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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 : Kurt Wachtendorf V.P., National Product Manager - EIPP Senior Solution Consultant. The 7 Steps to Go Paperless. Your Workbook.

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slide1

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

slide2

The 7 Steps to Go Paperless

Your Workbook

  • 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
slide3

The 7 Steps to Go Paperless

Making Sense of the Alphabet Soup

EDM (Electronic Document Management): the management of different kinds of documents in an enterprise using computer programs and storage.

DM (Document Management): The capture and management of documents within an organization

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

Workflow: The automatic routing of documents to the users responsible for working on them

BPM (Business Process Management ): a systematic approach to improving an organization's business processes

DI (Document Imaging): The online storage, retrieval and management of electronic images of documents.

EIPP(Electronic Invoice Presentment and Payment): The Commerce Bank Solution

slide4

The 7 Steps to Go Paperless

Business Challenges

  • 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
slide5

The 7 Steps to Go Paperless

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?
slide6

The 7 Steps to Go Paperless

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.”

what would you like to accomplish

The 7 Steps to Go Paperless

What Would You Like To Accomplish
  • List 5 things you’d like to accomplish today

1.

2.

3.

4.

5.

slide9

The 7 Steps to Go Paperless

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
slide10

The 7 Steps to Go Paperless

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?

slide11

The 7 Steps to Go Paperless

It’s like there is a wall between us

slide12

The 7 Steps to Go Paperless

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.

slide13

The 7 Steps to Go Paperless

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!
slide14

The 7 Steps to Go Paperless

The 7 Steps to Go Paperless

slide15

The 7 Steps to Go Paperless

Step #1

Understand the Problem

slide16

The 7 Steps to Go Paperless

Step 1: Understand the Problem

  • 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
slide17

Mails / Faxes PO to vendor

Sends copy to

Accounting

Purchasing

Walks to Purchasing to deliver requisition

User fills out requisition form

Enters PO in the

system

Prints approved PO

File copy in Purchasing

Sends copy to Receiving

Accounting files copy

Sends copy to

Accounting

Advanced Shipping Notification

Receiving

Sends copy to

Purchasing

Purchasing files copy

Files in receiving

Locate receiving document

Make copies of documents

Match to packing slip

Notate exceptions

Accept order

Sends copy to Approver

Non-Conforming

A/P

Reconcile process

GL Coding

Voucher entry

Print checks

AP receives documents

Makes copies

Matching of documents

Conforming

Match checks with paperwork

Mail

Approve / Sign

The 7 Steps to Go Paperless

P2P Process – Executive View

slide18

The 7 Steps to Go Paperless

P2P Process – User View

slide19

The 7 Steps to Go Paperless

Purchasing Process – Real World

slide20

The 7 Steps to Go Paperless

Receiving Process – Real World

slide21

The 7 Steps to Go Paperless

AP Process – Real World

slide22

The 7 Steps to Go Paperless

Step 1 Exercise

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

step 1 exercise

The 7 Steps to Go Paperless

Step 1 Exercise
  • List the top 10 problems / bottlenecks of your Purchase-to-Pay process from your perspective.
slide24

The 7 Steps to Go Paperless

What others say…

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

Customer AP Problems - Examples:

slide25

The 7 Steps to Go Paperless

Step 1 Exercise Review

  • 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
slide26

The 7 Steps to Go Paperless

Action Step – write this down

  • Ask the users to list their Top 10 Problems/Bottlenecks
  • List their names
  • Verify whether their list matches mine
slide27

The 7 Steps to Go Paperless

Step #2

Identify Goals and Requirements

slide28

The 7 Steps to Go Paperless

Step 2: Identify Goals and Requirements

  • 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
slide29

The 7 Steps to Go Paperless

Step 2: Identify Goals and Requirements

  • 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
slide30

The 7 Steps to Go Paperless

Step 2: Identify Goals and Requirements

  • 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?
slide31

The 7 Steps to Go Paperless

Step 2 Exercise

  • 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

The 7 Steps to Go Paperless

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

Functional Area: ________

Functional Area: __________

Functional Area: __________

slide33

The 7 Steps to Go Paperless

Action Step – write this down

Do my goals match the organization’s goals?

I will NOT let my current situation cloud my vision for the future!

slide34

The 7 Steps to Go Paperless

Step #3

Map the Current Process

slide35

The 7 Steps to Go Paperless

Step 3: Map the Current Process

  • 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
slide36

The 7 Steps to Go Paperless

Step 3: Map the Current Process

  • 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’
slide37

The 7 Steps to Go Paperless

Step 3 Exercise

  • 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?
slide38

The 7 Steps to Go Paperless

Action Step – write this down

  • I will remember to always keep the following in mind:
    • What
    • Who
    • When
    • Why
    • … and what if… ?
slide40

The 7 Steps to Go Paperless

Step #4

Design the Solution

slide41

The 7 Steps to Go Paperless

Step 4: Design the Solution

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

slide42

The 7 Steps to Go Paperless

Example Accounts Payable Before:

slide43

The 7 Steps to Go Paperless

Example Accounts Payable After:

slide44

The 7 Steps to Go Paperless

Step #5

Calculate ROI

slide45

The 7 Steps to Go Paperless

Step 5: Calculate ROI

  • 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
slide46

The 7 Steps to Go Paperless

Step 5: Calculate ROI

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)

slide47

The 7 Steps to Go Paperless

Step 5: Calculate ROI

  • 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
slide48

The 7 Steps to Go Paperless

Step 5: Calculate ROI

  • 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
slide49

The 7 Steps to Go Paperless

Step 5: Calculate ROI

  • 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
slide50

The 7 Steps to Go Paperless

Step 5: Calculate ROI

  • 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)
slide54

The 7 Steps to Go Paperless

Step #6

Document and Present

slide55

The 7 Steps to Go Paperless

Step 6: Document and Present

  • 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
slide56

The 7 Steps to Go Paperless

Contents of a Solution Design

  • Executive Summary
  • Goals and Requirements
  • Current Process
  • Solution Overview
  • Proposed Solution
  • Benefits
  • Return on Investment
  • Implementation Methodology
slide57

The 7 Steps to Go Paperless

Now what?

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

slide59

The 7 Steps to Go Paperless

What the user requested

slide61

The 7 Steps to Go Paperless

What the vendor suggested

slide62

The 7 Steps to Go Paperless

What the proposal described

slide63

The 7 Steps to Go Paperless

What the team implemented

slide64

The 7 Steps to Go Paperless

The tech support you received

slide65

The 7 Steps to Go Paperless

What you were charged for

slide66

The 7 Steps to Go Paperless

What was really needed

slide67

The 7 Steps to Go Paperless

The results are well-known

  • 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
slide68

The 7 Steps to Go Paperless

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

  • 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
slide69

The 7 Steps to Go Paperless

So Solution Design is the…

Business Design

or

slide70

The 7 Steps to Go Paperless

Step #7

Implementation

(Activation)

slide71

The 7 Steps to Go Paperless

Implementing a Solution

slide72

The 7 Steps to Go Paperless

Implementation Plan should include:

  • Project Management
  • Defined Process
    • Phase 1 – PLANNING
    • Phase 2 – EXECUTION
    • Phase 3 – STABILIZE
  • Responsibilities / Requirements
    • Client Responsibilities
    • Provider Responsibilities
slide73

The 7 Steps to Go Paperless

Did we accomplish everything?

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

slide75

The 7 Steps to Go Paperless

The Seven Steps to Go Paperless

slide76

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)

Involve key users along with management

The 7 Steps to Go Paperless

Things to keep in mind

slide77

Accept change

(change really can be good)

Use the Solution Design to guide your selection for the correct solution provider

Look at the full process, not just an activity(functional areas)

The 7 Steps to Go Paperless

Things to keep in mind

slide78

Document your findings, your goals, requirements, etc.

Take pride in what you accomplished!

The 7 Steps to Go Paperless

Things to keep in mind

Plan, then review, then stick to the plan

slide79

The 7 Steps to Go Paperless

Summary

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

slide80

The 7 Steps to Go Paperless

About Commerce Bank

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
slide81

The 7 Steps to Go Paperless

Next steps

  • 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
slide83

The 7 Steps to Go Paperless

Learn more

Kurt Wachtendorf

Vice President

National Product Manager – EIPP

Senior Solution Consultant

kurt.wachtendorf@commercebank.com

918-622-8489 - office

918-691-7911 - mobile

www.commercebank.com

www.commercebank.com/eipp