Is my company is ready for electronic document workflows?

There is growing awareness in all areas of business that technology is developing at an accelerating pace. Due to this realization an increasing number of companies regard IT investments as part of their market competitiveness strategy. One on the most popular technologies for investment, due to its low barrier to entry and general usefulness in any business process, is electronic document workflows.

While the benefits of using new technologies are obvious to specialists, the challenge is to convince decision makers that this is the right time to make a plan and start taking steps towards implementing it. These decision makers might have been working in a previous system for years, or they might even have helped implement the previous system. Therefore, some phrases seem to appear regularly like ‘management mantras’:

• Our company is doing fine, why do we need to change anything? (Because business standards and practices are changing.)
• Why does our company need a new solution? (Because everything is changing around us.)
• What we have does what we want. (Maybe we could do more?)
• We don’t need gadgets. (We do need equipment.)
• If we have been working this way for years, why do we need electronic document workflows now?

In this short article we will go through some of the benefits of electronic document workflow systems in more detail.

Dematerialization of information – the spirit of the times

The dematerialization of information occurs in the process of digitization. It occurs so frequently in our all facets of our daily lives that it is no longer surprising. Just a few years ago most people though of invoices as some collection of papers each presented in a format unique to a specific company. What do you think of now? Probably a spreadsheet or text document. Something similar has happened with almost any document you can imagine; bank statements, sales orders, etc. The ‘traditional’ medium for these documents, paper, seems almost quaint now, and for a growing number of people paper seems unnecessary, or even wasteful. This is a clear trend that is quickly becoming mainstream and therefore becoming the de facto approach used by businesses.

Electronic documents are more convenient to use than paper documents.

Paper documents – the risks of a previous era

Despite the growing popularity of electronic records there are still places dominated by paper. You don’t even have to look far:

• Warehouses – very often there are paper original/duplicate records.
• Human resources – in many companies even simple vacation requests are only in paper form.
• Business trips – this area is still dominated by collections of different paper documents.
• Invoices – despite many attempts to develop electronic document interchange (EDI) standards most documents are still in paper form.
• Offices – this area is seeing significant progress but completing this transformation is being blocked by the perceived need for traditional signatures and stamps.

The requirements given by conservative company structures are easy to accept; conservative ideas, ‘conventional wisdom’, are by definition those that have already been accepted. The key is to understand the consequences of continuing those business practices, e.g. using paper documents in a changing business environment.

Processing paper documents in order to, e.g. collect acceptances, assign costs, obtain opinions, is actually a source of risk for companies. This risk is generated by many factors, e.g.

• document progress being blocked by, e.g. forgetfulness, vacation, illness, being low priority
• uncoordinated teamwork which creates different versions of the same contract
• unintentional and intentional contract changes which create unfavorable conditions for the company,g. creating an unprofitable contract by overextending the warranty in order to get a signing commission
• document loss, e.g. accidental loss, incorrect delivery, misfiling, or even intentional obstruction and destruction by workers who are being dismissed
• sometimes documents just fall out of the window (hard to believe, but it’s true – it happened to…a friend of mine)

The effects of these risks may be manifested in many forms: late payments, financial decisions being delayed, a favorable contract not being signed, an unfavorable contracts being signed, or penalties being imposed by supervisory or tax authorities. The risk also extends to non-tangible assets such as the company’s reputation or credibility. These losses, in turn, have knock on effects which result in other serious consequences such as losing clients and contracts, or the reduction of goodwill.

Electronic documents create less risk for your company.

Universal direct access to information

The moment a paper document becomes electronic information, not just a scan/image/pdf, is when its information is stored in database records. At that moment our access to the information increases exponentially. From that moment onwards you can search through the information according to criteria you define, or combine it with other information in summaries, lists, and reports. This information obviously provides factual support for your business decisions but electronic information can do even more. Electronic information can, for example, automatically alert you to situations you weren’t aware of.

Let’s use the example of the combination a cost invoice workflow and an order placement workflow. The company receives an invoice for the purchase of materials for a project. The invoice goes through the approval process and goes to accounting. At the same time someone else is creating a new order from the supplier and would like to know the history of the material cost from this supplier and see a graph with a trend line. (Here, if the cost trend is downwards, you might get an alert that better prices could be negotiated.) Someone else who is accepting an order might like to know how much has already been spent on a specific project (Here, an upward trend line in cost might indicate the need to reduce expenses, or verify the project budget, etc.)

Using traditional paper documents to obtain this type of information is neither easy nor quick. It would require additional activities and the involvement of other employees (e.g. asking accounting for a statement). Information about future cases might be incomplete or unavailable. Any information that you do receive might be out of date by the time you get it, or too late to affect your decision making process. This lag between the request for information and its delivery can lead to project delays, which in turn can lead to contractual penalties, loss of future contracts, etc.  As you can see, timely access to reliable information is necessary for making the right decision at the right time.

Another example is a simple vacation request. A traditional paper process might have the following steps:

1. Contact HR and ask how much vacation time is available. (This interrupts whatever HR was doing and takes some time.)
2. Contact various employees to see if they are available to act as a replacement. (This takes up the worker’s time and interrupts the work of a number of employees until someone agrees to be a replacement, and also takes time.)
3. The employees fills in a request form and submits it to a supervisor for approval. (This blocks the request until the supervisor can review the situation and grant or deny the request.)
4. The application is then finally submitted to the HR department. (Hopefully no one has made a mistake, because then everything might have to start over.)

An electronic document workflow might have the following steps:

1. An employee starts the request process and fills in the form. (The form has access to the employee’s records so it is a simple matter of selecting how much and what type of leave you want to request. Optionally, you could select your preferred replacement or let the system pick.)
2. Another employee agrees to act as a replacement or is automatically assigned to that role.(This could take either milliseconds or until some employee agrees, but in either case the employee making the request can go about their regular tasks.)
3. The request is then forwarded to a supervisor for approval. (This could take milliseconds in some situations or until the supervisor gives their approval, but in either case the employee making the request can go about their regular tasks.)
4. There is no fourth step. (Because everything was registered in the system all along the way and all the rules have been followed automatically.)

The electronic document workflow minimizes downtime for employees, has greater accuracy, and completes more quickly.

Informational Consistency

Access to information is not just a matter of ensuring its availability. Without consistency there is confusion, therefore people from many different departments should see the same information if they make the same request.

In many companies ‘information islands’ develop over time. Each department develops its own version of the contractor database, its own handy application in Access, its own statement in Excel, its own folder with contract templates, etc. for its own needs. Firstly, there is a lot of wasted work as very similar systems are created. Secondly, by defining these systems by how they differ from each other (rather than designing for commonality and adding complexity as necessary) you are defining data inconsistency into your systems at the design stage. Even if the information is available to the entire organization, there is a problem with the variety of applications that the organization has developed over the years. These programs, some smaller and some larger, are accessed differently; some through a web browser, some as desktop applications, some as a folder on a network drive, some only work on Windows computers because there is no Mac version, etc. Logging in requires the use of different accounts, with logins and passwords that are updated with different frequencies. All of this must be managed by an administrator – by granting, revoking, and modifying permissions – which also takes time and hinders access. This is all part of the daily routine for many workers, isn’t it?

So, finally, how do I know if my company is ready or not?

Electronic document workflows are often seen through the prism of individual processes, e.g. cost invoices or vacation requests. However, this is just the tip of the iceberg. Deploying electronic document workflows means:

• achieving a higher level of organizational development
• a new chapter in your company’s history
• organizational changes
• increasing the effectiveness and efficiency of many workers
• facilitating and improving the quality of work
• reducing mistakes
• reducing bad decisions
• solving many small irritating problems
• accelerating the flow of information
• new methods of communication
• new possibilities

Together these things add up to increased organizational efficiency and, ultimately, to increased competitive advantages.

With this in mind, it’s worth looking at your entire organization. Ask your employees what is currently bothering them at work, what delays them, what they most often have problems with. Ask yourself what is keeping your organization from progressing, what is preventing you from taking the next step forward. It is possible that such an analysis will show that everything is working well at your company and that none of the problems outlined above are of concern to you. However, if you see some barriers to scaling your business that seem like they are too big, try to think of a way around that barrier. It is very possible that the path around that barrier can be found in the steps of an electronic document workflow. Check which of your problems can be solved by AMODIT.