Back-Office Alternatives to Preprinted Forms

Document Management
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Most offices employ documents for just about every phase of activity, churning them out in a volume that grows in lockstep with the growth and complexity of the enterprise. Indeed, documents are the correspondence of a corporation, and they collectively write its history. Individually, they may not seem a burden, but collectively, they can be a nightmare.

Throughout business today, costs and competition are squeezing profits as never before. Companies are compelled to find ways to cope. At the most visible levels, such as production, marketing, and sales, this is often done through clever engineering, hard negotiation, and sometimes, just plain doing without. In the back office, however, a different mindset often exists. Traditionally, the back office has been accepted as "overhead" that must be tolerated in order to serve the money-making activities.

And much of that overhead takes the form of mountains of paper documents generated to support the business.

Mandate for Change?

Several elements comprise the cumulative cost of the variety and volume of documents required by companies of any size.

The most obvious of these involves the preprinted forms on which documents are generated. They must be not only printed, but also stored, which involves assigning warehouse space and personnel to manage them. Furthermore, preprinted forms are rigid: Even small changes can result in a need to discard existing stock and preprint a whole new inventory.

A second major expenditure is the equipment necessary to process the forms. Once off the production printer, forms must be burst and decollated before they can serve their purpose. Most post-processing activities, whether for forms or checks, require equipment that is expensive to purchase and maintain (over time, maintenance contracts can equal the cost of the equipment itself).

Yet another expense is the cost of the IT people who run documents for the various departments within the company--purchasing, accounts receivable, production, inventory, and so on. Once processing and post-processing has been accomplished, the documents must be delivered to the user departments, which sometimes find their activities stalled as they wait for their materials to arrive. Nobody's fault; its just the way the technology works.

The 1990s showed signs of hope in the form of the personal computer and the laser printer. Both were compact enough and inexpensive enough that they could be placed within individual user departments and networked to the corporate database, effectively transferring document production activities out of IT and into the departments. Accounts Receivable could take charge of getting the invoices out and collecting the funds. Purchasing could generate their own purchase orders on their own schedules. Accounts Payable and Payroll could use MICR-enhanced laser printers to pay bills and compensate employees.

Departments suddenly were in tighter control of their most fundamental tasks, and IT departments were able to ease out of all or part of the printing business and renew their focus on the management of data.

Designing, Storing, and Printing e-Documents

Laser printed documents entail four stages: designing the electronic form template, storing the template, merging data into templates to create a document, and finally, printing the document.

In the iSeries world, there are two design choices: create the form template by positioning its various elements on the green-screen using latitudinal and longitudinal coordinates, or use a PC-based GUI design tool. Some green-screen experts can turn out a form template quickly and easily, but most people are not so fortunate. For them, the answer is a PC-based WYSIWYG design tool that allows users to position components by dragging and dropping and moving them about until the design meets their satisfaction.

In both cases, the designer often begins with an existing form and simply replicates the design in electronic format. Not infrequently, the process prompts an important question: Could this be done in a better, simpler way? For example, an IT professional who is in charge of converting all of the back office forms into electronic documents can involve the concerned departments in the design process, and together they can re-engineer a set of forms to be better looking, easier to use, and easier to read.

Once templates are built, they are stored electronically and can be used and reused endlessly. Eventually, new information--such as phone numbers, addresses, branch offices, terms, and so on--will need to be accommodated, but nothing need be discarded since the templates are easily modified electronically.

Changes can be made at the iSeries workstation, but where state-of-the-art design tools are in use, the designer simply downloads the template, makes the adjustments, and uploads it back to the senior platform. Interestingly, GUI-based design tools now can replicate the precision of the iSeries-AS/400, with tolerances as close as .001 of an inch.

Using form templates simplifies the processes, and usually no deviation from procedure is necessary. Just as in executing a conventional print job, a spool file is created from the relevant data, and the electronic document (or document run) is then spooled out to the printer for production. The form and the information it carries are generated simultaneously.

When using electronic forms, plain paper is the normal output medium, so the usual stock-handling and inventory activities are no longer necessary. Whenever a print run or an individual form is required, all that is necessary is to make sure there is paper in the tray. Most users are impressed with the clarity, quality, and professional appearance of the documents they produce. (Typically, laser printers generate crisp black-and-white copies; however, color enhancements are now available as well.) And once a document is printed, it is ready for distribution by company mail, the postal service, or courier.

Electrifying Experiences: e-Delivery Options

So far, we've been discussing printed documents, which are still subject to considerable manual handling. No matter how effective, the movement of hard copy documents always entails risk: lost checks, delayed purchase orders, missing inventory calls, shipping orders that fall through the pallet slats, and so on. It doesn't happen often, but it doesn't have to happen at all.

What can be done? Get rid of the paper, much of which is no longer necessary, and deliver documents electronically.

Normally, there are four options for delivering electronic documents. Two are very familiar: secure email and secure fax. The two more recent ones are secure Web posting and electronic archiving. Today, these alternatives can be directed right from the iSeries-AS/400 workstation, with files dispatched to any email address, fax number, or Web site in the world. All that is involved is the installation of software modules that accept the formatted data and release it over the chosen communications medium. The platform itself is the server. Manual intervention can be completely eliminated in many cases; for example, in billing runs, invoice files can carry fields indicating the destination fax number or email address, and an entire document run can be automated in a purely paper-free process.

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Figure 1: With electronic document output, all options are open for printing, distributing, and archiving. (Click images to enlarge.)

Electronic delivery offers several advantages. One is security, since the paper stage is avoided entirely. Another is speed: Invoices delivered more promptly mean faster payment and better cash flow. Efficiency is another: Less handling equates to lower personnel requirements and faster execution of processes. Better customer/vendor relations are yet another, since a more-reliable exchange of documents leads to fewer opportunities for misunderstandings.

Electronic archiving is not specifically an electronic delivery mechanism, but it can be, and it can support electronic delivery better than any other methodology. Archiving enables users to store, retrieve, view, and print documents right from the iSeries-AS/400 workstation. At its most basic use, it replaces the file cabinet. You don't have to file papers, you don't have to search file cabinets for records, you don't have to suffer paper cuts, and you don't have to allocate expensive floor space to accommodate a battery of ugly gray boxes.

But that's just the beginning. For example, some software allows a user to create a unique purchase order approval application. It works like this: A requisition is created and placed in archive. The software is programmed with approval cycles, and when the requisition is archived, the approvers are alerted. Once the requisition has run its course, it goes directly to a purchasing agent, who inserts the relevant data into a purchase order form and slates it for delivery to the appropriate vendor.

Elsewhere, in customer service and accounting departments for example, documents can be viewed on-screen during a phone conversation with a customer or vendor, and if need be, a copy of the document in question can be printed out and mailed or sent electronically for immediate delivery.

Payments as Documents

Payments are simply specific documents that instruct a bank to disburse funds to a named individual or corporate entity. Like other form-generating processes, MICR laser payment processing uses stored electronic check templates and then laser prints the complete check and accompanying remittance advice as a single document on a single sheet of cut paper (or more sheets, if extensive remittance advice must be included).

Check fraud is a major corporate problem that results in billions of dollars in losses annually. Historically, banks have carried the burden, since they are custodians of the funds, but that is changing under current "Ordinary Care" guidelines. MICR laser check printing helps to alleviate the problem by incorporating safeguards that can reduce or eliminate the liability of companies in the case of fraud attempts.

Primary safeguards include the following:

  • Securing company information, MICR lines, and signatures electronically under secure password-protected access on the computer
  • Storing the information on a memory card that can be inserted in the printer (or card reader) and removed at the end of the print run
  • Securing the software
  • Maintaining positive security over printer use and using security check stock that incorporates elements to combat chemical changing and duplicating

Another widely used preventive measure is Positive Pay, a totally automated process in which the software generates a list of the disbursements in a given check run and sends the list to the bank. As checks arrive for clearance, they are compared against the list; if there are anomalies, the issuing company is notified and is thereby positioned for the appropriate response. And all of that is automatic!

More and more companies are moving toward electronic disbursements, or direct deposit, using the banking industry's Automated Clearing House (ACH) network, often supplemented by financial electronic data interchange (F-EDI). Using the ACH network, a company can order its bank to transfer money electronically from its account to any other account on the network. The ability of the ACH "envelope" to accommodate remittance advice information is somewhat limited, however. Alternatively, using F-EDI, a virtually unlimited amount of remittance information can be sent right along with the ACH direct deposit. Secure email, secure fax, and secure Web posting are also simple and effective electronic notification alternatives.

iSeries-AS/400 Solutions

Key considerations facing back office and IT personnel concerned with optimizing traditionally paper-based operations include system features and capabilities, price, implementation options, and support. An interesting range of choices is available. As in other product categories, numerous solutions are offered by a variety of companies at a wide range of prices. In general, the back office requirements involve document template design, document generation, and document delivery--whether as paper forms or as electronic documents delivered by email, fax, and the Web.

As an example, our company develops and markets two solutions for documents and payments that are similar in operation but different in their missions. Both enable template design using either conventional green-screen or the GUI design process. Both offer the same conveniences of laser printed output and an array of electronic delivery capabilities. Both enable printed, pure electronic or mixed/blended output simply by indicating recipient preferences on the document or payment form. And both allow all document production and/or disbursements activities to be performed without ever leaving the workstation. In our experience, these capabilities represent what most users currently are looking for.

How quickly any company embraces the range of possibilities offered is entirely up to the company. Electronic document management solutions are essentially modular, so a company can choose to implement all or only some of the technologies available, and they can do so at whatever speed is comfortable. Some vendors offer individual elements of a solution, such as the fax and email modules. These solutions often require some degree of integration programming. Others market fully integrated modular solutions that enable users to acquire whatever level of solution their operational and financial resources permit and to build them out with additional modules as resources and conditions change.

A basic platform might include an electronic form template design module and a basic document or check production engine that enables the generation of laser printed documents or checks on plain paper. This solution avoids the need to preprint and store the multiplicity of forms used in corporate back offices--everything from invoices and purchase orders to shipping notices, production slips, barcodes, and checks, which require their own secure, fraud-resistant inventory conditions.

From the basic solution, these platforms can be expanded quite easily and naturally, since the total solutions normally are architected as complete, modular systems. Additional elements of a total solution focus on delivery options such as automated fax, automated email, PDF conversions, email attachments, tamper-resistant Web-posted documents, archiving, and in the case of payment systems, ACH and F-EDI payment and remittance advice delivery.

The list of electronic document solution providers is too extensive to cover here, but you can find a comprehensive roster in the MC Press Vendor Directory.

Going to the Next Level

As we ease away from the use of paper for routine back-office tasks, it becomes apparent that with the proper level of standardization, we can transact business directly between databases in a completely hands-off mode known as B2B EDI. (The term EDI has long referred to transactions using the ANSI X12 data sets, since they were the only ones available, but increasingly the term is applied generically to refer to other methodologies as well.)

EDI still involves forms--the data sets--but no forms handling. Once data has been input, it can often be transformed automatically to perform new tasks as a transaction progresses. For example, data from a purchase requisition can automatically populate a purchase order, which can generate an inventory picking slip, an advance ship notice, and an invoice. Ideally, EDI permits trading partners to exchange documents as formatted, semi-formatted, and non-formatted data, the requirement being that the data is understandable by the computers on both ends. (See Figure 2.)


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Figure 2: Exchanging data in different formats is easy with a data translator. Translators accept incoming and outbound data in one format and convert it to the format expected by the computer on the receiving end.

The ANSI X12 standard requires rigid formatting, and its document set involves virtually all business activities: purchasing, invoicing, shipping, receiving, inquiries, distribution, transportation, and so on--even remitting funds. Exchanging data can be accomplished in several ways:

  • XML, a "cousin" of HTML, (both derive from the Standardized General Markup Language) is fundamentally non-formatted, coming close to a plain-language description of transactions.
  • Variants such as RosettaNet and BIZTALK follow XML protocols, but they establish formats for various functions (POs, invoices, etc.) in order to reduce the need for up-front programming.
  • Yet another approach allows companies to exchange data in the form of the flat files produced by their ERP software and transmitted database-to-database.

In order for computer-to-computer transactions to be conducted, they must be talking the same language. Usually, this involves a middleware solution that provides translation resources required to make inbound/outbound transactions understandable on both ends.

The Business Case for Electronic Documentation

The reasons for transacting business electronically are simple and valid: lower costs, streamlined customer-vendor interaction, and greater accuracy, since virtually no re-keying of information is required once the initial document is in the system. B2B EDI optimizes transactions, reduces operating costs, improves the management of customers and suppliers, and engenders a more competitive position. It also facilitates expansion of important relationships with existing or new tech-savvy customers and vendors.

EDI is not limited to commerce between companies. It is also popularly applied to the exchange of data with a corporation itself and, increasingly, between companies with various reporting requirements and governmental agencies.

The Efficiency Expert's Dream

Realistically, the paperless back office is probably beyond reach for the foreseeable future. People like hard copy documents. For that and other reasons, such as the noncurrency of companies making the shift, blended back office environments are likely to be the rule for the foreseeable future. The realistic approach is to get rid of unnecessary paper, and that is imminently possible if you follow a few simple steps:

  • Examine your operations pragmatically.
  • Identify areas in which change makes sense.
  • Seek out alternative answers to your business challenge.
  • Look for expertise and support as well as technology.
  • Commit to a level that will allow you to be successful.

You can arrive at a back office that blends paper processes with electronic processes and that works right in your circumstances. Do not be impeded by the idea that you cannot swallow the whole thing at once. Most good solutions are modular, allowing you to start at your own comfort level and build out as your resources permit.

Go Figure

When your company makes a purchase, it doesn't do it to acquire more overhead. It needs to know where the purchase is going to fit in, what purposes it will serve, what problems it will solve, and how it is going to account for itself financially--in short, its ROI. And that is before the purchase is authorized. (See Figure 3, the ROI calculator.)

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Figure 3: An ROI calculator determines the costs of existing processes and estimates how they can be improved by converting to electronic processes.

Calculating return is not an exact science, but by analyzing the costs involved in an existing process and contrasting them with those of a higher technology alternative, you can arrive at a projection that will satisfy the boss and the board. The model shown here will get you started, and it may be all you need. Then, when you conduct your search, ask the vendors you contact for assistance in costing out your situation. And be realistic; remember that GIGO (garbage in, garbage out) remains a constant in the field of analytics.

The Payoff: ROI

Electronic back office optimization will result in a number of identifiable benefits:

  • Greater efficiency
  • Elimination of printing and handling costs
  • Speedier interchange of documents
  • Conservation of personnel
  • Greater control over processes
  • Improved security
  • Fewer errors
  • More responsive customer service
  • Improved cash flow (reduced Days' Sales Outstanding)
  • More effective cash management (lower cost of money)
  • More effective production planning and distribution

The ROI calculator establishes a way to measure the measurable and to arrive at a sound financial projection of the value of a given solution to your operations.

What Are You Waiting For?

Technological progress is a must in the back office. Figures are valuable, but the true measure of success will be how your solutions impact the way you do business. Are you more efficient? Are you containing costs while supporting corporate growth? Are you gaining productivity and reducing risk? Is your customer satisfaction level on the rise? Are you contributing to the overall corporate health?

These are a few of the questions you should ask. They all relate to how well you use your data. As I said in the beginning, documents may not amount to much individually. But together, they are what keep businesses going--and the better the quality, the faster the delivery, and the more flexibility they allow, the more effective the business.

Gregory T. Church is Vice President of Marketing, Communications, and Product Management at ACOM Solutions, Inc.

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