the 7 steps to go paperless a hands-on workshop for florida government finance officers association...

The 7 Steps to Go Paperless

A Hands-On WorkshopFor

Florida Government Finance Officers Association2012 School of Governmental Finance

Presented by :

Kurt WachtendorfV.P., National Product Manager - EIPP

Senior Solution Consultant

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• 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


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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

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• 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


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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 someone’s

desk)– Matching invoices to PO’s 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?

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Small or large, size doesn’t matter


• “We have years of paper documents stored everywhere. Our hallways are overflowing with file cabinets filled with paper. We can’t 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 today’s aggressive business environment, that gives us a competitive advantage.”

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Why are you here?


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What Would You Like To Accomplish

• List 5 things you’d like to accomplish today

1.

2.

3.

4.

5.


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http://www.apple.com/ipodshuffle/gallery/

What would you like to accomplish?


• 5 things you’d 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

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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?

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http://www.sap.com/index.epx

It’s like there is a wall between us


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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.

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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!

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Step #1

Understand the Problem


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• 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


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P2P Process – Executive View

The 7 Steps to Go PaperlessRe

ceiv

ing

Make copies of documents

Sends copy to Accounting

Locate receiving document

Advanced Shipping Notification

Match to packing slip

Notate exceptions

Accept orderFiles 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 entry Print checks

Match checks with paperwork

Approve / Sign

Mail

A/P

Sends copy to ReceivingPurc

hasi

ng

User fills out requisition form

Walks to Purchasing to deliver requisition Enters PO in the

systemPrints approved PO

Mails / Faxes PO to vendor

File copy in Purchasing

Sends copy to Accounting

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P2P Process – User View


Order Request Form

Completed

Reviewer or ProxyApproves

Order

RequestorMakes

Photocopy of Req.

ManualDelivery of Req.

to Admin

Requestor File Copyof Req.

Admin Sort and Deliver to

Reviewer for Approval

Copy of Approved

Req. Made

ManualDelivery of Req.

to Admin

Order Placed by Admin

Deliver Approved

Req. to Requestor

Order Placed by Requestor

File Approved

Req.

Copy of Approved Req. Filed

by Requestor

Deliver Approved

and Ordered

Req. to A/P

YES

Merge invoice checks printed

Checks are stuffed

MailUPS EFT/ACH

Single signature

checks

Invoice Received

Mail

FAX

E-mail

Invoices Delivery to A/P - Plant

Invoices are

sorted

Look up in ERP to Verify Received

ReceivedY/N

Held until received

NO

Visual Verification – Invoice to ERP

YES

2-3 WayVoucher Entry into

ERP

Copy sent to Approver

for Info/Approve

MatchY/N

NO

Notations made on Invoice

Invoice entered in

ERP by A/P clerk at the

plant location

YES

Invoice is filed at plant

location

Double signature checks

Checks are folded by machine

Mail Room

Require stuffing

YES

NO

Standard Voucher Entry - ERP

Approved & Completed

YESDeliver to

Approver if needed

NO

Packing slip received by W/H clerk

Shipment Received – Changes /

Corrections written on

Packing slip

Packet Delivered

toReceiving

Desk

Copy filed at Plant

Copy delivered to Purchasing

Agent

Packing slip or

Receiver Stapled to

PO

Variance – PO vs

Received

Copies of Receiving

Documents Filed –

pending Invoice

YES

NO

NO

Product Received into ERP

2-WayPO against what

was received

Book accrual to GL in ERP

Plant clerk notifies

Purchasing Agent for resolution

Approved Requisition

Approved Request is

filed

Receiver is filed

Receiver or Packing Slip

Copy of PO for

Receiving awaiting receiver

PO is printed then copied multiple

timesCopy of

PO for A/P

PO is filed

Purchase Order (PO)

Copy of PO for Buyer

Deliver to

Buyer

Deliver to Receiving

Desk

NO

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Purchasing Process – Real World


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Receiving Process – Real World


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The 7 Steps to Go PaperlessAP Process – Real World

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• List the top 10 problems / bottlenecks of your Purchase-to-Pay process from your perspective.

Step 1 Exercise


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Step 1 Exercise

• List the top 10 problems / bottlenecks of your Purchase-to-Pay process from your perspective.


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• 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 PO’s, 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

• 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


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Action Step – write this down


• Ask the users to list their Top 10 Problems/Bottlenecks• List their names• Verify whether their list matches mine

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Step #2

Identify Goals and Requirements


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• 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


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• 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



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• 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?



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• 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


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Step 2 Exercise• List the goals you would like to accomplish with a paperless solution.

Functional Area: __________

Functional Area: ________ Functional Area: __________


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• Do my goals match the organization’s goals?• I will NOT let my current situation cloud my vision for the future!

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Step #3

Map the Current Process


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• It’s 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


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• 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


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• 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


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• I will remember to always keep the following in mind:– What– Who– When– Why– … and what if… ?

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BREAK?


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Step #4

Design the Solution


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• 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


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Example Accounts Payable Before:The 7 Steps to Go Paperless

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Example Accounts Payable After:The 7 Steps to Go Paperless

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Step #5

Calculate ROI


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• 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


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• 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)



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• 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



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• 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



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• 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 user’s time– Filing of completed invoice packets– Invoices matched to related documents– Filing of invoices, statements, order acknowledgements



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• 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 world’s annual paper supply– Energy consumption (12% of total manufacturing energy)



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ROI


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ROI


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ROI – Results


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Step #6

Document and Present


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• 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


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• Executive Summary• Goals and Requirements• Current Process• Solution Overview• Proposed Solution• Benefits• Return on Investment• Implementation Methodology

Contents of a Solution Design


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• You’ve presented the Solution Design and your team has bought in, it’s time to kick-off the Technical Design.

Now what?


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How technology projects are usually carried out!


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What the user requested


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What IT specified


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What the vendor suggested


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What the proposal described


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What the team implemented


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The tech support you received


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What you were charged for


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What was really needed


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• 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


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• 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

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So Solution Design is the…


or Business Design

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Step #7

Implementation(Activation)


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Implementing a Solution


Initiate & Plan

•Strategic Vision •Current Process Review

•Statement of Goals & Objectives

•Executive Sponsor Meeting

•Solution Design

Control & Execute

•Onsite Workshop•Revise Solution Design•Project Plan•Payment Solution Installation

•Integration & System Conversion

•Status Updates

Stabilize & Close

•User Training•Project Launch•Project Summation•Ongoing Support• Post Launch Recommendations & Next Steps

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Implementation Plan should include:


• Project Management• Defined Process

– Phase 1 – PLANNING– Phase 2 – EXECUTION– Phase 3 – STABILIZE

• Responsibilities / Requirements– Client Responsibilities– Provider Responsibilities

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• Let’s go back to the list we created in the beginning of this workshop.

Did we accomplish everything?


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Wrap-Up


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The Seven Steps to Go Paperless


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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)

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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

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Plan, then review, then stick to the plan

Document your findings, your goals, requirements, etc.

Take pride in what you accomplished!

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• 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 don’t 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


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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 magazine’s 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


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• Review your workbook• Get together with other users/departments• Use the workbook and start planning your Solution Design in detail• If you’d like us to help you with your Solution Design, contact us

Next steps


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How do you feel?


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Kurt WachtendorfVice President National Product Manager – EIPPSenior Solution [email protected]

918-622-8489 - office918-691-7911 - mobile

www.commercebank.com

www.commercebank.com/eipp

Learn more


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