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The 7 Steps to Go Paperless A Hands-On Workshop For Florida Government Finance Officers Association 2012 School of Governmental Finance Presented by :

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Presentation on theme: "The 7 Steps to Go Paperless A Hands-On Workshop For Florida Government Finance Officers Association 2012 School of Governmental Finance Presented by :"— Presentation transcript:

1 The 7 Steps to Go Paperless A Hands-On Workshop For Florida Government Finance Officers Association 2012 School of Governmental Finance Presented by : Kurt Wachtendorf V.P., National Product Manager - EIPP Senior Solution Consultant 1

2 You received a workbook when you registered This workbook will be used throughout the workshop – All content is in the workbook – Your exercises are in the workbook – Use it to take notes, write down ideas and follow-up items The workbook will become the first draft of your Solution Design Your Workbook 2

3 Making Sense of the Alphabet Soup Workflow: The automatic routing of documents to the users responsible for working on them EDM (Electronic Document Management): the management of different kinds of documents in an enterprise using computer programs and storage. BPM (Business Process Management ): a systematic approach to improving an organization's business processes EIPP (Electronic Invoice Presentment and Payment): The Commerce Bank Solution ECM (Enterprise Content Management): the technologies, tools, and methods used to capture, manage, store, preserve and deliver information, content, and documents related to organizational processes DI (Document Imaging): The online storage, retrieval and management of electronic images of documents. DM (Document Management): The capture and management of documents within an organization 3

4 Paper-intensive, inefficient business processes – Need automated workflow functionality for AP and other processes – Gain new levels of efficiency without adding staff – Eliminate paper processing and reallocate staff to value-added work – Solve issue of processing and distributing paperwork across departments and locations – Missed discounts – Streamline audit preparation and response time – Manual data entry is prone to error Business Challenges 4

5 What drives organizations to go paperless? Intensive, paper-based, manual processes – Time consuming activities (shuffling paper, copying, filing, etc.) – Difficult to track (lost documents, filed in wrong folder, setting on someones desk) – Matching invoices to POs and/or Receivers Managing high volume of documents from different sources – Receive faxes, emails, EDI and LOTS of paper from many locations High document processing and storage costs – File cabinets occupying expensive real estate – Paying for outside storage Lack of visibility of invoice and other documents in the process – What happened to that documents I sent you? 5

6 Small or large, size doesnt matter We have years of paper documents stored everywhere. Our hallways are overflowing with file cabinets filled with paper. We cant afford not to be in control of how our paperwork is processed. Our environment demands it. Even as a private organization, our paperwork trail for doing business day-in and day-out is incredible. Getting control of how we process documents means time and money saved. And in todays aggressive business environment, that gives us a competitive advantage. 6

7 Why are you here? 7

8 What Would You Like To Accomplish List 5 things youd like to accomplish today 1. 2. 3. 4. 5. 8

9 What would you like to accomplish? 5 things youd like to accomplish today What can a paperless process do for me? Learn what other organizations are doing with their processes How to get my project on track Calculate ROI and present a business case for my project Network 9

10 Have you ever asked yourself… Why exactly are we doing this? How do we implement this solution? Do we know the expectations of the solution? Why have we started with this process? How long will it take? Who will manage the project? Has anyone seen a project plan? How much will this cost me? 10

11 Its like there is a wall between us 11

12 The answer: Solution Design Solution Design is a tool that helps you understand the problem, design a solution, and plan the approach in a way that gives you complete control over the project and its outcome. 12

13 Taming your projects The Solution Design helps you: – Solidify your understanding of the problem and the desired solution – Select the best solution provider – Ensure everyone is on the same page – Document clear objectives – Create a feasible schedule – Get commitment to implementing the solution you need – Define a common language among the team and when talking with solution provider – Describe the requirements and the expected results – Avoid surprises! 13

14 The 7 Steps to Go Paperless 14

15 Step #1 Understand the Problem 15

16 Involve key users/departments and understand the problem: – Paper reduction in the workplace – Too many file cabinets – Difficulty in finding information (time + costs) – Distributed offices make it challenging to share documents – Need for increased security in accessing information – Industry/Government regulations – Too many systems, not integrated, difficult to distribute documents – Time and cost to retrieve and distribute documents – Managing the approval process – Fax machines, MFD (Multi-Function Devices), scanners, etc. – Sorting and delivery – Slow response to inquiries Step 1: Understand the Problem 16

17 P2P Process – Executive View Receiving Make copies of documents Sends copy to Accounting Locate receiving document Advanced Shipping Notification Match to packing slip Notate exceptions Accept order Files in receiving Accounting files copy Sends copy to Purchasing Purchasing files copy AP receives documents Makes copies Sends copy to Approver Matching of documents Conforming Non- Conforming Reconcile process GL Coding Voucher entryPrint checks Match checks with paperwork Approve / Sign Mail A/P Sends copy to Receiving Purchasing User fills out requisition form Walks to Purchasing to deliver requisition Enters PO in the system Prints approved PO Mails / Faxes PO to vendor File copy in Purchasing Sends copy to Accounting 17

18 P2P Process – User View 18

19 Purchasing Process – Real World 19

20 Receiving Process – Real World 20

21 AP Process – Real World 21

22 List the top 10 problems / bottlenecks of your Purchase-to-Pay process from your perspective. Step 1 Exercise 22

23 Step 1 Exercise List the top 10 problems / bottlenecks of your Purchase-to-Pay process from your perspective. 23

24 Customer AP Problems - Examples: What others say… Average time taken from receipt of invoice to payment: 42 days On average, 3.6% of invoices handled by AP have errors Cost of manually handling, checking and processing a paper invoice and cutting a paper check: $8 to $12 dollars Taking advantage of vendor discount offers due to processing time 2 Way & 3 Way matching of POs, Receivers, and Invoices are manual Cost to reproduce documents for audits or customer research Lack of control during approval process Multiple AP processing locations creating redundancy and delivery cost Increased cost of postage for mailing purchase orders and checks Average days in payables is too high / too low Average cost to process vendor payment: $8.15 24

25 Tips to help you out: – Think about the process you go through every day in your functional areas – Where does the process break down? – How much time is your payment process taking? – What keeps you from taking advantage of discounts when paying invoices? – How can you improve the process? – Does it take too many people to get things done? – What is it about your process that keeps you up at night? – What other departments interact directly and indirectly with you? Who sends you requests, approvals, etc.? Who asks you for reports? – How many (and who are they) external entities do you interact with? Vendors, customers, partners… how do they affect your process? – Sit down with your users and managers and document your process – ASK YOUR USERS Step 1 Exercise Review 25

26 Action Step – write this down Ask the users to list their Top 10 Problems/Bottlenecks List their names Verify whether their list matches mine 26

27 Step #2 Identify Goals and Requirements 27

28 What would you like to accomplish? – Eliminate paper-based retrieval – Provide immediate access to AP related documents – Automate routing of exceptions to the proper person – Streamline workflow and exception handling process – Provide automated audit trail to meet regulations – Reduce people costs / time – Eliminate off-site storage – Notification of exception invoices – Make more space available – Take full advantage of AP discount opportunities in a more timely manner – Consolidate operations in one single office, eliminating redundant processes at other locations Step 2: Identify Goals and Requirements 28

29 What would you like to accomplish? (Continued) – Utilize immediate access to information for more timely and accurate analysis – Provide access to all authorized users at any location from their workstation – Electronically capture invoices when they arrive and utilize electronic workflow for approval and processing – Reduce or eliminate the need for multiple copies of certain documents – Reduce labor expense for processing these documents (printing, copying, filing document research, etc.) – Reduce mailing and shipping costs associated with delivery of documents to and from remote locations – Reduce time and work effort for audits with imaged documents – Reduce cost of check payments Step 2: Identify Goals and Requirements 29

30 Key questions – What are the manual steps in the process (photocopying, delivery, sorting, following-up on approval)? – Can we automate anything in the purchasing process? – Can we centralize any of the Purchase-to-Pay processes? – How do you handle receiving documents (invoices, other docs, etc.)? – How do you send your payments? – Who and how do you get your checks signed? – Who needs to review and approve invoices with exceptions? – How do you file and retrieve the documents? Step 2: Identify Goals and Requirements 30

31 List the goals you would like to accomplish with a paperless solution. You can break it down by functional area (purchasing, receiving, and accounts payable) to make it easier. Step 2 Exercise 31

32 Step 2 Exercise List the goals you would like to accomplish with a paperless solution. Functional Area: __________ Functional Area: ________Functional Area: __________ 32

33 Action Step – write this down Do my goals match the organizations goals? I will NOT let my current situation cloud my vision for the future! 33

34 Step #3 Map the Current Process 34

35 Its more than just technology – Think about the documents you receive or create Invoices, Packing Lists, Bills of Lading, Purchase Orders, Credit/Debit Memos, AP Checks, Receiver Reports generated from your business application – Think about the ways in which you send/receive documents Faxes, Emails, Mail – It is more than simply transforming paper into image format, it includes: Scanning, Indexing, Archiving Searching, Retrieving Sending it out to other people for approval, getting alerts and notifications, etc. Integrating into your business application – AND it includes integrating your business process into the equation Step 3: Map the Current Process 35

36 How to map the current process: – Identify points of origin, decisions and where it ends – Map the process, not only one task – Identify all personnel involved – Identify potential user issues – Identify all integration points with core applications – Identify document-related as well as activity-related tasks – Identify the problem areas or opportunity areas Step 3: Map the Current Process 36

37 Map your current process: – Create the flow for your current Accounts Payable process, using the previous example as a template – Tips to help you out Think about the functional areas first, and list all activities that happen there (e.g. Purchasing) Think about the activities that cross functional areas List exceptions - There are always exceptions Are all invoices handled all the same way? How does email play in the process? Do you have a clean audit trail? How many people are involved in handling each document? Is the process the same in other locations? Step 3 Exercise 37

38 Action Step – write this down I will remember to always keep the following in mind: – What – Who – When – Why – … and what if… ? 38

39 BREAK? 39

40 Step #4 Design the Solution 40

41 Explore different scenarios to solve the problems identified Validate chosen scenario with key users Identify the technology required Identify changes to business processes, business rules, etc. Prioritize implementation plan Schedule review of solution design with executive management Step 4: Design the Solution 41

42 Example Accounts Payable Before: 42

43 Example Accounts Payable After: 43

44 Step #5 Calculate ROI 44

45 Hard Savings – Reduction / Reallocation in personnel – Business operating costs (paper, photocopying, postal mailing, courier services) – Reduction in infrastructure costs (sell a building, remove filing cabinets, etc.) – Increase in productivity measured by man hours saved not handling paper (standing at fax machine, looking for lost or misplaced files, etc.) – Increased cash flow (vendor discounts, improved terms, payment options, etc.) – Reduction in cost of processing invoice – Go Green Soft Savings – Improved vendor/user service – Better and faster access to information – Faster internal communications Step 5: Calculate ROI 45

46 One of the best ways to fully capture ROI is to understand what the current costs are (Step 3) and identify how much you will save by implementing a paperless solution (Step 4) Step 5: Calculate ROI 46

47 Areas to look at for savings: – Legal mandates and regulatory compliance – Sarbanes-Oxley, SEC Rule 17 – Off-site storage costs and retrievals for existing documents – Labor reductions possible or additional labor required in the future – Employee retention – Remote access to documents – no need to FedEx, fax, and/or courier documents – Electronic voucher entry – Filing, retrieving, document, matching, audit preparation – Lost documents (a lost document may cost as much as $150 to replace) – Misplaced documents – search – Allows increased productivity around shared documents – Reduced printing, mailing, faxing, special delivery costs – Reduced storage costs from eliminating paper Step 5: Calculate ROI 47

48 Areas to look at for savings (continued): – Electronic payment options – Overall document management costs for existing resources and facilities – Cost of file cabinets/cost of file cabinet real estate – Cost of off-site storage and retrieval – Cost of paper, paper clips, staples, folders, index cards, etc. – Cost of printing and printers (total cost of ownership for printers) – Moving documents between departments/locations and making better decisions quicker – Improved security – Disaster recovery Step 5: Calculate ROI 48

49 Examples of areas to analyze – Accounts Payable – Invoices sorted into groups (PO vs. Non-PO) – Delivery of sorted invoices to users – Coping/scanning and emailing problem invoices – Delivery of problem invoices to approvers – Delivery of resolved invoices back to AP – Invoices sorted and packaged for delivery to corporate from remote locations – Copying and filing each location – Wasted time trying to track problem invoices – External auditor - AP users time – Filing of completed invoice packets – Invoices matched to related documents – Filing of invoices, statements, order acknowledgements Step 5: Calculate ROI 49

50 The cost of handling paper: – Knowledge workers spending >20% of their time on document management tasks – The average document is copied, either physically or electronically, nine to 11 times at a cost of about $18 – Documents cost about $20 each to file – Retrieving a misfiled document costs about $120 – Average cost of faxing a document: $2.60 – Average cost of printing and distributing a paper form: $0.17 per page – Average cost of the process of creating, modifying, printing and distributing a paper form: $1.26 per page Going Green can save money and the environment: – One tree yields 8,333 sheets of paper – Each office workers print 1,000 pages per month (10,000 to 12,000 year) – 45% of documents are thrown out within 24 hours – 768 million trees to produce worlds annual paper supply – Energy consumption (12% of total manufacturing energy) Step 5: Calculate ROI 50

51 ROI 51

52 ROI 52

53 ROI – Results 53

54 Step #6 Document and Present 54

55 Helps solidify your ideas, the goals, the analysis and all other steps you took until now Gives other people an opportunity to review the Solution Design as a whole (some people may have only participated in parts of this process) Good way to ensure everyone is literally on the same page You can always go back to the document to check why certain things are (or are not) being done You have something to hold the Solution Provider accountable Step 6: Document and Present 55

56 Executive Summary Goals and Requirements Current Process Solution Overview Proposed Solution Benefits Return on Investment Implementation Methodology Contents of a Solution Design 56

57 Youve presented the Solution Design and your team has bought in, its time to kick-off the Technical Design. Now what? 57

58 58

59 What the user requested 59

60 What IT specified 60

61 What the vendor suggested 61

62 What the proposal described 62

63 What the team implemented 63

64 The tech support you received 64

65 What you were charged for 65

66 What was really needed 66

67 Lack of communication between IT and users Lack of understanding from the vendor of what the problem really is Resistance from users on changing the way they usually do things System integration issues Short-term focus sacrificing long-term viability Scope creep Missed deadlines The results are well-known 67

68 49% of IT projects fail 1 Total U.S. project waste is $55 billion ($38 billion in lost dollar value and $17 billion in cost overruns) 1 55 % to 75 % of IT projects fail to meet their objectives 2 40% are never fully implemented Executives from 117 organizations stated that support costs after software implementation were 20% over original estimate 3 86% of projects fail for reasons other than technology 4 32% of project failures occur due to poor project management skills 4 About that project management thing… 1: 2010 CHAOS Report, Standish Group; 2: META Group; 3: The Conference Board Survey; 4: KPMG Information Risk Services study 68

69 So Solution Design is the… or Business Design 69

70 Step #7 Implementation (Activation) 70

71 Implementing a Solution 71

72 Implementation Plan should include: Project Management Defined Process – Phase 1 – PLANNING – Phase 2 – EXECUTION – Phase 3 – STABILIZE Responsibilities / Requirements – Client Responsibilities – Provider Responsibilities 72

73 Lets go back to the list we created in the beginning of this workshop. Did we accomplish everything? 73

74 74

75 The Seven Steps to Go Paperless 75

76 Things to keep in mind Involve key users along with management Understand how things are done today (the flow, the documents, the systems, etc.) Identify the costs associated with current processes (this will be later used for ROI) 76

77 Things to keep in mind Look at the full process, not just an activity (functional areas) Accept change (change really can be good) Use the Solution Design to guide your selection for the correct solution provider 77

78 Things to keep in mind Plan, then review, then stick to the plan Document your findings, your goals, requirements, etc. Take pride in what you accomplished! 78

79 Paperless projects are more than just technology Use the Solution Design to understand the problems, how to solve them and set goals Select a solution provider that can help you with a Solution Design… … or use the Solution Design to help you select a solution provider Beware of those who say you dont really need this, just trust me Project management is key to any implementation. Be on top of it and make sure there is a methodology and a process in place Summary 79

80 Strength, Stability and Growth for over 140 years Established in 1865; Family operated Top 50 bank holding company based on asset size, assets of $18 billion 11.5% annual EPS growth over past 10 years One of the largest banks in the country that declined TARP funds Issuing commercial cards for more than 40 years Top 10 on Forbes magazines list of Best Banks three years in a row Consistently ranked in the Top 10 Best Performing Banks by Bank Director magazine About Commerce Bank 80

81 Review your workbook Get together with other users/departments Use the workbook and start planning your Solution Design in detail If youd like us to help you with your Solution Design, contact us Next steps 81

82 How do you feel? 82

83 Kurt Wachtendorf Vice President National Product Manager – EIPP Senior Solution Consultant 918-622-8489 - office 918-691-7911 - mobile Learn more 83

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