Process to Profit

March 28, 2007 1 comment

I’m a programmer. Not an artist.

Sometimes I fail to remember this simple fact. On occasion, I try to play artist. Especially, when I take a look at my corporate logo and realize…”man, that kind of sucks”.

It is the tragedy that happens when a software engineer gets his hands on a copy of Photoshop. I figure I would just “tweak it a bit”. A few hours, a pot of coffee and a sunrise later I realize that maybe I should recruit a pro.

So I signed up for the guys (and gals) at Logoworks to redo my logo. I heard they had a unique process for streamlining the creation process. As a workflow guy, I figured I had to check it out.

I have to say I’m impressed. I haven’t actually seen the finished product yet. (I’ll make sure to share the prototypes with everyone). However, their process of gathering requirements is great. They start with a step-by-step wizard to find out what you want – colors, shapes and text. Then they show you existing logo samples and ask what you like and dislike. In only a couple days, you get to see prototype samples. Then, the samples are routed between the customer and designers for review. The bottom line is a new paradigm that provides professional designs without massive cost.

Typically, companies use workflow to streamline and reduce cost. I spend a lot of time automating accounts payables departments. So, the primary focus is on minimizing overhead. This is an amazing example of turning process into profit. The team at Logoworks uses workflow to innovate the delivery method.

Categories: Articles

Document Imaging: Hosted vs. Installed Solutions

February 28, 2007 Leave a comment

Hosted solutions are often called Software as a Service (SaaS) or Application Service Providers (ASP). Such systems offer a diverse array of solutions that can be made available quickly and with a low cost. There are many issues to consider when it comes to a document imaging and workflow solutions. Here are a few of the pros and cons.

Low Startup Cost
An enterprise-wide document imaging solution may cost you thousands of dollars in man-hours, software licenses, and hardware infrastructure. A hosted solution lets you bypass much of the start up cost and begin reaping ROI faster.

Total Cost of Ownership
Most hosted solutions charge based upon volume – based either on page count or disk space utilization. You will also be charged depending on how long you need to retain your documents (often called a retention schedule). There may be charges for the number of users that access you documents. Depending upon these factors, you may reach a tipping point where the installed solution has a lower TCO.

Shorter Project Schedule
The initial time taken to launch a hosted solution may be a fraction of the time needed to organize and implement an installed solution. Generally, hosting providers have the infrastructure in place to quickly launch a project. You could be searching for documents online in a few days. An installed solution may take weeks or months to implement.

Anywhere – anytime – anyone. Hosted solution has the benefit of being available to all your people, regardless if they are in the home office or abroad. Most are available from a web browser. Others may offer dial-in access via terminal services or Citrix. An installed solution may offer this benefit, provided your company has the infrastructure in place. Of course, such an infrastructure will add to the total cost of ownership.

If you are taking advantage of workflow in addition to document imaging accessibility could be even more important. Getting the right information to the right people becomes easier when your people can get their information from anywhere.

Depending upon the nature of our documents, compliance issues might make the decision for you. No hospital will be comfortable archiving medical records with a hosted solution. The demands of HIPPA require such organizations to keep tight control over such sensitive documents.

Even less sensitive documents require some level of security. Invoice, purchase orders and human resource documents all contain sensitive information. Most reputable hosting providers have secure, locked, facilities. Not to mention technical staff that maintains needed security patches. Considering that usually these documents are kept in simple file cabinets, it is easy to argue that a hosted solution is far more secure.

You might be able to reduce operating cost by letting others process your imaged documents. An interesting solution is to allow the hosting solution provider to receive your documents via fax. They could then provide your ERP system with the required data and a URL to the associated document. Workflow could allow outsourcing personal to easily communicate with your team members to resolve problem transactions. I am not a proponent of outsourcing office jobs overseas. However, I know of a few well qualified office workers in middle-America that would be more than willing to do your data entry work!

A hosted solution may be more difficult to integrate with your installed solutions. A useful trick is to streamline data capture by auto populating some data with a lookup. For example, while data entering the information from an invoice the operator may enter the purchase order number. The P.O. number could then be used to lookup the associated vendor. Since a hosted solution is not installed at your location, the lookup would be more difficult to accomplish. This problem can be resolved; however, such scenarios should be taken into consideration.

There is not just one simple answer as to which solution is right for your company. Consider how both flavors may benefit your company. A hosted solution might allow you to start using the system in a few days and opens the possibility of outsourcing to reduce cost. However, an installed solution might allow for tight integration with all your legacy application or give you more control over your information. Feel free to contact me if you need help making these decisions. I’d be glad to help.

Categories: Articles

Data entry is a necessary evil – Do less of it!

January 11, 2007 6 comments

We have thousands of paper documents with valuable information. Before we can use that information, someone needs to take the time to key the data. If you work with people whose days are consumed with tedious data entry, consider simplifying their workday with automated data extraction. Data extraction allows you to reduce manual data entry, increase throughput and often even reduce errors. Such technology is referred to as OCR, ICR, or MICR. It is easy to see how someone interested to automatic data extraction can get lost in a sea of acronyms. Here is a brief overview of some data extraction technologies and how they may benefit you.

Quick Note: Data extraction technology does not completely eliminate data entry. If you get a slick salesperson that promises OCR will magically make your data entry needs disappear, do the following. Allow him take you out to a free meal (order the lobster), smile and nod at everything he says and then never return his phone calls. It is the least you can do to someone that knowingly deceives you. OCR technology will allow your people to do more work in less time – making them more productive.

Image capture is the first step in electronic data capture. Image capture is the process of converting a paper document into an electronic image. Usually these documents are stored as Tagged Image File Format (TIF) or Portable Document Format (PDF). There are many benefits to document imaging beside automatic data extraction. I’ll cover those in later articles.

The image is typically captured with a scanner. There is a wide variety of scanners available – from single workstation (five pages / minute) to full-scale production scanners (fifty pages / minute). Of course the price reflects the features of the scanner.

Many companies have electronic fax servers such as RightFax or Biscom. These fax servers convert incoming faxes into images automatically. These solutions can be very costly. If you are looking for a low cost alternative to expensive fax servers consider email-based fax solutions such as eFax. These solutions send inbound faxes to an email address of your choosing.

Optical Character Recognition (OCR) software reads an image and converts the information into digital data. Such software is capable of processing machine print, handwritten or even cursive text. OCR of handwritten text is often referred to as ICR (see below).

OCR of machine written text is largely considered a solved problem and yields high accuracy. Clean machine text may conservatively reach 95% character accuracy. In the real world documents are rarely perfect when they are scanned. Lines running through text or smudged ink can reduce the accuracy level. However, significant productivity gains are typical.

Intelligent Character Recognition (ICR), or Handwritten OCR, has come a long way in the last decade or so. Accuracy of handwritten data extraction is enhanced using constrained print fields. You may receive recognition rates of 80 to 90%.

ICR implementation uses constraint print fields to maximize recognition rates. These print fields encourage the user to separate each character and prevent written text from “running together”. Here are a couple examples of print constraint fields.

Example Print Fields

Magnetic Ink Character Recognition (MICR) is used by the banking industry to facilitate the processing of checks. MICR characters are the odd looking numbers and symbols written at the bottom of all our checks – often called the MICR line. In addition to the special font the MICR line is written using special magnetic ink. The ink allows the text to be accurately captured – even if someone writes over the MICR line.

Example MICR Line

After a data has been extracted, the results shall require review. This step is necessary to ensure the data is accurate. Suppose an OCR program needs to extract data from the following region. Notice the smudge in the fist zero.

Example OCR Region

You and I can easily recognize the smudge and understand the zero is a zero. An OCR program, however, may not be so sure. The OCR application may recognize the smudged zero as an “8”.

The person reviewing the extracted data will have an opportunity to change the “8” to a “0”. This should require only one keystroke – as opposed to the four needed to data enter “2100”. This reduction in keystrokes is a primary source of productivity gains. There are other reason these techniques increase productivity. I’ll cover these in later articles.

If your people spend their days entering data, you should consider data capture as a strategy for increasing productivity. Such technology allows you to focus on the core business at hand – running your business – instead of pounding away on a keyboard. If you have any questions about how to best take advantage of OCR technology, feel free ask.

Categories: Articles

Drive Savings with Account Payable Automation

November 18, 2006 3 comments

Accounts payable departments require tremendous overhead – without generating revenue for an enterprise. For this reason, many view the AP department as a revenue sinkhole. However, your AP department may provide an opportunity to drive dramatic reductions in operating expenses.

Most account payable departments rely on expensive paper-based methods. Data entry operators key data from stacks of invoices into their ERP systems. Managers receive photocopies of invoices for approval via inter-office mail. Finally, invoices are archived for a decade in room full of file cabinets – or worse, sent to an off site storage location.

An average invoice cost $10 to process (IAPP, 2003). Consider an organization with a volume of 25,000 invoices per month. The overhead of paying these invoices will reach 3 million dollars per year. Organizations have reported between 40% and 60% savings by implementing an invoice automation solution (Aberdeen Group). If we assume only a modest 20% reduction in cost, this AP department can yield $600,000 in savings per year. Even a company that processes 5 thousand invoices per month can benefit from AP automation.

I shall discuss strategies that can be used to achieve such success in later posts.

Categories: Articles

Corporate Espionage

November 9, 2006 4 comments

A couple weeks ago I attended the Lawson Mega User Group (MUG) conference in Indianapolis. This conference included Lawson users and vendors for both the Lawson Great Lakes User Group (LGUG) and Lawson Mid-America User Group (LMAUG).

The keynote speakers were Lawson executives speaking about the new international corporate structure. Lawson acquired Intentia International, an ERP solution provider based in Stockholm, Sweden late last year. Their combined enterprises launch Lawson into the number three spot for ERP solution providers, behind SAP and Oracle.

Many of my customers utilize Lawson for their ERP solutions. Next year I will most likely be an official vendor for a few user group events. This year I spent a lot of time researching my competition in the document imaging arena.

I have to admit, I felt like I was engaging in pure corporate espionage. In my defense, I was very up-front with all the other vendors. There were two heavy-hitters in the imaging market: ImageNow and BasWare.

ImageNow has been a partner with Lawson for many years. They provide a solution to seamlessly integrate document imaging with Lawson. They appear to be a good solution for companies looking only for document imaging solutions.

BasWare, on the other hand, has a focus on automating the accounts payable processing of vendor invoices. They do not have an integrated retrieval solution for Lawson. In other words, a user will have to user a separate application to view a document.

I would consider DocEdge closer to BasWare than ImageNow. However, this gives me a lot to think when designing the next round of feature enhancements. A solution that provides integrated document imaging and AP automation would be received very well by the user community.

Categories: Articles

The Consultant Score Card

October 27, 2006 1 comment

A recent post on Mark Lee’s Blog, titled “Fees, fees, fees” brought up an interesting point about the focus on consulting firms focus on the holy grail of billable hours:

I recently heard of a company that uses a very ingenious method for rewarding its consultants for finishing a project. Typically, a consulting firm will focus on the number of dollars earned with professional services. A consultant would be given a bonus if they recorded an exceptional number of hours ($$$).

This firm used a customer-centric method for rating their service. Instead, they would give the customer a score card and ask them to rate the service and benefits of the project. The consultants would then get a bonus based upon the results from the score card. The customer would set the bonus – not the billable hours.

I like this approach because it creates an environment where the consultants focus on customer satisfaction – not just raking in the billable hours. Some consultants see a customer as a short-term opportunity to earn revenue. A score card approach shifts the focus towards creating long term, reoccurring customers. In the long run, this approach is far more beneficial for both the consultant and customer.

Categories: Articles

Keep it Simple

October 19, 2006 2 comments

Einstein once said, “Everything should be made as simple as possible, but not simpler.” I take this idea to heart every time I analyze a problem. Be it a business solution, or a personal dilemma. Any creative creation can benefit from this idea.

For example, a fiction author does not submit his first draft to the publisher. Of course they revisit their work to ensure that their story is complete and consistent. An author also tries to edit their work to remove unnecessary content. They strive to remove any unneeded words that add length without enriching the story.

I believe this effect especially applies to workflow implementations.

Some people implement their workflow system as to mirror their existing day-to-day manual procedures. “We’ve been doing it this way for years”, they may say. This attitude may result in a deliverable that is bloated with unnecessary steps.

I’ve asked customers to create a step-by-step list of their current process. Several procedures include a useless step. A report may be printed – only to be immediately discarded. A data entry step that must be completed; however, the data is never used.

Part of this is due to a natural resistance to change. However, some workflow implementation may be improved by taking a different look at the process. For each activity ask yourself (or the customer), “what would happen if we skipped this step?”

Anyone can throw software (and money) at a problem and hope to streamline their process. However, don’t forget to take the time to look for ways to simplify your work day.

Categories: Articles