Consider Risks, Benefits Of Document Management Style

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Credit unions wishing to deploy an enterprise-wide document management system have many products from which to choose, each with its own strengths and weaknesses. However, one weakness that most of them have in common is the use of batch scanning to digitize paper documents.

Regardless of the particular system, the process is always the same. Paper documents are crated up and shipped off to a centralized scanning area, where dedicated employees scan the documents and, as part of the process, manually index them. While this is arguably a simple approach from a deployment standpoint, it's clearly not the best approach from an operations standpoint. In fact, batch scanning is fraught with potential problems, both large and small.

Extra Staff

In a batch-scan environment, a credit union needs dedicated employees whose only job is to scan and manually index paper documents. How much do these extra employees add to the credit union's overhead?

When salary, other payroll-related expenses, training, turnover, office space, etc., are all factored in, it's not unreasonable to estimate this expense at $30,000 annually per employee. Depending on the size and nature of the credit union, it may well need two, three or even more employees assigned to this function.

That means in a modest operation that requires one or two scanning employees, extra staffing can add $30,000 to $60,000 to the credit union's overhead costs every single year. What's more, this is an expense that can only increase. Over time, employees expect raises. Likewise, as the operation grows, it may require additional scanning staff. Over a five-year period, this can contribute $150,000 to $300,000 or more in extra staff expenses.

According to industry trade groups such as the Association for Information and Image Management, a good portion of a document's usefulness occurs in its first 48 hours of existence. However, in a batch-scan environment, the turnaround between creation and scanning is typically in the area of 72 hours and can be as long as 15 days.

The math here is as simple as the problem is apparent. If your employees are likely to need a document within 48 hours of its creation, but those documents aren't available in your imaging system for 72 hours after creation, your employees don't have access to the documents they need, when they need them. Sometimes the employee's only alternative is to retain photocopies of the documents sent for scanning. This, of course, negates the whole idea of a paperless credit union.

This creates obvious inefficiency and frustration at the employee level. However, perhaps even more important, this creates potential bottlenecks in member service. Would a member in search of a document rather hear, "I'll call you back in two days," or, "I'll have that document in just a moment"? In short, batch scanning ultimately hinders member service.

Security of Documents

Most credit union executives would agree that their paper documents are every bit as mission-critical as the data stored in their core processing systems. With that in mind, it's interesting to note the disproportionate amount of time and money that most credit unions put into securing their data compared to securing their paper documents.

This isn't to suggest that credit unions should expend less effort on securing data. On the contrary, most credit unions need to put more effort into securing their paper documents. A comprehensive document management system is a great way to do just that. The problem is that when documents sit in a box for three or more days waiting to be scanned, they are put at significant risk.

Some of these risks are obvious. For example, documents can be lost in transit between an operational department and the scanning department. This loss can be temporary, or for all intents and purposes permanent. What's more, something as simple as an errant cup of coffee can destroy a whole box of documents before they're scanned.

Once the documents are scanned, they're safe, right? Well, not exactly. Remember that batch scanning includes manual indexing as part of the process. That makes them subject to human error. Even with the best of employees, some documents are destined to be misindexed. In other words, a document may be safely scanned into the system, and yet that digital copy may be lost forever. Loss of documents is so common that there's an industry term for them: orphaned documents.

Best Practices and the Logical Alternative

In a best practices environment, documents are available immediately and permanently. In a credit union setting, this can only be achieved through two equally important tactics. First, documents must be scanned into the system immediately as they are created or received into the credit union. Second, the document management system must do the indexing.

These objectives can only be achieved through decentralized scanning. This is a trend across the entire document management industry. According to an article published by AIIM a few months ago, "Even as organizations strive to standardize on technologies for use across the enterprise, there is a need to support decentralized user scenarios. We expect to see growth in decentralized information capture, such as field offices scanning images or capturing electronic forms into a central system-offloading large, centralized capture operations and reducing shipping costs and error-prone manual processing."

The advantages of such a system are both clear and significant. When documents are scanned as they are created, the need for dedicated scanning employees is eliminated. As already noted, this could represent a savings of $150,000 or more over a five-year period.

Likewise, when a document is immediately scanned and auto-indexed, it becomes part of the system immediately. Then any employee anywhere in the credit union can access that document whenever they need-including any time during those critical first 48 hours. The security risks associated with batch scanning also vanish.

The bottom line is this: Easy deployment is only one component of a best-practices approach to document management. A comprehensive solution combines that ease with instant availability, 100-percent indexing accuracy, and the highest levels of document security.

No single document management solution is right for every credit union. However, a doctrine of best practices is always right for every credit union. As your credit union evaluates various document management strategies, be sure to consider how each system will help to achieve all of the objectives outlined here.

Hal Tilbury is CEO of Bluepoint Solutions. For more info: www.bluepointsolutions.com.

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