document capture for sales order automation the value of moving document capture to the front office...
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Document Capture for Sales Order Automation
The Value of Moving Document Capture to the Front Office
Document Capture for Sales Order Automation
The Value of Moving Document Capture to the Front Office
Andrew PeryAndrew Pery
Presentation Context
• “…physical assets are generally subject to decreasing returns while Knowledge assets generally enjoy increasing returns because knowledge is cumulative -- the more intensive the use of knowledge, the larger the benefits…”
• Baruch Lev. Intangibles, Management Measurement and Reporting. Brookings Institution Press, 2001.
Paper Consumption Trends
Average Worker is estimated to use a sheet of paper every 12 minutes.
Use of email has resulted in a 40% increase in the use of paper.
Worldwide growth of 600% in desktop printers since 1998.
Global consumption tripled in the past three decades and is expected to grow by 50% by 2010.
Economic Implications
• Storage Space• $ 40,000 to $ 60,000 to store 2 million pages of documents in file
cabinets
• Lost Documents• 3% of documents are misfiled, 80% eventually lost
• Cost of misfiled documents is $ 120 per document
• Postage• Paper and Postage constitutes 70% of customer billing costs.
• Customer Relations
• 37% of time is allocated to discrepancy resolution and payment reconciliation
The Bottom Line
• “A Lawrence Berkeley Labs study estimates that the cost per ton of handling paper is:
• 20 times the cost of purchasing it
• 200 times the cost of throwing it away
• Automated processes can increase productivity by 50 percent or more”
The Changing Workplace
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2005 2010 2015
Different time and place
Same time, differentplace
Same time, same place
Working alone
Percentage of individual’sperformance that will depend on group input
Source: Gartner
Work Styles
Capture Device Proliferation
370K units in US
$350M in US (2007)
22% growth from 2006 to 2007
21.2M units in US
14% growth (2006 – 2007)
Becoming standard part of all office infrastructure
130M units in US
3-5+ megapixel cameras with
optical zoom will become the
standard on phones within the next 1 – 2
years
52M camera phones with 3 or more
megapixels worldwide in 2007
622M by 2011
Desktop Scanners
MFPs
Camera Phones
Device Proliferation & Maturity
Document Capture Trends
0
10
20
30
40
50
60
70
Total
Loan
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OTC Der
iv.
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Accts.
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ct m
gmt.
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mgm
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Distributed batch
Centralized batch
Desktop/shared MFP
Where Does Scanning Occur?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Don't know
End
Middle
Beginning
Key Finding: Scanning is frequently introduced late in the process—a missed opportunity to automate data capture, workflows or information exchange.
(% o
f re
spo
nd
en
ts b
y ch
oic
e)
Where Should Scanning Occur?
• 71% respondents indicated that scanning should occur at the beginning of the business process, with intelligent document recognition, extraction and notification reducing processing costs.
60.50% 60.90%
47.10%
78.30%
60.90%
73.70%70.80%
55.00% 56.50%
37.50%
52.90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total
Loan
Pro
c.
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ccts
.
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eriv.
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% o
f re
spo
nd
en
ts
Agree/Strongly Agree
Source: IDC
Order Processing
Why Automate Order Processing?
Business Challenges of Order Automation
•Fax image quality (90% of orders are faxed)
•There is no such thing as a typical, standard purchase order• Sales orders vary in format between customers,
especially with tabular data, and can span multiple pages
• All sales orders have common elements, but there are too many different formats to template
•Capture of line item detail is an absolute requirement
Sales Order Processing: Key Messages
• Reduce the order to cash cycle
• Start workflows as quickly as possible
• Reduce exceptions – wrong shipments
• Control the process as soon as possible
• Improve customer relations
Order Processing Cycle
Improve Data Quality
Detect Missing,Incomplete,or Wrong Data
Confirmation
No error detected
OrderApprovalWorkflow
Data CaptureSeparationClassificationExtraction
ERP
Validate Order
Dispute Resolution
Process-Ready Data
Data
Improve customer relations by confirming receipt of order
Order Processing Cycle
Improve Data Quality
Detect Missing,Incomplete,or Wrong Data
OrderApprovalWorkflow
Data CaptureSeparationClassificationExtraction
ERP
Validate Order
Dispute Resolution
Data
Notification
Error detected
NOTIFICATIO
N
Improve customer relations by notifying them of errors
Kofax Solution to Automate Sales Order Processing
1• Control Paper Flow
2• Reduce Manual Labour
3• Integrate Electronic Sales Orders
4• Enhance Process Transparency
5• Improve Data Quality
+ Workflow
=Automate the
whole process& deliver valueat every step!
Early Scanning
1• Control Paper Flow
Distributed Capture
• Scan at Document Origination
• Central and distributed capabilities
Atlanta
Seattle
Phoenix
New York
Image Quality
Effective scanner throughput:• User interface/Image processing/
speeds and feeds
Effective paper throughput:• Increase image quality/Reduce
file size/Data ready
Effective people throughput:• Ease of use/Focus on
business process
Kofax VirtualReScan
Business Challenges
Step 1 is important because…
Most invoices are still received via postal mail, often through different entry points..
• Forwarded manually to Order Department
• Are lost / misplaced
• Delayed processing
• No visibility of outstanding payments
Automatically extract invoice information
Includes fax, email (& trailing documents)
2• Reduce Manual Labour
Extraction and Classification
1. Classify Document Type
InvoiceCredit Notex Purchase orderx etc
Supplier 1 Supplier 2 Supplier 3
Extraction and Classification
2. Extract and validate information
3. Feeds ERP systems (SAP, Oracle, Lawson, etc)
Business Challenges
Step 2 is important because...
• Data has to be manually keyed into LOB applications.
• Manual intervention results in• Processing delays
• High / random error rates
• Separate manual processes reg. email and fax
• Elevated costs
• Negative impact on relationship with suppliers
Main Benefits
• Reduced AP labour (time saving)
• Significant cost reduction
• Prioritization of invoices (for early payment discounts, ...)
• Increased supplier satisfaction: faster processing & payment times
• Higher employee satisfaction, less frustration
How to make my customers send electronic sales orders?
3• Integrate Electronic Sales Orders
Business Challenges
Why is it hard to on-board most suppliers?
• Lack of IT skills to setup EDI
• EDI is a very costly and complex solution. Cost to supplier between $8k and $15k
• Limited resources to roll out EDI
Kofax e-Transactions
Accounts Payable SystemInvoicing System
Postal Service
(2-3 days)
ERP System
EnvelopeStamping
Open, sort, distribute mail
(1-2 days)
Seller Buyer
ERP SystemeInvoice
SendereInvoiceReceiverInstant electronic
delivery (2-3 sec)
Send receipt confirmationsTrigger exception notifications
4• Enhance Process Transparency
Business Challenges
Step 4 is important because...
•10% – 15% of suppliers place inbound calls relate to the status of the transaction
• Up to $30 per call
• Have you received my order?
• Is the order OK?
• Has my order been processed?
• When will shipment occur?
Leverage communication to initiate exception handling (outsource to purchaser)
Help to automate the matching
5• Improve Data Quality
Business Challenges
Step 5 is important because...
It is hard to match sales orders due to:
• Data errors
• Business logic errors
• Invoice conformity issues
• Extraction related issues
• AP personnel have the burden to manually fix the problem
Automated Order Processing Features
• Import order from fax server
• Extract order information
• Validate part numbers, unit prices, etc.
• Locate the customer number
• Create order in the ERP system
• Route order to appropriate workflow for fulfillment
Benefits of Automated Order Processing
•Reduces order fulfillment time and cycles
•Streamlines efficiencies
•Reduces costs
•Enhances accountability,
•Accelerates business processes
•Optimizes corporate performance
Use Case: Promotional Products Company
• Use Case• Sales orders
• 100,000 customers, 300 fax lines
• Faxed orders
• Business Problems• Lost/misplaced orders
• Customer service back log
• 11 individuals processing orders (3 just to confirm customer number)
• Service-level agreement of 48 hours to fulfill an order
• Kofax Solution• 24-hour turn-around time over 48
• Automatic confirmation/notification of incorrect orders
Use Case
• Promotional manufacturer (balls, hats, calendars, awards, etc.)
• Multi-million revenue, 5 operating divisions
• 300 fax lines, 100,000 customers, processing 500-650 orders daily
• 95% of orders received by fax, 4% email, 1% hard copy
• 25% of faxes arrive at the wrong division/group
• 25% of orders result in a customer call asking, “Did you get my order?”
• 11 individuals processing orders (3 of them just to confirm customer number)
• Service level agreement of 48 hours to fulfill an order
Kofax Capture
VRSImage Quality
Integrated Product Portfolio
TransformIntelligent
Classification
CaptureFront-OfficeBack-Office
DeliverRelease to Multiple
Back-Ends
KofaxTransformation
Modules
KofaxDocumentExchange
Server
Integrationswith hundreds
of systems
KofaxExpress
Order Processing
Questions?
Why More Services Than an Invoice Project?
• Order processing is dependent on line item detail• Quote includes the definition of up to 75 top customers
• Order processing requires separation of orders• Without the inclusion of Kofax Transformation Modules Professional,
scripting is added to separate orders upon the occurrence of a new purchase order number
• Fax receipt date must be parsed from fax server data file
• Lookup of customer number
• Notifications• Internal
• External
• Business rules around Ship To Address
• Higher project manager involvement
Thank You !Thank You !
For further information, please contact:
Joanne OldfieldDirector, Professional Services Americas
Phone: 949 727-1733 ext. 475Email: [email protected]
For further information, please contact:
Joanne OldfieldDirector, Professional Services Americas
Phone: 949 727-1733 ext. 475Email: [email protected]