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

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

2. 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

3. 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

4. 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

5. 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?

6. 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.”

7. The 7 Steps to Go Paperless Why are you here?

8. 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.

9. 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

10. 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?

11. The 7 Steps to Go Paperless It’s like there is a wall between us

12. 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.

13. 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!

14. The 7 Steps to Go Paperless The 7 Steps to Go Paperless

15. The 7 Steps to Go Paperless Step #1 Understand the Problem

16. 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

17. 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

18. The 7 Steps to Go Paperless P2P Process – User View

19. The 7 Steps to Go Paperless Purchasing Process – Real World

20. The 7 Steps to Go Paperless Receiving Process – Real World

21. The 7 Steps to Go Paperless AP Process – Real World

22. The 7 Steps to Go Paperless Step 1 Exercise List the top 10 problems / bottlenecks of your Purchase-to-Pay process from your perspective.

23. The 7 Steps to Go Paperless Step 1 Exercise • List the top 10 problems / bottlenecks of your Purchase-to-Pay process from your perspective.

24. 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:

25. 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

26. 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

27. The 7 Steps to Go Paperless Step #2 Identify Goals and Requirements

28. 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

29. 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

30. 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?

31. 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.

32. 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: __________

33. 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!

34. The 7 Steps to Go Paperless Step #3 Map the Current Process

35. 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

36. 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’

37. 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?

38. 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… ?

39. The 7 Steps to Go Paperless BREAK?

40. The 7 Steps to Go Paperless Step #4 Design the Solution

41. 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

42. The 7 Steps to Go Paperless Example Accounts Payable Before:

43. The 7 Steps to Go Paperless Example Accounts Payable After:

44. The 7 Steps to Go Paperless Step #5 Calculate ROI

45. 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

46. 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)

47. 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

48. 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

49. 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

50. 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)