In following up to our last article about the current state of paper, we are now going to vist exactly how to go paperless with some gret pointers…
The benefits of implementing a document management strategy have been well detailed at this point. For years independent consultants like Pricewaterhouse Coopers and the Gartner Group have been providing metrics on the many advantages including reduced print, storage and clerical costs. These studies have also clearly illustrated our propensity for losing critical documents and the high costs associated with re-creating them. The benefits of automating repetitive business processes while enforcing business rules through workflow are also unquestionable.
So if there are so many benefits to be found, why have so many organizations waited until now to implement a document management strategy?
Who’s Up First?
In many cases the thought of moving to a digital process is overwhelming. Determining where to start is always a source of controversy. Every department has more than its share of paper so is one more deserving than another?
Start by identifying the “paperless” objectives of each department by the type of application to be converted. Common applications include human resource records, contract management and vendor invoice management as just a few.
Next, analyze the benefits of each application including reduced printing, storage, and paper based distribution costs such as overnight mail. It is important to note that of all the costs savings available, the single greatest impact can be found through reduced labor costs. Repurposing a single clerical hire at $25,000 per year is the equivalent to reducing printing by more than 140,000 pages per year.
Tip: Identify 2-4 high impact areas for improving document efficiency and focus on making these successful before moving on to the next area
What to Manage?
Documents today are more likely to be received in digital form than ever before. In addition to the exchange of Word and Excel files, there seems to be an endless stream of emails with PDF attachments arriving every day.
While email has greatly reduced the impact of information being transmitted via facsimile, faxed records are still the number one source for exchanging agreements executed with a “wet” signature. This is especially true in the financial, mortgage and healthcare markets where digital signatures are more prevalent.
Add in reports being generated via mini or mainframe systems with the increasingly common HTML file and you have a wide variety of formats commonly referred to as “business content” Unlike paper which is typically captured as a scanned image once it has been finalized, content can be captured at any point in its lifecycle.
When to Manage?
With the ability to capture active content the opportunity to reduce document related costs is even higher. Distribution and storage costs are both less expensive with digital content and the costs to print, file, retrieve and re-file are virtually nonexistent.
Let’s start by looking briefly at the document lifecycle which is commonly viewed as a four stage process.
Creation; which is fairly self-explanatory refers to the origination of the document. Whether in Word as a contract, or Excel as a report information needs to be collected and presented as a document.
Managing documents more effectively at the time of creation is the Holy Grail of efficiency as typically these records can reside in a variety of storage media.
Many companies have tried to collectivize the “C” drives of their employees through the creation of a company share but the benefits to this approach are limited. Without the enforcement of standardized naming conventions, the ability to actually find a document with any level of efficiency is non-existent. Unless incredible self-discipline, the shared drive of an organization becomes the dumping ground for documents which will likely never be seen again.
A better approach is to utilize a document management system that incorporates automated tools for saving your Office documents directly to a secured area with a standardized naming convention. This includes the ability to archive emails and their attachments as well using the message properties such as To, From and Subject.
The added benefit of storing documents at their time of creation is their native text state. This allows you to refine searches through the use of key words or phrases within the content of your record.
Collaboration; is the exchange of information with the purpose of seeking feedback or editing. At this point the document has still not been finalized and can greatly benefit from tools inherent within document management such as revision control and check in/ checkout. These tools help to ensure that unauthorized versions are not accidently distributed and that the evolution of change is maintained throughout the process.
Management; regardless of the document type, some level of management will take place once it has been finalized. This could mean a simple “review and approve” or a complex workflow that requires routing, notifications and escalations. As the most critical juncture in the document lifecycle this is where the payoff from document management is most profound.
Document Management will enforce business rules such as who can approve an invoice at what level they can approve. It will conditionally route documents to the appropriate person based on any number of pre-defined guidelines. Finally it will make sure actions are taken in the proper timeframe sending reminders or escalations to superiors in the event they are not.
These are just a few examples of how workflow within a document management system can increase efficiency while reducing labor costs within the management phase of the document lifecycle.
Archival; as the final phase in the document lifecycle, Archival might be deemed as nothing more than en electronic file cabinet but it can also benefit greatly through the addition of workflow automation.
Typically most documents have a retention schedule associated with them. While retention could be based on an internal business rule, more commonly it is mandated by a governing agency such as the Internal Revenue Service, the Securities and Exchange Commission or by federal regulations such as HIPAA or Sarbanes Oxley.
With the introduction of workflow, documents can automatically be moved or destroyed based on a pre-defined retention period such as 5 or 7 years. In most cases documents are not automatically destroyed given the potential for the errant deletion of valuable business information. Instead, they are moved to a secure area where a manager makes the final decision regarding the disposition of these records.
During the archival process, emails notifications of a document’s disposition can be sent to management notifying parties of a pending destruction.
With digital storage becoming relatively cheap, many companies will hold their records indefinitely even with the use of a document management system. This practice offers significant exposure however that many organizations are unaware of. While many agencies such as the IRS mandate a defined 7 year retention schedule, you are required by law to provide any records available at the time of audit. This means that if 10 years of records are in existence at the time of audit, they all must be provided to the auditor.
The use of automated retention schedules can help avoid unnecessary exposure while mitigating risk of compliance during the audit process.
Providing sufficient forethought into the lifecycle of your documents will help you to build a better solution for managing them and increasing organizational efficiency. Armed with a thorough understanding of your processes, a document management professional can better help you to apply the available technology in a way that will optimize its effectiveness. Contact WCC Business Solutions for more information.