Improving business performance: Taking the pain out of document management

Transcription

1 Improving business performance: Taking the pain out of document management A white paper to investigate documents and how they can be better managed to improve business performance

2 Introduction Australian corporations are under unprecedented pressure to streamline functions and processes to improve their competitive performance in a global market. The demand for process change and improvement in outcomes is also placed squarely on the shoulders of small and medium sized businesses (SMBs), many of whom are not equipped to examine where savings and innovations can be found in their organisation. Many SMBs do not possess the appropriate resources to analyse their production and administration processes, and they struggle to find the time to do so. The result is that many small and medium businesses have limited information, directly relevant to their own organisation, which they can use to identify problems and solve them. Now more than ever, there is an imperative for small and mid-sized businesses to find ways to improve their operational efficiency while at the same time reducing their cost structure. Some initiatives may be obvious, but many others can go largely unnoticed. Managing document flows is central to the operations of virtually every organisation, and is one area in which significant improvements in performance can often be found, although it is often ignored by management. Those performance improvements can often also foster realisable cost savings. The IDC/Fuji Xerox Australia study The IDC independent research study, presented in partnership with Fuji Xerox Australia, was designed to examine the document processes of small and medium sized businesses, and identify areas, or pain points, which create bottlenecks and other hindrances in their operational performance. By doing so, new document management processes can be developed and introduced to ease the pain. The study used three approaches to gather information about document use in SMBs. The first was a series of phone surveys with 100 organisations, to discover how their document workflows are constructed, and the problems they have. This was combined with a wider online quantitative survey of 410 Australian organisations, held in conjunction with 20 in-depth interviews conducted by IDC analysts to examine particular organisational structures, their document workflows, and the challenges they face. Fig 1. Respondents 17% 16% 13% 21% 33% 14% 8% 11% 10% 10% 13% 10% 40% 8% 16% 10% 15% 14% 9% 12% Company size Industry Banking / Financial services Manufacturing Professional services Education Media / Communications and IT Resource / Utilities Government / Health Other Work group Finance and accounting Sales and marketing Customer service Human resources Office administration Product development IT / Procurement

3 Fig 2. The Document Process Print Scan Step 1 Step 2 Step 3/4 Step 5 Step 6/7 Create 56% Review/edit 40% Authorise and sign 33% Forward 19% Archive and store 33% Electronic Paper 68% 32% Review paper form Review electronic form 43% 40% Written approval Approval via Verbal approval Document approval process 46% 25% 25% 5% Forward electronic copy Forward scanned copy 60% 37% File physical document and store electronic File physical document Destroy paper and only store electronic 44% 41% 15% A first look at documents in organisations The results of the survey on document processes show a general lack of awareness of the importance of documents in general business practice. While everyone understands that documents carry information critical to the organisations operations, a clear understanding of the underlying impacts of documents and how they affect performance is less prevalent. The results of the survey on document processes show a general lack of awareness of the importance of documents in general business practice. The survey s findings also point to low awareness of areas in organisations which feel pain, and hindrances to their effective operations because of the inability of documents, or the people using them, to achieve the desired outcomes. The document process It is worthwhile examining a typical process in the development and ongoing use of a document to discover where there may be avenues for improvement. It should be remembered that there are variations in the document lifecycle, depending on the organisation, its functions and main objectives. The first step in a common lifecycle is the creation of the document. This is increasingly done electronically, with about 56 percent of respondents involved in this process. But about one-third of all documents created are still paper based. The second step in the document process is editing or reviewing, in which about 40 percent of respondents are involved. It is worth noting that about 43 percent of those respondents have a preference for doing this process on paper, with about 40 percent preferring electronic formats. The third step is authorisation and sign-off. This is most often achieved with written approval (46 percent), with combined and verbal approval done by 50 percent. Only about 5 percent of businesses have formal document approval processes. Documents are then forwarded to those who have an interest in its content step four. This is typically achieved in electronic format, although paper documents are still handed around physically in many situations. About 60 percent of respondents indicated that they use electronic formats for passing around the organisation, and 37 percent said they forward scanned documents. Lastly, in step five, documents are stored or archived. Nearly half of respondents (44 percent) said they store a physical file and also archive an electronic version of it, while 41 percent store just a hardcopy file. Only 15 percent said they archive an electronic file and destroy the paper file. Nearly three-quarters (72 percent) of respondents noted that they stored files on a shared or network drive, and only 9 percent use a web based document management system.

4 Common documents The most common documents used by SMBs, in order of prevalence, are reports (both internal and external), followed by invoices, purchase orders, sales figures and reports, training materials, HR department documents, contracts and brochures. Of the survey respondents, 76 percent used internal and external reports, 70 percent required contracts, 62 percent used financial documents, including invoices and purchase orders, 56 percent used training manuals and half, 50 percent, used marketing collateral of some kind. Those figures indicate what would be considered typical document usage for many businesses. They also indicate, because of the documents common usage, where there might be opportunities to improve their management, with a view to making the biggest impact on document workflow. Document media A full 38 percent of all documents are still in a paper format. Electronic formats such as were used for 28 percent of documents, with PDF the next most common at 27 percent. Images accounted for just 7 percent of documents in the respondent organisations. In other words, well over one-third of all documents are still paper based, placing numerous burdens on users in respect of handling, conversion, filing, storage/archival, and retrieval for future use. The degree to which external personnel require the use of the documents influences the ease with which documents can be manipulated to suit new workflow practices. There is usually greater control of documents used only inside the organisation. Well over one-third of all documents are still paper based, placing numerous burdens on users in respect of handling, conversion, filing, storage/archival, and retrieval for future use. Other influences on possible workflow changes include who the decision makers are, the IT literacy of staff, IT infrastructure, and the reluctance of employees to change. However, there is a solid foundation for improving document management practices. Documents on file More than four in five (87 percent) of companies departments receive documents that require conversion to an electronic format. While printing and scanning were never dominant processes, they were always a significant part of the document lifecycle. Printing typically occurs between the creation and review processes, and between the review and authorisation processes. Scanning often occurred after authorisation and forwarding to other parties or for archival and storage facilities. The pain points At first glance, most respondents (89 percent) indicated that their present document workflows largely achieved their desired outcomes, and 77 percent said they were essentially satisfied with their document processes, and considered their systems to be reasonably effective. While on one level those results show that many organisations have systems that deliver to a reasonable extent on their requirements, they also indicate that there may be some apathy in those organisations in seeking new and improved document workflows and processes which may offer better performance and productivity. People have become used to tolerating document processes that deliver some outcomes for their organisations, but do not deliver as much as could be achieved if those processes were analysed and streamlined. But over half (52 percent), said that their processes are frustrating because of inefficiencies in it, or that the system was costly to operate. Curiously, only 16 percent had implemented solutions to overcome those problems. But over half (52 percent), said that their processes are frustrating because of inefficiencies in it, or that the system was costly to operate. Curiously, only 16 percent had implemented solutions to overcome those problems. The most common pain point indicated by respondents is paper. It was regarded as the major stumbling block, and caused most concern in effective document management. Their concerns centred around conversion, management, storage and archival. The maturity of print technology in the market results in comparatively low levels of dissatisfaction whilst the same cannot be said for other aspects of the document workflow. Nearly two-thirds of respondents (63 percent) said they had no real problems with their printing, copying and scanning devices. Instead, the document management process caused their dissatisfaction. There are obvious opportunities to be found in improving the digitisation of paper documents, and their management. Saving effort and time The survey examined the amount of effort and time expended at various points throughout the document management process. The areas of creation, authorisation and review were by far the most significant in terms of time and effort required, and were considered the primary pain points. These areas offer the most opportunities for process improvement. Obvious enough was the respondents assertion that creation of documents took the most time and the most effort, marking this process as a key pain point. The other major bottleneck occurred in the authorisation and sign process. Respondents said that they wanted fewer levels of authorisation to forward documents, as well as alternative plans or strategies should people not be available for immediate action. An automatic forwarding system to the next appropriate authoriser was most desired. The process areas which scored the highest levels of dissatisfaction were actually scanning and storage/archival, indicating a lack of ease in the process. Automation of document management systems was often seen as a silver bullet cure for these problems. The ability to automate scanning, authorisation and approval, forwarding of documents and their storage/archival were all considered priorities for interviewees.

5 Other areas of frustration included scanning, which respondents said took less time than other processes, but took more effort. Printing and forwarding documents were considered to be the least painful processes. Storage and archival of documents Conversations with respondents revealed that the two terms, storage and archival, were used to indicate much the same activity, but in different contexts. Storage was often used in relation to paper documents, while archival tended to indicate the use of digitised document workflows. Levels of dissatisfaction recorded by respondents showed that for paper documents, the length of time spent looking for documents was a distinct pain point, closely followed by the tracking of changes made to documents. Other areas of dissatisfaction included sharing documents, automating the document system, and to a lesser extent, creating an index for storage to assist in the retrieval of documents. For those using a digitised document system, indexing of documents proved to be the most frustrating aspect of the system, followed by tracking changes and looking for documents. Sharing documents and finding them by folder were less frustrating than their paper based counterparts. These findings were supported by the participants in the in-depth interviews. The most commonly recognised problems stemming from these pain points were time loss and waste, most apparent when employees were trying to find and retrieve files or documents in a badly designed or indexed archiving or storage system. This was more acute in paper based systems, although electronic systems were not perfect either. The impact of pain points Document workflow can have impacts on numerous areas of a business, including its people, processes, customers and financial performance. The impact mentioned by most respondents (81 percent) was time wasted in dealing with documents. The next, raised by 65 percent, was the financial cost to the business of their document management system, with opportunity loss mentioned by 59 percent. Lost opportunity whether for achieving greater volumes of work or missing out on business also came out strongly in the in-depth interviews, with respondents citing both poor communication and poorly constructed document workflows as the cause. Employee and customer satisfaction were rated at 47 percent and 34 percent respectively. Energy and the environment With society and business having an increased focus on the environment, and with the proposed carbon tax highlighting environmental reporting across mainstream media, it is surprising that only 19 percent of organisations in the survey group had actually measured their use of documents on their energy use and overall environmental footprint. About 40 percent said they were considering measuring the environmental impact, but the majority (41 percent) of respondents indicated no intention to measure the environmental impact of their document processes a surprising finding considering the perceived focus on being green at an enterprise level. This area of analysis provides the potential for a significant shift in organisational behaviour with document management, and a clear motive for it, given legislative changes proposed for July Employee satisfaction The adage that a happy worker is a good worker may sometimes be forgotten by organisations, if figures for measuring employee satisfaction in the survey are any indication. Only 29 percent of organisations in the survey have measured the impact of their document management workflow on employee satisfaction. Another 35 percent said they were considering measuring it, and well over a third, or 37 percent, said they had not measured, nor were they considering measuring, document management and employee satisfaction levels. Customer satisfaction Perhaps most telling of all were the figures which indicated that only 29 percent of organisations had measured the impact of their document workflow on customer satisfaction, with 36 percent saying they are considering measurement of the impact, and 35 percent not measuring, nor even considering measuring, the impact on customer satisfaction. This leaves substantial room for investigation into organisational practices with respect to their impact on customers. Financial cost In pinpointing the impact of pain points in organisations, only about a quarter of organisations (26 percent) said that they had measured the financial cost in their resources, like paper and storage, while over one-third (37 percent) of organisations said that they were considering measuring the financial impact, and possible workflow improvements of their document processes on their operations. A full 38 percent said they had not yet considered it. Fig 3. Pain points in document workflow Time lost / wasted 81% Financial cost to the business 65% Opportunity loss 59% Employee satisfaction 47% Customer satisfaction 34% About three-quarters of organisations admitted that they have not yet measured any impact of their document processes on their own financial outcomes, performance, efficiency and productivity. If these two groups are combined, about three-quarters of organisations admitted that they have not yet measured any impact of their document processes on their own financial outcomes, performance, efficiency and productivity.

6 Fig 4. Annual cost to company per staff Typical number of staff in the organisation Total cost per workgroup per annum Office administration $5,295 3 $15,885 Finance and accounting $6,368 8 $50,944 Human resources $6,653 3 $19,959 Sales and marketing $9, $183,540 Customer service $3, $62,200 Logistics $12, $155,196 IT / IS and procurement $4,953 4 $19,812 Total cost to company in retrieving, searching documents $507,536 The cost of poor document management By focusing initially on costs associated with inefficient processes, we see a startling impact that businesses can look to avoid. An example of the typical costs being borne by a business with 70 employees can be seen in Figure 4 above. In this scenario, it can be seen that the costs of searching for and retrieving documents to this typical company is $507,536 per annum. Digitisation as a key solution The survey and interview results point to system inefficiencies that hinder organisations in performing to their maximum potential. In many cases, the performance was not optimal because paper rather than electronic documents were used as a primary document. A simple analysis would seem to indicate that digitising those documents would solve the problems for those organisations, and they would find new productivity gains. That is too easy an answer, because in reality digitisation of documents does not actually solve all document management problems. This is most apparent when investigating the responses to questions about storage and archival, which indicate that while paper documents generated the highest levels of dissatisfaction among workers due to time spent looking for them and tracking changes to them, digitised documents had their own shortcomings, which also raised levels of dissatisfaction among workers. Digitising documents Nearly half of respondents to the survey (46 percent) said that they had begun a process to convert paper documents into electronic formats, while 27 percent were planning to. Over a quarter (27 percent) said they had no plans to convert documents. Current market solutions Current document workflow systems already utilise a number of solutions, or partial solutions, which have been embraced (some more enthusiastically than others). These include: Scan to (90 percent) Electronic forms (80 percent) Optical character recognition (OCR) (55 percent) Auto ordering of parts, services and supplies (52 percent) sending and receiving of faxes (50 percent). These figures indicate that there is significant room for growth in some of them, and it can be assumed that some of them will find greater workplace acceptance. The opportunities There are clear opportunities available for organisations to improve their document creation, handling, forwarding and storage, and the benefits from all of them are apparent. But existing pain points, which have been revealed by this study, require more than a simple technology solution to free up document workflows. An additional dilemma is that many organisations are unaware of the detrimental impact of their document workflows, and many of them have no method of analysing the impediments to improving business structures or their operations. In other words, many of these organisations are carrying the costs of these performance impediments without realising it, and are therefore oblivious to the improvements they could enjoy in both performance and profit streams. In the short term, there is an opportunity to improve awareness of the adverse effects of poor document management and workflow. This will lead to better understanding of how these effects can be mitigated through relatively straightforward techniques, such as digitising some of their documents. These might entail simple software solutions to accelerate or enhance document handling, and minimising the number of paper documents in the overall workflow to reduce the amount of physical handling of documents. In the longer term, consideration must be given to the impact of new technologies, such as tablets, which will undoubtedly provide new and better ways of document generation and handling.

7 But the advent of a paperless office is not imaginable in the foreseeable future, so paper documents must be taken into consideration when document management solutions are devised for organisations. The most critical challenge is not the document itself it is the behaviour of those who create and use documents. It is in behavioural change that most improvements in document management will be found, alongside appropriate technology to ease organisations into streamlined, effective document workflows. Perhaps the greatest barrier to better document management is not centred in the actual document management system, but in the reluctance or refusal of some employees to embrace the changes required to implement new document management solutions. Cultural change in an organisation is never easy, and particularly when it is targeted at fundamental operational systems such as document management. There is inevitably resistance to technological changes, often because of ignorance rather than an inability to adapt to new systems. This resistance can often be overcome, however, given sufficient initial training as an introduction to the new system, and adequate time for the development of familiarity with the system. IDC observations IDC interviewers recognised some common themes among interviewees comments on document management within their organisation. These included: Workflows are not well understood within most companies, and identifying the lifecycle of a document is not top of mind; Solutions must be tailored to size and vertical industry many interviewees, particularly in smaller companies, noted that they did not have time to evaluate the various vendors offerings, and some were worried about disruptive impacts; There is a level of tolerance among many interviewees, indicating an absence of assessment and evaluation from a document perspective; Paper is an ongoing concern and regarded as a pain, although few have actually measured the impact. Digitisation is viewed as the solution. IT decision makers are concerned about the impacts of storage, and a common goal was to look at collaboration solutions to address users concerns and desires. Summary It is apparent from both phone and in-depth interviews with respondents that every organisation is different in its operations, and has different pain points due to particular work processes and goals. Nevertheless, there are several general findings relevant to almost all organisations, and they can be earmarked for analysis and further action in the drive to improve document workflow systems. At the highest level of review, there is an overarching problem affecting nearly all organisations in their document use. Most organisations, including their management, do not have any great awareness of the true impact of document workflows on their business, in efficiency and productivity terms, and also in real costs. There is a genuine need and an opportunity for broader education about the worth of documents in an organisation, and the real value that comes from ensuring documents work for the benefit of the business through effective and timely processes. They come from streamlined document creation right through to archival an automated, efficient document workflow system. This also requires understanding from everyone involved in the document workflow that process change is needed, along with a positive attitude to altering work behaviour. The paper trail Paper is still the most common format for many documents. It is also the cause of considerable frustration in the creation, copying, authorisation, dissemination and storage of documents. It has a direct impact on the performance of employees due to its requirements for physical handling in every part of the document lifecycle. A transformation from paper based documents to electronic document formats would be at the top of most respondents wish lists, and is seen by many as a silver bullet solution for dealing with documents. There is, therefore, a significant opportunity for digitising document workflows. Digitising paper documents might be a solution for some of the pain points in document workflows, but does not necessarily address inefficiencies caused by delays for document review, correction, authorisation and approval. These pain points need to be eradicated through collaboration tools and automation in electronic authorisation. The processes involved in scanning, storing and archiving documents were cited as the ones most directly connected to employee satisfaction. Simplifying and automating these processes would address simmering dissatisfaction levels among employees, and contribute substantially towards a more efficient workflow. In many cases, dissatisfaction with processes and pain points in workflows were not the result of devices, but of the processes themselves in document workflows. How do you do it? Many SMBs do not have a clear idea of what the best solution is for enhancing their document workflow. Neither do they have the time and expertise to analyse and evaluate their processes and find appropriate solutions. Information, in the form of case studies and other readily available materials, as well as functions such as forums and seminars, would help many SMBs to understand the problems inherent in poor document workflows, and point them in the right direction for finding more comprehensive tools. This study has shown that there is a strong case to be made for systematically tackling document management systems and workflows. Almost all organisations suffer bottlenecks and poor productivity from document processes, and will benefit from new solutions in document processes.

8 About Fuji Xerox Australia Fuji Xerox Australia is part of a world leading enterprise for business process and document management services. Through the implementation of efficient business processes and effective communication, we deliver the right information to the right people in the right format. A continuous source of innovation helps us optimise IT and print infrastructures to deploy document strategies that are efficient, productive and waste-free. This enables our customers to meet their business challenges in new ways with measurable results. Protecting the environment is fundamental to our commitment to corporate citizenship. Fuji Xerox Australia provides products that have been designed with both our customers and the environment in mind. We are known for our end-of-life product resource recovery and remanufacturing programs. Our products regularly lead the industry in energy performance and all our sites maintain ISO 14001:2004 Environmental Management System Certification. Fuji Xerox Australia has been recognised for its achievements in environmental sustainability by the United Nations and the Banksia Environmental Foundation in Australia. For more information on improving business process with better document management, visit or call us at Fuji Xerox Australia Pty Ltd. ABN Australian Head Office: 101 Waterloo Rd, Macquarie Park NSW Phone (02) Fax (02) Xerox and the sphere of connectivity design are trademarks or registered trademarks of Xerox Corporation in the U.S. and/or other countries. September 2011