Return on Investment (ROI) for Document Management

Transcription

1 Return n Investment (ROI) fr Dcument Management Versin nd April The need fr ROI Sme businesses purchase Dcument Management (DM) because they have t, either fr cmpliance with legislatin r driven by demand frm their custmers, but mst d s because it ffers significant cst savings r increases capacity, allwing the business t achieve mre with the same resurce. A typical DM slutin shuld prvide an ROI in less than 12 mnths, making it an attractive prpsitin. Cst savings can be bth tangible (quantifiable) and intangible (harder t quantify) like custmer satisfactin, custmer retentin, etc. A return n investment (ROI) frms part f the Business Case fr acquiring a new system. The ROI is derived frm an analysis f the tangible savings and csts assciated with deplying the system. It will prvide useful infrmatin n which t base a purchasing decisin, including the elapsed time in which the new system will have paid fr itself and the n-ging annual savings ptential f perating the system after the acquisitin cst is cvered. The task f perfrming the ROI analysis usually falls t the Finance Directr (FD) r t an internal prject spnsr, but ultimately the FD has the respnsibility fr validating the ROI and ensuring the prpsed prject makes gd business sense. The purpse f this dcument is t highlight areas that typically prvide savings r efficiency gains when implementing DM r related technlgies, and advise hw such savings can be quantified. Many DM vendrs ffer t prepare an ROI fr prspective custmers but t frequently d nt cver all the ptential internal csts f the rganisatin, s they are at best ptimistic. Hwever, even such ptimistic ROI assessments can be a useful starting pint n which t build. As a result f the ROI yu will btain a new mnthly perating cst fr a prcess, and a cmparisn with the existing mnthly prcess cst. The difference is therefre the mnthly cst f nt implementing DM.

2 Return n Investment (ROI) fr Dcument Management Versin nd April Ttal Cst f wnership All t ften we fcus n the savings and cmpare t the csts f current practises and the cst f acquiring the prpsed system. There are additinal csts which are frequently verlked, and shuld be budgeted fr, including but nt limited t: Lifetime csts including maintenance sftware and hardware upgrades new sftware releases, integratins cnsumables scanner parts, tapes replacements end f life scanners grwth adding mre users r strage Training, bth the cst f and the disruptin t business during training Change management, ease f adptin, vercming resistance t new systems and ways f wrking Management and auditing time f the new system 3. Where t Fcus DM can be applied t mst business functins and yield savings, s where shuld yu start? If yu are reading this dcument yu already have sme idea where yur fcus lies whether it is Accunts Payable (AP), Human Resurces (HR), Custmer Services, Cmpliance, etc. but cnsider the wider pprtunities. Hpefully this dcument will suggest ther areas in which savings can be made. Select an apprpriate DM slutin that can be applied t ther areas f the business. If initially seeking a DM slutin fr AP, dn t just cnsider DM prducts that fcus n AP, but lk at the wider picture and cnsider ther business functins that may als benefit frm the investment. If yu are cnsidering generating an ROI mdel withut a particular prject in mind, lk fr the bvius signs f inefficiency. It is ften fairly easy when walking int an ffice t spt pprtunities, large amunts f paper filing, lts f dcuments n peple s desks, heavy usage f cpiers r printers. Take a lk at the business prcesses and the jbs f different staff whse wrk relies heavily n dcuments and identify where their bttlenecks are.

3 Return n Investment (ROI) fr Dcument Management Versin nd April 2013 Here are sme cmmn pprtunities fr making savings by implementing DM: Strage wasted ffice space fr paper filing Filing time taken t file dcuments Retrieval time taken t lcate and retrieve/replace a dcument Archive time taken t manage archives, delete ld dcuments etc Duplicatin where dcuments are cpied fr multiple staff, printing and paper csts Dcument lss the cst f lsing a dcument, time wasted, cmmercial value Offsite strage csts and time fr strage, retrieval and destructin Distributin methds f distributing paper dcuments, time taken Prcess time taken fr different dcument-based prcesses Length f time t apprve smething Cst f inefficiencies in the existing prcess Cst f lack f enfrcement by defined plicies Lack f visibility and management f the prcess 4. Disaster Recvery (DR) All t ften DR is mitted frm ROI cnsideratins and is cnsidered a cnsequential benefit. But what wuld be the cst t the business f lsing its dcumentatin as a result f fire r fld; culd the business cntinue t perate? Well managed businesses have DR plans in place, but hw many include a means f recvering infrmatin held in paper dcumentatin? Even if the dcuments are still available fllwing the disaster, what is the cst f nt having access t them fr a perid while buildings are inaccessible? 90% f a business s infrmatin is held in paper frmat and nt backed up but nly 27% f businesses include paper in their DR plans. Implementing DM makes replicatin and backup f business dcuments feasible, s yur DR plicy can encmpass everything. Placing a tangible value n DR as a business benefit is difficult as it has t be balanced with the prbability f suffering a disaster. But DR is an increasing requirement fr supplier selectin and there may cme a pint

4 Return n Investment (ROI) fr Dcument Management Versin nd April 2013 when yu will be required t have DR and need t analyse the implicatins f life after disaster withut dcumentatin. 5. Intangible Benefits Intangible benefits are things that are difficult t quantify. Just hw much value can yu attribute t prviding better custmer service? Often yu will nt be able t measure them until smetime after adpting DM, maybe by cmparing custmer retentin rates befre and after, r perfrming custmer satisfactin surveys befre and after. Mst businesses adpting DM realise the intangible benefits but have never quantified them. It is wrth measuring such things as custmer retentin befre implementing DM s that it can be cmpared pst implementatin, therwise measuring imprvement is difficult. Being able t answer a call in 3 minutes instead f 6 may be quantifiable in terms f the cst t answer the call, but what is the cst f retaining a custmer r, cnversely, f lsing ne? Sme pssible intangible benefits: Better respnse times with custmers Happier custmers imprved sales, custmer advcacy and referrals Answer the questin immediately n call backs Mre mtivated staff, better staff mrale, better custmer service Custmer retentin / reduced drp ff Fewer cmplaints, less time spent managing cmplaints Availability f infrmatin Better infrmed decisin making Mre timely decisin making Imprved Security / Traceability Reduced leaking f r access t cnfidential infrmatin Ability t review individual staff perfrmance / activity Cnsistency One cntrlled way f ding things, apply the rules

5 Return n Investment (ROI) fr Dcument Management Versin nd April Generic Tangible Benefits The fllwing are specific measurable benefits t be gained frm DM. Yu shuld identify which can be applied t yur business and try t quantify each. Paper Filing Fr each type f dcument (applicatin, invice etc ) identify Time taken t file a dcument With DM varies depending n indexing requirements but typically a few secnds. Number f dcuments filed/mnth Time taken t retrieve a dcument Number f dcuments retrieved/mnth Administratin hurs spent / mnth With DM typically secnds r less. Als cnsider time taken t put back retrieved dcuments. Remving unwanted files, etc. Hurly rate f Admin Staff % f dcuments Printed/Cpied Cpied s they can be shared r sent t custmers. Cst f printing a dcument Tner, paper, servicing. % f dcuments misfiled Mis-filing is nt impssible with DM but can be significantly reduced if nt eliminated, and finding mis-filed dcuments is easier. Cst f lsing a dcument Either in terms f time taken t replace it r damage t the business as a result; fr example, lss f a prf f delivery when the custmer claims a nndelivery and cmpensatin may be due. Paper Strage Cst per Square meter We assume 1 m 2 per cabinet allwing fr pening space. Number f cabinets There is apprximately 1GB f disk space per 4 drawer cabinet. Annual ffsite strage csts The strage, depsit, recvery and destructin csts. Time t retrieve frm ffsite Cst t business fr waiting There may als be a cst fr scanning/retrieval.

6 Return n Investment (ROI) fr Dcument Management Versin nd April 2013 Wrkflw fr each step f the prcess ( Register, Allcate, Cde, Apprve, Pay etc. ) Number f peple invlved Dcuments per mnth prcessed per persn Average time taken t prcess (excluding dcument retrieval time) Time t allcate t next persn in the prcess. Management hurs (allcating, mnitring, exceptin handling, reprting) Cst f missing SLA in prcess Hw many apprvers, hw many cders, etc. Hw many dcuments des each apprver apprve? Will need t cmpare n a case by case basis when implemented using DM. Hw d they pass the dcument t the next persn, latency. DM can autmate much f this, r at least make it mre readily available. Missing early settlement discunts, fr example. Number f missed SLA s / mnth Cst t the business per dcument fr latency Time cst fr delays using manual prcess that can be remved if autmated.

7 Return n Investment (ROI) fr Dcument Management Versin nd April Cst Benefits f Autmatic Data Capture Autmated data capture entails capturing data frm dcuments that wuld have therwise been manually keyed int an applicatin, like an accunts payable package. As well as the bvius reductin in the amunt f manual data entry, there are als savings t be made in cnsistency f data captured. Fr example, machine captured data, typically Optical Character Recgnitin (OCR), repeatedly uses rules and validatin t find and extract data. Manually entered data is prne t errrs and incnsistency, fr example, entering Limited r Ltd, which results in duplicatin and additinal csts fr data cleansing. It is typical t be able t reduce data entry effrt by 50% r mre, thereby either saving csts r enabling the team t take n additinal vlume r mre prductive wrk. The savings that can be made will vary depending n the quality and structure f the dcuments being used t capture the data, and the accuracy and availability f the master data t which the extracted data can be cmpared, fr example, a list f knwn suppliers. Any prcess that requires high vlume data entry f cnsistent infrmatin frm dcuments is a prime candidate fr autmatin. Once the fllwing statistics have been gathered, tgether with sample dcuments, yur DM vendr shuld be able t prvide cst reductin estimates. Data Capture fr each type f dcument (Invice, Applicatin etc ) Number f dcuments per mnth Average number f pages per dcument Number f fields entered per dcument Time taken per dcument t manually enter Is crss-reference data available fr each field? What systems is the data entered int Percentage f incrrect data entered Fr example Invice number, supplier name, Date. Fr example, 30 secnds. Is there a database r file that cntains the valid values fr each field, like supplier names? Fr example Oracle Financials. Details f which fields typically cntain errrs r incnsistency.

8 Return n Investment (ROI) fr Dcument Management Versin nd April Cst benefits f System Integratin System Integratin is lsely defined as the interfacing f different systems t prvide functinal benefits ver using the different systems in a discnnected manner. Fr example, with a nn-integrated DM system and an AP system ne wuld lk at an invice details screen in the AP system and then switch t the DM system and enter the Invice number t lcate and view the Invice. In an integrated DM / AP system ne wuld simply click a buttn r press a key t pen the Invice being shwn in the AP system. Obviusly the Integrated methd is quicker and has time and cst savings. Mre sphisticated integratins can autmate parts f business prcesses that are currently perfrmed manually. Fr example, when a purchase invice is entered, a check can be made autmatically t lk fr the crrespnding Purchase Order and Gds Receipt t flag the invice fr autmatic apprval, rather than require a manual matching/apprval prcess. 9. On Premise r Hsted? The decisin t implement DM n-premise r in a hsted envirnment is nt within the scpe f this dcument as there are bth ptins have financial and technical merits. Frm an ROI perspective a hsted implementatin can ffer a faster ROI as it avids the initial infrastructure and sftware license csts, but cmpare the ptential lifetime returns ver say 3 r 5 years when ding the ROI analysis. Hwever, hsted slutins can prvide an almst instant ROI. 10. And finally Dcument Lgistix can prvide ROI analysis tls t help yu perfrm an ROI evaluatin; we can even d ne fr yu given sme f the infrmatin utlined in this dcument. Cntact us t bk a cnsultatin.