Andrew Pery

1. Document Capture for Sales Order AutomationThe Value of Moving Document Capture to the Front Office Andrew Pery

2. Presentation Context • “…physical assets are generally subject to decreasing returns while Knowledge assets generally enjoy increasing returns because knowledge is cumulative -- the more intensive the use of knowledge, the larger the benefits…” • Baruch Lev. Intangibles, Management Measurement and Reporting. Brookings Institution Press, 2001.

3. Paper Consumption Trends Average Worker is estimated to use a sheet of paper every 12 minutes. Use of email has resulted in a 40% increase in the use of paper. Worldwide growth of 600% in desktop printers since 1998. Global consumption tripled in the past three decades and is expected to grow by 50% by 2010.

4. Economic Implications • Storage Space • $ 40,000 to $ 60,000 to store 2 million pages of documents in file cabinets • Lost Documents • 3% of documents are misfiled, 80% eventually lost • Cost of misfiled documents is $ 120 per document • Postage • Paper and Postage constitutes 70% of customer billing costs. • Customer Relations • 37% of time is allocated to discrepancy resolution and payment reconciliation

5. The Bottom Line • “A Lawrence Berkeley Labs study estimates that the cost per ton of handling paper is: • 20 times the cost of purchasing it • 200 times the cost of throwing it away • Automated processes can increase productivity by 50 percent or more”

6. The Changing Workplace Work Styles Percentage of individual’sperformance that will depend on group input Source: Gartner

7. Capture Device Proliferation Camera Phones 130M units in US 3-5+ megapixel cameras with optical zoom will become the standard on phones within the next 1 – 2 years52M camera phones with 3 or more megapixels worldwide in 2007622M by 2011 Device Proliferation & Maturity MFPs 21.2M units in US 14% growth (2006 – 2007)Becoming standard part of all office infrastructure Desktop Scanners 370K units in US$350M in US (2007)22% growth from 2006 to 2007

8. Document Capture Trends

9. Where Does Scanning Occur? Key Finding: Scanning is frequently introduced late in the process—a missed opportunity to automate data capture, workflows or information exchange. (% of respondents by choice)

10. Where Should Scanning Occur? 71% respondents indicated that scanning should occur at the beginning of the business process, with intelligent document recognition, extraction and notification reducing processing costs. Agree/Strongly Agree % of respondents Source: IDC

11. Order Processing Why Automate Order Processing?

12. Business Challenges of Order Automation • Fax image quality (90% of orders are faxed) • There is no such thing as a typical, standard purchase order • Sales orders vary in format between customers, especially with tabular data, and can span multiple pages • All sales orders have common elements, but there are too many different formats to template • Capture of line item detail is an absolute requirement

13. Sales Order Processing: Key Messages • Reduce the order to cash cycle • Start workflows as quickly as possible • Reduce exceptions – wrong shipments • Control the process as soon as possible • Improve customer relations

14. Order Processing Cycle Improve customer relations by confirming receipt of order OrderApprovalWorkflow Data Capture SeparationClassificationExtraction Improve Data Quality Detect Missing,Incomplete,or Wrong Data ERP Validate Order Data Process-Ready Data No error detected Dispute Resolution Confirmation

15. Order Processing Cycle NOTIFICATION Improve customer relations by notifying them of errors OrderApprovalWorkflow Data Capture SeparationClassificationExtraction Improve Data Quality Detect Missing,Incomplete,or Wrong Data ERP Validate Order Data Error detected Dispute Resolution Notification

16. Kofax Solution to Automate Sales Order Processing • Enhance Process Transparency • Improve Data Quality • Reduce Manual Labour • Integrate Electronic Sales Orders • Control Paper Flow 2 3 4 5 1 + Workflow = Automate the wholeprocess & deliver value at every step!

17.  Early Scanning • Control Paper Flow 1

18. Distributed Capture New York Seattle • Scan at Document Origination • Central and distributed capabilities Phoenix Atlanta

19. Image Quality Effective scanner throughput: • User interface/Image processing/speeds and feeds Effective paper throughput: • Increase image quality/Reducefile size/Data ready Effective people throughput: • Ease of use/Focus on business process Kofax VirtualReScan

20. Business Challenges Step 1 is important because… Most invoices are still received via postal mail, often through different entry points.. Forwarded manually to Order Department Are lost / misplaced Delayed processing No visibility of outstanding payments

21. Automatically extract invoice information  Includes fax, email (& trailing documents) • Reduce Manual Labour 2

22. Extraction and Classification Supplier 3 Supplier 1 Supplier 2 1. Classify Document Type • Invoice • Credit Note • Purchase order • etc

23. Extraction and Classification 2. Extract and validate information • 3. Feeds ERP systems (SAP, Oracle, Lawson, etc)

24. Business Challenges Step 2 is important because... Data has to be manually keyed into LOB applications. Manual intervention results in Processing delays High / random error rates Separate manual processes reg. email and fax Elevated costs Negative impact on relationship with suppliers

25. Main Benefits Reduced AP labour(time saving) Significant costreduction Prioritization of invoices (for early payment discounts, ...) Increased supplier satisfaction: faster processing & payment times Higher employee satisfaction, less frustration

26.  How to make my customers send electronic sales orders? • Integrate Electronic Sales Orders 3

27. Business Challenges Why is it hard to on-board most suppliers? Lack of IT skills to setup EDI EDI is a very costly and complex solution. Cost to supplier between $8k and $15k Limited resources to roll out EDI

28. Kofax e-Transactions eInvoiceSender eInvoiceReceiver Instant electronic delivery (2-3 sec) Seller Buyer Accounts Payable System Invoicing System ERP System ERP System Postal Service(2-3 days) Open, sort, distribute mail (1-2 days) EnvelopeStampingMail

29.  Send receipt confirmations Trigger exception notifications • Enhance Process Transparency 4

30. Business Challenges Step 4 is important because... 10% – 15% of suppliers place inbound calls relate to the status of the transaction Up to $30 per call Have you received my order? Is the order OK? Has my order been processed? When will shipment occur?

31. Leverage communication to initiate exception handling (outsource to purchaser) Help to automate the matching • Improve Data Quality 5

32. Business Challenges Step 5 is important because... It is hard to match sales orders due to: Data errors Business logic errors Invoice conformity issues Extraction related issues AP personnel have the burden to manually fix the problem

33. Automated Order Processing Features • Import order from fax server • Extract order information • Validate part numbers, unit prices, etc. • Locate the customer number • Create order in the ERP system • Route order to appropriate workflow for fulfillment

34. Benefits of Automated Order Processing • Reduces order fulfillment time and cycles • Streamlines efficiencies • Reduces costs • Enhances accountability, • Accelerates business processes • Optimizes corporate performance

35. Use Case: Promotional Products Company • Use Case • Sales orders • 100,000 customers, 300 fax lines • Faxed orders • Business Problems • Lost/misplaced orders • Customer service back log • 11 individuals processing orders (3 just to confirm customer number) • Service-level agreement of 48 hours to fulfill an order • Kofax Solution • 24-hour turn-around time over 48 • Automatic confirmation/notification of incorrect orders

36. Use Case • Promotional manufacturer (balls, hats, calendars, awards, etc.) • Multi-million revenue, 5 operating divisions • 300 fax lines, 100,000 customers, processing 500-650 orders daily • 95% of orders received by fax, 4% email, 1% hard copy • 25% of faxes arrive at the wrong division/group • 25% of orders result in a customer call asking, “Did you get my order?” • 11 individuals processing orders (3 of them just to confirm customer number) • Service level agreement of 48 hours to fulfill an order

37. Integrated Product Portfolio VRS Image Quality Kofax Capture CaptureFront-OfficeBack-Office TransformIntelligentClassification DeliverRelease to MultipleBack-Ends KofaxDocumentExchangeServer KofaxExpress KofaxTransformationModules Integrationswith hundredsof systems Kofax Communication Server Notification DataValidation

38. Order Processing Questions?

39. Why More Services Than an Invoice Project? • Order processing is dependent on line item detail • Quote includes the definition of up to 75 top customers • Order processing requires separation of orders • Without the inclusion of Kofax Transformation Modules Professional, scripting is added to separate orders upon the occurrence of a new purchase order number • Fax receipt date must be parsed from fax server data file • Lookup of customer number • Notifications • Internal • External • Business rules around Ship To Address • Higher project manager involvement

40. Thank You ! For further information, please contact: Joanne Oldfield Director, Professional Services Americas Phone: 949 727-1733 ext. 475 Email: joanne.oldfield@kofax.com