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.

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 multiday 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,” he added.
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.
Davis Janowski can be reached at [email protected]. For additional information on the companies listed above, visit the online version of this story at investmentnews.com.