Industry news

Christina Bowe from Perceptive Software discusses the myths and benefits behind this approach

AIIM recently surveyed a range of organisations to ascertain what stage they were at with digitising paper processes. The results revealed some surprising statistics, including that 40 percent of the organisations questioned stated they process over 1,000 items per day and for nearly a fifth of them this volume of paper is still increasing. This confirms that while we’ve been talking about the paperless office for many years, it’s still not a reality.

Organisations are subject to a never ending daily deluge of documents. Orders, payments and contracts make up just part of this and many are struggling to deal with processing this influx of documents. This is not just physically managing the routing and the classification, but extracting the business critical information containing in these documents. Indeed, 74 percent of the organisations quizzed stated they have business improvement campaigns that would benefit from paper-free processes but 18 percent haven’t yet begun implementing a plan to digitise processes.

Organisations are fully aware of the business risk that this increasing volume of information stuck in unstructured, unmanaged documents causes. It’s all essential information but it becomes practically impossible to manage when 80 percent of it is caught up in inefficient workflow processes. Not only is the manual classification of this extremely time-consuming, but as with anything involving human input, there is a risk of accidental error which can often be costly to resolve. The value lies not just in extracting the content, but in extracting the context.

Furthermore, not being able to get your hands on information quickly and efficiently means that opportunities and information gaps can be overlooked and a company’s ability to respond to its customers’ needs is significantly affected.

A digital mailroom offers the antidote to much of the above, as the entry point to the organisation for essential documentation. This manual sorting of data and the methods of doing so have evolved in recent years to become even more intuitive and efficient. Nowadays there are intelligent capture-based solutions available that allow scanned documents to be automatically classified, according to their content, which significantly reduces the need for any manual intervention.

An ‘Intelligent Data Capture’ solution can extract intelligence from unstructured or semi-structured documents like invoices, sales orders and inbound correspondence — in fact, virtually any type of document. It sorts documents based on their content, lifts critical information based on its context, validates it, reconciles it, then passes it to core business applications. Because it uses advanced pattern recognition techniques that work like the human mind, Intelligent Data Capture doesn't need to take a template- or rules-based approach to data capture: instead, it learns from just a small sample set of documents and is then able to process information received, regardless of the format.

The whole process can be managed from end-to-end, with documents imported, OCR (optical character recognition) used to classify information and then information extracted and validated before being exported. These intelligent solutions can be put into action from the very beginning of the process and can automatically differentiate different forms of mail regardless of the layout or format, and then process them according to the needs of the business.

Digitising your mailroom processes brings many benefits; primarily it means the right information can be put in the hands of the right people quickly and securely. Access to information is dramatically improved which in turn enables a more smoothly run and efficient business, something which positively impacts on a company’s bottom line. By removing all the tedious and time consuming steps previously necessary for a business to gather and prepare their documents, employees’ time can be freed up to get on with more valuable tasks.

As mentioned, organisations can face many problems thanks to inadvertent human slip ups too. With a digital mailroom, documents can be securely stored from the very beginning and any chance of losing a document is greatly reduced. Automating the entire process means little need for manual intervention and therefore a far slimmer margin of error. Furthermore, with digitisation, organisations can ensure that they are compliant with both existing and newly introduced regulations. Transforming paper documents to digital gives greater visibility throughout the organisation; this is particularly important in departments such as finance, which are constantly under pressure to ensure there’re adhering to regulatory changes. Then in turn, customers can be confident that they are being treated in a fair and consistent way, thus ultimately helping to build loyalty.

Despite all these clear benefits, there are still many businesses lagging behind and relying on paper-heavy processes for their day-to-day workings. Some fear the process of digitising their mailroom will be far too complicated. This is where businesses can look at outsourcing their mailroom needs, allowing a company to handle all the complex challenges needed to implement a digital mailroom.

We have seen digital mailroom techniques develop steadily over recent years. Now with the intelligent tools available to assist with the automation of processes, it is a lot quicker, efficient and cost effective to sort through incoming documents. Without this in place, organisations still risk errors occurring from manual intervention, which can be damaging to the business and its reputation.

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Centrica, the owners of British Gas, have revealed a 2 per cent drop in profits over 2013 after rising supply costs for electricity and gas reduced revenue.

The energy giant announced that overall operating revenues fell to £2.695 billion due to a combination of factors including rising costs, a increasingly challenging market and a fall in customer numbers with business and residential customer accounts lower by 1 and 2 per cent respectively year on year.

The main UK energy companies are all expected to see a reduction in customer numbers towards the end of 2013 due to negative PR surrounding rising energy bill costs.

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Drinks company Diageo has selected Tata Consultancy Services (TCS) as its new IT partner.

TCS will provide infrastructure services, data centre facilities, servers and support services. TCS will also be tasked with delivering new and innovative services and technology.

TCS will provide IT services to Diageo’s brands including Johnnie Walker, Bushmills, Smirnoff, Baileys, Captain Morgan, and Guinness and to 36,000 staff located throughout 180 countries. The new contract replaces Diageo’s previous outsourced IT service delivered by CSC.

Diageo said that the deal with TCS would provide a: “"enhanced self-serve capability to deliver an improved end user experience".

Diageo CEO Ivan Menezes, said: "Working with TCS, I believe that we can make a significant step change in the way that IS supports our 36,000 employees around the world, giving them the freedom and agility to drive growth for Diageo in each of our markets.”

The RBS is expected to announce details of a major reconstructing programme which could see 30,000 positions being cut over five years.

The programme will see the downsizing of the banks corporate and investment banking arms according to details revealed by the Financial Times. A new strategy is expected to move focus away from U.S. and Asian markets, resulting in the loss of 11,000 jobs from the banks investment division.

The reconstruction strategy coincides with RBS’ move to float parts of the business on the market in order to drive savings.

The announcement is expected to be delivered next week along with the banks full year financial results.

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Wipro recognized as a winner of the Global, Asian and Indian MAKE (Most Admired Knowledge Enterprise) Awards for 2013.

This is the ninth time Wipro has been recognized as a leading Indian organization.

The MAKE Awards are administered by Teleos, an independent research firm based in the United Kingdom. A panel of Global Fortune 500 senior executives and leading experts selected the winners, in each category.

Rory Chase, Managing Director of Teleos said: “Wipro Limited consistently ranks in the top tier of global knowledge-driven companies. The firm excels at managing its intellectual capital - especially human capital - and is noted for its intense customer focus. Wipro is using its entire enterprise knowledge to gain the competitive edge."

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New research has placed the UK as one of the world’s leading user of multi-sourced outsourcing contracts, adopting the outsourcing approach at nearly four times the rate than the US.

The research by the Information Services Group (ISG) found that nearly 44 per cent of all outsourced functions in the UK are divided between at least five service providers, compared with 36 per cent of outsourced contracts in Australia and New Zealand, while in the US only 12 per cent of contracts were found to involve five or more providers.

The research revealed that only 6 per cent of UK based outsourcing contracts were solely single source.

While the UK’s uptake of multi-sourced outsourcing outperformed uptake in the US and the two pacific countries, European countries including Spain, Portugal and Italy were also found to be stong advocates, with multi-sourcing appearing in 56 per cent of outsourced contracts, multi-sourcing was also found to be employed within 65 per cent of all outsourced contracts in Nordic counties.

President of ISG North Europe, John Keppel, said: “More mature markets, like the US, have previously embraced multi-sourcing but realized it can be difficult to manage the numerous supplier relationships and have swung back towards a model with fewer providers. However, the UK is still clearly in the honeymoon phase and is employing more sophisticated management models, such as the Service Integration and Management (SIAM) method to maximize efficiency.”

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BAE Systems shares have fallen by 9 per cent after the defence giant recorded a net profit drop of 82 per cent.

The company recorded profit after tax of £176 million over 2013, compared to £948 million the year previously following western defence cuts, with business particularly affected in the U.S.

BAE said: "As certain areas of spending were protected from these reductions, such as military personnel accounts, the budgets funding much of the US defence industrial base are likely to be disproportionately impacted”.

BAE warned that it expected further profit drops for it pre-tax earnings in 2014 of around 7.5 per cent.

The profit fall comes despite a major deal with Saudi Arabia for Typhoon aircraft valued at £18.18 billion.

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BAE pointed to the continuation of “challenging market conditions” from reduced government spending and increased financing costs.

Only 10 per cent of SMEs have optimised websites for mobile usage according to a new survey, with £77 billion being lost in annual revenue from a failure to upgrade website infrastructure.

The survey carried out by Impact Research on the behalf of digital marketing firm hibu revealed that 45 per cent of the total 900 SME respondents do not have a website despite an understanding that such a capability had significant sales and growth potential.

The research concluded that: “the opportunity for SMEs and mobile is huge and we hope it will spur many into action. A simple change to their digital presence could unlock significant new revenue.”

Matt Anderson, chief digital officer at hibu, said: ““Local businesses need a site that renders well on phones and tablets, or they are missing out on dramatic growth because ‘on-the-go’ people around them can’t see their website well.”

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Although some may consider the business adage, “You can’t manage what you don’t measure,” a cliché, this doesn’t make it any less true. It is a lot more difficult to judge whether something has been a success or a failure when there are not clear benchmarks to judge against.

While many in the outsourcing world would think this has nothing to do with them, believing that everything is covered in the service level agreements (SLAs), this is not really the case. Our State of Relations in Outsourcing report exposed many gaps in reporting between outsourcers and their clients and the need to improve the management skills in outsourcing relationships.

As touched on in a previous blog the move towards service integration and management (SIAM) is throwing up new challenges for those managing outsourcing processes. While our research found 75 per cent of organisations manage the SIAM process internally, only 11 per cent feel extremely confident that their organisation has the skills to do so effectively. SIAM sees many different suppliers collaborating to deliver services to a client and effective dialogue with and between the suppliers is essential to success. Each must be familiar with the others’ commitments to ensure collaborative support is received.

As well as this, the management layer in SIAM needs to receive and consolidate timely information and to run an analysis against SLAs and key performance indicators (KPIs). They will need to compare performance levels and, crucially, understand the cause and impact of the diverse dependencies that now exist.

Our research also found that while cost-reduction was the most popular original business motivation for outsourcing (65 per cent), this doesn’t really paint the whole picture of what clients are looking for. When asked to identify which was the most critical task outsourcers were involved with in the organisation, cost-reduction was considered the most critical by only 17 per cent, with the most popular area being strategic alignment, on 26 per cent. It’s clear that clients are looking for more than a box ticking exercise; they want their supplier to really work with them to generate the best business outcomes. To get the most value from an outsourcing relationship they need to move beyond simply having clients on one side and suppliers on the other, and instead become a collaborative partnership.

To move to a collaborative partnership there needs to be an ability to deliver a transparent business 'flight deck' that becomes a single lens for everyone involved. This allows teams across on each side to review performance, understand the impact of transition and transformation and allow for effective communications that will support and encourage innovation to ensure all parties benefit from the relationship. Decision-makers both side of the fence having access to the same timely information will greatly improve the relationship and outcomes for both sides.

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If the game has changed, who you gonna call?

Sometimes, the need for up-scaling capacity is part of a long term strategy, the talk of the boardroom for years before the wheels of growth are set in motion. Other times, the need for extra capacity arrives suddenly, only half-expectedly, like bloated charcoal rainclouds or a thief in the night…

We’ll get onto how outsourcing can quickly solve the flooding insurance crisis in a moment. But a major problem with thieves in the night: all too often it’s the same bloke. A Google search for “reoffending rates” reveals, of the top four pages, three are news stories headlined thus:

Nov 2010: Guardian: Reoffending Rates Top 70% in some prisons

May 2012: BBC News: Reoffending Rates Reach Record Level

Jan 2013: Independent: Reoffending Rate Increases

Granted, that’s a very quick and dirty assessment, but it sure paints a sorry picture…no wonder the private sector has been drafted in to have a crack at re-aligning recidivists with the straight and narrow. Privatising probation services might not cut reoffending, but even flattening out the reoffending growth rate would help us rest easier in our beds, and adding capacity to ensure lags who served short sentences also take part in probation schemes is a good idea - those guys should be easier to reform, surely?

Of course, it’s a wider issue than the probation service can tackle alone. What happens in jail, in terms of education and reducing drug dependency and alcohol abuse is vital. Society’s acceptance of rehabilitated offenders needs considerable work too. But if any option is equipped to take an objective, proactive look into an underperforming system, improve accountability, collect the right data and find ways to improve skills and processes, it’s outsourcing. So hats off to the government for daring to explore other avenues towards righting a serious societal problem.

The other big problem at the moment where the government needs an outsourced helping hand is flooding. There needs to be serious infrastructure investment, because we are calamitously under prepared every time rivers swell up. And in the meantime, for all those people anxiously waiting on insurance claims, how about a bit of plug-and-play BPO support, to build capacity and broaden the bottlenecks?

Tell the insurance companies that Mr Cameron, when you sit down to critique their sluggishness in getting compensation to those in desperate need.

The third news item that screams “Outsourcing to the Rescue” is one from Australia, where Sensis, the company that produces the Yellow Pages, has shed 800 jobs as it restructures to be more suited to a digital world. Because capacity doesn’t just expand or recede - it morphs and shape-shifts to adapt to customer needs. And if business leaders are in fear of ‘doing a Woolworths’, their antiquated offering getting consigned to a bygone era, then rightsizing and skilling-up by offshoring work to The Philippines and India shouldn’t be seen 800 jobs gone, but 2000 Australian jobs saved. And with unemployment on the rise in Oz, daring decisions that protect jobs should be respected, not decried.

Moving with the times, rolling with the punches and finding innovative ways to satisfy your customers are often something an organisation doesn’t feel equipped to go it alone. At times like these, outsourcing can step in and be the hero.