Fragmented Document Practices Add Cost, Heighten Risks
and Hamper Competitiveness

This article, the first in a series of four, is designed to provide you with an overview of the issues and costs associated with enterprise document management.  Subsequent articles will focus on specific print environments and opportunities for improvement.

Documents are the heart of every financial services organization, driving every facet of your business and serving as the primary communication vehicle between the enterprise and its internal or external clients.  Indeed, documents such as statements, notices, prospectuses and checks serve as both products and process enablers. Oftentimes, they provide the only tangible evidence of transactions and services. 

Despite their importance, however, documents can be expensive, wasteful, and a drain on the time and resources of an organization. According to industry analyst InfoTrends, the average company spends 6 percent of its annual revenues on document production alone. Moreover, for every dollar spent on printing, ten more dollars are spent on managing those documents.

Fragmented Structure, Disparate Activities
Most financial institutions lack a complete understanding of their total investment in creating, printing and managing documents.  They tend to view document management in a highly fragmented way, often only within a specific department or function, rather than looking at the process company-wide.  That problem is magnified in those companies that have grown through acquisition.  Oftentimes, redundant processes coexist.  As a result, opportunities for cost containment and process improvement have been and continue to be overlooked.

For the majority of financial services organizations, printing occurs in several distinct environments, each with its own discrete management and reporting structure. For example, office printing is typically under the auspices of the computer network group, while copiers and faxes have traditionally been the responsibility of administrative services or purchasing departments.  Centralized reprographics, more commonly known as the print shop or copy center, may be a part of mail or graphics services, whereas data center printing remains staunchly part of the information technology organization.  The marketing department most often contracts with outside providers of offset printing, while various individuals and work groups procure their ad hoc print jobs from a local copy shop.

With this disconnected document activity, most financial institutions do not have a clear view of their total document-related expenses and they can’t be sure whether associates’ printing habits are in the best interest of the organization as a whole. Moreover, they may not see how document processes are negatively impacting productivity, customer service, marketing effectiveness and overall business performance.  

Managing Risks and Digital Transition
Risk management is another way enterprise documents strategically impact the financial services organization.  Increased regulations and the risks associated with fraud, identity theft and litigation have given rise to a new set of strategic concerns about privacy, data protection, electronic discovery and information security. A corporate-wide document policy and strategy is critical to effectively assure regulatory compliance and reduce corporate risks.

For many financial institutions, the transition from paper to digitally-based processes has added another layer of complexity.  Developing document management best practices in the midst of change challenges the most astute management team.

In Pursuit of a Competitive Edge
As competition in the financial industry has intensified, so have marketing dollars and effort.  Companies are relying on market segmentation and cross-selling to gain an edge.  As such, marketing pieces have become strategic vehicles for driving revenue and building customer loyalty.  With the increased knowledge collected about customers, many financial institutions have turned to customized statements and personalized documents to bolster their marketing activities.

The difficulty in making these communications effective, however, stems from the often-disparate repositories of customer data, and the systems and technologies that support the document communications process.  Organizations that overcome these technical hurdles and create highly customized one-to-one documents that are tightly integrated with customer account information achieve more strategically powerful results in terms of market expansion and revenue growth.

The Total Cost of Ownership
When companies look at the documents they produce as a whole, they are destined to find opportunities for savings and process improvements.  Research indicates that more than 30 billion documents are used each year in the United States and the total cost of producing and managing them is estimated to reach as much as 15 percent of annual corporate revenue.  That is about $1.2 billion annually for an average Fortune 500 company. 

Banks, investment firms and other financial services organizations are not immune from this expense. By closely examining the entire enterprise document supply chain, including documents produced internally as well as those procured externally, organizations find that the resulting expense is significantly higher than anticipated and often more costly than necessary.  According to Gartner, most companies could reduce their printing expenditures by 10 percent to 30 percent.  Looking at it from another perspective, operating costs can be reduced by 20 percent to 30 percent when a company implements strategic supplier agreements, coupled with electronic catalogs and e-procurement, according to Granada Research.

From High-Cost Liabilities to High-Value Assets
Only by stepping back and building a more holistic view of enterprise document management -- the entire document-related life cycle and all associated supply chains -- can a financial services organization develop an effective document management strategy, capable of transforming its documents from high-cost liabilities to high-value assets that drive revenue, build customer loyalty and improve overall business performance.

Next Insight: Office Printing
The next issue of Insight will give you a closer look at office printing – costs, trends and best practices for reducing expenses in this environment.  However, if you want immediate information about gaining a comprehensive view of your enterprise, contact us now.