Document Management Systems Cost – Where Does it Come From?
Posted by Melanie Aizer on Fri, Mar 25, 2011 @ 11:07 AM
When evaluating a document management solution it is critical to identify and focus on those attributes of the paper transaction which contribute to cost and generate inefficiencies.
Typically these attributes are:
- Speed – how quickly can you complete a business transaction? Faster is better.
- Quality – how many errors (and of what type) make their way to your paperwork? Less is better.
- Time and effort – how much data entry is involved? How much quality control and document reviews? Less is better.
This 2-part article outlines an analytical model for estimating the current cost of paper-based processes.
Part 1. Document Process Cost 
The following data is based on information collected from clients using Agreement Express.
Documents requiring completion / sign-off
Documents requiring completion/sign off typically involve the following cost components:
- Document preparation (time/effort)
- Document presentment (printing)
- Document delivery (Mail? E-mail? Fax? In person? Courier?)
- Document retrieval (Mail? E-mail? Fax? In person? Courier?)
- Document quality control
- Error correction (re-doing documents, amending, etc.)
- Data entry into back-office systems
- Document filing / imaging
- Document storage
- Search/retrieve costs
- Document purging
With an industry-estimated error/incomplete rate of 35% (as reported to us by other clients), and assuming manual document quality control and data entry, the estimated cost per single document (requiring input/signatures) is in the $10.00-$20.00 range.
Documents NOT requiring completion / sign-off
Documents which do not require completion typically do not involve any robust quality control and manual data entry.
However, such documents are typically delivered to recipients via mail and/or couriers, and may involve elaborate and expensive printing and packaging.
Additional cost elements include document imaging/filing/storage; document search/retrieval; re-sending documents; and document retention policy enforcement.
Based on information gathered from other clients, the estimated cost of producing, delivering, and handling statement-type documents is in the $7.00-$10.00 per single document range.
NOTE: This analysis greatly under-estimates the current business impact/cost of paper-based processes: The following are excluded from the analysis:
- Document filing (paper based? Imaging? Both?)
- Document storage (on-site? Off-site?)
- Document search and retrieval methods currently used
- Document retention (shredding, purging) cost
- Lost document re-creation
- Average time to complete a transaction (and its impact on performance)
- Number of resources/amount of labor involved in paper-based processes (data-entry, quality control, filing, etc.)
- Cost of operating and maintaining certain IT systems which could be made redundant by implementing TELUS Secure Contracts (imaging solutions, work-flow engines, document management, etc.)
- Legal / compliance risk/costs of documents that are not in good order
- The impact of slow/inefficient paper-processes on advisor satisfaction, performance, and retention
- Opportunity costs of slow paper-driven processes: How many clients never complete a transaction? What is the cost of un-invested funds while accounts are being opened/transferred?
Also, it is important to note that pure cost analysis does not capture critical business elements/objectives such as:
- Improved customer and employee experience
- More sustainable / environmentally-friendly business processes
- Ability to grow the business by enabling self-service, remote, and mobile transactions
Agreement Express by Recombo is contract management software designed to have a material impact on cost/quality/time on a transaction by-transaction basis. Processes take less time, consume fewer resources, and achieve higher quality.
In Part 2: We will outline the Indirect Costs