Transitioning to a digital office involves the transformation of back-end processes, which can reap sustainable cost and competitive advantages.
By Tracey Mustacchio
One of the greatest opportunities for cost containment is a reduction in paper volume. The direct cost of printing supplies including paper is alarmingly high for most enterprises, and an estimated 38 to 41 percent of printing expenses are not formally approved by procurement.
Typically, the older the business, the more entrenched and outdated are the back-end processes, which increases the likelihood that these processes remain in place. Many small- and mid-sized businesses (SMBs) opt to keep archaic workflows unchanged, erroneously believing that fixing them will take too much time and resources. Larger companies tend to be the earliest adopters of innovative technologies and processes for a variety of reasons, including cost savings of significant scale, management support and their natural appeal to the most forward-looking vendors. However, the promise of the digital office is not limited to an exclusive club. Even the most resource-constrained organizations have ample opportunity to transition to a digital office.
Traditional back-end operations share several common characteristics: outdated processes, inefficient paper-based workflows and ad hoc supplies purchases with little attention paid to strategic budget management. Consider a procurement worker who notices a supply in their warehouse is running low. They order the supply, which is delivered with an emailed invoice. The worker then prints the invoice, walks it over to accounts payable (AP) and places it on a desk for manual processing. Once processed, the paper invoice is either thrown away, or placed in a file cabinet – costing an estimated $20 per file, and up to $120 when workers try to locate this document.
This workflow is rife with inefficiencies and opportunities for error due to misplaced invoices. These organizations are also more likely to incur late fees and miss opportunities for early payment savings by rolling the transaction into a larger budget management initiative. Consider hundreds of these types of workflows, and the potential for a cumulative, negative bottom-line impact becomes clear.
In a digital office, workers can take a picture of a paper invoice and submit it to AP electronically – the beginning of an automated, digital workflow. The document is automatically converted to a PDF, making it ready for archiving by ensuring its compatibility with future PDF software versions, and automatically placing it in a queue based on due date. AP workers receive an invoice notification, which they can approve with an electronic signature, perhaps using a mobile device. After approval, the invoice is automatically routed to other approvals, paid and ultimately submitted to the appropriate back-end system of record, such as an ERP database. Once in the database, the invoice becomes part of a larger analytics initiative that helps the company identify opportunities to negotiate more advantageous, money-saving contracts. In the end, suppliers and partners are paid faster, inventory depletion is avoided, paper is reduced and worker productivity is improved.
Moving to a digital office may seem like a daunting task. The key is breaking the journey into manageable steps, with the following five providing a roadmap:
Moving to a digital office requires digitization of documents to reduce printing and enable electronic files to be incorporated into digital workflows. This is necessary, but the piles of paper organizations have accumulated over the years can seem like an insurmountable obstacle. There are solutions available to digitize, convert and classify documents in bulk and without manual intervention, leveraging cloud infrastructure and avoiding significant up-front hardware investments.
Pick one or two back-end processes that are leading to the most waste. Identify key inefficiencies and determine what capabilities would eliminate bottlenecks. In the example above, it’s possible AP workers must manually sign all invoices, scan them and then route them via email to the next step in the approval cycle. The time it takes from invoice submission to payment may lead to delinquencies that result in invalid invoices and force the entire process to begin again. Zero in on inefficiencies and start there.
Front-line workers are often the experts on what could streamlined their workflows. What aspects of their daily work frustrate them? What could be done faster that would make their lives easier? Today’s employees are working longer hours than ever, although their output is not necessarily increasing. They’ll likely welcome the opportunity to make their jobs more productive.
Business needs are constantly changing, which means workflows must be flexible. Today’s workflow tools are increasingly componentized and available in the cloud for easier, more flexible mixing and matching. This means no workflow functionality is “set in stone” and organizations don’t need to worry about getting things perfect the first time.
Measure and selectively identify new areas for improvement
Organizations should aim to constantly assess progress and determine what process improvements could potentially yield similar results in other areas. SMBs don’t need sophisticated KPI analysis. In fact, too many KPIs can be counterproductive. In the example above, organizations can measure against simple metrics: how many invoices processed per day, satisfaction with the invoice payment process and late fee avoidance.
Almost every organization, big or small, has room to improve their back-end processes. To get closer to the digital office it’s critical to not just improve profitability, but cultivate happier, more productive workers and satisfied partners and customers. The digital office and the future of business is within every enterprise’s grasp. The key is to make it an incremental journey.
Tracey Mustacchio is the Senior Vice President of Product & Marketing, Nuance Document Imaging.