Evolving the digital mailroom

Automated mail processing technologies and services are bringing new efficiencies and savings to the enterprise.

Organisations still receive reams of paper correspondence, forms and documents and will continue to do so for many years. Many have turned to automated digital mailrooms—whether outsourced or integrated into internal operations—to ensure efficient, productive, and correct processing and accessibility.

IDM asked the region’s leading business process outsourcing (BPO) bureaeaus where the significant new opportunities lie for inbound mail processing in enterprise and government users in Australia & New Zealand.

According to Paul Bellette, general manager of Sales & Marketing for NZ Post subsidiary Converga, “We are starting to see a real take up in enterprise and government organisations in digital mailrooms. The enquiry level has increased significantly in these sectors over the last 6 months with two to three early adopters going live in that same time period. “

“High volume high distribution is one of the key areas, but also organisations that process forms/applications/claims currently using a manual paper process, by going electronic there is a huge upside in process efficiency and cost reduction. “

There is a growth in demand for digital mailroom solutions caused by modern business practices such as hot desking, working from home and geographic expansion, so staff are not being tied to one desk in one location.

“This certainly adds to the business case,” said Belette, “making the originating document digital and accessible has actually allowed for more hot desking and working from home resulting in further cost savings.”
Lee Bourke, Director, Digital Execution at SEMA, sees most growth in the enterprise and government markets.

“We expect this growth to continue as enterprises continue to search for cost out and quality up initiatives,” he said.

Mailroom automation helps generate strong efficiency improvements by sending customer information to where it is needed within the organisation far quicker than manual processes.

Customer transactions, requests, and inquiries are therefore dealt with quickly, allowing organisations to compete on service level as well as cost.
“Mailroom automation includes the rapid digitisation of stakeholder data,” said Bourke. This data can then be processed and distributed in real time.”

“We have seen significant growth in the use of our accounts receivable solution. This solution allows same day banking and three-way matching in real and near-real time. This automation usually drives 30-50% of the cost out of the crucial business process. It also allows exceptions to be processed on the day they are identified thus reducing any major issues associated with the AR processing (e.g. frozen accounts).”

The Digital Mailroom Today

When implemented correctly digital mailrooms boost compliance, reduce costs associated with opening and sorting mail, and negate misplaced mail pieces. Digital capture, indexing, and electronic distribution allow businesses to access the most current information, complete with its digital audit trail.

Mark, Josman, Speedscan CEO, said, “We typically see a 25-30% cost savings in the outsourcing of document intensive business processes, where we can use a combination of technologies (OCR/ICR/barcodes), processes, infrastructure and experience to improve a business process and deliver a better solution for the end users. Increasingly organisations are looking at single platform solutions that manage all inbound documents (mail/fax/email and webforms) and provide the data in standard agreed formats into the core business systems. BPOs are now providing organisations with a greater range of management tools such as dashboards and reports to maintain a real time view on the processes that have been outsourced.”

Speedscan currently provide solutions that send automated responses (SMS/email) on receipt of certain documents to ensure that the business process continues and that all stakeholders, especially external stakeholders (brokers/customers) can be kept up to date.

“We also communicate through web services to send backchannel messages to client systems and third party applications in real time. In mortgage processing for example we use LIXI compliant messaging to update our client’s systems,” said Josman.

“Volume is an important driver, but once again other factors such as the complexity of the business processes that follows the mail process are very important considerations. The earlier the documents are able to be managed electronically, the greater the benefit a BPO is able to deliver to an organisations business process.”

Another major issue to consider is fluctuations and variations in volumes. Most organisations do not have the flexibility to handle large fluctuations in volumes. A BPO has both experience and flexibility when it comes to handling significant changes in volumes of inbound documents.

“Also, as paper based inbound documents become a smaller proportion of the total inbound document population (email/fax/webforms), the cost per unit of processing those documents becomes significantly greater. The paper documents effectively will become “exceptions” to the standard electronic process, with the resultant loss of knowledge, redundancy and experience. This is when a BPO is able to generate meaningful benefits for an organisation as it processes these “exceptions” for multiple organisations. A good example is in the Accounts Payable area, where electronic transactions are becoming the norm and paper based invoices, a costly exception.”

Before investing in a digital mailroom, consider and understand your organisation’s needs

“The greater the effort an organisation makes to understand its own business processes, the greater the benefit to be derived from workflow driven BPO solutions,” notes Josman.

“While we are all for keeping it simple, oversimplifying processes will reduce the potential benefits.”

One of the first decisions that needs to be made is whether to look to a BPO provider rather than an in-house solution.

John May is Portfolio Manager for Business Process Outsourcing at Salmat, which has about three billion documents under management, including for three of the four major banks.

May said, “If the timeframe of delivering a document or acting upon it is critical to your business, then automating it will make it quicker. In all reality now with email, there is not much internal mail that gets shipped around companies anymore, so really it’s around the business opportunities. It’s documents coming from your customers or your suppliers that you want to act on as quickly as possible.”

May believes the investment required in digital mailroom automation is probably prohibitive to a lot of small to medium businesses.

“Really all they want is the business outcome. They don’t want to be hiring OCR specialists and buying scanning machines and implementing workflow frameworks and having the IT overhead of maintaining those.

“By using a BPO we can leverage economies of scale by sharing infrastructure, resources and workflow platforms to reduce the costs a lot below the point that if someone had to buy and set it up themselves.

“There is an opportunity in organisations looking to improve service levels to retain existing customers. Mailroom automation helps generate strong efficiency improvements by sending customer information to where it is needed within the organisation far quicker than manual processes. Customer transactions, requests, and inquiries are therefore dealt with quickly, allowing organisations to compete on service level as well as cost. “

The ROI equation

What are the conditions that make it sensible for an organisation to look to a BPO provider rather than an inhouse solution?

SEMA’s Lee Bourke sees it as a simple commercial equation.

“If the volumes are significant enough then benefits can come from mailroom automation.

“There are three reasons that can drive this. Some choose to outsource their non-core functions thus getting the benefits that come from a deep concentration on core functions. Some are looking for improvements in quality that they have not been able to get themselves. Some are looking for simple cost-out of their business processes.”

Converga’s Paul Bellette believes most customers would see a benefit within 3 months and generally at least a 30% processing cost reduction.

“BPOs often offer a small implementation fee and a pay per use fee making it more an OPEX cost rather than CAPEX and thus a greater ROI,” he said.

Salmat’s John May said, “It really depends on what the document type is and what the business benefits you’re looking for are.

“For claims processing, the ROI has to include the customer satisfaction in processing claims as quickly as possible and processing them as accurately as possible. If you’re talking about accounts payable, it’s how much money have I saved in not having duplicate payments, in being able to take advantage of early payment discounts and knowing what my liabilities are, managing my cash-flow better. They’re all the things that go into their ROI.”