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It won’t be over by Christmas

The latest Paper Wars research from AIIM shows slow progress towards paperless processes. James Goulding spoke to Doug Miles,

 only one in five respondents has a board-level endorsed policy to reduce paper
only one in five respondents has a board-level endorsed policy to reduce paper

director of AIIM Market Intelligence, to find out why so many organisations still rely on paper and what processes one should digitise first.

Our conflicted attitude to paper is laid bare in the latest Paper Warssurvey conducted by AIIM, the independent information management analysts.

Two thirds (68%) of the 450 business people surveyed for Paper Wars 2014 – an update from the battlefield said that ‘business-at-thespeed-of-paper’ will be ‘unacceptable in just a few years’ time’, and around half said that the biggest single productivity improvement would be to remove paper from their organisation.

However, only one in five respondents has a board-level endorsed policy to reduce paper use; and in one in five (21%) organisations paper use is actually increasing.Businesses that do manage to reduce paper report increased productivity and enhanced customer service as a result, with 60% achieving ROI on their paper-free projects within 12 months and more than threequarters seeing ROI within 18 months. Why, then, are organisations so slow to drive paper from their business?Doug Miles, director of AIIM Market Intelligence, blames a lack of management drive.

“Progress is being made on paperfree processes and in a number of areas, specifically invoice processing, it’s moving really quite quickly. But whenever you attempt to change a process within an organisation there are more people who will give you reasons why not to do it than will give you reasons to do it,” he said.

“It tends to be when a process comes up for review that people decide it’s time to get rid of paper, rather than having the initiative from above or having it writ large on the operations department wall: How do we get rid of paper in this process? What’s the next candidate? What’s the candidate after that?”

According to AIIM’s 2013 Paper Wars study, the most popular candidates for digitisation are internal HR (e.g. expenses, timesheets, on-boarding), cited by 65% of respondents, followed by accounts payable (62%) and customer correspondence (62%). But how do you decide what process to address first?

Miles advises businesses to focus on processes that are hampering their ability to respond to internal and external customers.

“Any process in which the time cycle is dictated by how long it takes to get a piece of mail from the customer or from a branch office to head office or from head office to employees should be reviewed. The one thing any process analysis should ask is how much core work is there going on in this process? Well, it’s three days. How long is the end-to-end process taking? It’s taking 20 days. Why is that? Because things have to go backwards and forwards. How do they go backwards and forwards? On paper. If you can send them backwards and forwards electronically, you might be able to get the process time back to the core objective of a few hours,” he said.

Miles says that doing so may not improve out and out productivity, but it will enable you to provide better customer service and will give you greater visibility, which in the case of invoice processing is often a greater benefit than faster payment processes.

“Your ability to manage your cash goes up enormously when you know just how many invoices are at point of payment. You don’t have to pay them any sooner, but knowing you could if you wanted is one of the bigger benefits,” he said.

“The other big benefit is from consolidating accounts payable duties. If you have branches all over Europe or the US and each has an accounts payable function with a clerk, a financial controller and two or three process people, you could instead receive all invoices electronically to one spot and process them electronically.”

Invoice processing is a good workflow to make paperless: a) because on average, 44% of invoices already arrive in electronic form (PDF, Fax, EDI) – even though 59% of these will end up as a paper copy; and b) because it is the one you can get closest to not having to re-key any information.

“Once you’ve worked out the different lay-outs, you can OCR an invoice and pull-off customer number, invoice number, line items ordered. If you’ve got the delivery note, you can check that against the invoice. A big proportion of that can be hands-free. If you’ve got a three-point matching, as they call it in SAP, then you can pay without needing any hands-on.

That’s where you get a lot of pure productivity benefits,” explained Miles.

“The other processes in which we see much quicker progress are things like insurance claims: the assessor can be out there and take a photograph of the damage and submit it by mobile phone; the form gets filled in on a tablet and the whole thing is in process within hours, rather than days.”

Miles points out that the benefits of electronic processing are equally valid for less defined case-based processes.

“Case-based processes tend to involve less predictable routes and less predictable participants. For example, a claims benefit payment might involve input from a number of different people and you may have to present several people with the contents of a case folder.

Doing that on paper restricts the whole collaboration. The person who has the case folder sitting on their desk can see it, but no one else can. That’s not very conducive to getting the thing done. As soon as it becomes paper-free, everybody sees the same content,” he said.

Lack of imagination

Digital mailrooms, the scanning of documents ‘at the door’ and then routing them to the recipient electronically, seems like an obvious way to reduce paper use. Yet, according to Paper Wars, just one in four organisations has such a strategy.

“A lot of it is due to lack of imagination. I went to my solicitor to hand in some proof of identity documents. It’s a branch office in Tewkesbury, about 20 miles from the head office. She took my passport and utility bills behind the counter and when she brought my passport back, I said: ‘Just out of interest, did you scan or photocopy it?’ She said:

‘I photocopied it: I’ll send it to the head office and they’ll scan it there.’ So many organisations will scan paper at the end of a process, because they have to reduce the amount of floor space taken up by records. Why not scan it at the start of the process and put it through the process electronically so it moves so much faster?”

One reason why there is still so much paper in business processes, second only to a lack of management initiatives (cited by 47%), is the perceived need for physical signatures (44%).

“People like to have a hard copy,” explained Miles. “People assume you need a wet ink signature in order to make it legal, but you don’t. It’s valid to use digital signatures, to use bitmap signatures. We’ve been using signatures on faxes for years.”

He adds that electronic processes actually enhance compliance.

“If the process flow says you need to store a record of a form in the records management system and the records management system is a filing cabinet and you rely on someone to take a photocopy and pop it in the filing cabinet, nobody will know if it didn’t happen, whereas with an electronic workflow, you can ensure it happens and block the workflow or flag up the workflow as non-compliant if it doesn’t,” he said.

A word of warning, though: implementing paper-less electronic processes is not a panacea. “Even when everything is electronic, some stuff will have value and some stuff will have nil value, and trying to separate the stuff with nil value that we pay a lot of money to keep is the next huge issue within electronic record keeping and electronic processing,” warned Miles.

Paper Wars 2014 – an update from the battlefieldis free to download at http://www.aiim.org/Research/Industry-Watch/Paper-Wars-2014.

The full interview with Doug Miles can be read in the December issue of Business Info, available at www.binfo.co.uk.

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2018