of unique types of mail and documents processednumber of unique types of Mailflows Items in and authorizers per service-fulfillment cycle making variables, and service-fulfillment steps Number of variables or items to considermail and documents can Complex Number of workflow participants, decision- Number of decision-makers, reviewers in taking a well-informed actionmask inherent business Workflows DECISION POINTS PARTICIPANTSrisks—communications and ENTAILMENTSdocuments that entail a TYPESgreater number of workflowparticipants, decision-makingvariables, and service-fulfillment steps. FEWER FEWER FEWER FEWER Doc_Volume_Decisions_Participants.B.1.3 © 2009 GISTICS, All rights reserved. LOWER VOLUME GREATER LOWER VALUE GREATER Number of mailed and emailed items processed GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 9
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow do faster cycle times of digital mail processing contribute to major launches, customer engagement, and revenuepipelines? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedTHE VALUE OF ONE DAY’S REVENUE VALUE CREATION CUSTOMER ENGAGEMENT LIFECYCLEFrontline service staff’s instant access to The major launch of new products, campaigns, Today, organizations must re-engineer howthe pertinent information of a customer’s partnerships, or business models often they attract and keep customers for life.situation—digital account files composed of represents the most significant source of new Online consumers expect more: better, faster,previous emails, voicemails, and digitalized revenue for most firms. cheaper.correspondence, forms, faxes, and A 2.9 day cycle-time gain in faster fulfillment of The customer engagement lifecycle modeldocuments—speeds completion of service- customer questions and faster processing of depicts additional needs for a more informedfulfillment cycles first-time orders correlates to more sales in the and agile context for communication andFaster completion of service-fulfillment cycles product sales lifecycle. interaction.can add up to significant positive effects for thefirm. CYCLE-TIME GAIN IN PROCESSING INBOUND MAIL ADDS VALUE THROUGHOUT THE FIRMGISTICS’ research of digital mail processingreveals that a medium to large enterprise can CUSTOMER ENGAGEMENT LIFECYCLEexpect an average net gain of 2.9 days in allbusiness processes that rely upon inbound STATUS OF BRAND No awareness Awareness Consideration Trial Purchase Preference Commitment Repurchase Advocacy Collaborationmail and related documents. IDENTIFICATION OF WEB USER Unknown Known Profiled Customerized Certified BRAND CONVERSIONS Lead generation (BC1) Facilitated Buying (BC2) Retention (BC3) Loyalty (BC4) WOM agents (BC5)A quick calculation of the 2.9 day cycle-time gain suggests that a firm with $1 billion VA L U E - C R E AT I O N P R O C E S Sin annual revenues or roughly $4.5 millionper business day (from 220 days in a year)can add up to $13.5 million in incrementalrevenue—essentially adding 2.9 days to thefiscal year. Offer-market Demand Sales Satisfaction Strategic development creation conversion fulfillment developmentThe figure below depicts three areas ofbenefits from a 2.9 day cycle-time gain,calling attention to the pervasive effects ofprocessing inbound mail, forms, faxes, anddocuments and integrating those native digital MAJOR LAUNCH: Products, Campaigns, Partnerships, Business Modelsobjects such as emails and their attacheddigital files. Pipeline_Engagement_Sales.B.1.0 ©2009 GISTICS All rights reserved. Faster, more informed service-fulfillment cycles, using the digitized objects from digital mail processing, enable frontline sales to close more business, customers to more fully engage in self- service workspaces, and firms to maximize the sales potential of major launches. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 10
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systems Section 3 Digital Mail Processing PAGE ESSENTIAL QUESTIONS ADDRESSED 12 What summarizes the basic idea of digital mail processing? 13 How can an activity model of enterprise mail flows highlight the value of digital mail processing? 14 Which of these types of documents flow through your enterprise operations? 15 Which of these types of documents flow through these industries or supply chains? 16 How long must firms store various types of business records and customer communications? 17 What constitutes a customer engagement package, a logical collection of digital contents of a digital customer file? 18 What elements comprise a customer engagement package? GISTICS | EXECUT IVE W HITE PA P ER | Digit al Mailroom s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 11
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat summarizes the basic idea of digital mail processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedLAST HOLD-OUT OF THE PAPERLESS OFFICE ALREADY DIGITAL AND READY TO INTEGRATE ALL-DIGITAL MAIL FLOWSSuccessive waves of innovation in IT and Much of the existing communications and Digital mail processing entails the digitizationInternet technologies drive gains in productivity, messaging already exists in digital form: emails of physical mail and the integration of thesebusiness agility, and customer engagement. and their attached files, digital dispatches from newly digitized items with email, digital camera phones, faxes, online file transfers dispatches, and web content.Digital mail processing constitutes another (FTP and HTTP), digital newsletters, and Webmeaningful step toward business process Digitizing physical mail upon first receipt pays posts (Web pages, user-generate content, andautomation and the long-time vision of the several downstream dividends: Web-user session recordings, etc.)“paperless office.” • Faster, more agile fulfillment of revenue- Digital mail rooms simply bring physical producing workflowsThe figure below depicts the basis elements mail and documents into the digital flow of • Lower labor expenses and physical costsof digital mail processing, calling attention to information. associated with the life cycle of businessexisting digital flows of communications andfiles. information and records managementDIGITIZING UP-FRONT REDUCES COST, ERROR RATES, AND TIME-TO-SATISFY REQUESTS FOR INFORMATION OR SERVICES O R I G I N AT E CAPTURE I N T E G R AT E MANAGE PROCESS PRESERVE P H YS IC AL • Correspondences MAIL • Forms and applications • Agreements Digital Workflow • Statements of work Manager Archival Mail B ra n d Current Condition Policies • Coupons and contests START Processing REWORK SUB-CYCLE(S) HERE !DIGITAL SOURCES 1 2 3 PRECIPITATING EMAIL • Plain text Affirm Equity INCIDENT Bankers Box • Rich text • PDFs Enterprise • MS Office docs Enterprise Content Complain Detract • Photos, scans, etc. DI GI TAL Data Sources Repository Physical Digital Satisfaction Request Long-term Long-term M AI L ROOM Storage Storage OPERATI ON S DIGITAL • WiFi/3G camera photos • Scan: digital INTERACTION Insufficient D I SPATC HES • Faxes image DEVICES Assess • FTP/HTTP transfers • Capture / crop PC Confirm S • eNewsletters TION digital image S IE RT PA ORA • Classify / index ER NA L LAB • Extract data item Smart INT WEB • User-generated content OL Phone YC – OCR or Auto-Fill POSTS • Syndicated content RT A – Manual data input TIP UL • Webpage "snapshot" • Dispatch to Web Mail STE P, M S ULTI IE Fulfill RT • Session recording workflow Plan M AL PA RN TE Fax EX SERV Mail_Flow_Model.A.1.5 © 2009 GISTICS All rights reserved. Handheld ICE-FULFILLMENT CYCLE Service_Fulfillment_Cycle.A.2.2 ©2009 GISTICS All rights reserved GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 12
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can an activity model of enterprise mail flows highlight the value of digital mail processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedCENTURIES OF HABIT TOTAL ELAPSED END-TO-END TIMES DIGITIZE NOW OR LATEROrganizations have received and handled mail This activity model shows that physical This activity model also calls attention to afor nearly two centuries without much change workflow takes an average of three to eight stunning irony: enterprises will eventuallyin the basic structure or task. days to complete mail transport within a digitize many of their business records large enterprise and another four to nine and customer communications and incurThe figure below depicts a general activity days to complete a service fulfillment—the tremendous costs of a paper-based workflow.model for the typical physical and digital mail satisfaction of a request for information or This paper makes the now self-evident caseflows, calling attention to two workflows: mail service. Digital mail processing slashes the to digitize paper-based mail upon receipt,transport and service fulfillment. total number of days elapsed (both workflows eliminating the costs of duplication, local combined) to 1.3 to three days, saving 5.7 to storage of 9 ± 5 duplicates, the labor of an 14 days. end-of-lifecycle assessment, and long-term record storage.ACTIVITY MODEL OF TYPICAL MAIL FLOWS REVEAL SIGNIFICANT OPPORTUNITIES FOR PROCESS IMPROVEMENT MAIL TRANSPORT WORKFLOW SERVICE FULFILLMENT WORKFLOW TOTAL DAYS ELAPSED 3 to 8 Calendar Days 4 to 9 Calendar Days 7 to 17 Days RE CE IVE M OVE AS S E S S RESEARCH R E S O LV E R E S POND MONI TOR ARC HI V E • Intake mail tubs • Load carts • Read incoming • Access workflow • Review request • Telephone or fax • Confirm satisfaction • Assess itemsPhysical • Unbundle packs • Visit mail-stop • Verify account • Forward to staffer • Edit or request summary or rework subcycle • Certify to policy • Bulk sort: piles • Pick-up bundle • Determine issue • Confirm hand-off clarification(s) • Print cover letter • Run reports and • Store or DIGITIZE – Discard junk mail • Put to inbox • Open new case • Research answers • Discuss / IM / Email • Package for mailing summaries official records – Reroute to other • Approve or reject • Route pick-up • Expedite lagging cases • Journal items address(es) • Pick-up items • Label case folder • Compose response • Return to desk • Create correspon- • Add to correspondence • Add to correspondence • Update case folder • Declare official records • Offline / offsite – High / low priority • Photocopy (3) dence folder folder folder • Destroy (16 to 18) • Warehouse or • Certify received photocopy duplicates • Initiate workflow • Request approval destroy • Pre-route to trays • File a copy TOTAL DAYS ELAPSED 0.5 to 1 Calendar Day 0.8 to 3 Calendar Days 1.3 to 4 Days CA P TU RE M AN AG E PROCESS R E S O LV E P R OV I S I ON MONI TOR ARC HI V E • Ingest into repository • Read online • Review request • Execute email with • Review cases • Assess items DIG ITAL M AI L • Assign to workflow(s) • Access account • Edit or request links: pending • Certify to policy P ROC E S S I N G • Multi-route items • Determine issue clarification(s) – Teleservice center – Customer engagement • Run reports and summaries • Store official – Teleservice representative • Collaborate online • Discuss / instant records • Scan: digital imageDigital package – Account manager with multiple parties message / email – Interactive FAQ • Expedite lagging • Journal items • Capture / crop digital • Link to policy manager cases • Research answers • Approve or reject database • Offline / offsite image • Integrate to IT services • Telephone with • Declare official • Compose response • Notify Account • Warehouse / • Classify / index – ERP, CRM, Portals Service confirmation records – ECM, BPM, Email • Request approval destroy • Extract data item • Destroy duplicate – OCR or Auto-Fill • Build customer digital copies – Manual data input engagement objects Mail_Asset_Lifecycle.A.1.7 © 2009 GISTICS All rights reserved. • Dispatch to workflow – Previous correspondences, mailers, business records, etc. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 13
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhich of these types of documents flow through your enterprise operations? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedMAILFLOWS OF AN ENTERPRISE Schedules Equipment Maintenance Plans Bills of Material Spreadsheets Equipment Profiles Channel ListsThe table on the right depicts a partial list of documents Text Documents Equipment Receipts (POP) Commission Reports Web Documents Guidelines Customer Communicationsthat most enterprises process on a regular basis. Maintenance and Repair Docs Inventory Reports MARKETING OPERATIONS Maintenance History Summaries Leads ReportsItems underlined represent high-risk inbound mailflows Coupons Maintenance Records Letters of Intentfor which firms likely pay a high “analog tax” in the form General Business Reports Maintenance Schedules Presentations Marketing Reports Programmed Maintenance (by Mfr.) Price Listsof significant time delays, paper management costs, and Multimedia Presentations Repair Expense Documents Product / Service Catalogsbarriers to fast-cycle collaboration among teams. Newsletters Repair Expense Tracking Promotion Materials Product Info and Spec Sheets Schedules ProposalsThe figure to the right depicts the operational capabilities Product / Service Catalogs Tracking Reports Quotesof attracting and keeping customers for life—customer Promotions Brochures Receipts Qualification / Reference Reports SALES OPERATIONS Return / Credit Documentsengagement—calling attention to the two applications of Surveys Account Statements Sales Agreementstransactional content processing: digital mail processing Targeted Emails Arrangement Letters Sales Reportsthat speeds in-bound customer communications HR AND PAYROLL MAILFLOW DELAYS AFFECT CUSTOMER ENGAGEMENTand requests to the appropriate department and Resumescustomer portals that provision content and self-service Cover Letters Recruiting Collateral Customeapplications to customers, trade partners, and customer- Employment Policy Handbooks ilities of the r Enfacing staff. Employee Surveys Capab gag l em Benefit Enrollment Documents na e tio PersonalACCOUNTING CALL CENTERS Benefit Claim Documents Interaction- OSHA Compliance Docs Fulfillment nt eraAccount Statements Account Statements Customer Individualized Service Email and CyAnnual Reports Bills Federal/State Compliance Docs Op (Operational CRM) Services cleFinancial Models Collection Notes Training Seminar MaterialsFinancial Statements Customer Communications Workbooks / Online Resources Sales Force MultichannelGeneral Ledger Incident Reports Salary Surveys Automation (Tactical CRM) AnalyticsInternal Audit Reports Notification Letters Job Opening AnnouncementsInternal Project Analyses Price Lists Skills Matrices S INS ICEInvoices Product / Service Catalogs Work Agreements SERVING IGH RVPortfolio Management Reports Receipts eCommerce Customer TS Customers SE PROCUREMENT ENT and Web site ExperiencePurchase Orders Service Outage Reports MARK Agreements Management for Life ManagementPro Forma Statements Service Reports / Notes Catalogs EM ATTRACTING KEEPINGQuarterly Statements Service Requests Misc. Analysis Reports ET AGTax Documents Termination Notices Payable Invoices DEVELOPMENT I Marketing Social N Collaboration G N Price Lists A Content OP M MediaBILL PRESENTMENT / PAYMENT Agreements Management ERATIONS MonitoringAccount Statements Product Manuals CalendarsInvoices Purchase Orders Correspondence Content Voice ofPayment Advice Notes Purchase Requisitions (BOMs) Customer Design Drawings Optimization ContentPayment Orders / Histories Receipts for Goods Received Agile Emails (SEO, Semantic tagging) Content AnalysisReceipts RFQs / RFPs Historical Documents CreationVendor Profile Data Forms Specification Sheets (DAM, Media Services, Marketing Collateral Localization) Project Logs PROJECT MANAGEMENT Proposals Assignments Engagement_Cycle_Capabilities.A.1.7 ©2009 GISTICS All rights reserved GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 14
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhich of these types of documents flow through these industries or supply chains? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedMAILFLOW NOT SIMPLEThe table below depicts a partial list of documents that flow through particular industries and supply chains on a regular basis.Items underlined represent high-risk inbound mailflows in which firms likely pay a high “analog tax” in the form of significant time delays, papermanagement costs, and barriers to fast-cycle collaboration among decision-making teams.BANKING FINANCIAL INDUSTRY MANUFACTURING TAX, LICENSE, & CUSTOMS TRAVEL AND LODGINGAccount Agreements Appraisals and estimates Bills of Material Customs Documents InvoicesAccount Balance Statements Customer Trade Orders CAD / CAM / CAE Drawings Customs Regulation Manuals ItinerariesCredit Appraisals Trade Confirmations Component Catalogs Denied / Restricted Party Lists (for Reservation ConfirmationsCustomer Correspondence Research Reports Detailed Product Specifications Drawback Documents) TicketsCustomer Payments Account Balance Statements Inspection Approvals Exports Travel Preference ReportsLoan Applications Inventory Reports General InstructionsProspects Lists and Information INSURANCE Operating Procedures & Manuals Import/Export Licenses WAREHOUSE MANAGEMENT Accident/ Catastrophe Reports Quality Specs Other Regulatory Compliance Docs AgreementsCONSTRUCTION Claims Reports Repair Logs Sales and Use Tax Docs Barcode LabelsAgreements Cost Estimates Request Documents Tariff / Rate Rules Bills of Lading / AirbillsClosing Statements Disputes / Counter claims Shipping Tags US / VAT Tax Docs Bills / Invoices / ReceiptsConstruction Permit Requests Insurance Policy Agreements Supplier Lists / Info Broker / Freight Forwarder CostsConstruction Permits Invoices TRANSPORTATION / LOGISTICS Capacity Planning, Optimization, Test PlansConstruction Plans / Designs Lists of Asset Repair Vendors Agreements and Demand Forecasting ReportsConstruction Status Reports Payments PROFESSIONAL SERVICES Barcode Labels Daily SchedulesInspection Certificates Prospects Lists Agreements Bills of Lading / Airbills Exception Handling DocumentsInvoices Repair Work Approvals Budget Reports Bills / Invoices Feedback / Quality SurveysMaterial Requirements Sheets Risk Profiling Reports Invoices Broker / Forwarder Costs General Instructions / ManualsPurchase Orders Letters and Reports Capacity Planning, Optimization, Inventory ReportsSpecification Sheets LEGAL SERVICES Plans and Schedules and Demand Forecasting Reports Loss / Damage Claim Documents Agreements Proposals Daily Schedules & Inventory Order and Order Detail DocumentsHEALTHCARE INDUSTRY Arbitration Agreements Purchase Orders Exception Handling Documents Performance ReportsAppointment Books Corporate Filings Time and Expense Reports Feedback / Quality Surveys Pickup Request DocumentsDoctor Fees Reports Court Filings General Instructions / Manuals Price ListsInsurance Applications Lawsuits PHARMACEUTICAL Landed Cost Estimation Reports QuotesInsurance Cards Letters and Reports Chemical Reports Loss/Damage Claim Documents Reorder DocumentsPatient Records New Patent Filings Clinical Test Procedure Manuals Performance Reports Return DocumentsPayment Invoices Proposals New Drug Application (NDA) Pickup Request DocumentsPrescription Slips Time and Expense Reports Approvals Price ListsVerifications of Insurance NDA Filings QuotesCoverage Patient SummariesX-rays Receipts Research Plans and Schedules Return Documents Research Reports Service Level Reports Statistical Analysis Reports Testing Reports / Records GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 15
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow long must firms store various types of business records and customer communications? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedBUSINESS RECORD RETENTION ONE YEAR Inventories of products, materials, Minutes books of directors and Correspondence with customers and supplies stockholdersDigital mail processing helps to reduce the cost of vendors Invoices to customers Payroll tax returns Duplicate deposit slips Notes receivable ledgers, schedules Property recordsrecords management, eliminating the surprising Purchase orders (other than Payroll records and summaries, Real estate appraisals by externaland largely hidden costs of labor, physical storage, purchasing department copy) including payment to pensioners appraisers Receiving sheets Plant cost ledgers Retirement and pension recordsphotocopying, and productivity lost in searching Requisitions and stockroom Purchasing department copies of Sales and use tax returnsfor or re-creating lost or misplaced documents. withdrawal forms purchase orders Tax returns and worksheets (not Sales records mandated but recommended) THREE YEARSAccording to a published report of AIIM, an Employee personnel records (after Time books Trademark and patent registrations Travel and entertainment records Training manualsinternational professional association dedicated to termination) Voucher registers and schedulesinformation and image management, the average Employment applications Vouchers for payments to vendors, Expired insurance policiescompany studied spends. Form I-9 (employment eligibility employees, etc. NOTE: Document • $20 in labor to file one document verification) LONG TERM retention regulations and General correspondence Annual financial statements policies vary according • $120 in labor to find a misfiled document Help wanted ads Audit reports from CPA / accountant Internal audit reports Business permits to a particular nation and • $220 in labor to reproduce a lost document Internal reports Buy-sell agreements province. • $8 to $15 to courier or overnight a document Petty cash vouchers Canceled checks: fixed assets, Physical inventory tags income taxes • $12,000 per year to maintain one file cabinet Savings bond registration records of Cash disbursements journals with four file drawers employees Charts of accounts Time cards for hourly employees Contracts AIIM also reports that a typical firm Leases now in effect SEVEN YEARS • Photocopies a typical document 19 times Accident reports and claims Corporate documents (incorporation, charter, by-laws, etc.) • Loses 7.5 percent of all documents Accounts payable ledgers and schedules Deeds, mortgages, bills of sale Depreciation schedules • Misfiles a remaining 3 percent of all documents Accounts receivable ledgers and Documents substantiating fixed asset schedules additionsIn addition, AIIM reports, professionals spend 11 Auto mileage logs Employee records: actuarial reports, Bank statements and reconciliations financial statements, correspondencepercent of their time reading information and up Canceled checks: general, payroll, with IRS and Dept. of Labor, plan andto 50 percent of their time searching for pertinent payroll taxes trust agreements Canceled stock and bond certificatesinformation. Charitable contribution General and subsidiary ledgers and year-end trial balances acknowledgments of $250 or more Insurance records: current accidentINVESTMENT JUSTIFICATION Employment tax records reports, claims, and policies Expense analyses and expense Investment trade confirmations distribution schedulesThe infrastructure of digital mail processing Expired contracts, leases IRS revenue agents’ reports Legal records, correspondenceincludes records management and workflow— Expired option recordscritical elements of enterprise recordsmanagement. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 16
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat constitutes a customer engagement package, a logical collection of digital contents of a digital customer file? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedTRANSFORMING CONTENT INTO ENGAGEMENT Similar in structure to virtual case files and emails, forms, etc. within a service portal, or digital account files, customer engagement enable users to download policy-managedFrontline staff interacts and communicates with packages may contain emails and attached PDFs—a customer engagement package.customers throughout the workday, using the documents, Web pages from corporate andbest available information to answer questions, Customer engagement packages also enable social networking sites, videos, and photos.render services, and keep customers satisfied. frontline staff, partners, and managers Frontline staff, partners, and managers may to simultaneously access any customerA closer examination of how frontline staff simultaneously access any customer communication or content—no hand off’s, noengages customers and suggests three engagement package, speeding ad hoc lost folders, and no delays.transformational ideas: collaboration, decision making, and approvals. • Live improvisational performances by frontline staff engage customers in problem- PROVISIONING STRATEGIC ENDPOINT OF DIGITAL MAIL PROCESSING: CUSTOMER ENGAGEMENT PACKAGES solving collaborations. PACKAGES TO • A fully informed frontline staff, accessing all CUSTOMERS CONTENT TYPES BY SO U R CE pertinent information related to the customer, Collaborative Content MASTERED PACKAGES A well-designed • Email - Vetted for external use stands a much better chance of satisfying PDF object or online folder document archive - Packaged to provision • Discussion boards Customer the customer. • Social networks - Linked to CRM & ERP and workflow • Workspace annotations Engagement • Integrated collections of all pertinent platform enables Static or Locked Files Package customer information require digital objects, authorized • CAD drawings • Illustrations COLLABORATIVE OBJECT SETS • Dates and times created, used, workflow engines, and content archiving. CONTENT WORKFLOW • Maps / geospatial Multi-party workspaces personnel to • PDFs - Extensive metadata - Policy-managed routes and retired share portions • Customer • PhotosThe figure on the right depicts a content • Scans (film or - Storage governance comments,services workflow for improving customer of customer paper-based) Editable Documents communications,engagement among frontline staff, engagement • Drawings BASIC CONTENT and messages • Commitments packages with • Presentationsemphasizing the production and provisioning - Known source • Text files - Basic metadata mapped toof customer engagement packages to the customers, as • Spreadsheets - Basic storage policies and trackingfrontline staffer. well as service Time-based • Audio: voice, music, signals intermediaries Customer_Engagement)_Packages.1.5 • Video: camcorder, DARK ©2009 GISTICS, All Rights Reserved webcam, broadcast,CUSTOMER ENGAGEMENT PACKAGES (maintenance streaming CONTENT - Digital objects and repair • Webcast, presentation, webinar - No descriptiveAn accessible, digital collection of pertinent metadata organizations). Physical Objectscustomer information, enabling frontline Authorized • Postal mailstaffers to more effectively engage and satisfy • Express mail/Overnight personnel can • Shipping manifestscustomers and trade partners, defines the send an emailstrategic endpoint of digital mail processing DIGITAL EMAIL WEB Digital mail processing adds scans of physical with hyperlinks to MAIL AND SITES PROCESSING DESKTOP mail objects to online workflows, contributing to view documents, the production of customer engagement packages. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 17
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat elements comprise a customer engagement package? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedENTERPRISE CONTENT MASH-UPS For example, a customer engagement package ALL IN ONE PLACE FOR MULTI-PARTY COLLABORATION contains all digital content related to one openYoung adults today grab mash-up content— The figure below also depicts how multiple customer case, including emails, forms, faxes,photos, graphics, videos, music—creating a parties can examine all or portions of a drawings, receipts, etc.mixed media file that they subsequently share package in a concurrent or time-shiftedwith friends. Authorized users may access customer basis, adding comments and visual engagement packages in a customer portal or annotations in a specific context of a customerThe figure below depicts an example of how an internal service portal. engagement (disputed item on invoice oran organization might combine emails, forms, return authorization). Concurrent, multi-partyvideos, and faxes related to a particular collaboration can eliminate hours or days inaccount, creating a customer engagement fulfilling a request for service or information.package.DIGITAL MAIL PROCESSING SUPPORTS THE TRANSFORMATION PAPER-BASED FORMS AND COMMUNICATIONS INTO MIXED-MEDIA CUSTOMER ENGAGEMENT PACKAGES EMAIL FORM EMAIL DISCUSSION THREAD SCREENCAST VIDEO WEB CONFERENCES PHOTOGRAPHIC EVIDENCEEXTERNAL MULTI-PARTY COLLABORATION• Customers, subcontractors, trade partners CUSTOMER PORTAL Customer Engagement Package DIGITAL OBJECTS OF CUSTOMER ENGAGEMENT PACKAGES POLICY-MANAGED PDF INTEGRATED VIEW CREDIT APPLICATION RMA ( Return Material Authorization ) FAX LETTER CAD DRAWING SERVICE SERVICE FULFILLMENT PORTAL CYCLE SS F E AS S UL BUSINESS REPLY MAIL SHIPPING MANIFEST SHIPPING RECEIPT JOURNAL REPORT FILL PLANINTERNAL MULTI-PARTY COLLABORATION• Account executives, teleservice representatives, credit managers, risk and compliance officers, department heads, senior executives DIGITIZED SCANS OR PAPER-BASED MAIL Customer_Engagement_Package.B.1.2 © 2009 GISTICS All rights reserved. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 18
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systems Section 4 Strategic Use Cases and Payback Scenarios PAGE ESSENTIAL QUESTIONS ADDRESSED PAGE ESSENTIAL QUESTIONS ADDRESSED 20 What makes an IT investment strategic? 30 How can digital mail-processing of account payables save 21 What drives the return on IT investments? $10,002,376 in processing costs and $1,153,125 in ancillary gains from fewer mistakes and overpayments? 22 What assumptions underlie the productivity dividends in mortgage processing, emphasizing the benefits of digital mail processing? 31 What assumptions underlie the productivity dividends of the faster, more accurate service fulfillment cycles in a public institution, 23 How can digital mail processing of new loans reduce cycle time? emphasizing the benefits of digital mail processing? 24 How can digital mail processing of new loans save $11,918,750 in costs, 32 How can digital mail-processing reduce cycle time in the add $20,555,556 in new loans and add $49,636,409 in incremental interest fulfillment of citizens’ requests for information or service by public earnings? institutions? 25 What assumptions underlie the productivity dividends in new account 33 How can digital mail-processing in public institutions save establishment, emphasizing the benefits of digital mail processing? $28,330,455 in processing costs, $4,666,667 in incremental 26 How can digital mail-processing reduce cycle time in new account revenues, and $210,000,000 in overall economic impact? establishments? 27 How can digital mail-processing of new account establishments save $6,807,301 in costs and add $148,750,000 in potential new revenues? 28 What assumptions underlie the productivity dividends of the faster, more accurate processing of account payables, benefits deriving from digital mail processing? 29 How can digital mail-processing reduce cycle time for accounts payable processing? GISTICS | EXECUT IVE W HITE PA P ER | Digit al Mailroom s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 19
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat makes an IT investment strategic? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedINNOVATION AND MARKETING BASIC STRATEGY MAP DEPICTS THREE AREAS OF RETURN ON IT INVESTMENTPeter Drucker, expert on management, wrylynoted, “Only two things create value: innovation Increase returnand marketing. All else is cost.” on capitalThe figure on the right depicts a generic strategy 1map, emphasizing the practical implementation ofDrucker’s dictum. Financial Improve Increase sales in Grow sales in Focus existing segments new productsIn this paper, we make the case that digital productivity and markets and servicesmail processing delivers substantial short-termproductivity improvements, increases sales inexisting segments and marketing, and supports Improve Operating Grow High-Value Accelerate Product Quality and Efficiency Customer Relationships Innovationbringing innovation to market—greater levels of 2customer engagement and faster fulfillment of Become acknowledged Provide valued service, Introduce innovative,requests for information or services. Customer application expertise, high-performance Focus leader in quality and reliability and support products or solutionsIn this section of the paper, we will examine fourstrategic use-case scenarios, correlating the 3 Excel at technology,criteria as depicted in this strategy map to the Improve supply chain product development, Optimize customer Process efficiency andfollowing: Focus effectiveness profitability and lifecycle management • Processing new loan applications • Closing an accounts receivable Improve quality, cost, Expand channels, Identify next-generation and flexibility of offerings, and • Processing a new, complex order operating processes markets market opportunities • Processing a new mortgage.In each use case, we will compare the activity Build and maintain strong customercosts of current physical mail and service relationshipsfulfillment workflows with all-digital workflowsenabled by digital mail processing. 4 Create a High-Performance Culture Learning Expand and builld Enable and require a Develop leadership and strategic skills, and an execution- continuous learning Growth capabilities, and sharing of driven culture Focus and expertise knowledge StrategyMap_Generic.D.1.3c © 2009 GISTICS Incorporated, All rights reserved. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 20
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat drives the return on IT investments? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedTHE PROMISE AND REALITY OF IT INVESTMENTS Personal computers, packaged software, 20-20 INSIGHT and local area networks enabled many firmsEach new wave of information technology GISTICS’ research of hundreds of deployed to eliminate typing pools and clerical staff.arrives with a unique set of opportunities. systems at 15,000+ end-use firms reveals This opportunity required new investments in that bottom-up automation solutions yield theThe arrival of mainframes gave many industry-standard hardware and software, as highest return on investment when comparedfirms unprecedented ability to control the well as in user support and help desks. to other options. Why? Workflow andfundamentals of their businesses, in particular, The Internet enables many firms to engage workgroup automation rarely addresses moreinventory and accounting. However, this customers worldwide 24x7, reducing costs than a small, tightly focused group of users.opportunity demanded mastery of software and time-to-market cycles. This opportunitydevelopment. The figures below depict the distilled insights still requires huge investments in specialized of industry research: The highest return-Minicomputers and packaged software gave IT infrastructure and in reengineering core on-investment for information technologymany firms the ability to automate specialized business processes. results from quickly deployed solutionsbusiness processes and departments, such (usually in workgroups or departments) thatas human resources and manufacturing. successfully automate a business process.This opportunity required new investments intraining. WORKFLOW AUTOMATION DELIVERS GREATEST RETURNS BY SPEEDING CYCLE TIMES FROM THE BOTTOM UP HIGH HIGHLY AUTOMATED Enterprise Workgroup systems systems productivity gains, savings, or increased sales Workflow Number of times total cost returned from automation Workgroup procedures, processes, or practices Workflow EMBEDDED KNOWLEDGE RETURN ON INVESTMENT Enterprise systems Business rules automating systems automation Departmental systems Departmental systems Desktop Desktop applications applications MOSTLY LOW MANUAL ROIVsTimeB.1.2 ©2009 GISTICS Incorporated, All rights reserved. ROI-CycleVsKnowledgeB.1.2 ©2009 GISTICS Incorporated, All rights reserved. SHORT BREAKEVEN TIME LONG SLOW BUSINESS PROCESS CYCLE TIME FAST Time to recoup total cost of ownership Time to produce a finished unit of work GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 21
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat assumptions underlie the productivity dividends in mortgage processing, emphasizing the benefits of digitalmail processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedPROCESSING NEW LOANS “banking” the operational capacity to handle a following pages) separates efficiency-based significant increase in lending activity. cost savings and revenue gains, calculatingLending institutions make money by lending two different payback scenarios.money to businesses and individuals. SOURCE OF INCREASED REVENUES The activity-based data of the modelsIn the particular case of home mortgages, a The payback model estimates potential demonstrate cost savings from currentnetwork of middlemen facilitate the lending revenues from realizing 162 extra revenue- workloads. Increase revenues derive fromprocess; these middlemen often include producing days from a greater daily capacity faster revenue cycles and greater capacity tomortgage brokers, appraisers, and loan to process loan applications already in the process more loans.aggregators—with great variation across pipeline:regional markets (states or nations). • Daily processing capacity expands from 68.5 Unlike many efficiency benchmarks that loans per day or 25,000 per year to 123.3 examine the contribution of workflowThe lending process often entails the loans per day or 45,000 per year. automation to a specific operation (such asproduction, delivery, and review of 50-plus CRM)—where only a small number of userspages of material: loan application forms, Increased productivity in loan processing benefit from the exchange certain types ofcredit reports, legal disclosures, tax returns, represents a potential of $70,191,964 on new information—the productivity dividend asappraisals, permits, waivers, etc. revenue from existing lines of business and described in this paper spreads to everyDigital mail processing addresses the labor- revenue pipelines, comprise of the following: aspect of the enterprise: sales, accountand cost-intensive process of getting the right • Receipt of $20,555,556 in incremental management, customer service, HR, legal,documentation to all the authorized individuals revenue from points (one percent of administration, etc. Processing loansinvolved in the lending process, minimizing $185,000 loan package) represents one of several benefits of digitaldelays, errors, and redundant activities of a • Activation of a loan four days sooner, mail process in lending institutions.multi-step, multi-party workflow. thus earning FASTER PROCESSING OF IN-BOUND LOAN PACKAGES INCREASES REVENUE IN TWO WAYS additionalANNUAL COST SAVINGS interest MANUAL MAIL PROCESSING MANUAL SERVICE FULFILLMENT: PROCESSING NEW LOANSThe figure to the right depicts a net gain income of 2.0 Days 4.5 Days 7.0 Daysof four days of a lending institution that $49,636,409 DIGITAL MAIL PROCESSING DIGITAL SERVICE FULFILLMENT: PROCESSING NEW LOANSprocesses 25,000 loan packages (averaging calculated at 0.5 Days 4.5 Days 4 Day Cycle-time Gain$185,000) per year, delivering $11,918,750 in six percent Productivity assumptions and drivers Productivity dividendstotal cost savings from: per annum. LOAN PROCESSING $10,668,750 Annual labor savings • $10,688,750 in annual labor savings or 75.5 PHYSICAL / DIGITAL Daily loan processing capacity 68.5 123.3 $1,250,000 Annual material savings percent reduction labor DESCRIPTIVE $11,918,750 Total annual savings Annual loan processing capacity 25,000 45,000 DATA MODEL • $1,250,000 in annual cost savings or 100 Average loan amount $185,000 162 days Extra revenue-producing The detail days recouped percent reduction in materials $20,555,556 New loans closed analytic modelA lending institution may realize these (SEE two $49,636,409 Additional interest from faster closingslabor savings in a staff reduction as well as Productivity_Dividend_Digital_Mail_Loan.1.2 © 2009 GISTICS All rights reserved. $70,191,964 Potential new revenue GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 22
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can digital mail processing of new loans reduce cycle time, emphasizing the benefits of digital mail processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedUse-case payback scenario: Loan processing agent receives 50-page loan application package, including legal disclosures, forms, applicantfinancials, and regulatory notices, from independent broker and initiates evaluation workflow. LABOR TASKS LABOR / MINUTES NOTES SUBORDINATE ACTIVITIES PHYSICAL DIGITAL DESCRIPTION OF ACTIVITIES: ITALICS INDICATES SYSTEM-ASSISTED ACTIVITIES OF A DIGITAL MAILROOM MAIL TRANSPORT WORKFLOW Mailroom staff receive intake, unbundle, bulk sort (junk mail, periodicals, correspondence, priority, etc.) Central mail center - receives, processes and sorts mail 15 22 Receive, open, sort, categorize, execute digitization process, verify addressee and key reference IDs Mailroom staff certifies receipt, pre-routes bundles by location, transports, ships or re-mails to office (often long distance) Certify, route and deliver to office location 10 0 No action required, documents have been digitized and ingested and metadata, including addressee, that defines routing Office administrator receives, sorts, and fills employee in boxes, agent retrieves mail periodically at the risk of interruptions and dis- Inter-office sorting, distribute to inbox, and 15 0 tractions collecting by employee Loan agent is notified via email or other digital channel (text or in-system message etc.) that package awaits his or her review Agent makes 5 copies for: supervisor, underwriter, compliance manager, records management, a working copy and files each Photocopy and file loan application packages 45 0 Application is accessible by all relevant parties with varying levels of access rights to all or part of the application package Review application package, verify sources, assess Agent reviews and verifies application, determines issues to resolve accepts ownership of application processing 60 15 issue and determine actions Configurable views into documents accelerate review efficiency, and offer potential for automation, quality control and governance Agent starts new docket, creates various file folders, fills out process tracking forms Open new loan docket and set up organizational tools 18 5 Agent opens new loan processing project or workspace in system Fill out processing forms, and distribute packages to Agent defines routing and workflow, prepares request forms and sends packages to relevant workflow actors 45 5 multiple parties Workflow automation configuration defines actors and distributes e-notifications prompting recipients to action Agent executes complex review and approval workflow comprised of 5 participants: agent, agent’s supervisor, underwriter, compliance Execute parallel, multi-party review and approval 600 150 manager, and records administrator cycle System-facilitated review and approval workflows with collaboration tools and status-based access controls SUBTOTAL (minutes) 808 197 LABOR COSTS (dollars) PHYSICAL DIGITAL DIFFERENCE BASED ON PORTION OF WORK COMPLETED BY EACH ACTOR Mailroom Staff (physical) $8.33 $0.00 $20 per hour fully-burdened rate Mailroom Staff (digital) $0.00 $11.00 $30 per hour fully-burdened rate Office Administrative Staff $6.25 $0.00 $25 per hour fully-burdened rate Loan Processor Agent $238.00 $49.58 $35 per hour fully-burdened rate Loan Processing Supervisor $85.00 $21.25 $50 per hour fully-burdened rate Loan Underwriter $168.00 $42.00 $60 per hour fully-burdened rate Compliance Manager $45.00 $11.25 $45 per hour fully-burdened rate Records Management Administrator $15.00 $3.75 $30 per hour fully-burdened rate TOTAL LABOR COSTS $566.00 $139.00 GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 23
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can digital mail processing of new loans save $11,918,750 in costs, add $20,555,556 in new loans and add$49,636,409 in incremental interest earnings? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reserved MATERIAL COSTS (dollars) PHYSICAL DIGITAL NOTES Mail transport, shipping, postage $15.00 $0.00 Blended cost of local or re-route containers, couriers & postage Photocopies $5.00 $0.00 250 copies @ $.02 each File storage overhead and maintenance $30.00 $0.00 $12K/yr. per 4-drawer file cabinet, assume 0.25% per app. package TOTAL MATERIAL COSTS $50.00 $0.00 ANNUAL VOLUMES AND COSTS Loan applications processed per year 25,000 ANNUAL COSTS ($) PHYSICAL DIGITAL NOTES Annual labor costs $14,139,583 $3,470,833 Fully-burdened labor costs Annual material costs $1,250,000 $0.00 Total material costs associated with process Annual rework costs $2,770,125 $312,375 Costs from errors and missed deadlines. 10% reworks physical, 5% reworks digital TOTAL ANNUAL COSTS $18,159,708 $3,783,208 PRODUCTIVITY DIVIDENDS: COST SAVINGS, INCREASED PRODUCTIVITY, INCREMENTAL REVENUE ANNUAL SAVINGS ($) SAVINGS PERCENT NOTES Total labor savings $10,668,750 75.45% Percent reduction in costs, physical vs. digital Total material cost savings $1,250,000 100.00% Percent reduction in costs, physical vs. digital TOTAL ANNUAL SAVINGS $11,918,750 CYCLE TIME (days) PHYSICAL DIGITAL NOTES Mail transport workflow 2.0 0.5 Linear workflow to distribute physical packages, per loan processed Service fulfillment workflow 7.0 4.5 Non-linear workflow - variable routing & alterations, per loan processed TOTAL DAYS PER LOAN 9.0 5.0 DAYS TO COMPLETE PROCESSING OF ONE LOAN Loan processing capacity 68.5 123.3 Number of loans that can be processed each day Annual loan processing capacity 25,000 45,000 Number of loans that can be processed per year NEW REVENUE GAINS ($) NEW WORK DAYS NEW REVENUE ELIMINATING CYCLE TIME BOTTLENECKS INCREASES CAPACITY, OFFERING POTENTIAL TO PROCESS MORE LOANS Increased # of loans closed 162 $20,555,556 Revenue generated at closing - assume 1 point (1%) for each average. $185K loan Increased # of earning days 162 $49,636,409 Interest on additional loans in place each extra day (using average. $185K loan at 6% IO, compounded) TOTAL NEW REVENUE $70,191,964 POTENTIAL NEW REVENUE BY LEVERAGING INCREASED CAPACITY INTANGIBLE GAINS Brand Reputation Reputation among wholesale loan broker market as fast-processing lender - reducing their sales cycles Brand Reputation Reputation for fewer errors and reworks - reducing brokers operating costs and headaches Fewer process failures Fewer deals lost from expired rate locks, perceptions of incompetence and lack of customer service GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 24
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat assumptions underlie the productivity dividends in new account establishment, emphasizing thebenefits of digital mail processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedSETTING UP NEW COMPLEX ACCOUNTS ° Expanding daily processing capacity DESCRIPTIVE DATA MODEL from 113.6 account activations to 272.7All commercial firms find and serve customers. The detail analytic model (SEE two following accounts activations.Digital mail processing addresses the often- pages) separates efficiency-based costsloppy hand-off between “finding” a customer ° We assume that an all-digital workflow savings and revenue gains, calculating twoand “serving” one. will enable a firm to convert 25 percent of different payback scenarios. its greater processing capacity (a total ofThe figure below depicts a net gain of six 128 days of productivity) into $30,989,583 The activity-based data of the models supportsdays of a firm with annual sales of $1B. of incremental sales. the claim that most enterprises can realize significant increases new revenue and lowerThe six-day cycle-time gain derives from the ° In accounting terms, this figure represents faster revenue recognition—the result costs from the efficiency gains of digital mailoperational efficiencies of two workflows: of fewer days needed to activate a processing. • Mail transport workflow: faster “inputs” to all core business processes revenue-generating service or deliverable. Unlike many efficiency benchmarks that examine • Service fulfillment workflow: faster • “Getting it right the first time” enables a the contribution of workflow automation to a “resolution” of new account set-up workloads firm to recoup of $6,177,916 or 10 percent specific operation (such as SCM, CRM, etc.)— of all revenue from: where only a small number of users create andIn a larger or smaller business, savings exchange certain types of information—the ° Resolution of new account activationand revenues would increase or decrease workflows with fewer errors, reworks, productivity dividend as described in thisproportionally. “make goods”, and compensatory paper digital spreads to every aspect of the discounts or fee waivers. enterprise: sales, customer service, HR, legal,ANNUAL COST SAVINGS administration, factory floor, etc.Total cost savings in this model of $6,807,301 TWO WORKFLOWS PRODUCE PRODUCTIVITY DIVIDENDS FOR NEW ACCOUNT SET-UPrepresent less labor and lower material costsneeded to set-up 25,000 new accounts: MANUAL MAIL PROCESSING MANUAL SERVICE FULFILLMENT: PROCESSING NEW ACCOUNT APPLICATIONS$5,939,688 or 79.8 percent reduction labor 2.0 Days 4.5 Days 10.0 Daysand $867,614 or 67.1 percent reduction in DIGITAL MAIL PROCESSING DIGITAL SERVICE FULFILLMENT: NEW ACCOUNT PROCESSINGmaterials. 0.5 Days 4.5 Days 6 Day Cycle-time GainSOURCE OF INCREASED REVENUES Productivity assumptions and drivers Productivity dividends NEW ACCOUNT PROCESSING $5,939,688 Annual labor savingsThe payback model estimates potential revenues PHYSICAL / DIGITAL $867,614 Annual material savingsfrom realizing 128 extra revenue-producing days Annual revenues $1,000,000,000 Daily account set-up processing capacity 113.6 272.7 $6,807,301 Total annual savingsfrom two sources: Annual account set-up processing capacity 25,000 60,000 Extra revenue-producing 128 days • Greater daily capacity to convert new Percentage of new capacity used in days recouped revenue-generating projects 25% accounts into paying customers by reducing $123,958,333 Increased sales days cycle time and labor content needed to $24,791,667 Increased earning days $148,750,000 Potential new revenue activate a new billing cycle: Productivity_Dividend_Digital_Mail_Account.1.2 © 2009 GISTICS All rights reserved. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 25
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can digital mail-processing reduce cycle time for new account establishments? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedUse-case payback scenario: New account specialist receives account application and first order - including service order form, credit application,customer info forms and copies of relevant permits and licenses - completes account setup and submits order for fulfillment. LABOR TASKS LABOR / MINUTES NOTES SUBORDINATE ACTIVITIES PHYSICAL DIGITAL DESCRIPTION OF ACTIVITIES: ITALICS INDICATES SYSTEM-ASSISTED ACTIVITIES OF A DIGITAL MAILROOM Mailroom staff receive intake, unbundle, bulk sort (junk mail, periodicals, correspondence, priority, etc.) Central mail center - receives, processes and sorts mail 15 22 Receive, open, sort, categorize, execute digitization process, verify addressee & key reference IDs Mailroom staff certifies receipt, pre-routes bundles by location, transports, ships or re-mails to office (often long distance) Certify, route and deliver to office location 10 0 No action required, documents have been digitized and ingested and metadata, including addressee, that defines routing Office administrator receives, sorts, and fills employee in-boxes, specialist retrieves mail periodically at the risk of interruptions and Inter-office sorting, distribute to inbox, and 15 0 distractions collecting by employee New account specialist is notified via email or other digital channel (text or in-system message etc.) that package awaits his or her review Specialist makes four copies for: supervisor, credit line manager, records management, a working copy and files each Receive package, make copies, and create new account file 45 0 Application is accessible by all relevant parties with varying levels of access rights to all or part of the application package Review application package, verify sources, assess Specialist reviews and verifies application, determines issues to resolve accepts ownership of application processing 60 15 issue and determine actions Configurable views into documents accelerate review efficiency, and offer potential for automation, quality control and governance Specialist starts new docket, creates various file folders, fills out process tracking forms Open new loan docket and set up organizational tools 18 5 Agent opens new application processing project or workspace in system Fill out processing forms, and distribute packages to Specialist defines routing and workflow, prepares request forms and sends packages to relevant workflow actors 45 5 multiple parties Workflow automation configuration defines actors and distributes e-notifications prompting recipients to action Specialist executes review and approval workflow comprised of three participants: specialist, new accounts supervisor, credit line man- Execute review cycle and send services agreement to ager, and records administrator, then sends services agreement to new customer 120 25 new customer System-facilitated review and approval workflows with collaboration tools and status-based access controls, and automated generation of outbound electronic or paper mail Specialist reviews agreement, secures approval from the new accounts supervisor recovers original order form from file and sends over Receive completed services agreement, review approve 60 10 order for fulfillment and place order System-facilitated final approval automatically invokes order processing SUBTOTAL (minutes) 388 82 LABOR COSTS (dollars) PHYSICAL DIGITAL DIFFERENCE BASED ON PORTION OF WORK COMPLETED BY DIFFERENT STAFF Mailroom Staff (physical) $8.33 $0.00 $20 per hour fully-burdened rate Mailroom Staff (digital) $0.00 $11.00 $30 per hour fully-burdened rate Office Administrative Staff $6.25 $0.00 $25 per hour fully-burdened rate New Accounts Specialist $202.95 $33.71 $45 per hour fully-burdened rate New Accounts Supervisor $40.80 $7.93 $80 per hour fully-burdened rate Credit Line Manager $32.40 $6.30 $60 per hour fully-burdened rate Records Management Administrator $7.20 $1.40 $30 per hour fully-burdened rate TOTAL LABOR COSTS $298.00 $60.00 GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 26
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can digital mail-processing of new account establishments save $6,807,301 in costs and add$148,750,000 in potential new revenues? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reserved MATERIAL COSTS (dollars) PHYSICAL DIGITAL NOTES Mail transport, shipping, postage $15.00 $0.00 Blended cost of local or re-route containers, couriers & postage Photocopies $6.75 $0.00 45 copies @ $.15 fully-burdened cost each File storage overhead & maintenance $30.00 $0.00 $12K/year to maintain 4-drawer file cabinet, assume 400 account files per cabinet Digital infrastructure overhead $17.05 Assume 75,000/year total, 1% assigned to this specific use case TOTAL MATERIAL COSTS $51.75 $17.05 ANNUAL VOLUMES AND COSTS New account applications per year 25,000 ANNUAL COSTS ($) PHYSICAL DIGITAL NOTES Annual labor costs $7,448,333 $1,508,646 Fully-burdened labor costs Annual material costs $1,293,750 $426,136 Total material costs associated with process, digital side is burdened cost of infrastructure Annual rework costs $2,360,363 $174,130 Costs from errors and missed deadlines. 15% reworks physical, 5% reworks digital TOTAL ANNUAL COSTS $11,102,446 $2,108,913 PRODUCTIVITY DIVIDENDS: COST SAVINGS, INCREASED PRODUCTIVITY, INCREMENTAL REVENUE ANNUAL SAVINGS ($) SAVINGS PERCENT NOTES Total labor savings $5,939,688 79.75% Percent reduction in costs, physical vs. digital Total material cost savings $867,614 67.06% Percent reduction in costs, physical vs. digital TOTAL ANNUAL SAVINGS $6,807,301 CYCLE TIME (days) PHYSICAL DIGITAL NOTES Mail transport workflow 2.0 0.5 Linear workflow to distribute physical packages, per account processed Service fulfillment workflow 10.0 4.5 Non-linear workflow - variable routing and alterations, per account processed TOTAL DAYS PER ACCOUNT 12.0 5.0 DAYS TO COMPLETE ONE NEW ACCOUNT SETUP Account setup capacity 113.6 272.7 Number of new accounts that can be processed each day Annual account setup capacity 25,000 60,000 Number of new accounts that can be processed per year ELIMINATING CYCLE TIME BOTTLENECKS INCREASES CAPACITY, OFFERING POTENTIAL TO NEW REVENUE GAINS ($) NEW WORK DAYS NEW REVENUE PROCESS MORE LOANS Increased # of sales or earning days 128 $123,958,333 Additional revenue from increased capacity - assumes 25% utilization of new capacity Increased # of earning days 128 $24,791,667 Reduction in lost sales from clumsy account setup order-processing, recoup 10% of sales TOTAL NEW REVENUE $148,750,000 POTENTIAL NEW REVENUE BY LEVERAGING INCREASED CAPACITY INTANGIBLE GAINS Brand Reputation Reputation among customers for fast-processing new accounts - competent service Brand Reputation Reputation for fewer errors and reworks - reducing customer’s operating costs and/or headaches GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 27
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat assumptions underlie the productivity dividends of the faster, more accurate processing of account payables,benefits deriving from digital mail processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedACCOUNTS PAYABLES AP PROCESS ASSUMPTIONS of paper-based workflows enables the firm to realize only half or 7.5 percent of all payables.All organizations buy goods and services from Our payback model assumes a firm with $1B An all-digital AP workflow increases botha network of suppliers and service providers. in annual revenues, $300 million in resulting productivity and transparency: we assumeThis entails receiving and processing invoices annual payables, and 200,000 invoice that the firm can realize the remainingand other forms of demand for payment. workflows per year from a base of 3,000 early payment discounts and, with greater vendors, using 14 full-time clerks and oneIndustry benchmarks indicated that 45 percent confidence and transparency, negotiate new supervisor.of all invoices correspond to pre-established discount terms for another 15 per of totalpurchase orders in the accounting system of Using industry benchmarks, we assume that payments.the buying firm. The remaining 55 percent of an AP clerk can process 1,200 invoices perpayment demands do not have pre-established month using paper-based invoices and a modern PRODUCTIVITY DIVENDENDpurchase orders (also known as “non-PO accounting or ERP application. In an all-digital Annual labor savings represent doing moreinvoices”), entailing more work and a greater workflow, the processing capacity expands to with fewer people Material savings derive from:likelihood of errors, duplicate payments, and 3,000 invoices per month. 1) early payment discounts, 2) reduction offraud. fraudulent payment, 3) elimination of interest We also assume that 15 percent of the current-The account payables (AP) function of the state account payables offer a 2.5 percent early payment and recovery fees associated withfirm: payment discount—which due to the inefficiency duplicate payments. • Receives incoming invoices with PRODUCTIVITY GROWS BY 80 PERCENT AND ANNUAL COSTS FALL BY $10 MILLION approximately 15 percent in digital form—PDF or XML datastream—and the remaining 85 MANUAL MAIL PROCESSING MANUAL SERVICE FULFILLMENT: PROCESSING NEW INVOICES percent in paper form. 3.0 Days 4.5 Days 4.0 Days • Confirms the validity of the invoice or DIGITAL MAIL PROCESSING DIGITAL SERVICE FULFILLMENT: PROCESSING NEW INVOICES demand for payment, matching four to 14 1.0 Days 2.0 Days 4 Day Cycle-Time Gain business facts of the invoice to the terms of Productivity assumptions and drivers Productivity dividends the purchase order or internal requisition or communication. INVOICE PROCESSING PHYSICAL / DIGITAL $5,001,467 Annual labor savings Invoice processing capacity—daily 909.1 1590.9 $5,614,545 Annual material savings • Posts a cleared payment of the invoice to the $10,616,012 Total annual savings Invoice processing capacity—yearly 200,000 350,000 accounting system. Total annual payables $300,000,000 126 days Extra revenue-producingDigital mail processing addresses the inherent days recouped Number of vendors: 3,000inefficiency of processing paper-based $1,125,000 Savings from early payment of invoicesinvoices, speeding the delivery of digitized $49,636,409 Duplicate payments -versions of invoices to AP staffers. interest costs $375,000 Duplicate payments - cost recovery Productivity_Dividend_Digital_Mail_Invoice.1.1 © 2009 GISTICS All rights reserved. $1,153,125 Potential new revenue GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 28
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can digital mail-processing slash cycle times in accounts payable processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedUse-case payback scenario: Accounts payable worker receives invoices and executes validation and payment workflows. LABOR TASKS LABOR / MINUTES NOTES SUBORDINATE ACTIVITIES PHYSICAL DIGITAL DESCRIPTION OF ACTIVITIES: ITALICS INDICATES SYSTEM-ASSISTED ACTIVITIES OF A DIGITAL MAILROOM Mailroom staff receive intake, unbundle, bulk sort (junk mail, periodicals, correspondence, priority etc.) Central mail center - receives, processes and sorts mail 1.5 2.0 Receive, open, sort, categorize, execute digitization process, verify addressee and key reference IDs Mailroom staff certifies receipt, pre-routes bundles by location, transports, ships or re-mails to office (often long distance) Certify, route and deliver to office location 1.0 0.0 No action required, documents have been digitized and ingested and metadata, including addressee, that defines routing Office administrator receives, sorts, and fills employee in-boxes, AP worker retrieves mail periodically - at the risk of interruptions and Inter-office sorting, distribute to inbox, and 1.5 0.0 distractions collecting by employee AP worker is notified via email or other digital channel (text or in-system message etc.) that package awaits his or her review AP worker locates vendor file or creates new one and makes 4 copies for: supervisor, procurement manage, records manager, and Receive invoice package 4.5 0.0 working copy, and files each Invoice package is accessible by all relevant parties with varying levels of access rights to all or part of the application package AP worker checks for PO match in multiple locations defined by operational areas or purchase type, 40% have no PO whatsoever Check if matched to PO 2.2 1.2 Like invoices, POs are also found in the system - simplifying and accelerating review efficiency, with potential for automation, quality control and governance AP worker contacts POs owner for approval, or when no PO issues execute search to identify who ordered and who approved purchase Identify proper PO owner / approver 12.0 1.4 Agent opens PO in system and auto-messages owner for payment approval The number of non-PO’d purchases will decrease dramatically from requirement to post to system to gain approvals AP worker executes review and approval workflow comprised of 3 participants: AP worker, procurement manager, PO/purchase approver, records manager, primarily through email and attachments transfer Secure approval 13.0 3.1 System-facilitated review and approval workflows with collaboration tools and status-based access controls—consistent notifica- tion processes, doc version control etc. AP worker completes approval paperwork to update file, then makes 4 copies for: supervisor, procurement manage, records manager, and Update approved status 3.5 0.0 working copy and files each None. Approval status is always maintained in the system by definition. AP worker collected up all required info from file and execute payment online Execute payment 6.0 1.3 One button processing - message sent to payment processor or group SUBTOTAL (minutes) 45 9 LABOR COSTS (dollars) PHYSICAL DIGITAL DIFFERENCE BASED ON PORTION OF WORK COMPLETED BY DIFFERENT STAFF Mailroom Staff (physical) $0.83 $0.00 $20 per hour fully-burdened rate Mailroom Staff (digital) $0.00 $1.00 $30 per hour fully-burdened rate Office Administrative Staff $0.63 $0.00 $25 per hour fully-burdened rate AP Worker $23.13 $3.63 $45 per hour fully-burdened rate AP Supervisor $2.60 $0.62 $80 per hour fully-burdened rate Procurement Manager $3.51 $0.84 $60 per hour fully-burdened rate Records Management Administrator $0.52 $0.12 $30 per hour fully-burdened rate TOTAL LABOR COSTS $31.00 $6.00 GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 29
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can digital mail-processing of account payables save $10,002,376 in processing costs and $1,153,125in ancillary gains from fewer mistakes and overpayments? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reserved MATERIAL COSTS (dollars) PHYSICAL DIGITAL NOTES Mail transport, shipping, postage $5.00 $0.00 Blended cost of local or re-route containers, couriers & postage Photocopies $3.30 $0.00 22 copies @ $.15 fully-burdened cost each File storage overhead and maintenance $30.00 $0.00 $12K/year to maintain 4-drawer file cabinet, assume 400 account files per cabinet Digital infrastructure overhead $0.00 $13.30 Assume 75,000/year total, 1% assigned to this specific use case TOTAL MATERIAL COSTS $38.30 $13.30 ANNUAL VOLUMES AND COSTS New invoices processed per year 200,000 ANNUAL COSTS ($) PHYSICAL DIGITAL NOTES Annual labor costs $6,244,333 $1,242,867 Fully-burdened labor costs Annual material costs $7,660,000 $2,045,455 Total material costs associated with process, digital side is burdened cost of infrastructure Annual rework costs $3,754,170 $351,176 Costs from errors and missed deadlines. 15% reworks physical, 5% reworks digital TOTAL ANNUAL COSTS $17,658,503 $4,253,134 PRODUCTIVITY DIVIDENDS: COST SAVINGS, INCREASED PRODUCTIVITY, INCREMENTAL REVENUE ANNUAL SAVINGS ($) SAVINGS PERCENT NOTES Total labor savings $5,001,467 80.10% Percent reduction in costs, physical vs. digital Total material cost savings $5,000,909 65.29% Percent reduction in costs, physical vs. digital TOTAL ANNUAL SAVINGS $10,002,376 CYCLE TIME (days) PHYSICAL DIGITAL NOTES Mail transport workflow 3.0 1.8 Linear workflow to distribute physical packages, per account processed Service fulfillment workflow 4.5 2.1 Non-linear workflow - variable routing & alterations, per account processed TOTAL DAYS PER INVOICE 7.5 3.9 DAYS TO COMPLETE ONE WHOLE INVOICE PAYMENT CYCLE Annual working days required 220 114 Number of work days required to process the existing volume of invoices Annual invoice processing capacity 200,000 384,615 Number of new accounts that can be processed per year ADDITIONAL COST SAVINGS SAVINGS NOTES Savings for early payment $1,125,000 Increase in payment discounts from on time payments, assume 2.5% terms, 15% of invoices Duplicate payments - Interest cost $28,125 Borrow $ to cover cash flow, .5% dupe payments, 4.5 mo. average term @ 5% interest only Duplicate payments - cost recovery $375,000 Outsource collections on dupe payments, vendor takes 25% TOTAL ANCILLARY GAINS $1,153,125 INTANGIBLE GAINS Brand Reputation Reputation among vendors for fast-processing invoices Brand Reputation Results in closer relationships with vendors - more favorable terms and more accommodation in other aspects of doing business Brand Reputation Reputation for fewer errors and reworks - reducing everyones operating costs and headaches Brand Reputation Reputation for fewer errors and reworks—reducing everyone’s operating costs and headaches GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 30
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat assumptions underlie the productivity dividends of the faster, more accurate service fulfillmentcycles in a public institution, emphasizing the benefits of digital mail processing? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedSERVICE CYCLES AND REVENUES permits and the collection of additional sales • Daily processing capacity expands from taxes. 1363.6 permits per day or 300,000 per yearPublic institutions deliver a diverse and to 2933.1 permits per day or 642,857 percomplex set of services to the citizens and ANNUAL COST SAVINGS year.businesses under their jurisdiction. Total cost savings in this model of $28,330,455 Increased productivity in issue permitsDigital mail processing can deliver substantial represent less labor and lower material costs represents a potential of $215 million inincrease in productivity throughout a state needed to issue 300,000 seller’s permits: ancillary gains, and comprise of the following:or federal agency, department, bureau, or $24,255,000 or 72 percent reduction laboradministrative office—any group that now •$4,666,667 in incremental permit fees and $4,075,455 or 95 percent reduction in from faster processing of permit applicationsreceives in-bound mail, initiates an internal materials.workflow, and communicates or delivers its already in the queue—thus a one-time gain.result to internal or external parties. SOURCE OF INCREASED REVENUES • $210,000,000 in incremental sales tax receipts, a result of issuing 35 percent fewerSeller’s permits enable their holders to buy The payback model estimates potential seller permits to individuals or business thatproducts at wholesale prices and avoid the revenues from realizing 103 extra revenue- do not qualify as a reseller—a recurringpayment of retail sales taxes. producing days from a greater daily capacity annual gain. to issue seller’s permits:Consequently, many individuals or businesseswith no intent to resell the goods purchasedwill nonetheless seek seller’s permits as a wayof defrauding government of sales taxes. PUBLIC INSTITUTIONS BENEFIT IN FOUR WAYS FROM DIGITAL MAIL PROCESSING MANUAL MAIL PROCESSING MANUAL SERVICE FULFILLMENT: PROCESSING NEW SELLER’S PERMIT APPLICATIONSThe six-day cycle-time gain derives from the 4.5 7.0 Days Days 8.0 Daysoperational efficiencies of two workflows: • Mail transport workflow: faster “inputs” to DIGITAL MAIL DIGITAL SERVICE FULFILLMENT: PROCESSING PROCESSING NEW PERMITS all core business processes 3.0 Days 5.0 Days 7 Day Cycle-time Gain • Service fulfillment workflow: faster Productivity assumptions and drivers Productivity dividends issuance of seller’s permits NEW ACCOUNT PROCESSING $24,255,000 Annual labor savingsThe figure to the right depicts a net gain Daily permit applications PHYSICAL / DIGITAL $4,075,455 Annual material savingsof seven days of a public institution and, processing capacity 1363.6 2922.1 $28,330,455 Total annual savingsin particular, the office that issues 300,000 Annual permit applications processing capacity 300,000 642,857 103 days Extra revenue-producingseller’s permit to businesses and individuals Average sales tax revenue per year $15,000,000,000 days recoupedper year. Using a permit fee of $10 each, this $4,666,667 Increased fee generationinstitution will earn $4.7 million in additional $210,000,000 Revenues recovered $7,687,500 Faster collections andfees. Moreover, greater workflow accuracy early payment discountsleads to the issuance of fewer fraudulent $214,666,667 Ancillary gains Productivity_Dividend_Digital_Mail_AP.1.3 © 2009 GISTICS All rights reserved. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 31
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can digital mail-processing reduce cycle time in the fulfillment of citizens’ requests for informationor service by public institutions? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedUse-case payback scenario: State tax office receives seller’s permit application, directs to local field office, where it’s processed, permit issued,and recorded by central state tax office. LABOR TASKS LABOR / MINUTES NOTES SUBORDINATE ACTIVITIES PHYSICAL DIGITAL DESCRIPTION OF ACTIVITIES: ITALICS INDICATES SYSTEM-ASSISTED ACTIVITIES OF A DIGITAL MAILROOM State government mail center - receives, processes and State mail center staff receive intake, unbundle, bulk sort (by agency, general correspondence, priority etc.) 3.0 4.4 sorts mail Receive, open, sort, categorize, execute digitization process, verify addressee & key reference IDs State mail center operations certifies receipt, pre-routes bundles by location, transports, ships or re-mails to office (often long distance) Route and deliver to central tax agency offices 2.0 0.0 No action required, documents have been digitized and ingested with metadata, including addressee, that defines routing Central office receiving staff inspects application, flags for delivery to regional office in daily bulk transport Inspect, route and deliver to regional office 3.0 0.6 Automated routing suggested based on applicant’s location, quick staff confirmation and instantaneous digital routing to regional office Regional office administrator receives, sorts, and fills employee in-boxes, seller’s permit clerk retrieves mail periodically - at the Inter-office sorting, distribute to inbox, and collect by 3.0 0.0 risk of interruptions and distractions employee No action required, digitized documents are routed directly to seller’s permit clerks Clerk reviews application package for completeness and accuracy, any gaps denoted in file for hardcopy letter or telephone follow-ups Check application for completeness and accuracy 6.0 2.0 Clerk’s review results are accessible across work teams allowing processing flexibility among staff and avoiding bottlenecks from individual clerk performance or availability Clerk verifies business applicant’s standing with other government agencies (corp. or LLP/LLC status, county business name registration Check applicant’s legal status for dependencies and holds 3.0 1.0 etc.) - sometimes via fax & phone Verification, if not completely electronic, is facilitated by joint access to digital application by other agencies and offices Clerk submits application to immediate supervisor for approval via inter-office mail, requiring additional copies Acquire supervisor’s approval 6.0 1.0 Clerk flags application for approval and system automatically routes it to supervisor (or any available approver) for quick review and approval Clerk issues permit, completes request for physical certificate printing and delivery to applicant, records at local regional office and reports Issue perm invoke delivery to applicant and report 8.0 1.6 issuance to central office - multiple redundant data entry events (paper-based and online) issuance to central office System automatically routes request to certificate production upon clerk’s issuance of permit Central office recording staff receives issuance notification, copies and/or attachments, files and records Central office records permit issuance 7.0 0.0 No action required; documents in system are inherently preserve however may become exposed to the central office only after when permits issued based on workflow-triggered business rules SUBTOTAL (minutes) 41 11 LABOR COSTS (dollars) PHYSICAL DIGITAL DIFFERENCE BASED ON PORTION OF WORK COMPLETED BY DIFFERENT STAFF Mail Center Staff (physical) $5.50 $0.00 $22 per hour fully-burdened rate including government-level benefits Mail Center Staff (digital) $0.00 $12.10 $33 per hour fully-burdened rate including government-level benefits Central Office Receiving Staff $6.88 $1.38 $27.50 per hour fully-burdened rate including government-level benefits Regional Office Administrative Staff $6.88 $0.00 $27.50 per hour fully-burdened rate including government-level benefits Seller’s Permit Clerk $73.79 $17.97 $38.50 per hour fully-burdened rate including government-level benefits Central Office Records Management $19.25 $0.00 $33 per hour fully-burdened rate including government-level benefits TOTAL LABOR COSTS $112.00 $31.00 GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 32
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can digital mail-processing in public institutions save $28,330,455 in processing costs, $4,666,667 inincremental revenues, and $210,000,000 in overall economic impact? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reserved MATERIAL COSTS (dollars) PHYSICAL DIGITAL NOTES Mail transport, shipping, postage $4.00 $0.00 Blended cost of bulk transport to regional offices Photocopies and forms $3.60 $0.00 15 copies @ $.15 fully-burdened cost each + 6 multi-part duplicate forms at $.05 each File storage overhead and maintenance $6.67 $0.00 $12K/yr. to maintain 4-drawer file cabinet, assume 1800 permits per cabinet Digital infrastructure overhead $0.00 $0.68 Assume 75,000/yr total, .025% assigned to this specific use case TOTAL MATERIAL COSTS $14.27 $0.68 ANNUAL VOLUMES AND COSTS Seller’s permits issued per year 300,000 ANNUAL COSTS ($) PHYSICAL DIGITAL NOTES Annual labor costs $33,687,500 $9,432,500 Fully-burdened labor costs Annual material costs $4,280,000 $204,545 Total material costs associated with process, digital side is burdened cost of infrastructure Annual rework costs $10,251,225 $520,400 Costs from errors and missed deadlines. 15% reworks physical, 3% reworks digital TOTAL ANNUAL COSTS $48,218,725 $10,157,446 PRODUCTIVITY DIVIDENDS: COST SAVINGS, INCREASED PRODUCTIVITY, INCREMENTAL REVENUE ANNUAL SAVINGS ($) SAVINGS PERCENT NOTES Total labor savings $24,255,000 72.00% Percent reduction in costs, physical vs. digital Total material cost savings $4,075,455 95.22% Percent reduction in costs, physical vs. digital TOTAL ANNUAL SAVINGS $28,330,455 CYCLE TIME (days) PHYSICAL DIGITAL NOTES Mail transport workflow 7.0 3.0 Linear workflow to distribute physical packages, per permit processed Service fulfillment workflow 8.0 5.0 Non-linear workflow - variable routing & alterations, per permit processed TOTAL DAYS PER PERMIT 15.0 8.0 DAYS TO COMPLETE ONE DAYS TO COMPLETE ONE SELLER’S PERMIT ISSUANCE CYCLE Permit processing capacity 1363.6 2922.1 Number of permits that can be processed each day Annual permit processing capacity 300,000 642,857 Number of permits that can be processed per year Annual working days required 220 117 Number of work days required to process the existing volume of permits ADDITIONAL GAINS SAVINGS NOTES Additional permitting fees $4,666,667 Greater capacity to process permits generates more fees, assume 1M permits/yr., $10/permit * Tax revenue recovery $210,000,000 20% of inaccurate permitting avoided, assume 4% errors $15B sales tax revenue/yr. Accounts payable efficiencies $7,687,500 SEE EARLY PAYMENT, INTEREST SAVINGS, AND COLLECTIONS COST GAINS TOTAL ANCILLARY GAINS $214,666,667 INTANGIBLE GAINS Economic Stimulus Macroeconomic: any reduction of government delays to business, especially small business, carries a profound economic benefit GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 33
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systems Section 5 Enterprise Content Processing Infrastructure PAGE ESSENTIAL QUESTIONS ADDRESSED 35 What IT elements enable digital mail processing and the production of customer engagement packages? 36 How can digital mail processing support transformational applications? GISTICS | EXECUT IVE W HITE PA P ER | Digit al Mailroom s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 34
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsWhat IT elements enable digital mail processing and the production of customer engagement packages? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedENTERPRISE APPLICATIONS AND SERVICES The figure also depicts that digital mail Internal-only packages dynamically link to processing can deliver four different types of enterprise applications and enterprise contentAll modern firms use enterprise applications customer engagement packages to seven services.to operate; most large firms also deployed common types of users.enterprise content management (ECM) or Suitably configured ECM systems andseveral of its components. The figure below Customer engagement packages consist customer portals enable access to vetteddepicts the major components of ECM, of policy-controlled collections of public-versions of customer engagementemphasizing those components that enable communications and transactional content. packages for customers, subcontractors, ordigital mail processing. trade partner. C O N T E N T W O R K E R S : D I G I TA L M A I L Account managers Teleservice representatives Credit or loan Order processing and Account receivables or Risk or compliance Regional or processing agents provisioning agents payables staff managers department heads C U S T O M E R E N G A G E M E N T PA C K A G E S Loan and mortgage packages New account establishment packages Trade accounts-payable packages Service fulfillment packages C O N T E N T A P P L I CAT I O N S Marketing portals Enterprise publishing Video publishing Information portals Video publishing Digital mail processing Communities and • Collateral store • Catalogs • Corporate videos • gent broker portal A • Corporate videos • Orders social media • Content expert profiles • Documentation • Product demos • Branch network portal • Product demos • Service requests • Catalogs • Presentations • Editorial publishing • Training and • Independent financial • Training and • New accounts • Documentation • Marketing collateral support advisors portal support • Product demos • Marketing campaigns • Webcasts • Procurement portal • Trader broker network • Claims portal • Tax returns ENTERPRISE CONTENT MANAGEMENT (ECM) Web content Media asset Document Metadata Transactional content Business process Records Email archive Collaboration management management management management processing management management management management • HTML, XML • Animations • Compound • Business • Business forms • Business rules • Business records • Addresses •Discussions • Production • Audios / documents objects • Correspondence • Process • Communications • Attachments • Instant support podcasts • resentations P • Data-entity • Digital Credit files monitoring and • Scanned • Contacts and messaging • Rich media • Images / • Spreadsheets relationships reporting images of vCards • Postings and • Faxes • Stylesheets photos • Static items • Document • Workflow paper, film, or • Emails ratings properties • Handwritten notes routing transparencies • Video (PDF, TIFF) • Surveys • Invoices E N T E R P R I S E A P P L I CAT I O N S Transaction processing applications: Analytic Applications: Systems and networks Transformational Applications: Systems ICT Infrastructure: Information, communi- Systems that automate the basic repetitive that promote analysis, interpretation, and and networks that change the prevailing cations, and telecommunications technolo- transactions of the enterprise sharing of information or knowledge business model of the enterprise gies and managerial expertise to enable effective delivery and use of ICT services GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 35
  • ECM | Business case for speeding the time to satisfy customer requests for information and service fulfillment with digital mail processing systemsHow can digital mail processing support transformational applications? DigitalMailrooms.2.5 ©2009 GISTICS Incorporated, All rights reservedSTRATEGY MAP HIGHLIGHTS INNOVATION PROCESSES BENEFITS OF DIGITAL MAIL PROCESSING FUND FULL DEPLOYMENT OF ECM AND SUPPORT GAME-CHANGING INNOVATIONSBringing game-changing innovations to market often entailsconsiderable risk and opportunities for considerable reward. Increased Shareholder ValueNow more than ever, agile ICT infrastructure and applicationsmust support the rapid, problem-free launch of new product Financialconfigurations and novel business concepts. Productivity Brand Growth Strategy Strategy StrategyECM and content applications described in this paper play anevermore critical role in driving innovations to market. IMPROVE COST STRUCURE INCREASE ASSET UTILIZATION BUILD REVENUE FROM NEW PRODUCTS AND BUILD REVENUE FROM EXISTING PRODUCTS BUILD REPUTATION • Institutional • Spendings • Greater output CUSTOMERS AND CUSTOMERS citizenshipThe figure on the right depicts a strategy map that calls attention • Payroll • Waste or • Inventory turns • Workforce • Acquisitions • Product launches • Order volumes • Share of wallet • Thought leadership • Social programsto a relatively new class of applications—transformational reworks planning • Market making • Cross-selling • Corporate cultureapplications—that change the game. Customer Value Proposition CustomerIt seems that each quarter or month brings new wave of Price Quality Selection Availability Functionality Personalized Partnership Brandinnovations, making it impossible to predict which new application Interactionor service will disrupt the status quo of markets and customer PRODUCT/SERVICE ATTRIBUTES RELATIONSHIP VOICErequirements. However, it remains certain that the pace of Operations Management Customer Management Innovation and Regulatory andinnovation will continue to accelerate, bringing change, disruption, Internal Process Process Solutioneering Process Social Processand opportunity for the agile. • Supply • Selection • Opportunity discovery • Environment • Production • Acquisition • Design/development • Safety and healthDigital mail processing clearly adds value to internal processes • Logistics • Risk management • Retention • Growth • Launch/Market-making • Customization • Employment • Communityof operations management, customer management, andregulatory compliance, speeding the flow of mail and concurrent ORGANIZATION CAPITAL: Leadership, Teamwork, Culturemulti-party collaboration around customer engagement objects. People and Culture HUMAN CAPITAL: Skills, Knowledge, Values StrategyMap.D13 ©2009 GISTICS.All rights reserved.Each enterprise of particular industries will have its ownopportunities to drive game-changing innovations—transformational INFORMATION CAPITAL: Systems, Databases, Networksapplications—to market. Transaction Technology Analytic Transformational Processing Infrastructure Applications Applications ApplicationsAnd success will in part result from the firm’s information capital Systems that Systems and networks Systems and networks The shared technologyand its internal capability to develop and launch new applications. automate the basic that promote analysis, that change the and managerial repetitive transactions interpretation, and prevailing business expertise required to of the enterprise. sharing of information model of the enterprise. enable effective deliveryDigital mail processing capability not only mends a missing or knowledge. Source: Strategy Maps–Converting Intangible Assets into Tangible Outcomes by and use of Information Capital applications.link in the customer value chain; deployment also supports the Robert S. Kaplan and David P. Norton, Harvard Business School Press, 2004deployment of a full ECM capability—that in turn will support the The strategy map above depicts the central role that transformational applications can play in drivingsuccess of mission-critical, game-changing transformational growth.applications. GISTICS | EXECUTIVE W HITE PA P ER | Digit al Mailroo m s : F i x i n g Yo u r We a ke s t Li n k i n t h e C u s t o m e r Va l u e C h a i n 36
  • Thought-Leadership White Papers mapped to DAM Maturities DAM LEVEL 1 DAM LEVEL 2 DAM LEVEL 3 DAM LEVEL 4 DAM LEVEL 5   Marcom Image Portals LESSER Enterprise Marketing Content Portals SCORE AND DEPTH OF DAM SERVICES Global Media Service Portals Integrated DAM-enabled Production Platforms Integrated Media or Marcom Factories GREATER Executive White Paper Executive White Paper Executive White Paper Executive White Paper Executive White Paper Making the Business Case for Business Case for Digital Supply-Chain Pan-Regional Marketing Business Case for Marketing Content On-demand DAM and Strategies for Productivity Dividends Digital Asset Repositories in the Media Services in Marketing from Outsourced Management Enterprise Global Marketing and Packaging Assets Collateral Operations Strategies and business metrics for managing the product Operations How global brand-marketing communication groups maximize their productivity with workflow automation, digital asset How to redirect savings from outsourced pan-regional collateral operations to additional media placements and campaigns within existing operational budgets launch, supporting field sales, and enabling self-service management, and real-time collaboration tools Strategies and business metrics for estimating the economic benefits Impact of outsourcing the online management of marketing access to multichannel marketing materials Business case for the full-service pan-regional collateral factory of digital asset management and related technologies content and reusable media components on the productivity • Simple pay-for-page localization Business case for reduced time-to-market of multichannel, multi-format • Managed operations and systematized best practices of marketing, sales, and corporate communications • Instant automated collateral-artwork production and retailer modifications How a centralized repository and related digital media services reduce marketing artwork, and packaging content in automotive, consumer packaged goods, How to use analysis of activity-task automation • Online workflow and approval platform the cost and speed time to market of brand identify elements, selling food and beverages, and life sciences • Online progress monitoring, reporting, and process quality controls. to calculate time to breakeven Business metrics, automation benchmarks, and total cost of ownership models for • Real-time workflow data interfaces to enterprise IT systems. images, and marketing collateral automating the global delivery of marketing materials, presentations, videos and TECHNICAL CAPABILITIES INCLUDE: sales training to creative teams, field staff and partners • Visibility of all projects and campaigns across the • Branded web sites and extranets Industry emphasis: • organization Centralized assets that increase utilization rates • Real-time collaboration, annotation, and mark-ups • Global enterprises • Streamlined routing and approval of source • Full color management, matching, and OPERATIONAL OPERATIONAL OPERATIONAL SPENDINGS SPENDINGS artwork files and finalized content proofing SPENDINGS • Life sciences and pharmaceuticalsDOWNLOAD DOWNLOAD DOWNLOAD DOWNLOAD STRATEGIC STRATEGIC STRATEGIC • Standardization platform for digital assets, and global • Review of RIP files for printing verification, SPENDINGS SPENDINGS SPENDINGS • Media, entertainment, and publishing brand identities tracking, and reporting • Detailed project tracking and reporting • Management of video, audio, podcasts, • Retail and consumer products • Web-based collateral management and fulfillment 3D content and graphic files • Regulatory compliance and audit trails Current Spend Greater Operational Efficiencies Future Spend 34 pages 24 pages 32 pages 32 pages 80 pages Executive White Paper Executive White Paper Executive White Paper Executive White Paper Business Case for Business Case for Executive White Paper Digital Supply-Chain Strategies for Dynamic Imaging Impact of Strategies for Maximizing On-Demand Delivery of Enterprise Collaboration Enterprise Content in the Digital Asset Management Pan-Regional Enterprise on Productivity of Market Coverage and in Global Marketing Intangible Assets How digital asset management (DAM) maximizes productivity of workflow automation and creative collaboration, fortifying the Sales from Integrated Operations weakest link in the enterprise content lifecycle Strategies and tactics for accelerating the time to market for promotional images, online advertising, and visual knowledge assets Business case for speeding acquisitions and divestitures, value-chain innovations, enhanced customer value, and strategic sourcing of indirect Economic analyses of reduced time-to-market for multichannel, multi-format content, using New-Product Launch Platforms production best practices of smart content factories for broadcast,marketing operations, Impact of Automating the Management and International Distribution of spend with enterprise collaboration platforms military intelligence, and publishing. How dynamic imaging and related workflow automation technologies Approved Marketing Content, Reusable Media Components, and Digital Assets address the shortcomings of content management, enterprise resource planning, supply chain management, on Multichannel Product Launches, Field Sales Productivity, ROI payback model for business metrics, process automation benchmarks, and service-delivery Business case for a center of excellence in customer relationship management, and eCommerce and Brand-Voice Consistency requirements for coordinating the work of subject matter experts throughout the enterprise and among trusted partners of supply chains, distribution networks, and customer organizations international marketing communications ROI payback models, business metrics, process automation benchmarks, and outsourcing-service Outsourcing-service requirements for reducing the cost to localize, produce, requirements for reducing the cost and time to market throughout the marketing communications value chainDOWNLOAD DOWNLOAD and fulfill marketing brochures, direct mail, trade DOWNLOAD DOWNLOAD DOWNLOAD promotions, point-of-purchase materials, and multimedia content 34 pages 40 pages 40 pages 36 pages 46 pages ................... ................... .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 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