Document Management: A Recipe for Process Improvement

Mindy Rathe
December 1, 2012

Every organization gets to a point where something happens and they ask themselves, "Why are we spending so much money on this?" "THIS" can be anything from FedEx-ing documents between offices to needing extra people to process invoices to programming costs incurred to keep legacy applications running. When "this" happens, document management software can serve as the recipe for success.

The Ingredients

Document management tools are akin to baking ingredients: flour, water, eggs, sugar, butter, etc. These ingredients are needed to make any cookie, cake or doughnut and taste better in their new form than individually. Document management is the same: each solution is comprised of five or six elements and combine to create something much better—efficient workflow.

Document management "ingredients" include:

  • Capture: pulling documents into the system, whether they are paper, fax or email
  • Workflow: automated workflows that utilize these electronic documents
  • Integration: making documents available in ERP, accounting and other line-of-business information systems
  • Access: your ability to quickly search for and retrieve your documents
  • Version Control: ensuring that everyone is working from the same document version
  • Storage: where your documents are kept
  • Retention Schedules: ensuring your documents are available for as long as needed and destroyed when no longer needed

Know Your Base Ingredient

A document is anything that can be used in your business process

  • Electronic documents: Word and Excel files, PDFs, email, fax server output, etc.
  • System generated documents: purchase orders, reports, etc.
  • Paper documents: supplier invoices, contracts, forms, remittances, etc.

In most cases, any given transaction is a combination of documents,
so connecting them in a meaningful way is important. The best way to
describe how document management can be used is to look at a couple of
specific "recipe" examples. Here are two:

Invoice Processing: Too Many Cooks Spoil the Broth

In many organizations, invoice processing requires the involvement of
several people. The invoice arrives to the mailroom, is sorted and
arrives in accounts payable, after first being accidentally sent to
purchasing, where it then sits in someone's inbox who just happens to be
on a two-week vacation. The AP clerk then returns, pulls the invoice
from the stack days later, visually checks it against the original
purchase order in their enterprise resource planning (ERP) or accounting
system, approves it, sends to their supervisor for final approval who
kicks it back to the clerk who then has to run down some missing
information with purchasing and people in the field. The supervisor then
needs to kick it up to the CFO because it exceeds a certain amount.
Finally, weeks later, the AP clerk receives the supervisor's approval
and posts the transaction. The accounting person then files the invoice
into a filing cabinet. The invoice may or may not be there when the
supplier calls. This entire process required manual intervention at each
step of the way.

With document management, the invoice is scanned
(capture) in the mailroom or a third-party service and indexed with the
purchase order number. Based on receivers in the ERP or accounting
system (integration), the invoice is presented to the right AP clerk
(workflow), who visually approves the invoice. Work rules then
automatically send the invoice to the AP clerk's supervisor and CFO for
their approvals. Missing information is found in the document management
system (access) and in the right version (version control). The invoice
is then electronically filed (storage) and marked as protected for
seven years (retention schedule). As such document management typically
cuts invoice processing time down from two weeks to two hours.

Contract Management: the Way to an Organization's Heart Is through Its Contracts

Today, contracts are physically passed between different entities,
including sales, legal and management—each of whom needs to read, mark
up and then approve the document. Multiple emails and calls are sent to
people to assure that they are doing their work to meet the deadline.
Even if the contract is electronically passed, it may be difficult to
understand which revision is the latest, with endless frustration
experienced for those that mark up the wrong version. Upon receiving
provisional agreement from the other party, a paper version of the final
contact is signed, and the renewal date is put into a spreadsheet
managed by the legal administrator, who is about to retire. And, when
there's a flood or other disaster, these paper documents get
destroyed—this is why 60% of businesses affected by a disaster go out of
business in less than two years.

With document management, the contract is checked out (manage) by
various people. If a response is not provided in a timely manner,
automatic notifications (workflow) occur, reminding them that they need
to respond to the document. Upon signing the document and getting email
approval from the other party, the email is stored (storage), and the
signed document is scanned (capture) into the document management
system, and indexed appropriately so that it can be quickly found later
(access). And 60 days before its expiration, an email goes out to the
legal department and management (workflow), notifying them that they
need to decide what to do with this contract.

A Cookbook to Make Martha Stewart Jealous

The Windward Group has implemented document management solutions
to help hundreds of organizations across a wide range of industries
solve business processing issues, cut costs, increase efficiency and create a competitive advantage.

Contact us to learn more about document management