The True Costs of Paper - Documenting Savings with Electronic Document Management

By Kristina Gaffney Feoli, Director of Sales, Inception Technologies, Inc.

Are you still inundated with paper in your office?  Still using traditional paper filing systems? Don’t worry- you’re not alone. The term “paperless office” has been tossed about for years, but has yet to be adopted as the standard practice amongst most small and even many mid-sized businesses. Even as we swim daily in the vast sea of technology available all around us, many companies are still hanging on to the old paper-based practices despite the significant benefits that can come along with adopting electronic document management. It is always astonishing to me that these businesses are often unaware that adopting paperless practices can put thousands of dollars back into the company’s pockets each year.

What’s holding them back?
Getting to the root of that question is always the key to us helping these businesses move forward into the electronic age of less paper and more digital efficiency. Is it that they don’t know how to get started? Is it fear of change? Is it the misconception that the costs will be prohibitive? Are they afraid their staff won’t be accepting of the new practices? Often, it’s a combination of these concerns. The good news is taking your business processes electronic does not have to be scary, cost a ton or be painful for your employees.

What is it costing us to stay paper based?
Have you ever considered how much it costs to fill a traditional filing cabinet? According to Efficient Technology, Inc.’s white paper, “Achieving the Paperless Office”, if every person filed just four forms per day it can cost companies $12,000 per year on labor costs at a $40,000 salary. For a company of 50 people, that’s $600,000 per year! The average company makes 19 copies of each paper document during the document’s lifecycle. On average, companies lose 1 in 20 documents. Searching for those lost documents will cost an average of $120 per document. The average time to recreate a lost document is 25 hours. That can really add up. The more paper that moves through your business, the greater the chances you’ve personally experienced these situations. You just may not have realized how much it was actually costing the business.

 How does electronic document management work?

There are many different software products and strategies which can help companies of all sizes achieve an electronic way to scan, archive, search and retrieve their documents via their PC. They are intended to replace storing and retrieving documents in traditional filing cabinets. Some of the features available are the ability to search on key words or numbers within the document, pulling up any document you need instantly rather than going to a file cabinet or a storage unit to search for it. Workflow functionality can be used to route documents through an approval process within your company electronically, replacing the old physical paper trail from person to person. You can automate business practices like invoicing, sharing documents with teams, or deploying electronic forms on tablet devices to eliminate the paper forms your business may be using every day.

What are the three most important benefits of adopting electronic document management?

1.      Increase your business efficiency and agility. You can find information faster, and move information around your company faster. That means saving time and money, as well as making it easier for your employees to do their jobs. That’s a huge win for both you and your customers.

2.      Increases the protection and security of your documents and business history with a level of security that traditional paper filing just can’t match. If there was a disaster tomorrow, would you be able to continue your business seamlessly if you lost all your paper records?

3.      Decreases your carbon footprint. Being as environmentally friendly as possible is an important goal no matter what line of business you are in. Most companies have a green initiative in place to reduce the use of energy, paper and printing.

While there’s no way for a business to go completely paperless, adopting an electronic document strategy can make a big impact on your business. Is it time for you to consider the benefits and investigate if it makes sense to develop a digital strategy for your company?

Xerox’s Mistake May Cost You Thousands

By Raymond Feoli, President Inception Technologies Inc.

Recently there have been several online articles and reports on an issue regarding the Scan functionality of Xerox’s Multi-Function Printers (MFPs). The problem initially was reported as a bug with the factory default scan settings. The problem would manifest itself changing characters on the scanned images. In one instance reported, the Xerox equipment was changing the size of rooms on a drawing. Measurements defined were being altered replacing one set of digits for another so a rooms dimensions would change. To be clear, the problem is not that OCR (Optical Character Recognition) was not being read accurately. The problem is much deeper than that. Actual characters and digits were being changed on the image layer of the document and not the embedded OCR layer. To put this in perspective for non-technical people, this would be similar to someone taking a picture of someone and the colors would be changed whereas a red shirt would show up as a blue shirt and bring into question the integrity of the picture itself. For more detail on how the problem manifests itself, please reference the following online article.
Confused photocopiers randomly rewriting scanned documentile Xerox has acknowledged the problem, they have pointed to the use of an industry standard technology, JBIG2 compression technology. This is not a Xerox developed technology and is also used by other MFP manufacturers which begs the question "Is this problem bigger than just Xerox?"

So why is this my problem?
If you or your organization uses the Xerox MFP’s clearly you could be a victim of this problem. This is the most obvious scenario but the problem goes much deeper than this. In order to understand the scope of the problem perhaps a brief overview of the document scanning market and its origins is in order for those who may not be familiar with this market space.

Document scanning evolved as an alternative to microfilm.The nature of an organization’s use of these technologies was primarily rooted around a strategy to archive documents. So as the digital world continued to evolve, the use of microfilm and other analogue technologies diminished. Organizations began to scan documents to images, destroy or store the paper, and amass very large repositories of electronic documents. Organizations have always dreamed of being the "paperless office" but few if any have ever achieved such Utopia.

According to InfoTrends, there were over 26 million MFP’s placed in the North American Market in 2012. Xerox owned about 1.4% of those placements. That’s approximately 364,000 Xerox MFP’s placed in North America last year. The percentage with this problem is not known for sure at this point.

So let’s stop for a moment with the history lesson. If companies just utilized document scanning for archiving as they historically have, consider the impact and the questions that arise regarding the integrity of the documents while pondering the number of Xerox MFP’s installed and the fact that other manufacturers utilize the JBIG2 Compression algorithm. As we see examine the problem, we see that there are 4 areas in which this would impact an individual or organization who has been a victim of this problem.

Financial Impact
Everyone’s first thought tends to be centered on what is this going to cost to fix the problem. Fortunately for most Xerox customers the cost to implement a fix to the problem once there is a resolution should be minimal, if not free. The real cost to the customer are the hidden costs that will creep in over time around the other areas of impact. These costs will surface as the customer needs to access the archived information for use in resolving problems, verifying information or making business decisions.

Legal Ramifications
Documents that have been scanned are often used in legal disputes. Sometimes contracts themselves are scanned or even judgments from a court ruling. While the problem is not that a word is misspelled, the real problem is with numbers. When numbers are altered, the ramifications can be severe. Take for example, a couple that applies for a mortgage and the mortgage rate gets altered. The change of 1 digit from a 3 to a 5 on the APR could end up costing that consumer thousands of dollars over the term of that loan and exposing the lender to a potential lawsuit that may double the damage when you factor in the judgment and lawyer’s fees. Contract terms agreed to by two parties, where one may have scanned using a Xerox device and the other using another manufacturer, may conflict with each party having only the image as a legal document because the originals were destroyed. Dates could be altered impacting deadlines or penalties. The cost to litigate the discrepancy and prove the "original" document could be millions of dollars to the two parties. Clearly the impact of this problem could be exponential with ripple effects across organizations that had no interaction with a Xerox MFP directly.

Records Management
There are many facets of Records Management. Governance, compliance and retention policies are some of those facets. As a records manager, the impact across his or her department is catastrophic. The man hours invested in digitizing, organizing and maintaining those documents, policies and procedures are countless. The Records Manager understands that the validity of his or her archive may now come into question. Document capture has been an unquestioned and proven technology for the most part. In fact, the reliability has been so good that most people would never have even questioned the image versus the original document. That may now change.

Most companies do not track which documents have been scanned by device. In addition, there may be a combination of devices that are being utilized to capture document images such as desktop scanners, fax servers, and MFP’s. With mountains of images and no way to know which documents have been scanned or captured on a particular device, each document now has a shred of doubt surrounding its authenticity. So when you look at the processes and procedures around your retention policies and compliancy regulations, how do you decipher which documents you can rely on as an "original document."

Business Intelligence and Reporting
From an archive standpoint, business intelligence and reporting may not be as significant as some of these other factors. Management may reference some documents to verify some information when trying to make business decisions but most of the time the relevant information is the current information being presented. Nonetheless, some companies or industries may be impacted as they require historical data to make decisions about the organizations future.

As organizations continue to be regulated by industry standards and government regulations, each business should start to assess the validity and impact of the organizations digital archive repositories. That is unless they can be certain that the organization has not utilized Xerox MFP’s to capture documents internally or that documents coming in via an electronic delivery method were not captured using these devices. Companies that have not formally formed or enforced digital document retention policies now have a greater motivation to implement and carry out these policies. Regulations such as Sarbanes-Oxley and SEC-17A can create problems for organizations that have documents that have outlived their retention policy and found to be corrupt. In these instances, you are better off not having the documents as long as they are beyond the required retention periods.

Scan to Process
As we continue to look at the evolution of the document scanning technology, we see that over the past several years document scanning has moved from Scan to Archive and to a more proactive approach by Scanning to a Business Process. This approach to scanning can often times be more transactional in nature and so the distributed scanning model has grown in popularity. In a distributed model, smaller desktop scanners are utilized or departmental scanning devices such as Network Attached Scanners or MFP’s are used to capture at remote stations but process in a centralized location. See the figure below demonstrating the information being captured at remote points within the organization. For example, if a customer comes into a bank and fills out an application for credit or an account, the documents may be scanned right at the service representative’s desk or the representative may walk over to an MFP to scan the document which may be sent to another location for processing and approval.

Historically the documents would be gathered, shipped to a single location and scanned by a team of people. However in today’s current model, documents are being scanned immediately, processed digitally through an automated workflow using data extraction technology, and decisions are being made based on that information.Organizations are embracing workflow and Business Intelligence. Many of these systems and processes will take decision making out of the hands of people or perform the heavy analysis of the information presenting it in an easy to understand format for those making the decision. Consider this for one moment, if data is automatically extracted off of documents, calculations are being performed, and business logic is being applied, what impact would changing a couple of the characters extracted from those documents have? The answer could be anywhere from absolutely no impact or it could lead to a major problem for that entity.

Again from a legal, financial, business intelligence, and records management perspective, the impact of the unknown changes could be devastating to an organization. For some institutions relying on these automated business processes, the cost of the mistake may go beyond these areas. As document scanning is becoming more transactional in nature and decisions are being made much quicker, opportunities for Sales or capturing revenue may be impacted. For example, a customer that comes in to Bank A may fill out a loan application. The documents and data the customer supplies may be scanned on that MFP and sent through an automated loan approval process. If you change a value such as the Social Security Number perhaps that little change returns a low credit rating for another individual but the decision to not fund that loan has now been made based on that factor. Bank A has now lost the revenue from that transaction and the customer may go to Bank B and be approved immediately.

How to move forward
Without the means to track which documents were scanned on what devices already in place, businesses will need to deal with these problems as they surface. Here are some suggestions to help deal and resolve this issue:

•  Inventory your MFP’s and compare to Xerox’s affected models list
•  Engage your MFP provider and ask them to certify that you are not affected by this    

If you accept digital documents from third parties, request those organizations to perform an inventory as well. Require third parties to sign an affidavit stating they have performed the audit stating they have confirmed they do not have these models or have deployed the fix for these devices

Consider the use of specialized capture devices such as desktop scanners or Network Attached Scanners instead of MFP’s. Utilize a Capture solution with the ability to apply business rules and workflow. In workflow or Business Intelligence applications, be thorough on your business rules to have multiple checks and balances on the data be extracted, processed and calculated

While these measures will help you, the use of a Document Management System or Enterprise Content Management system can help you formalize your policies and procedures for the management and retention of documents. If investing in an on premise solution is too costly, perhaps a Cloud Based Solution is better for your organization. Utilizing your network storage to organize folders and files is not an effective strategy for complying with government and industry regulations and can lead to more problems down the line.

Whatever your strategy is for managing your documents our recommendation would be to engage an expert in the industry. Be cautious with your sources and understand you don’t know what you don’t know. Engaging with a service provider, VAR or System Integrator will come at a price but it may save you money in the long run by helping you to avoid common mistakes.

For more information, you can visit our website atwww.inceptiontech.com or email Ray Feoli at rfeoli@inceptiontech.com.