Leading the Pack?

Recent AIIM research indicates that many in the financial, banking, and insurance industries (FBII) operate highly-sophisticated in-house scanning and capture operations.1 This would appear to make sense, given the fact that these industries were among the first to embrace sophisticated information technologies, dating back to the early 1960s and beyond.

Scanning and capture, however, cannot merely be lumped wholesale into “information technology,” since it encompasses a wide range of specific practices and technologies which are only now being widely adopted and must be independently analyzed.

Demand for scanning and capture
The overall demand for going paperless in this sector, however, is unambiguous, as was sharply articulated in a 2008 interview with John Chickering of Fidelity Investments, one of the largest financial houses: “(Our) storage volumes are growing by leaps and bounds. The research data I’ve seen quote 30 percent annually. That means we’re doubling faster than every three years. 2.

“The more volume we have to manage, the harder it is for us to find what’s important, and so I think we as an industry need to address the volume issue.” A best practice, adds Chickening, “is to embed in the capture of documents (and their use in running a process), the things you need to manage the documents throughout their lifecycles.”

Traditionally, scanning and capture has been considered technically challenging. Achieving high throughput at minimum cost has required specialized machinery and skilled staff, hence the prevalence of service bureaus and outsourcers.

As a result there has been reluctance in various sectors to invest in onsite capture technology, relying instead on low offshore labor rates and cheaper communications, enabling a combination of onshore scanning, with offshore remote keying into corporate legacy systems. But that is changing, as revealed in the AIIM data below.

For the purposes of the AIIM study, the term “capture” covers the combined processes of document scanning, image correction, recognition of text, barcodes, form fields, etc. and finally, output to an appropriate format for subsequent processing or archive storage.

For 20 years or move, capture has been the entry point for document store-and-retrieve systems and increasingly for forms-processing, workflow and business process management. And while the term “capture” is sometimes used in reference to faxes, emails, electronic documents, images and messages, this report is restricted to document scanning only.

The study, conducted in November 2009, revealed 19 general findings across 17 market segments polled. Among them:

• Centralized, in-house scanning and mailroom scanning are set for considerable growth when compared to outsourced scanning and capture. 
• Distributed scanning on multifunction peripherals is set for some growth compared to desktop scanning.
• Integrating scanned files back into internal systems is a bigger outsourcing issue than security breaches or lost documents. Quality of indexing is an issue for 30 percent.
• Only 38 percent of paper-originated records are scanned and archived electronically.
• Also set for a considerable increase is automated recognition via optical character recognition, intelligent character recognition, and automated classification.

Salient trends in FBII
Drilling down into the results as reported by FBII firms primarily located in the U.S. (with a smattering from Canada, Europe, and other parts of the world), we can see the most salient trends:

• 67 percent of respondents do not outsource any scanning or capture services. 
• 72 percent of all respondents have a centralized scanning and capture facility.
• 72 percent also use distributed capture within their organizations (multifunction peripherals, desk-top scanners, branch-office and field-office scanning).
• The strongest drivers for scanning and capture are “Improve process throughput (efficiency)” 64 percent; “Records security and accessibility (compliance)” 56 percent; “Improve speed of access (customer service)” 52 percent; and, finally, “Improve searchability/findability of business documents (knowledge management)” 46 percent.
• The three largest “barriers to greater strategic adoption of scanning and capture” were “Justifying the investment – demonstrating ROI,” 44 percent; “Resistance to change,” 40 percent; and “Still thought of as scan-to-archive, not scan-to-process” 40 percent.
• 51 percent of respondents reported return on investment (ROI) on scanning and capture investments within 12 months or less, with an additional 18 percent reporting ROI within 18 months.
• 66 percent index and store scanned images and electronically generated files in the same system.
• 80 percent of respondents do not store “significant numbers of scanned images” in SharePoint.

How can you improve your profitability through scanning and capture?
Moving from this broad-based FBII study to the microscopic level, every business, no matter what it produces, must engage in “financial services” to earn a profit, and when it comes to accounts payable, scanning and capture offer clear opportunities for process efficiencies and savings. Oracle’s Jason Lamon, for instance, laid out “Three Pathways to Process Efficiency” in a recent article that richly illustrates the incremental savings an organization can realize as it moves up the food chain into increasingly sophisticated scanning and capture practices. 3

At level one, back-end document capture and archive, savings can be wrought simply by scanning and archiving invoices following manual processing, says Lamon.

 At level two, even greater efficiencies can be realized with front-end document capture and data entry. In this scenario, paper invoices are scanned upon receipt. Capturing the document on the front end “immediately removes paper from the process and speeds data entry within the enterprise resource planning system (ERP),” writes Lamon. At level three, front-end document capture and workflow “is realized as robust workflows are built to ensure the greatest efficiencies. In this system, invoices are scanned upon receipt and archived within the content management system, triggering workflow processes”.

Lamon goes on to explain that “invoiced images can be routed to the appropriate person for coding and review, accelerating overall approval processing. With workflow invoked within the process, your company will start realizing the benefits of early payment discounts and reduced late-payment fees, while gaining visibility into the process by being able to monitor specific transactions at both the individual and aggregate level”.

Benjamin L. Herring, editor-in-chief Infonomics magazine.

Footnotes
1. See the AIIM “Industry Watch” market intelligence report, “Document Scanning and Capture: local, central, outsource – what’s working best?” The survey was taken by 882 individual members of the AIIM community in November 2009, using a Web-based tool. Invitations to take the survey were sent via email to a selection of the 65,000 AIIM community members. 
2. See the Sep/Oct 2008 Infonomics magazine cover story, “Four Who Get It: Business Leaders Maximizing Return on Enterprise Content Management”.
3. See the Nov/Dec 2009 issue of Infonomics magazine, “Accounts Payable: Three Pathways to Process Efficiency.”