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Is Your Business at Risk? Document Management Facts & Aspects - Whitepaper By BancTec

Is Your Business at Risk? Document Management Facts & Aspects - Whitepaper By BancTec



BancTec explains three important aspects of document management systems to reduce the business risks of its clients thus simplifying the process of managing their information.

BancTec explains three important aspects of document management systems to reduce the business risks of its clients thus simplifying the process of managing their information.



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    Is Your Business at Risk? Document Management Facts & Aspects - Whitepaper By BancTec Is Your Business at Risk? Document Management Facts & Aspects - Whitepaper By BancTec Document Transcript

    • IS YOUR BUSINESS AT RISK?Facts You Should Know aboutThree Aspects of Document ManagementA BancTec White Paper
    • © 2010. BancTec, Inc. All Rights Reserved. Page 1A PAPER DOCUMENT IS THE SINGLE SOURCE OFFAILURE AND LIABILITY Misfiled Lost Damaged Takes too long to retrieve Security risk Expensive Doesn’t interface with computer systems New regulatory reporting and retention rules adds to theburden of handling paper documents Doesn’t age well 96% of all invoice-processing time is keying data from paperINTRODUCTIONCompanies handle a huge amount of business-critical and sensitive information everyday. Many lack standardized processes, state-of-the-art technology, and personneltrained to manage the document flow in an optimal manner.Consequently, some operate with a high level of risk resulting in three major impacts totheir business: Constraints in ability to make effective, timely decisions Inability to reduce and control costs Business liability due to lack of compliance and confidentialityEssentially, document management is a breeding ground for business risks.There is another area of risk. Although, increasingly, companies outsource variousdocument-management processes, some achieve less-than-satisfactory outcomesbecause they approach the initiative with common approaches to outsourcing, but theseare not the best way to approach document management initiatives.This paper discusses important facts companies need to understand about three aspectsof document management: The enormous risks of inefficient document management How outsourcing document management can yield a high return oninvestment The best-practice approach to outsourcing document management thatenables successful outcomes
    • © 2010. BancTec, Inc. All Rights Reserved. Page 2DOCUMENT MANAGEMENT: BREEDING GROUND FOR BUSINESS RISKSThe demand for timely, accurate information for decision makers has never been greater.In addition, executive accountability for handling sensitive information has reached newheights due to increased legislation. Lacking quick access to customer information leadsto significant customer dissatisfaction. There are also corporate imperatives to achieve ahigher return for all expenditures with quicker and larger paybacks on capital investments.In the midst of such demands, today’s businesses also must do more with less whiletrying to grow market share.In such an environment, an organization’s approach to document management is criticalto minimize risks and maximize competitive advantage. However, many organizationslack well-designed and well-executed document management processes. Typical in-house approaches to document management simply cannot keep pace with theheightened demands. Consequently, operational costs and risks rise dramatically. Suchrisks are illustrated below.
    • © 2010. BancTec, Inc. All Rights Reserved. Page 3THE POWER OF OUTSOURCED DOCUMENT MANAGEMENTDocument handling has a real impact on a business but, for mostorganizations, document management is a non-strategic, overhead function.Thus, any resources dedicated to document management are a distractionfrom the core business and a drain on resources.Some key points to consider are: Risks associated with typical inefficient in-house documentmanagement processes are avoidable by outsourcing theseprocesses. Outsourcing document management places the process in the handsof experts who focus all their attention only on that process and whowill definitely consider it to be strategic. Outsourcing not only achieves process improvements but alsoaccelerates change. Organizations use business process outsourcing (BPO) to drivechange, as it forces a higher level of organizational discipline andrequires better planning. Outsourcing providers have the resources to accommodate specialorganizational needs cost-effectively.An outsourced document management solution will yield a measurable, highreturn on investment (ROI). Typical benefits include the following: Efficiency gains from digitizing documents –This makes informationaccess easier. An electronic document is easier to find, share, andreview. This ensures more timely and comprehensive decisionmaking and increases customer satisfaction because of quick accessto information. In addition, disc storage is less costly than filingcabinets. Organizations have two choices when dealing with paperand computers. They can rely on employees to process paper in anad hoc way as it comes across their desk, or they rely on anoptimized process that digitizes paper at the earliest possible stage –which is how a BPO provider handles it. Ability to cope with sudden surges in demand – Extra capacity is ontap to address problems and sudden needs without substantialincreases in capital expenditure. Technology gains – Access to the latest technology enables greatercost and efficiency gains. Scanning equipment requires maintenance,and technology evolves quickly. In-house investments in the wrongequipment or maintaining hardware that will rapidly become obsoleteis a serious financial risk.Business situation: Provider of credit management and debtcollection services already employed 20clerical staff to manually process incomingmail and anticipated a significant rise indata capture requirements The company had limited physical spaceand did not want to increase its staffingSolution: The outsourcing partner provides a fullmailroom solution including:o Receiving and opening mailitems dailyo Processing 2,000 new businessrecords and 1,200 field agentbooks weeklyo 1,500 payments and 3,000“moved away” letters daily All data collected is transmitted to thecompany’s headquarters for incorporationinto the company’s management reportsand used to generate the next week’s fieldagent booksValue Delivered: The solution is designed to handle peaksand troughs of activity, which can vary by30% The outsourcing provider is handling moremail and processing more payments butat a lower cost. Significant improvements in the processof input rates of new business and in theprocessing of “moved away” mail Eliminated time and expense ofmaintaining technology Ensured its remittance processingequipment would not be out of dateCase Study #1:Processing Mail and Business Records
    • © 2010. BancTec, Inc. All Rights Reserved. Page 4 Risk Reductiono A BPO provider invests in the technology systems,business processes, and skilled personnel to ensurecompliance with U.S. regulatory requirements such asSarbanes-Oxley, SAS 70, and HIPAA and similarrequirements in the European Union surrounding thesharing, storage, and retention of documents.o The provider implements role-based access control tosensitive information and assures an audit trail.o A BPO provider applies industry and process bestpractices as well as automation to reduce human error. Strategic growth activities – Outsourcing document managementmakes it easier and faster to implement change as an organizationgrows and enters new product or global markets. It also facilitatespost-merger/acquisition (M&A) activities and changes in businessstructure. Case study #2 is an example of outsourcing documentmanagement to enable gaining new business. Business continuity and disaster recovery – A BPO provider hasthe resources and facilities to ensure a cost-effective solution forstorage and recovery of documents in case of disaster and ensurethat the document management process resumes smoothly andefficiently. Cost benefits – In addition to cost reduction from improvedprocesses, outsourcing eliminates unpredictable capitalexpenditure and non-core employee costs. Service costs arepredictable, controllable, and based on service level agreements. Efficiency gains from end-to-end outsourcing – Companies achievesignificant efficiency gains by optimizing their documentmanagement end to end. This resolves or minimizes multipleissues including:o Lost or misrouted documentso Late delivery of documentso Typing errors from invoiceso Need to forward hard copyo Poor audit trailo Poor security and privacyo Mismatched data to invoiceo Slow processing of paymentso Need to create multiple copiesCase Study #2:Processing Healthcare DocumentsBusiness situation: The company administers Medicareprograms in every state in the U.S.,processing more than 130 millionMedicare claims per year, plus images ofmedical records, enrollment applications,and correspondence The company bid through an RFP for newscope of services; as part of the bid, itsought a subcontractor that could provide:o Mailroom serviceso Imaging and OCR of paperclaims and support documentsand medical recordso Data correction, formatting andtransmissiono Imaging and manual keying ofpaper claims that cannot beprocessed with OCRo Ability to handle tens of millionsof documents while meetingstringent HIPAA security andinformation regulationsSolution:The company outsourced the work to a BPOprovider with expertise in documentmanagement services and a HIPAA-compliantprocessing and imaging facility.Value Delivered: The company was able to win theadditional scope of work Enabled the company to expand itsclaims-processing capacity Allowed the company to reduce the costof processing millions of paperdocuments
    • © 2010. BancTec, Inc. All Rights Reserved. Page 5Outsourcing of non-core but critical processes is a proven strategy formaintaining a competitive edge. Moreover, a process that is recognized asoverhead expense can be the engine that drives transformation andmaximizes shareholder value. Document management has emerged as anarea of high potential for providing the benefits of outsourcing.THE APPROACH TO OUTSOURCING DOCUMENT MANAGEMENTIMPACTS SUCCESSWhile outsourcing document management is a highly successful strategy forbusiness efficiency and risk mitigation, the outcomes can be unsatisfactory ifthe appropriate approach is not taken.Lift-and-shift. A common approach to outsourcing is where labor arbitrage isoften used in lieu of process transformation. Avoid this method if you’relooking for long term, sustained or increasing economic value – especially ifthe service provider is not planning to transform the process.Change management. Companies also need to bear in mind that outsourcingdocument management involves a high degree of change management. Thus,deciding to outsource high value-add function(s) first is likely to be a high-riskapproach since those functions are likely to undergo a high degree of change;this approach carries a risk of failure.The best-practice, low-risk approach to outsourcing document managementinvolves these rules of thumb:1. Don’t start by outsourcing a decision-heavy process that requires a lotof human interaction.2. Start by outsourcing the function with the least value added, mostrepetitive, and most easily automated processes, and work up fromthere.3. Don’t make decisions based on whether the function is a revenue-generating activity; this carries the risk of turning the initiative into a B-level activity.It is much easier, for example, to outsource data entry and scanning ofapplication forms than it is to outsource loan decision-making.This approach, together with a clear understanding of the company’s businessobjectives and drivers, will present a decision framework that yields thedesired ROI, whether the company wants to start with point solutions forvarious functions or begin end-to-end process transformation at the outset.Siloed approach. It is also important to recognize that optimizing thedocument management process requires eliminating a siloed approach. Suchan approach often ends up with the initiative not being perceived as highpriority; thus, it risks achieving less-than-anticipated outcomes.Business Situation: A Catholic diocese sought to preserve itssacramental documents for 125 parishesin 25 counties to protect against paperdecay and destruction in case of adisaster More than 120,000 images needed to bemicrofilmed and digitized The Diocese wanted a local provider toavoid shipping the irreplaceablesacramental books elsewhere fordigitizationSolution: Microfilm was chosen as trusted sourcefor preservation – provided hard copy insecure facility and digital files for theparishes for easy access. The outsourcing provider broke theproject into 11 phases over one year.Each page of the hardbound books wasmicrofilmed.Value Delivered: The Diocese now has redundancy for itssacramental records, with the originalhandwritten records preserved in a securelocation on microfilm and on several sitesas digital files. Searching the digitized records now takesminutes instead of the days to search theoriginal hardbound books.Case Study #3:Preserving Irreplaceable Documents
    • © 2010. BancTec, Inc. All Rights Reserved. Page 6In many organizations, different departments have their own capture, imaging,and archival implementations. Optimizing the end-to-end process requiressomeone at a higher level in the organization who can envision benefiting fromconsolidated operations.Risk/Reward Model. Companies can also benefit by considering a risk-and-reward model in which the provider is rewarded for benefits delivered.A shared risk-and-reward model also helps to ensure the client company willperform its responsibilities that enable the provider to achieve the objectives.Financial incentives are a highly effective strategy for maximizing the valuethat is possible through outsourcing.RECOMMENDATIONS FOR SELECTING A DOCUMENTMANAGEMENT OUTSOURCING PARTNERMaximizing the value outcomes from outsourcing requires not only taking theright approach at the outset but also selecting the right partner. The selectionstrategy should involve finding a partner that can meet the following criteria: Superior track record of dealing with high-volume business-criticaldocuments Has a superior track record in transition planning and staff acquisition Has a superior track record in reengineering business processes and inrationalizing process-oriented operations, which leads to performanceimprovement, improved customer service, and cost reduction Can help its client understand the risks as well as the benefits Will conduct a risk assessment, reviewing paper flows and businessprocesses up front to assess the impact of outsourcing variousfunctions Has a rigorous framework and methodology that serves as thefoundation for well-documented processes Has leading technologies Uses software tools that provide rapid integration, scalability, andflexibility Adheres strongly to corporate governance, SLAs, and controls Uses quality metrics and continuous improvement methods Provides complete business continuity in the event of operationaldisruptions Has a proven track record for incorporating flexible results-orientedpricing methods.Today’s business environment has more disruption to established businessprocesses – and more risks – than ever before. Leveraging the resources of adocument management outsourcing partner is a key enabler to turning thedisruption and risks into a competitive advantage.Case Study #4:Bank Check ImagingBusiness situation:A European bank’s check images were storedon microfilm, which resulted in severalchallenges: Security and interoperability issues Document retrieval was a manual processrequiring individual branches to send copyrequests to operators in the centralmanagement center More than 20 staff members wereretained to manually locate microfilm,obtain copies, and dispatch them to thebranch Each request for check copies tookbetween 24-48 hours to fulfill, impedingcustomer service Quality of images variedSolution: The outsourcing provider replaced themicrofilm library with a hosted digitalarchive at its facilities and a mirroredarchive at the bankValue Delivered: Seamless backup for business continuityin case of a disaster Bank branches’ staff have instant accessto images via a Web-based interface Speeds cycle time for lending and pay/no-pay decisions Ensures customer records are secure Increased customer satisfaction Reduced costs Eliminated capital outlay for ongoingtechnology upgrades Significant improvement in quality ofimages
    • © 2010. BancTec, Inc. All Rights Reserved. Page 7FOR MORE INFORMATIONBancTec helps clients around the world simplify the process of managing theirinformation. Founded in 1972, the company provides a wide range of solutions forautomating complex, high-volume and data-intensive business processes for clients in thefinancial services, healthcare, manufacturing, government, and services and utilitiesindustries. BancTec’s offerings include business solutions, business process outsourcing,and infrastructure services. Headquartered in Dallas, BancTec serves clients in more than50 countries. For more information on how BancTec can help you optimize informationmanagement, visit www.banctec.com or call 1-800-BANCTEC.©2010 BancTec, Inc. All rights reserved.BancTec is a registered trademark of BancTec, Inc. Other brandor product names herein are the property of BancTec, Inc. or their respective owners. Specificationsare subject to change without notice.05DS-0310-101