AIIM - The Global Community of Information Professionals

Digital Transformation: If A Two-Thousand-Year-Old Tradition Can Do It; So Can You

Feb 16, 2017 10:46:00 AM by Thomas LaMonte



Chinese New Year is host to many traditions from tasty, meat-packed dumplings to an all hours riot of fireworks. Over its two weeks, the whole country erupts in celebration—it’s a sight to be seen.

But above all Spring Festival traditions, I have a clear favorite; maybe you have heard of it before: the gifting of red paper envelopes filled with money.

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Topics: bpm, paperfree office, digital transformation,, paperless

Intelligent Capture and Digital Transformation

Dec 14, 2016 10:14:09 PM by John Mancini

Business Process Improvement is on every executive checklist, but I fear far too often, it is just that – an item on a checklist.  How can we rethink business process improvement and make it real and tangible?  I recently chatted with Sandy Kemsley about her keynote at the ABBYY Technology Summit, and she shared some observations with me.

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Topics: digital transformation,, intelligent capture

Analytics and Digital Transformation are the REAL Reason to Automate Financial Processes - Part 3 of 3

Dec 1, 2016 3:41:56 AM by John Mancini

This is the third of three posts.  The first two in the series:

According to the American Productivity and Quality Center, an amazing 74% of organizations are currently engaged in a finance process improvement initiative. Why are they doing this?  And how does this tie to broader Digital Transformation initiatives?

The APQC survey notes that 50% of these initiatives are being driven by “the realization of the need for better business analytics.”  This business driver is even higher -- and far more strategic -- than the traditional driver for financial process automation, cost reduction.

Ding, ding, ding, we have a winner in the Digital Transformation sweepstakes.  

Demands are rising for finance executives to playing a more fundamental role in the transformation of the business and to provide the analytics and data needed to document and drive that change.  Per Mary Driscoll in the APQC blog,

“Business managers are changing their tune when it comes to what they want from finance. They now insist that finance re-imagine itself and deliver a step-change in the quality and relevance of insights it generates. What used to be called decision support is now branded—with large doses of aspiration—as predictive business analytics. Finance is expected to keep pace with the enterprise’s data-driven race toward competitive advantage. That means mastering the analytical methods, tools and terminology of the day.”

Gabriel Zubizarreta from Silicon Valley Accountants noted some of the structural impediments to fundamental financial process transformation in an interview on the APQC blog:

“There are significant structural disincentives to change. The deadline-driven nature of the accounting close makes implementing changes risky. If a change goes well, typically the rewards are small, but if a change goes badly and impedes or delays the close, the consequences for the accountant championing the change can be severe.  When you consider that up to 70 percent of process improvement projects fall short of expectations and/or go significantly over budget, it makes total sense for accounting departments to be risk averse.

In the past, many process improvement initiatives have focused on the “big bang” such as the implementation of a new ERP system or other significant automation. Even if this kind of big bang improvement is successful at first, underlying conditions will change, requiring that processes will need to continue changing or they will become outdated.

And there is one more thing to consider. Since the implementation of Sarbanes-Oxley, companies have added layers of controls. Often, these controls are implemented in a way that becomes inflexible and resistant to change. We understand that compliance is crucial, but it can’t be the sole focus. Companies need to implement compliance and agility; controls and continuous improvement. Finding the balance is not easy, but it is crucial if companies are to thrive as conditions change.”

Information Capture is a proven first step in digitizing information and improving financial processes.  According to AIIM’s Paperfree Progress: Measuring Outcomes, 72% agree – “Business at the speed of paper will be unacceptable in a few years’ time.”  But mere “Digitization” (getting stuff digital) is not enough, even though the ROI of this simple step is impressive (59% of users achieved payback in 12 months or less (a single budget cycle), including 28% seeing positive returns after just 6 months).

In addition to “Digitization,” organizations need to pursue “Digitalization” -- getting the business to execute and adapt with the benefit of information in digital form, using the availability of information as an engine for customer experience, business transformation and adaptation.  Leveraging the capture and mailroom technologies and capabilities you already have, and applying this experience to get the fat out of financial processes is a great place to start. Capture doesn’t just occur in the mailroom anymore:  It includes distributed capture, real time/mobile capture and capture as a service, all critical to the task of automating financial processes.

No C-level executive ever woke up in the morning, slapped themselves on the head, and said, “Wow. The sexy Digital Transformation thing I want to do today is transform my financial processes.” But they need to get serious about these processes.  Yes, automating them can cut costs -- savings that can be used to fuel other initiatives.

But more importantly, automating financial processes sets in motion two critical Digital Transformation value propositions -- 1) back-end processes are often the difference between cutomer experiences that feel good initially, but then wind up being frustrated and disjointed; and 2) financial processes are a key source of the analytics and business intelligence needed to transform customer experiences.

Free White Paper - 4 Facts Savvy CFOs Know About Business Process Transformation

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Topics: finance, digital transformation,, accounts payable, financial process, accounting

New E-Book -- Applying Lean Principles to Digital Transformation Challenges

Oct 24, 2016 9:30:00 AM by John Mancini

Is "information chaos" in your core business process processes slowing your organization down? Making you less competitive? Frustrating your employees, suppliers, and customers?

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Topics: process automation, information management, business process, digital transformation,

5 Examples of Digital Disruption -- the Flip Side of Digital Transformation

Oct 21, 2016 9:58:19 AM by John Mancini

I've been collecting examples of "Digital Disruption" -- the negative flip side of Digital Transformation.  In other words, examples in which a well-entrenched incumbent just failed to see the writing on the wall.

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Topics: Digital business, digital transformation,, digital processes, digital maturity

5 Strategies to Avoid the Digital Riptide

Oct 5, 2016 11:20:37 AM by John Mancini

In the wake of all of the news coverage about Hurricane Matthew, my "5 Strategies to Avoid a  Digital Riptide" is on my mind:

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Topics: digital transformation,, digital riptide

Financial Process Automation -- A Huge Untapped Source of Potential Cost Reduction -- Part 2 of 3

Sep 20, 2016 6:12:08 PM by John Mancini

This is the second of three posts on the theme -- CFOs and Finance Directors: Neglected Players in the Drive for Digital Transformation.  The first post was HERE.

The core point of the three posts is the financial process automation creates a value stream in two directions.  It is a proven source of cost reduction for companies looking for marginal but sustaining competitive advantage, something that Finance Directors can use to "manage up" in their organizations in making the case for resources to drive financial process automation, which is the focus of this post.  Financial process automation also creates the foundation for sound analytics and business intelligence, a priority of great concern to the C-Suite, which will be the focus of the third post.

The American Productivity and Quality Center notes that cost reduction is the key business driver for 43% of financial improvement initiatives.  Let's think about the role that content and more effective management of unstructured information plays in delivering upon this promise.

The Harvard Business Review (https://hbr.org/2010/05/when-youve-got-to-cut-costs-now) notes the importance of permanent process change in the drive to cut costs, and automating the capture component of processes is a key part of insuring the permanence of change.

Often, internal administrative processes become frozen—despite the fact that, over time, they may cease to be efficient or effective. Asking questions in four areas can help you understand whether this has occurred in your department and whether you can cut expenses accordingly:

Reduced business requirements.  How have the business requirements evolved since you last fundamentally redesigned the process? Perhaps the need for certain data has diminished or disappeared altogether. How would you design the process differently today, to meet today’s needs?

Manual processes.  Where do you use people to process forms or information repetitively, rather than do it electronically, with little or no human intervention?

Exceptions to the norm.  Do the routine 90% of items cost much less to handle than the exceptional 10%? What would it take to do away with the exceptional ones? At a large health insurer, we found that a 'clean' claim cost 80% less to process than one that required special handling. By redesigning its claim forms and eliminating exceptions that did not matter, the client saved more than half the cost of exceptions.

Timing.  Could you save money by shifting the time of day, week, or month that you undertake certain tasks? For example, how about doing the work when activity in your department is otherwise slow? Could it be done more efficiently in batches? Is there a real penalty attached to being available online for fewer hours of the day? Could tasks be completed more efficiently if they were not tackled on a first-in, first-out basis?”

Financial processes have three key characteristics that make them a prime candidate for cost reduction efforts: 1) They represent significant cost to the organization; 2) They are characterized by wide variation in performance; and 3) They are typically very paper intensive.

Consider this data from the American Productivity and Quality Center (http://www.apqc.org).  and consider what this means in actual dollars:

Let’s break this down a bit.  There are five core processes characteristic of just about any finance department:

  • Accounts Payable
  • Accounts Receivable
  • Financial Close Process
  • Procurement & Purchasing
  • Vendor Management

What do these have in common?  They are all: 1) document-intensive; and 2) must integrate with your broader financial and/or ERP (Enterprise Resource Planning Systems).  Your ability to automate them and reduce cost – your key to moving from a bottom performing finance organization to a top performing one – rests on putting in place a common document management infrastructure for all of them. 

Financial process

Document challenges

Accounts payable

Automation cannot occur without strategy to capture documents that arrive from multiple locations and in widely varying formats

Accounts receivable

Disconnected and manual contracts, billing, sales order, and dispute resolution processes

Financial close process

Endless, frantic and manual end-of-month spreadsheet reconciliation

Procurement and purchasing

Manual purchase order processes disconnected with finance and ERP systems

Vendor management

Manual vendor onboarding

No central view of relationships with key business partners

Most organizations have not applied the lessons from the digital mailroom to their core financial processes.  According to an AIIM unreleased survey of 290 finance executives, there are still many green field transformation opportunities in you core financial processes.  Some would argue that most organizations automated their financial processes long ago.  Perhaps on the data side, but not on the content and unstructured information side. When we asked, “What is paper usage in the following processes?” here are the percentages answering, “% answering “A lot of documents are processed as paper documents”:

  • Accounts receivable = 38%
  • Financial close process = 40%
  • Accounts payable = 39%
  • Procurement and purchasing = 32%
  • Vendor management = 32%

Consider the differences in cost structure associated with invoice processing in top performing vs. bottom performing companies (source:  http://cdn.cfo.com/content/uploads/2015/06/Driscoll-June.png):

Information Capture is a proven first step in digitizing information and improving financial processes.  According to AIIM’s Paperfree Progress: Measuring Outcomes, 72% agree – “Business at the speed of paper will be unacceptable in a few years’ time.” 

Financial process automation has been one of the bread and butter content management applications for years.  But I think these initiatives need to be viewed not only through the prism of cost reduction, but also in terms of how back-end process automation and efficiency are now Digital Transformation table stakes.  In a world in which customers and suppliers are being drawn further and further into our organizations, no smooth and beautiful front end customer experience can compensate for weak supporting processes that are inevitably the next step in a customer experience.  Finance Directors need to understand this critical linkage and use it to "manage up" in their organizations in making the case for resources to drive financial process automation.

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Free white paper -- 4 Facts Savvy CFOs Must Know about Business Process Transformation

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Topics: content management, finance, digital transformation,, accounts payable, financial process, accounting

CFOs and Finance Directors – Neglected Players in the Drive for Digital Transformation - Part 1 of 3

Sep 15, 2016 4:56:51 PM by John Mancini

This is the first of three posts reflecting thoughts on the role of Financial Process Automation in Digital Transformation.  Yes, you read that right, and I realize it could be argued that this is one of the great oxymorons ever, combing "Financial Process Automation" and "Digital Transformation" in the same sentence.  But stick with me.

Every business operates on a pretty thin line between success and failure, and technology disruption is making this line sharper every day.

We all know the survival challenges faced by new companies.  According to the U.S. Bureau of Labor Statistics, only about 50% of all new businesses survive 5 years or more, and about one-third survive 10-years or more. 

But even when a business gets past the initial survival threshold, it must still constantly look for sources of advantage and efficiency.  According to the Yahoo!Finance database for 212 different industries, the median profit margin for U.S. public companies was 6.5% for the most recent quarter

6.5%.  That certainly isn’t a very large margin between success and failure.

So the question for any business executive is whether you want to operate as a bottom tier company barely scraping by or as a top tier company, generating profits and investing for the future.

So of course, the answer is “Duh!”  Alex Trebek, I will choose “Success” for $20.

How can you lay a solid foundation for digital transformation?  How do you systemically get to be a top tier company? How can you push your median profit margin well above the 6.5% survival level of the typical US company?   

According to the American Productivity and Quality Center -- an awesome organization, BTW -- an amazing 74% of organizations are currently engaged in a finance process improvement initiative. Why are they doing this?  And how does this tie to broader Digital Transformation initiatives?

APQC notes that cost reduction is the key business driver for 43% of these initiatives, and that will be the focus of my second post.  Financial process automation -- and particularly automating invoice processing -- has been one of the bread and butter content management applications for years.  But I think these initiatives need to be viewed not only through the prism of cost reduction, but also in terms of how back-end process automation and efficiency are now Digital Transformation table stakes.  In a world in which customers and suppliers are being drawn further and further into our organizations, no smooth and beautiful front end customer experience can compensate for weak supporting processes that are inevitably the next step in a customer experience.  Finance Directors need to understand this critical linkage and use it to "manage up" in their organizations in making the case for resources to drive financial process automation.

The same APQC survey also notes an even more important business driver for finance process improvement initiatives.  They note that 50% of these initiatives are being driven by “the realization of the need for better business analytics.”  

Ding, ding, ding, we have a winner in the Digital Transformation sweepstakes.  

The focus of my third post in this series will be on how C-Suites need to drive finance improvement initiatives down through their organization, not just because they can save money and not just because customer needs require it, but because financial processes are a rich and untapped source of the data and analytics that is needed to fuel Digital Transformation.

So join me on the ride -- CFOs and Finance Directors – Neglected Players in the Drive for Digital Transformation.

Free white paper -- 4 Facts Savvy CFOs Must Know about Business Process Transformation

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Topics: content management, finance, digital transformation,, accounts payable, accounting

Information Chaos Summer Catchup - 6 Tip Sheets and 28 "Must Knows"

Aug 19, 2016 10:23:32 AM by John Mancini

Digital Transformation Roundup -- 6 Information Management Tip Sheets and 28 "Must Knows" You Don't Want to Miss

In case you missed them while taking a few days off this summer, here are a few of my most popular tip sheets and posts from the summer. Check 'em out.

7 Tips to Create MORE Information Chaos

There are lots of ways to being to attack the challenge of information chaos.  But how might you inadvertently make things worse

Download Your Tipsheet!

6 Things You Need to Know About Emerging Markets and Information Management

Among both information management users and information management solution-providers, the digital disruption that is coming drives a number of opportunities and challenges.  On the user side, organizations must extend their content and information management capabilities into new markets, and understand how those markets are different from the traditional markets they serve, and think through how those different needs translate into different content management infrastructure requirements.  Similarly, content management solution providers have focused on established markets and economies. They will now face two pressures: 1) new “home-grown” content management competitors who really understand the unique issues of their home markets; and 2) pressures from their customer base to provide the tools they need to penetrate emerging market. 

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3 Reasons Why Document Processing Should Matter to the C-Suite

Here’s the fundamental question for many organizations – When it comes to streamlined document processing, why bother? What business results can you expect if you go down this path?  Let’s take a look at intelligent document recognition and streamlined document processing through the prism of the 3 things that keep C-level executives up at night:  Cost, Compliance, and Customers.

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4 Steps to Leverage What You Already Have and Know to Improve Customer Experiences

Digital Disruption. Digital Experiences. They are on the wish list for just about every C-level executive. But where do you start? How do you move from the hype to value? A good place to start is by leveraging the capabilities you likely already have – scanning, capture, and the digital mailroom – and extending them into the core processes that you use to run your business.

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5 Faces of Information Chaos

For many years, I’ve watched people in organizations that I KNOW could benefit from content technologies politely listen to sales presentations, nod their heads and then back away from a decision.  I find this “reluctance to commit” mysterious, because most of the people that I’ve spoken with who have automated a previously paper-driven process swear by the results and wouldn’t return to life pre-content management for anything.  I’m convinced that this “reluctance to commit” is due to the fact that many on the sell-side of our industry (including AIIM at times, I’ll confess!) can’t resist talking about technology.  ECM! BPM! Taxonomies! Metadata! Capture!

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3 Questions to Ask About Content Creation

Content is a valuable corporate asset, driven by value, created by many authors, and generated from many sources. Yet content creation is often taken for granted by business organizations as something that just happens as part of the daily business routine.

Download Your Tipsheet!

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You might also be interested in these 6 blog posts...

8 Reminders About Why World Paper Free Day Matters

Digital Disruption and the Structure of Emerging Markets

7 Tips to Unstick Your SharePoint Implementation

Big Data, Content Analytics, Information Capture and the Hype Curve

Preparing for the Era of Intelligent Machines

What Part of Being Blockbustered Don't You Understand?  Digital Transformation In Action

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In the Toronto, NY or DC metro areas?  We've got a process improvement seminar coming up in your neighborhood!  They're FREE.

Washington DC event -- October 4 at the National Press Club

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New York event-- October 6 at the Manhattan Penthouse

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Toronto event -- October 13 at the Allstream Centre

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Topics: process management, capture, information chaos, digital transformation,

Digital Disruption and the Structure of Emerging Markets

Aug 15, 2016 9:38:39 PM by John Mancini

Brexit, Presidential Campaign Follies, the Olympics and Disruption Déjà vu

I was in London during the Brexit debates and heard a lot of "interesting" things about trade during those debates.  Coming home, I and the rest of the world have obviously witnessed a lot of irrational pontifications in the context of our own presidential election about trade and jobs and disruption. 

Watching the Olympics opening ceremonies and the parade of nations got me thinking in particular about how all of this plays out in emerging markets. And in particular, it got me thinking about the critical role that information management and disruption plays in emerging markets in changing the game and bringing new customers and new competitors into the game.

Image source = http://www.indiaexpress.com

That led me back to James McQuivey’s Digital Disruption: Unleashing the Next Wave of Innovation.  I’ve been a big fan of the book, and find myself coming back to the book again and again in the context of thinking about the future of information and content management.

For those unfamiliar with his core premise, McQuivey starts the book with a description of a 12-year old entrepreneurial mobile app developer named Thomas.  As he thinks about the kinds of technology resources available to Thomas versus those available during his own youth, he offers this conclusion:

“What tools does Thomas need to pursue his digitally disruptive goals? A computer? Check. An internet connection? Check. A programming language and SDK? Check. A friction-free digital platform for distributing and making money from his innovations? Check.”

As he thinks about this disruptive stew, he reaches two conclusions about “old” disruption (the kind that Clayton Christensen talks about so eloquently) and what is going on now.

“Under old disruption, only a very small number of innovative companies can amass the tremendous amount of capital necessary to develop and bring a small number of possible ideas to market. Capital is the first constraint. You can raise capital through bank loans or IPOs or private investment, but as long as you have to spend money to make money, the market can only fund so many innovations. The second constraint is information. Because only a few ideas will make it to capitalization, people keep ideas secret, floating only those ideas that have immediately obvious economic merit. And the only innovators who get funded are those who have access to holders of capital and are willing to jump through whatever hoops investors deem necessary to prove their ideas have merit.”

And he offers this prediction, which I think hits the nail squarely on the head in terms of the disruptive challenges facing companies, and the critical importance of information management in the disruptive times ahead:

“When companies adopt technology, they do old things in new ways. When companies internalize technology, the find entirely new— disruptive— things to do.”

That's exactly where we are right now, moving quickly past the surface level disruption of technologies as they play out in the consumer realm and get incorporatied into the very fabric of how business is done, creating radical disruption along the way.

All of this ultimately manifests itself in international trade, financial, and data flows and the impact these on the individual knowledge skills that workers need to have to survive and the organizational competencies in information management that companies and governments require to continue to be relevant and competitive. 

I came across a great McKinsey study on this, Digital globalization: The new era of global flows, and that led to this tip sheet, 6 Things You Need to Know About Emerging Markets and Information Management.

Check it out.

Download Your Free Tip Sheet!

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Topics: content management, enterprise content management, digital transformation,, digital disruption

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