PERICENT - A DOCUMENT AND PROCESS AUTOMATION COMPANY
While it may seem obvious in general terms that a managed document environment would provide significant benefits, justification in clear-cut financial and competitive terms is less clear. The information below provides a road map for clarifying the ROI process for a Document Management System.
In the past, when IT professionals and executive leaders discussed the ROI of technology investment, they were primarily thinking of financial benefits. Today, business and technology leaders need to take into account the non-financial benefits of IT investments such as how document management will facilitate the achievement of broader corporate goals.
The Case for Document Management
Everyone has experienced the frustration of not being able to find that piece of paper or file with the answer to that important, pending question. “IDC has estimated that the typical enterprise with 1,000 knowledge workers wastes $2.5 million to $3.5 million per year searching for nonexistent information, failing to find existing information, or recreating information that can’t be found.”
(Source: IDC)
BAE Systems conducted a study that discovered that 80% of employees waste an average of half an hour per day retrieving information, while 60% are spending an hour or more duplicating the work of others. (Source: “Show me the Money, Measuring the Return on KM” Knowledge Management)
More statistics supporting the need for document management come from Coopers & Lybrand (Source: Imersion Technologies, Inc.):
These statistics easily support the fact that most businesses will benefit from a well-deployed document management system. It is not an issue of “if” but “when”. From Accounting and Human Resources to Product Development and Customer Service, every department can realize productivity improvements. The sooner a document management solution is in place, the sooner the benefits can begin to affect business bottom-line and become the basis for efficiently conducting every business function.
Understanding and Calculating the ROI of Document Management
Although ROI may be expressed as a simple number or percent, calculating it is not so simple. To begin, clear comprehension of costs must be undertaken. “The financial benefit of a document management system must be clearly recognizable. Without a business case and without the knowledge of the actual documentation costs before and after implementation, a ‘successful project cannot demonstrate its success and justify further investment.” (Source: Price Waterhouse).
It is also important to assess the ROI potential – the broader the scope, the greater the potential ROI. Common applications that are used frequently by many people will result in a greater return on investment.
Getting started: This involves two parts – knowing what to measure and understanding how to quantify the value of those measurements into actual dollars. The first step is estimating your document handling costs. This might include the following:
Answering some of the questions outlined below can assist you in compiling your current document handling costs. Then you can evaluate document management implementation expenses to render some bottom-line break-even data.
Questions :
How many people in your office handle paper documents? | 10 | 10*20*2=400mins |
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How many times does each person retrieve or file a paper document per day? | 20 | 400/60=6.6 hours |
How long does it take to retrieve a paper document? | 2 minutes | 6.6*$10=$66 |
What is the average hourly salary of those staff members? | $10.00 | $66*20=$1320/mo. |
How much time does each person spend making copies per day? | 5 minutes | 10*5=50 50/60=.8*$10=$8 |
How many paper copies are generated per day? | 50 | $8*20=$160/mo. |
How much time does each person spend filing per day? | 20 minutes | 200/60=3.3 hours 3.3*$10=33.00 $33.00*20=$660/mo. |
The monthly calculation takes the # of people, multiplies it by the # of times and the amount of time to get the total # of minutes for the action per day. The minutes are divided by 60 to get the # of hours and then multiplied by the hourly rate of the employee. This daily expense is then multiplied by 20 workdays per month. In this example, document handling costs are roughly $2140 per month.
Secondly, it is necessary to collect document storage expenses such as follows:
By adding together document handling costs and storage expenses, you generate a realistic estimate for your document expenses today. Using this data, the following illustrates how to compare your current document handling methods with a document management system.
Measuring the effectiveness of a document management solution requires that you really think about the departments it will impact as well as the number of employees and the value of their time. The values below are just suggestions.
Now, multiply these percentages by the calculations in the first section. This will give you an idea of the monthly savings your company will realize by implementing a more efficient document management solution. Now, you can input the costs associated with the document management system you are evaluating. The most difficult cost to derive will be the conversion expenses. There are scanning service bureaus who will scan and index your documents, or you can accomplish the conversion in-house. Most scanners operate as quickly as a copier and support batch processing. And grouping together similar documents can streamline the indexing process. The operator can take
advantage of zone indexing tools and batch indexing processes as well as automatic full-text indexing for accurate information collection.
It is important to note that these are simply measurable expenses. But, this analysis can provide an initial framework for demonstrating potential success and further investment. Most organizations use one or more “financial metrics” which they refer to individually or collectively as “ROI”. Both Net Present Value and Internal Rate of Return are valuable for larger scale or multiyear projects. These metrics include:
Using this type of model will provide a basis of comparison for pre and post installation, as well as for comparing various solutions. Carefully considering your business specific measurable costs for an IT purchase is just good business practice. Then by evaluating the non-measurable benefits that are discussed below, the big picture for achieving positive ROI for a document management implementation will be clear.
Non-financial Benefits
Taking this analysis further requires answering more difficult questions that are frequently more challenging to quantify. Given the varying definitions of these “softer” benefits, there are no comprehensive tools that can be applied. However, the potential for producing positive impacts on business performance and mission results are undeniable. This process also requires an organization to take a look at the bigger picture of a document management installation – from department level improvements to company-wide benefits. This will help them to define what to evaluate and how to measure it. Some suggestions include:
Conclusion
Managing business information is a critical mission of any operation, but process improvements demand cost justification. Using the ROI information provided in this article will provide a basis to make the right document management solution decisions for your company. For more information on how a document management system can meet your information management needs, contact us.
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PERICENT - A DOCUMENT AND PROCESS AUTOMATION COMPANY
FEATURES | Enterprise Edition |
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Access Controls | |
Encryption | |
Version Control | |
OCR for Image Text Search | |
Bulk Upload and Download as Zip | |
Full Text Search | |
Stamping | |
eForms Management & Publish | |
Direct Email Capture & Email Filter | |
Document Sharing via Email(ticket/download) | |
Document Rating | |
Document Tags | |
Document Archiving | |
Backup Management | |
Document Indexing | |
Metadata & Template Management | |
Document Sharing via Email | |
Collaboration | |
Compliance Management | |
Detailed Audit Trail & Reporting | |
Multi Tenancy | |
Workflow Design & Execution | |
Multi-lingual Support | |
LDAP / Active Directory Access | |
Web Services API | |
Document Scanning & Capturing | |
Meta Template & Tagging | |
Document History | |
Google Docs/MS Office Integration | |
Watched Folder Document Indexi | |
Sharing Document with other Tenant & Publically | |
Document Annotations | |
Digital Signature | |
Event Subscription & Notifications | |
Event Calendar/Scheduling Task | |
Mobile App (Android/iOS/Windows) |
Key Features | Standard Edition |
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Configure different levels of permission to multiple users or roles. | |
Encrypted Transmission and Storage of Documents | |
Transparently manage and control multiple versions of any document | |
Optical Character Recognition for text search on any Image Document | |
Bulk Upload of Multiple Documents and Download Multiple Document as Zip | |
Document Searching by Full text, Meta Data, Tag and Many More. | |
Design, Edit, Control and Apply Multiple Stamps | |
Capture Data and Generate Predefined Documents in PDF using eForms | |
Direct Email Capture by Individual User & Email Filter | |
Document and Folder Sharing to External Parties via | |
Document Rating by Multiple Users | |
Apply Multiple Free or Predefined Tags on Documents | |
Configure Document Archiving Bundle of Old Documents | |
Backup Management | |
The document gets Automatically Indexed in the Repository | |
Configure Different Metadata Template to Assign Category to a Document and Custom Indexes | |
Various Options to Share Documents via Email (Attachment, Encrypted Document, Download Ticket) | |
Built-in Calendar, Task Definition and Assigning to Multiple Users | |
Various Compliances ISO 9001:2018, ISO27001, SEC etc | |
Detailed Audit Trail of User Activities | |
Setup of multiple isolated repositories with specific users | |
Very Simple to Design of Various Document Intensive Proceses like Various kinds of Approvals | |
It supports the search of documents in different languages | |
LDAP / Active Directory Access | |
External Integration API | |
Document Scanning & Capturing | |
Meta Template & Tagging | |
Document History | |
Google Docs/MS Office Integration | |
Watched Folder Document Indexi | |
Sharing Document with other Tenant & Publically | |
Applying Multiple Annotations on Document Preview and downloading PDF document with annotation | |
Configure Organization Level Digital Signature and Digitally Sign any document by users of the system | |
Monitor Documents with Event Subscription & Notifications. | |
Event Calendar/Scheduling Task | |
Mobile App (Android/iOS/Windows) |
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