A paperless office can boost your ROI

Taking your firm paperless might seem as daunting a challenge as climbing Mount Everest, but it can bring significant return on investment over the long term.

A recent study and white paper (available on investmentnews.com) sponsored by Laserfiche, a Long Beach, Calif.-based document management unit of Compulink Management Center Inc., showed that the smallest of advisory firms can realize savings of $40,000 or so annually when they integrate a document management solution into their practices. For larger firms, the savings can reach into the hundreds of thousands of dollars.

It isn’t as if paperlessness is a new idea. For more than two decades, the technology world has championed digital record keeping as one of its Holy Grails (straight-through processing is another).

Solutions have come and gone, and the hype continues, but there remain many good reasons to embark on the paperless-office quest.

Aside from the considerable savings in square footage occupied by filing cabinets, going paperless improves customer service, enhances compliance and transforms audits into little more than minor data calls instead of multi-day office shutdowns. For owners considering retiring or selling, a document management system can add significantly to a firm’s value.

Even though it isn’t difficult to come up with a solid argument for going down this path, most firms aren’t biting, however.

“Unfortunately, based on our research, less than 10% of [registered investment advisers] have adopted electronic document management systems,” said Tim Welsh, president of Nexus Strategy LLC, a Larkspur, Calif.-based consulting firm to the advisory business. “Despite the efficiencies it can introduce, the various savings in operational costs and the ease in terms of dealing with audits, some firms still won’t embrace the technology.”

For many firms, this has more to do with the mix of infrastructure they already have than with the new technology itself.

“We have not gone totally paperless as of yet, because of the myriad of applications we use and the constraints of outside custodians and carriers,” said Pasquale J. Sacchetta, president of CFIG Wealth Management of Westport, Conn. “We’re working now to try to find the best long-term solution.”

One firm that has taken on the challenge is Friedman & Associates, a five-adviser wealth management firm in Novato, Calif. With 140 clients, $220 million in managed assets and 14 years’ worth of filing cabinets, going paperless was no small task.

Gregory H. Friedman, the firm’s president and a participant in a recent InvestmentNews technology round table, said the implementation required a lot of advance planning. Deciding on the technology, both for going forward with new clients and for the old hard copies associated with current and long-term clients, and how best to handle the physical labor of scanning documents were two crucial factors in the process.

“Immediately, we realized this wouldn’t be a one-month or even a three-month deal. We did it by client,” Mr. Friedman said. “We made a list of the clients and we tried to do X number of clients a month.”

The firm settled on the Worldox document management system, from World Software Corp. of Ridgewood, N.J. Mr. Friedman explained that several factors weighed heavily in favor of the solution, which previously had been used almost exclusively in the legal profession. These included how well it integrates with his Junxure customer relationship management system and how it handles every document, whether a scanned paper document, e-mail or other type of digital file.

Next, the firm addressed the manpower issue. Mr. Friedman decided early on that scanning documents wasn’t a prudent use of time for his revenue-generating professional staff.

So he placed his office manager in charge of the project, and the firm hired a rotating cadre of high-school-aged sons and daughters of firm members and clients to do the manual labor. They were paid $10 an hour for 10 to 20 hours of work a week.

Within a year, the project was completed, Mr. Friedman said.

Firms can take several routes, depending on their size. In addition to platforms that tend to cater to enterprise-size firms, such as those from Astria Solutions Group of Schenectady, N.Y. and its docSTAR suite; Conarc Inc. of Alpharetta, Ga.; Docupace out of Los Angeles; EMC Documentum out of Pleasanton, Calif. (EMC is based in Hopkinton, Mass.); IBM Corp. of Armonk, N.Y.; Interwoven Inc. of Sunnyvale, Calif.; Laserfiche; Open Text Corp. of Waterloo, Ontario; and World Software Corp., several solutions are more tailored to small firms.

A suite of applications from eCopy Inc. in Nashua, N.H., the Office SharePoint line from Microsoft Corp of Redmond, Wash., and PaperPort and OmniPage from Nuance Communications Inc. of Burlington, Mass., give smaller firms a more palatable starting point. While the former list of more-enterprise-focused solutions is centralized client server technology, PaperPort, for example, can be thought of as a desktop document management application that could reside on each adviser’s PC.

“I wouldn’t say it’s pain free, but there is just no alternative to going paperless. I just can’t imagine that within five years, if you haven’t, I just don’t know how you can be profitable,” Mr. Friedman said.

Document management, content management

The first practical step to achieving the Holy Grail that is the paperless office is coming up with a manageable plan. An important part of that plan should be to take the process in steps and thereby avoid overwhelming your firm’s employees and your technology budget. For many firms, especially smaller ones with limited personnel resources, it often makes the most sense to begin the process of going paperless starting first with new clients you add to your practice, adding older records to the mix at a later time. It also makes sense to come up with a realistic schedule based on how many staff members (or temporary workers you might bring in) are available, the capabilities of the hardware you have or plan to buy, and an assessment of just how many documents can be scanned and added to your system over a given period (X number of clients a month or week, or X number filing drawers, etc.).

eCopy and Nuance can be thought of as products targeted specifically at addressing the task of document scanning and the management of those documents thereafter. They each provide fairly comprehensive management and search capabilities related to these documents and allow you to in some measure view and organize all content including, email attachments, on your network. They are not; however, what you would consider an integrated and centralized solution in the way that Microsoft addresses and subsumes the paperless conundrum within multiple products (see overview below). It should also be noted that both the products from eCopy and Nuance are meant to reside on Windows PCs and networks. Both of the latter products are more straightforward and targeted in their approach; if you are planning to launch a major initiative to achieving a paperless office they are probably the simpler approach to take. If, on the other hand, you already have some or all of the Microsoft components listed at bottom you should start by carefully studying the process of document scanning, imaging, search, and access using them. If you find Microsoft’s approach to the process too cumbersome, too hard to train your staff in, or is incompatible with the hardware you already own you can further investigate and/or add the others later.

eCopy ShareScan OP and eCopy Desktop, from eCopy Inc. of Nashua, N.H.

This company has a set of scanning and document management applications that take any paper document and converts it into a digital file. As is the case with most document scanning and management applications the eCopy set of applications starts with paper, specifically with the scanning capabilities of your firm’s networked copier. eCopy ShareScan OP software connects your firm’s copier (if it is network-compatible and attached to your network) to the rest of your firm’s network including desktop PCs, e-mail, and other networked enterprise applications companies.

Bundled with eCopy ShareScan OP, eCopy Desktop is a PDF creation and image editing solution offering a set of tools that includes annotation, stamps, and optical character recognition (OCR), which will allow those in your firm to work with and distribute scanned documents.

eCopy software and hardware solutions are used with Canon, Gestetner, HP, Konica Minolta, Lanier, Ricoh, Savin, Sharp and Toshiba multi-function printers (MFPs), and some TWAIN-enabled scanners, and PCs. Firms interested in purchasing or getting a demonstration of eCopy products will go through office equipment dealers (OEDs) and value added resellers (VARS). If your firm lacks an IT department but regularly uses a local computer consultant they can be a good starting point to find the best such companies in your locale.

Currently eCopy has sold over two million software licenses worldwide and their customers include companies in the construction, education, financial services, government, healthcare, manufacturing, legal, and telecommunications industries. Some of the company’s larger customers include BP, Cisco Systems, General Motors, Nissan, Sprint, and Verizon Wireless. Pricing information was unavailable at press time.

For additional information on eCopy go to:
www.ecopy.com
Pricing information for eCopy:
eCopy ShareScan software embedded on the multi-function printer MFP (including 10 license of eCopy Desktop): $2,995 per per MFP (this includes integration to e-mail, fax server and Microsoft SharePoint).
eCopy ScanStation (including ShareScan & 10 licenses of eCopy Desktop): $4,195 per MFP (this includes integration to e-mail, fax server and Microsoft SharePoint (an ergonomic keyboard and touch panel included).
eCopy Desktop, five-license bundle: $795
ScanSoft PaperPort 11 and OmniPage Professional 16 from Nuance, Inc. of Burlington, Mass.

This software is a relatively low-cost solution (when combined with a scanner and PC) to begin getting a handle on paper in a financial adviser’s office.

Think of Paperport as scanner-to-desktop client software. In a nutshell it allows an individual adviser or their assistant to scan and easily import documents into a PC. It is also a desktop document management system for Windows, an operating system use by most everyone but one not well-designed to deal efficiently with scanned files or image files.

For really small firms Paperport can be everything a firm needs in terms of document management. A firm with more than a couple of advisers will want to add or start with Nuance’s Omnipage product that has Paperport bundled in it.

Whereas Paperport has rather rudimentary conversion-to-text features (pulling text out of a scanned document and making it editable as, say a Microsoft Word document for example), Omnipage has far more advanced optical character recognition (OCR) features. The software is available for download, as boxed CD software at retail, and as an add-on with the purchase of Kyocera and Konica Minolta copiers, as well as from value added resellers (VARs).

For more information on Nuance products:
www.nuance.com
Pricing information for Paperport and Omnipage:
OmniPage Professional 16 – $499 (note that this includes PaperPort and PDF as well)
OmniPage Standard 16 – $199
PaperPort Professional 11 – $199
PaperPort Standard 11 – $99
Microsoft Office Document Imaging in combination with Microsoft Office SharePoint Server 2007 from Microsoft Corp. of Redmond Wash.
www.microsoft.com/sharepoint/default.mspx

Many small businesses, including financial advisers, prefer to keep their offices running on Microsoft products. There are many reasons for this, not the least of which is that Microsoft continues to dominate the market with between 80 and 90% of companies running some combination of Microsoft office productivity products. Another big reason is that a large majority of the value added resellers (VARs) and technology consultants serving the needs of small businesses throughout the U.S. prefer to sell and train on Microsoft’s products.

In terms of achieving a paperless office on a Microsoft platform the simplest solution is to run Microsoft Office (whether 2003 or the latest 2007) on your PCs in combination with Microsoft Office SharePoint Server (again, version 2003 or the latest version 2007) on your office network.

Providing an overview of the range of services provided within SharePoint goes well beyond the scope of this piece but you can check the Microsoft site (link below) for all the details; suffice it to say that SharePoint and SharePoint Server provide a platform for running a small office network and acts as a centralized repository and collaborative brain for your office’s computer network including content and document management. In brief, you can run your scanner(s) and do basic image editing using Microsoft Office Document Imaging that is bundled and loaded by default as part of Microsoft Office. Office Document Imaging has two components, both of which you’ll find within the Windows Start menu (Microsoft Office Document Scanning and Microsoft Office Document Imaging respectively).

There are many new or updated content management features built into the latest version of SharePoint Services including the ability to lock document check-in and check-out status, more granular versioning that includes both major and minor versions, more detailed content-type policy management, and more depth in creating access controls for document libraries you’ve created on your network.

For more information on Microsoft’s Office line of products:
http://office.microsoft.com/en-us/suites/FX101754511033.aspx
Microsoft pricing examples:
Microsoft Office Small Business 2007 (suggested retail, $449; upgrade price from Office Small Business 2003, $279) or Microsoft Office Professional 2007 (suggested retail, $499; upgrade price from Office Professional 2003, $329).

Since setting up of servers and an office network of any size is usually the domain of a consultant or VAR (rather than a typical PC power user or do-it-yourselfer) Microsoft makes Office SharePoint Server 2007 and client licenses available only through volume licensing and prices are not quoted online or to the general public. Based on discussions with two networking consultants, getting a ten-person office set up with SharePoint Server will cost between $2,500 and $4,000 depending on the mix of components selected. This does not include the cost of server hardware, which can vary greatly ($600 to $5000 depending on the brand, model, and configuration of internal components).

Solutions for larger firms:
The following are document and/or content management companies and their applications, solutions, or services that tend to be most appropriate for larger firms or those with special requirements. These installations also vary greatly in terms of cost—generally negotiated on an installation-by-installation basis— and are often sold through and installed by value added resellers (VARs).

Astria Solutions Group of Schenectady, NY produces the docSTAR automated system for document storage and retrieval. Its document management works in conjunction with you copier, “turning it into an electronic filing cabinet.”
www.docstar.com

Conarc, Inc. of Alpharetta, GA has a line of iChannel offerings including iChannel Document Management, iChannel Email Manager, iChannel CRM, and iChannel Knowledge Management applications among others.
www.conarc.com/industries/finance_accounting.asp

The EMC Documentum product family of Pleasanton, CA, (a subsidiary of EMC Corp. located in Hopkinton, MA) has a selection of literally dozens of document management and content management components for your IT manager to choose from.
http://software.emc.com/products/product_family/documentum_family.htm

IBM FileNet (An IBM Company based in Costa Mesa, Calif.) and its FileNet Enterprise Content Management (ECM) solutions are installed in nearly 1,000 financial services organizations around the world, including 23 of the top 25 global banks.
www.filenet.com

Interwoven, Inc. of San Jose, CA has a large line of document management and collaboration applications including Interwoven Collaboration and Document Management; and Interwoven E-mail Management among many others.
www.interwoven.com/products/index.html

Open Text Corporation of Waterloo, Ontario is an independent vendor in Enterprise Content Management (ECM). Their Livelink ECM – eDOCS DM suite of products serve many large financial services companies (On October 2nd, 2006, Open Text acquired Hummingbird).
www.hummingbird.com/products/enterprise/dm/index.html?cks=y

WORLDOX Document Management System, a product from World Software Corporation of Ridgewood, New Jersey that initially catered mainly to the legal community. The system combines profile searching and full-text searching with document management services like check-in and check-out, version control, work lists, integrated file viewing, file activity auditing, reporting, file-level security, and others. www.worlddox.com

A sampling of document and/or content management online service providers:

Docupace is a service provider out of Los Angeles, CA that offers both on demand and premise-based Enterprise Document Management (EDM) applications including Docuserv, a solution tailored for the financial services market.
www.docupace.com

Cambridge Investment Research, Inc. of Fairfield, Iowa is one example of a broker-dealer providing document management as a service, in this case called C-Docs, an online document management tool and virtual file cabinet for document storage (meets NASD and SEC disaster recovery requirements). Imaged paper files (a firm will need a scanner) are then indexed and searchable on a Cambridge database; Cambridge is also connected to the imaging system used by National Financial Services LLC. This enables Rep/Advisors to send client paperwork electronically through to the clearing firm without having to mail most documents in the traditional manner or timetable.
www.joincir.com

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