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Information Lifecycle Management

Martin Hurley (Global) - The Need to Consider Document Processes and Risk Management in Tandem

Underlying almost everything we do, as we all go about our daily business tasks, are business critical document processes. These binding threads in our organizations ensure information can enter, travel inside and leave our organization according to our business and client needs.  Furthermore, with the era of ‘Big Data’ now upon us, organizations are facing an unprecedented rise in the amount of data which needs to be collected, processed and shared across the business.

Also essential to business success is its ability to manage risk. Yet interestingly these two activities are often not considered by business leaders in tandem. In fact, in many cases document processes are an overlooked aspect of risk management and the impacts of this can be significant.  This was highlighted in a recent IDC report which found that 76% of companies experienced significant business risks and/or compliance incidents due to broken document processes.

IDC also identified that over a third of businesses (36%) aren’t meeting basic compliance requirements, 30% have lost key employees and 25% have lost major customers due to ineffective business document processes.

Inaction to address these issues is likely to have huge financial consequences in the future. IDC estimated in its report that the overall cost of process failure is ten times that of direct out-of-pocket costs, such as paying financial settlements. Furthermore, according to Ricoh’s own research that was undertaken last year, European firms alone could be missing out on potential profit increases of as much as €46 billion due to inefficient, largely manual information processing methods.

However, as IDC points out, this issue requires a step change in how organizations approach the issue. One of the major barriers to improvement is that many senior executives believe that ineffective document processes carry low-impact risks to the business. Commonly the sole benefit of improving document processes is to drive down costs. This means that the need to review and optimize the processes to minimize risk and add more value to the business is sitting below the corporate radar and not commanding C-level attention.

Moreover, the most commonly used ‘fixes’ by organization to the issue of poor document processes, on the occasions they are recognized, are the re-deployment of existing staff and investment into new technology solutions. While these can help, they will not fix the underlying problems if they are simply applied to the underperforming organizational processes and they may even ‘lock in’ the inefficiencies.  Also, document management should not be confused with the concept of going ‘paperless’. The medium itself is not the issue, as there are both efficient and inefficient digital and paper based document processes. In fact, according to IDC’s report, some companies have reported that selected paper-based processes are some of the most efficient and many electronically based processes are the least effective when it comes to business risk.

In order to understand the impacts correctly, it is essential that the C-level, who has authority across multiple functions, support a study into the existing processes within their organizations. The existing ways of sharing information that worked well in the past may need to change to ensure they are fit for the future. One route to achieve this is to work with an external expert that can audit and identify the process inefficiencies that exist organization-wide and make recommendations as to how these can be addressed. It is then imperative that the implementation of any recommended changes remains a board level issue for on-going evaluation and alignment with the business goals.

Achieving efficient document processes is intrinsic to the success of the organization and its effectiveness and must be a tier one management priority. If properly addressed, the rewards are considerable, if ignored the impacts could make the kind of front page news a business isn’t seeking to achieve.

By Martin Hurley, Vice President and General Manager, Outsourcing Services, Ricoh Europe

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