Taming the Paper Tiger

Today, Oct 2004 by Ryan, Erin

Extracting Value From Document Management Initiatives

The problem of paper plagues organizations of all sizes. Putting aside the environmental, aesthetic and space management issues, the real problem with paper is cost. This cost is realized both in terms of the actual cost of purchasing and storing paper as well as the negative impact paper has on productivity.

Document management solutions have spent the past two decades addressing this problem, with little success. Research from Gartner, Inc., states that the document management and integration market has been unchanged at $5 billion worldwide for the past twenty years. In that same amount of time, the amount of paper being produced by businesses around the world has exploded - a study by Alvin Toffler states 1.3 trillion paper documents are generated each year in the U.S.

Why have offices not gone paperless when they have deployed a Document Management System? Well, to be paperless, everybody in the organization has to have access to the system, and few organizations have been able to justify the cost of deploying a document management solution wall-to-wall.

Another reason document management solutions have not restrained the paper explosion is that they address only part of the problem. Document management solutions are a static repository for previously paper records. But it is no longer enough to strive simply for the "paperless" office. Whatever the kind of document, once the records are digitized, the need often arises to do something with the record - add information, edit information, send it to someone else, etc. At that point, the document management system has reached the limit of its effectiveness.

Document management is now evolving to a point where product offerings must address the necessity to put process ahead of applications. They need to structure the info they are storing, distribute it accordingly, and provide access to it securely-all process-based functions. This second phase, integrating documents with people and processes, takes us into the arena of what is called Business Process Management (BPM).

The Process Problem

Paper generally does not exist on its own. It is created and distributed as part of a larger process or activity. To squeeze the most productivity out of employees, organizations need to look beyond the paper that is generated and into the processes that create those documents. Organizations must find ways to streamline how they work with their documents.

Processes are an incredible challenge for organizations. Too few established processes and the organization risks falling into chaos and confusion. Too many processes and an organization risks hampering productivity by requiring an extensive amount of administration for every minor task.

Cutting back on the paper is one step in reducing the impact on employees of institutional processes, but the real benefit comes when organizations address the amount of administration affiliated with those tasks. Whether the process is requesting time off, submitting expense reports or managing incoming invoices, employees become more productive when they can minimize the time devoted to those processes and focus on their core tasks for which they were hired. Reducing the need to search for paper records or to print out forms is only the first step. Providing an integrated process management system is where the benefits really begin.

The Limits of Document Management: A Case Study

Fiat, the large Italian auto manufacturer, implemented a document management solution to help convert its previously paper invoices into electronic records. Almost immediately, the organization was able to cut back on the number of lost invoices, improve its record storage system and improve the performance of its invoicing department.

However, even with the records digitized, the organization still needed a person to manually compare invoices with the database. When invoices did not match the database, the records then needed to be printed out and faxed or mailed to other offices across the country. Once faxed or mailed out, the invoice manager had no idea if the form was lost in the mail, sitting on the desk of an employee on vacation, or resolved and en route back to the invoice management department. Once the document was returned, the paper invoice could be re-entered into the document management system. If the errors were not rectified properly, the correction process would begin again.

The auto manufacturer had focused on eliminating the paper from the system, with mixed success. For a large portion of its invoices, the document management solution performed perfectly. For the problematic invoices, a great deal of extra work was necessary. And the company still had to devote employees to the mundane task of comparing the invoice to the corresponding record in the database.

Process Equals Productivity

Moving beyond a paper-focused mentality, many organizations have started to address their processes as a major cause of productivity problems. The concept of Business Process Management has taken hold among organizations of all sizes. Research from Aberdeen Group predicts the market for BPM solutions will grow beyond $6 billion in 2005.