CloudX Blog

Document Processing 2.0 - Defining Document Process Outsourcing

Posted by Chris Cosgrove

May 7, 2015 2:08:20 PM


Time for a reboot!

From time to time it’s important to revisit the foundation of a concept, especially a burgeoning one.  With respect to document processing and how it’s always been done, we feel that now is a pertinent time to challenge the status quo and define what document process outsourcing is and why it’s so powerful.  Since we’re dealing with static, paper-based processes, the general approach to automating cumbersome processes is generally the same.

1.  Front-end capture

Any meaningful document process outsourcing effort is going to be driven by converting documents to data from the process outset.  However these documents arrive, whether physically or digitally (PDF attachments or Tiff faxes) is immaterial...either way they need to get sucked into an advanced OCR process.  This means, no template based approach since that will just get tripped up as soon as a vendor shifts their document format around.   Rather, initiate with a layout and learning based recognition model and extract all relevant details off of the document.  In the event, you can’t pull what you need from the document, boom, it needs to kick to an exception queue for human intervention since requisite data to process is unavailable.

2.  Exception handling

Part of good document processing automation is the ability to interface with documents digitally in a manner that parses data into a structured database format.  Folders based storage mechanisms aren’t up to snuff because items can easily get mis-filed, lost, and be irretrievable. Therefore, by utilizing status queues and business rules based upon this meta-data, you can force documents that contain exceptions to be handled by processing staff who are familiar with the process nuances and have the means to supply the missing data or who know how to interface with internal or external stakeholders to resolve the exception.

3.  Workflow

Additionally, assuming all data is present and accounted for to advance a transaction (whether invoice processing, sales order processing, remittance processing, or anything else for that matter), it may be necessary to get an authorized digital approval for large dollar or critical documents.  This is achievable through electronic workflow and approval processes, and provides a convenient audit trail for future reference.

4.  Back end integration

Now comes the tricky some cases.  Obviously the goal of digitizing and automating the data capture effort is to divest oneself of the burden of entering that data into the back end system.  By doing so, you can you eliminate between 60-70% of the labor effort required to perform the process.  Additionally, because that effort is gone, the process is accordingly expedited, and you pick up the benefit of enhanced visibility, provided you have a decent outlet for reporting and dashboarding.  Integration to back end systems can range from direct methods to APIs to ingestible file formats to robotic entry technology.  Whatever the means, it is the fundamental pivot point of the process that delivers massive value.  Additionally, it’s an equally important step besides the data depositing aspect to match and reconcile data against database tables within the erp.  In the case of order processing this could involving product codes, descriptions and pricing, and on invoice processing can include references against vendor master data or PO data tables (as we do in our typical Accounts Payable process automation scenario).

5.  Visibility

Without these components it’s near impossible to have meaningful insight to the process.  This means, you can’t ferret out bottlenecks or use latent process data to affect positive business outcomes.  As a case in point in terms of invoice processing, you might miss the capture of an early payment discount by not turning around a payment to a priority vendor in a timely fashion.  Alternatively, it may cost you money if you miss a payment and get penalized for late payment because you couldn’t unearth an invoice fast enough.  Another impact of visibility is upon ancillary procesess associated with data retrieval including audits or even monthly accrual and forecasting functions.  All of these can be positively affected through dynamic visibility, another key facet of document process outsourcing.



All of these are impactful components to a successful document process outsourcing campaign, but the bedrock element to DPO is the connection of cloud based technologies overlaid by efficient and affordable human processing.  The key nuance of DPO is that it empowers organizations who have not had the financial wherewithal to invest in automation technologies to do so by leveraging a SaaS infrastructure and transactional pricing model.

We’ll dive more into DPO in the coming weeks when we explore processes that are compatible with this approach and how they can look pre and post automation.

Free eBook on Unlocking Profit From Transactional Document Processes!

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Topics: document process outsourcing, document processing,

The Real Costs of Not Transforming Transactional Document Processing

Posted by Chris Cosgrove

Apr 30, 2015 3:23:34 PM


 There's better things in the world to do than be bogged down under your paper process


They say nothing in the world is free, and I couldn’t agree more (with the exception of salvation, but I’ll leave the theological / philosophical discussion to other folks).  With respect to bringing in automation technologies and revamping manual processes, there certainly are no ways to go about improving without investing some resources into an initiative.  Sadly, there are so many upsides to modernizing static processes like AP invoice processing, AR remittance processing, check payments, and sales order processing, that it is something of a sin to leave them in the antiquated state that many companies do.  So beyond the investments required to transform a process, there are definite costs to not doing so and that’s what we want to deal with today.



Here we go:


Opportunity Cost


For many folks struggling with burdened, inefficient processes (the Accounts Payable process is a prime example), there are costs to that inefficiency. In some scenarios, particularly in invoice processing, there is an opportunity cost to invoices that are simply paid by their due date or worse, paid late.  The way this fleshes is out is via late payment fees in the worst case scenario. That is a penalty for the due date target being missed and results in a negative fiscal impact to the payee. However, though more benign, it is nonetheless equally true that early payment discounts on invoices are missed through inefficiency.  This means a potential financial gain to the payee is lost. 


In the space of check payments, there are massive opportunity costs for not pursuing more advanced methodologies for payment.  In the case of virtual payments, it’s difficult to argue with the compelling force that is the rebate stream they generate.  Whereas checks cost money to produce, send, and necessitate a longer period to deliver, receive, process, and clear, virtual payments are instant, and provide far greater security measures than that of checks.


Processing Costs


An area most Accounting and Operations leaders will be familiar with are the latent processing costs to advance a transaction. The calculation for processing costs is different in every process, but it is essentially a function of simple math by summing up the labor efforts associated with the process, along with the technology that supports the process, and then factoring in miscellaneous costs involved in transmitting documents.  Miscellaneous costs can include things like postage, the cost to print a document, courier costs or others.  The reality is that until and unless a process is modernized, you are stuck with higher than necessary costs, especially in the processing department.


Process Risks


Other areas for consideration that should be considered a cost are the risks associated with how a process is performed. In the case of a manual, paper-based process there are many factors to consider.  For starters, manual processes are virtually always slower and more error prone than digitized process.  By virtue of the fact that data is not passed along electronically, there is a requisite element of data entry that needs to happen to integrate data into disconnected systems.  With this effort comes human error.  Additionally, because manual processes are less visible, it is harder to get accurate reporting out of these processes.  This creates two difficulties; a. process administration from a key performance indicator standpoint, and b. massively diminished ability to curb payment errors or protocols to detect fraud on a dynamic basis.  Both of these are areas that can be improved through automation.


 Human Costs


Another area that is not something that is readily considered in most cases,  is the quality of the work that is done.  Not so much from a data throughput standpoint, but rather from the perspective of the labor staff that is responsible for the document processing. In most cases there is nascent understanding that most processes are ripe for improvement.  The net result of improvement in these areas is that the mundane and joyless task that is data entry and document processing is replaced by more valuable, analytically driven or socially rich experiences (vendor support and interaction) than in a manual processing environment. The reason being is that in a manual state, there is simply not enough time to get around to higher order items involving the process, when just ‘surviving the process’ so to speak is so cumbersome as to preclude other pursuits.  In turn, this means that the job function associated with these processes can be enriched through a more valuable work experience.


There’s a lot more to be said about document processing costs, and we get down and dirty on that subject in this eBook, which you might find cool  However, for oddball processes, sometimes it’s helpful to lay the cards on the table and have an outright discussion and consult with folks who have actually looked at hundreds and thousands of them to get insight as to the best way to achieve transformation.  We welcome you to do that here.

 Now get on with transorming your document processes so you can get out there and enjoy your life a little more!

Free eBook on Unlocking Profit From Transactional Document Processes!

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Topics: Accounts Payable Process, invoice costs, document processing,

Re-thinking Document Processing For Today's Business Climate

Posted by Chris Cosgrove

Apr 23, 2015 4:44:52 PM


I don't know what that does, but it looks cool! 


Face it, the more things change, the more they stay the same.  Businesses today are faced with so many challenges that there are dizzying slew of items that corporate leaders can get hung up on when prioritizing what demands improvement and attention.  One common thing for many companies is that often the prioritization of improvement is centered on activities that improve top-line revenue production, and that’s a good thing. The only challenge is when this thinking renders back office improvements  secondary or tertiary on a consistent basis.


Why this is a problem!


You see, while top-line revenue is certainly a good indicator for the health of a business, and something that’s kind of akin to air for a human being in terms of importance, back office document processing issues can create a plentitude of problems that no leader wants to contemplate.  And yet, probably 8 out of 10 times, corporate re-investment and attention will inevitably get drawn to the more glamorous, less prickly side that is top-line rev.   However, in today’s marketplace, by turning attention to the back office processes that have been neglected from an automation and transformation standpoint, it’s possible to achieve and extract value on numerous levels, including monetary and operational gains, risk mitigation, and strategic wins.


Document Processing Trends


Certainly enterprise level companies have invested the most dollars into correcting these processes, though in fairness, many of them have embraced the process punt that is offshoring.  Countries like India, the Philippines, and China present substantial dollar cost reductions and pools of technical talent that can help re-engineer and iprove a document process.  However, this is by no means a one-size fits all model, and is thus typically embraced by the biggest of the big.


Alternatively, other large companies may deploy automation technologies, or at a minimum document management technologies. The big challenge for most mid-sized (sub $1 billion in revenue) is the cost justification and technical resources required to sustain these kinds of initiatives.  Nonetheless, people have an innate feeling and knowledge that there has to be a better way.  Much of this is credit to the drastic changes and advances that have entered the scene in recent years through the mobile revolution.  It’s never been easier to manage personal documents, photos, files, whatever- through the thousands of apps that exist to revolutionize how we live.  Similarly, things are changing on the work front, but identifying the best approach is largely a subjective exercise.


For starters, mid-sized companies are supremely aware of the capital investment costs required to enter this space, and for many it has been a deal breaker in the past.  What’s constant is that everyone wants to improve, but traditionally this has been unfavorable to mid and small sized businesses, and that’s why it’s important to challenge the status quo of thinking in this space. As you’ll see in upcoming posts from us, there is a way for businesses of all sizes to participate in the document processing revolution.  We like to call it document process outsourcing and it blends state of the art technology, plus best practices for managing document processes, and packages it in a pay as you go model that anyone can justify.  We think that one of the key things here to unlocking the profits in these processes is to identify the latent dollars that you might be bleeding out and recoup them to be used as a source of additional reinvestment until you’re as tricked out and modded as KITT in the latter years of Knight Rider.


Stay with us over the next few weeks as we unleash more in this series on unlocking profit from transactional document processes and how to achieve performance optimization!  It’s sure to be a blast – now punch the turbo, drop the smoke screen , and get us out of here!


Free eBook on Unlocking Profit From Transactional Document Processes!

Read More

Topics: document process outsourcing, document processing,

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