The document discusses three key aspects of document management: the risks of inefficient document management, how outsourcing can provide high returns, and best practices for outsourcing. It notes that paper documents are prone to failures like being misfiled, lost, or damaged, and that inefficient in-house processes limit decision-making and increase costs and liability risks. Outsourcing to experts can improve processes, accelerate change, and provide cost-effective access to new technologies. However, the best approach is to outsource less complex processes first before more complex ones, and to consider a shared risk/reward model between the organization and provider. Case studies demonstrate how outsourcing improved processing volumes, costs, compliance and customer satisfaction for various

1. IS YOUR BUSINESS AT RISK?
Facts You Should Know about
Three Aspects of Document Management
A BancTec White Paper

2. © 2010. BancTec, Inc. All Rights Reserved. Page 1
A PAPER DOCUMENT IS THE SINGLE SOURCE OF
FAILURE 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 the
burden of handling paper documents
 Doesn’t age well
 96% of all invoice-processing time is keying data from paper
INTRODUCTION
Companies handle a huge amount of business-critical and sensitive information every
day. Many lack standardized processes, state-of-the-art technology, and personnel
trained to manage the document flow in an optimal manner.
Consequently, some operate with a high level of risk resulting in three major impacts to
their business:
 Constraints in ability to make effective, timely decisions
 Inability to reduce and control costs
 Business liability due to lack of compliance and confidentiality
Essentially, document management is a breeding ground for business risks.
There is another area of risk. Although, increasingly, companies outsource various
document-management processes, some achieve less-than-satisfactory outcomes
because they approach the initiative with common approaches to outsourcing, but these
are not the best way to approach document management initiatives.
This paper discusses important facts companies need to understand about three aspects
of document management:
 The enormous risks of inefficient document management
 How outsourcing document management can yield a high return on
investment
 The best-practice approach to outsourcing document management that
enables successful outcomes

3. © 2010. BancTec, Inc. All Rights Reserved. Page 2
DOCUMENT MANAGEMENT: BREEDING GROUND FOR BUSINESS RISKS
The demand for timely, accurate information for decision makers has never been greater.
In addition, executive accountability for handling sensitive information has reached new
heights due to increased legislation. Lacking quick access to customer information leads
to significant customer dissatisfaction. There are also corporate imperatives to achieve a
higher 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 while
trying to grow market share.
In such an environment, an organization’s approach to document management is critical
to minimize risks and maximize competitive advantage. However, many organizations
lack well-designed and well-executed document management processes. Typical in-
house approaches to document management simply cannot keep pace with the
heightened demands. Consequently, operational costs and risks rise dramatically. Such
risks are illustrated below.

4. © 2010. BancTec, Inc. All Rights Reserved. Page 3
THE POWER OF OUTSOURCED DOCUMENT MANAGEMENT
Document handling has a real impact on a business but, for most
organizations, document management is a non-strategic, overhead function.
Thus, any resources dedicated to document management are a distraction
from the core business and a drain on resources.
Some key points to consider are:
 Risks associated with typical inefficient in-house document
management processes are avoidable by outsourcing these
processes.
 Outsourcing document management places the process in the hands
of experts who focus all their attention only on that process and who
will definitely consider it to be strategic.
 Outsourcing not only achieves process improvements but also
accelerates change.
 Organizations use business process outsourcing (BPO) to drive
change, as it forces a higher level of organizational discipline and
requires better planning.
 Outsourcing providers have the resources to accommodate special
organizational needs cost-effectively.
An outsourced document management solution will yield a measurable, high
return on investment (ROI). Typical benefits include the following:
 Efficiency gains from digitizing documents –This makes information
access easier. An electronic document is easier to find, share, and
review. This ensures more timely and comprehensive decision
making and increases customer satisfaction because of quick access
to information. In addition, disc storage is less costly than filing
cabinets. Organizations have two choices when dealing with paper
and computers. They can rely on employees to process paper in an
ad hoc way as it comes across their desk, or they rely on an
optimized 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 on
tap to address problems and sudden needs without substantial
increases in capital expenditure.
 Technology gains – Access to the latest technology enables greater
cost and efficiency gains. Scanning equipment requires maintenance,
and technology evolves quickly. In-house investments in the wrong
equipment or maintaining hardware that will rapidly become obsolete
is a serious financial risk.
Business situation:
 Provider of credit management and debt
collection services already employed 20
clerical staff to manually process incoming
mail and anticipated a significant rise in
data capture requirements
 The company had limited physical space
and did not want to increase its staffing
Solution:
 The outsourcing partner provides a full
mailroom solution including:
o Receiving and opening mail
items daily
o Processing 2,000 new business
records and 1,200 field agent
books weekly
o 1,500 payments and 3,000
“moved away” letters daily
 All data collected is transmitted to the
company’s headquarters for incorporation
into the company’s management reports
and used to generate the next week’s field
agent books
Value Delivered:
 The solution is designed to handle peaks
and troughs of activity, which can vary by
30%
 The outsourcing provider is handling more
mail and processing more payments but
at a lower cost.
 Significant improvements in the process
of input rates of new business and in the
processing of “moved away” mail
 Eliminated time and expense of
maintaining technology
 Ensured its remittance processing
equipment would not be out of date
Case Study #1:
Processing Mail and Business Records

5. © 2010. BancTec, Inc. All Rights Reserved. Page 4
 Risk Reduction
o A BPO provider invests in the technology systems,
business processes, and skilled personnel to ensure
compliance with U.S. regulatory requirements such as
Sarbanes-Oxley, SAS 70, and HIPAA and similar
requirements in the European Union surrounding the
sharing, storage, and retention of documents.
o The provider implements role-based access control to
sensitive information and assures an audit trail.
o A BPO provider applies industry and process best
practices as well as automation to reduce human error.
 Strategic growth activities – Outsourcing document management
makes it easier and faster to implement change as an organization
grows and enters new product or global markets. It also facilitates
post-merger/acquisition (M&A) activities and changes in business
structure. Case study #2 is an example of outsourcing document
management to enable gaining new business.
 Business continuity and disaster recovery – A BPO provider has
the resources and facilities to ensure a cost-effective solution for
storage and recovery of documents in case of disaster and ensure
that the document management process resumes smoothly and
efficiently.
 Cost benefits – In addition to cost reduction from improved
processes, outsourcing eliminates unpredictable capital
expenditure and non-core employee costs. Service costs are
predictable, controllable, and based on service level agreements.
 Efficiency gains from end-to-end outsourcing – Companies achieve
significant efficiency gains by optimizing their document
management end to end. This resolves or minimizes multiple
issues including:
o Lost or misrouted documents
o Late delivery of documents
o Typing errors from invoices
o Need to forward hard copy
o Poor audit trail
o Poor security and privacy
o Mismatched data to invoice
o Slow processing of payments
o Need to create multiple copies
Case Study #2:
Processing Healthcare Documents
Business situation:
 The company administers Medicare
programs in every state in the U.S.,
processing more than 130 million
Medicare claims per year, plus images of
medical records, enrollment applications,
and correspondence
 The company bid through an RFP for new
scope of services; as part of the bid, it
sought a subcontractor that could provide:
o Mailroom services
o Imaging and OCR of paper
claims and support documents
and medical records
o Data correction, formatting and
transmission
o Imaging and manual keying of
paper claims that cannot be
processed with OCR
o Ability to handle tens of millions
of documents while meeting
stringent HIPAA security and
information regulations
Solution:
The company outsourced the work to a BPO
provider with expertise in document
management services and a HIPAA-compliant
processing and imaging facility.
Value Delivered:
 The company was able to win the
additional scope of work
 Enabled the company to expand its
claims-processing capacity
 Allowed the company to reduce the cost
of processing millions of paper
documents

6. © 2010. BancTec, Inc. All Rights Reserved. Page 5
Outsourcing of non-core but critical processes is a proven strategy for
maintaining a competitive edge. Moreover, a process that is recognized as
overhead expense can be the engine that drives transformation and
maximizes shareholder value. Document management has emerged as an
area of high potential for providing the benefits of outsourcing.
THE APPROACH TO OUTSOURCING DOCUMENT MANAGEMENT
IMPACTS SUCCESS
While outsourcing document management is a highly successful strategy for
business efficiency and risk mitigation, the outcomes can be unsatisfactory if
the appropriate approach is not taken.
Lift-and-shift. A common approach to outsourcing is where labor arbitrage is
often used in lieu of process transformation. Avoid this method if you’re
looking for long term, sustained or increasing economic value – especially if
the service provider is not planning to transform the process.
Change management. Companies also need to bear in mind that outsourcing
document management involves a high degree of change management. Thus,
deciding to outsource high value-add function(s) first is likely to be a high-risk
approach 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 management
involves these rules of thumb:
1. Don’t start by outsourcing a decision-heavy process that requires a lot
of human interaction.
2. Start by outsourcing the function with the least value added, most
repetitive, and most easily automated processes, and work up from
there.
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 of
application forms than it is to outsource loan decision-making.
This approach, together with a clear understanding of the company’s business
objectives and drivers, will present a decision framework that yields the
desired ROI, whether the company wants to start with point solutions for
various functions or begin end-to-end process transformation at the outset.
Siloed approach. It is also important to recognize that optimizing the
document management process requires eliminating a siloed approach. Such
an approach often ends up with the initiative not being perceived as high
priority; thus, it risks achieving less-than-anticipated outcomes.
Business Situation:
 A Catholic diocese sought to preserve its
sacramental documents for 125 parishes
in 25 counties to protect against paper
decay and destruction in case of a
disaster
 More than 120,000 images needed to be
microfilmed and digitized
 The Diocese wanted a local provider to
avoid shipping the irreplaceable
sacramental books elsewhere for
digitization
Solution:
 Microfilm was chosen as trusted source
for preservation – provided hard copy in
secure facility and digital files for the
parishes for easy access.
 The outsourcing provider broke the
project into 11 phases over one year.
Each page of the hardbound books was
microfilmed.
Value Delivered:
 The Diocese now has redundancy for its
sacramental records, with the original
handwritten records preserved in a secure
location on microfilm and on several sites
as digital files.
 Searching the digitized records now takes
minutes instead of the days to search the
original hardbound books.
Case Study #3:
Preserving Irreplaceable Documents

7. © 2010. BancTec, Inc. All Rights Reserved. Page 6
In many organizations, different departments have their own capture, imaging,
and archival implementations. Optimizing the end-to-end process requires
someone at a higher level in the organization who can envision benefiting from
consolidated 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 will
perform its responsibilities that enable the provider to achieve the objectives.
Financial incentives are a highly effective strategy for maximizing the value
that is possible through outsourcing.
RECOMMENDATIONS FOR SELECTING A DOCUMENT
MANAGEMENT OUTSOURCING PARTNER
Maximizing the value outcomes from outsourcing requires not only taking the
right approach at the outset but also selecting the right partner. The selection
strategy should involve finding a partner that can meet the following criteria:
 Superior track record of dealing with high-volume business-critical
documents
 Has a superior track record in transition planning and staff acquisition
 Has a superior track record in reengineering business processes and in
rationalizing process-oriented operations, which leads to performance
improvement, 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 business
processes up front to assess the impact of outsourcing various
functions
 Has a rigorous framework and methodology that serves as the
foundation for well-documented processes
 Has leading technologies
 Uses software tools that provide rapid integration, scalability, and
flexibility
 Adheres strongly to corporate governance, SLAs, and controls
 Uses quality metrics and continuous improvement methods
 Provides complete business continuity in the event of operational
disruptions
 Has a proven track record for incorporating flexible results-oriented
pricing methods.
Today’s business environment has more disruption to established business
processes – and more risks – than ever before. Leveraging the resources of a
document management outsourcing partner is a key enabler to turning the
disruption and risks into a competitive advantage.
Case Study #4:
Bank Check Imaging
Business situation:
A European bank’s check images were stored
on microfilm, which resulted in several
challenges:
 Security and interoperability issues
 Document retrieval was a manual process
requiring individual branches to send copy
requests to operators in the central
management center
 More than 20 staff members were
retained to manually locate microfilm,
obtain copies, and dispatch them to the
branch
 Each request for check copies took
between 24-48 hours to fulfill, impeding
customer service
 Quality of images varied
Solution:
 The outsourcing provider replaced the
microfilm library with a hosted digital
archive at its facilities and a mirrored
archive at the bank
Value Delivered:
 Seamless backup for business continuity
in case of a disaster
 Bank branches’ staff have instant access
to 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 ongoing
technology upgrades
 Significant improvement in quality of
images

8. © 2010. BancTec, Inc. All Rights Reserved. Page 7
FOR MORE INFORMATION
BancTec helps clients around the world simplify the process of managing their
information. Founded in 1972, the company provides a wide range of solutions for
automating complex, high-volume and data-intensive business processes for clients in the
financial services, healthcare, manufacturing, government, and services and utilities
industries. BancTec’s offerings include business solutions, business process outsourcing,
and infrastructure services. Headquartered in Dallas, BancTec serves clients in more than
50 countries. For more information on how BancTec can help you optimize information
management, visit www.banctec.com or call 1-800-BANCTEC.
©2010 BancTec, Inc. All rights reserved.
BancTec is a registered trademark of BancTec, Inc. Other brand
or product names herein are the property of BancTec, Inc. or their respective owners. Specifications
are subject to change without notice.
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