5 Strategic Benefits of IDR: The 5 Strategic Benefits of Transforming Information Management with Intelligent Document Recognition

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1 The 5 Strategic Benefits of Transforming Information Management with Intelligent Document Recognition By Dan Lucarini The combination of pressure to reduce costs, comply with stringent regulations, and satisfy ever-increasing customer service demands is placing a big strain on operations and processes that rely on unstructured information such as documents, images and s. Making matters worse is the explosion of information that must be managed efficiently and securely, and the increasingly diverse channels through which documents arrive. Approximately two-thirds of those surveyed report that the volume of documents (paper and electronic) flowing through their operations increased between 2014 and 2016, according to a 2016 survey conducted by Brousseau & Associates and commissioned by ibml. What s more, two-thirds of organizations report that the volume of paper alone flowing through their document processing operations is unchanged or higher compared to two years ago. Transforming information management with intelligent document recognition has 5 strategic benefits: 1. Accelerated document processing cycle times 2. Streamlined regulatory compliance 3. Enhanced service 4. Reduced operating expense 5. Streamlined document preparation A 2015 InfoTrends study found that implementation of the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 is one of the main drivers behind higher volumes of paper and digital documents at financial services organizations. For organizations in other industries, big data initiatives are requiring the capture of more data, faster and more accurately than ever. 2/3 of businesses report higher document volumes 66% of businesses expect their capture requirements to increase 5 Strategic Benefits of IDR: 83% of CIOs say their organization is not fully utilizing its data Telephone: (205) Accelerated cycle times 2 Streamlined regulatory compliance 3 Enhanced service 4 Reduced operational expense 5 Streamlined document preparation 2016 Imaging Business Machines, LLC. All rights reserved.

2 The challenge will only get worse. Two-thirds of the organizations surveyed by Brousseau & Associates anticipate the total volume of paper and digital documents that they capture annually will continue to increase between 2016 and Paper documents are not going away: more than 40 percent of organizations anticipate that the total volume of paper flowing through their document processing operations will increase over the next two years. Intelligent document recognition solutions transform these manual steps by digitally capturing documents from any source, automatically classifying each document and extracting data, and providing end-users with immediate access to documents and data via workflow or a repository. It is no wonder that 36 percent of C-suite executives at large organizations believe their enterprise is not coping with the enormous glut of data, according to a 2015 report by the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CMA). Eighty-three percent of CIOs surveyed by Experion in 2015 reported that their organization is not fully utilizing its data, while 64 percent of those surveyed said poor data management is keeping their organization from moving forward. For instance, PwC s benchmarking data finds that more than half of all businesses consider data collection to be a challenge when completing tax returns. And a whopping 80 percent of CIOs surveyed by Experion can point to at least one occasion over the past three years where a strategic decision was made, only to find out later that the decision was based on bad data. The bottom line is that many document-driven business functions have either reached or are reaching their tipping point for automation the point where automating processes becomes critical to accomplishing core tasks with high quality and in a timely manner. This is especially the case where organizations are receiving documents through a variety of delivery channels. Businesses must accelerate the dissemination of information throughout the organization, the report from AICPA and CMA warns. That s where intelligent document recognition comes in. Intelligent document recognition accelerates document-driven business processes by automating the manual, slow and error-prone tasks of document classification, extraction of information and routing the information to the next step. This white paper explains how intelligent document recognition brings substantial improvements to document-driven business processes, and shows how businesses achieve these benefits.

3 How Intelligent Document Recognition Works Intelligent document recognition provides three key capabilities that transform unstructured information into the fuel that ignites better processes and insight: Intelligent document recognition provides three key capabilities that transform unstructured information into the fuel that ignites better processes and insight 1. Classification: Intelligent document recognition interprets content and patterns on documents to automatically classify paper and electronic documents into different document types, and determine the beginning and end of a document. For instance, intelligent document recognition can apply optical character recognition (OCR) technology to an entire document to capture information and compare it with data stored in lookup tables about known document types. The technology can also classify documents based on images contained on a document such as a logo, or based on text such as a description of a field (e.g. patient number or invoice amount ). Compared to old template-based solutions for document classification, this content and pattern-based approach to document classification is easier to setup and manage, and delivers better results. Knowing that the document is an explanation of benefits form, tax return, contract, bill of lading, customer correspondence or a completed survey equates to higher levels of data extraction accuracy in the next step. It is for these reasons that 86 percent of organizations surveyed by Brousseau & Associates expect to be using intelligent document classification technology within the next two years. In fact, increasing the use of intelligent document classification technology was the top priority identified by survey respondents for improving their current document capture system, topping hot-button strategies such as legacy system updates, improved security and compliance, consolidating systems, and deploying mobile capture capabilities. 2. Extraction: Once a document is classified, intelligent document recognition automatically extracts important data from anywhere on the document, creating information to start a business process and/or to populate a database in a downstream application such as an accounting system, enterprise resource planning (ERP) platform, customer relationship management (CRM) system, or enterprise content management (ECM) system. This increases accuracy by identifying patterns and data formats. For instance, if the term taxpayer ID is identified, intelligent document recognition will search nearby and extract the taxpayer identification numbers. Rules for data extraction can be flexibly configured based on unique business requirements. 3. Release: Intelligent document recognition solutions automatically export data and images (such as searchable PDFs) to a business process/workflow or to any downstream system. This information is immediately available for use, to gain insights into operations and customers, or enabling workers to quickly take action.

4 Taken together, these capabilities radically transform the manual steps found in a typical document processing environment where staff must physically classify and sort all documents that enter the organization, manually key data from documents, and file the documents for safekeeping. In this environment, knowledge workers or business processes cannot access the information until it has been filed. Intelligent document recognition solutions transform these manual steps by digitally capturing documents from any source, automatically classifying each document and extracting data, and providing end-users with immediate access to documents and data via workflow or a repository. The only time that staff must intervene is the rare event when the software cannot automatically classify a document, or the business rules for a particular workflow require a subject matter expert to review a particular document or data that does not meet a preset confidence level. Intelligent document recognition solutions are also content-driven, meaning they capture content from any document, from any source, including: Centralized batch scanning Remote browser-based capture Ad-hoc desktop capture s Fax servers Networked multi-function peripheral (MFP) capture Mobile devices This is a critical capability considering that organizations receive their documents from more channels than ever, and analysts predict that on-the-go image capture using mobile devices will grow. Strategic Benefits With an understanding of the technology, we can now review the strategic benefits and outcomes of using intelligent document recognition: Accelerated document processing cycle times: Faster processing of businesscritical activities is the biggest benefit of business process management automation for 53 percent of organizations, reports the Association for Image and Information Management (AIIM s) 2016 Process Improvement and Automation report. Intelligent document recognition reduces the time to process documents from several days to just a few minutes. For starters, the technology processes multiple document types co-mingled in the same capture workflow. Additionally, the technology can read a barcode on the cover page of document packages to automatically separate documents into a batch. And intelligent document recognition enables organizations to transfer file images downstream in a fraction of the time it takes traditional scanning systems; this enables knowledge workers to take much faster action on documents.

5 Streamlined regulatory compliance: Regulatory compliance is a tremendous burden for organizations in industries such as healthcare, financial services, and government. For instance, 89 percent of organizations require audit trails and that executed processes be secure, according to AIIM s 2016 Process Improvement and Automation report. Intelligent document recognition solutions help ensure regulatory compliance by tracking activity history, providing role-based and userlevel security, and using multiple mechanisms for safeguarding document images and data. The technology also eliminates the need to manually compare the many line items from a document with data in a system of record a process that can take several days with traditional scanning systems. Intelligent document recognition automatically imports images of paper documents or electronic documents, extracts required data, and validates it against information in any downstream system. Enhanced service: Intelligent document recognition helps improve service to internal and external stakeholders through easier and more accurate access to archived documents and data. The technology enables organizations to capture rich data from paper and electronic documents that can be used for document indexing, routing, analytics and much more. The finance departments at topperforming businesses spend 20 percent more time on data analysis versus data gathering, according to PwC s 2016 finance benchmarking data. Reduced operational expense: Intelligent document recognition solutions reduce the paper handling and manual data-entry common in many document-driven business applications. The advanced data extraction and validation technologies used by intelligent document recognition solutions also reduce the chances of incorrect or incomplete data. Accuracy is the most important documentprocessing metric to 49 percent of organizations surveyed by Brousseau & Associates in Tellingly, five times as many organizations surveyed identified accuracy as the most important metric as those that identified cost as their top processing metric. Despite the importance of accuracy to document processing, 48 percent of CIOs surveyed for Experion s 2015 data quality study said that data quality is on ongoing problem in their organization, largely because of their reliance on manual processes.

6 Streamlined document preparation: Intelligent document recognition enables organizations to reduce the time required to prepare documents and generate separator sheets. With an intelligent document recognition solution, employees do not need to physically sort each document type and create a single-use slip sheet for every document in a batch. The technology automatically classifies and separates documents from within batches, extracts data elements from various document types, and routes document images and the extracted data to downstream processes or systems. Organizations do not need to insert separator sheets between each document; the technology automatically determines the start of a new document. Reducing the use of separator sheets significantly lowers operational overhead, and eliminates the time and labor cost spent pulling separator sheets out of scanned batches. Conclusion Succeeding in today s increasingly challenging global economy requires businesses to deploy the best automation solutions. This is a tall order for businesses that still rely on manual labor, or on antiquated scanning and capture systems that cost too much, take too long, create too many exceptions, and provide inadequate visibility. The problems will only get worse as data volumes continue to climb, and documents arrive via increasingly diverse methods. Every organization can benefit from deploying intelligent document recognition solutions. Importantly, the technology provides organizations with five strategic benefits: faster cycle times, streamlined regulatory compliance, enhanced service, lower costs, and streamlined document preparation. These benefits not only improve an organization s document-processing operations, they help position the organization for future growth and success. The Bottom Line Intelligent document recognition solutions result in faster document workflows with fewer manual tasks and less people required to do them, put valuable information securely into the hands of front-line employees at a faster pace, and help to meet deadlines for compliance. More importantly, they help organizations meet the challenges of razor-thin margins, heightened security and compliance requirements, and rising customer service demands. Dan Lucarini is the Chief Marketing Officer at ibml. He can be reached at dlucarini@ibml.com.