An Essential Guide to Digitization – An SVI Whitepaper

Introduction to the Whitepaper

Reduction in the amount of paper used in business processes and the digitization of existing paper-based documents have become two of the key initiatives in various organizations and businesses. The shift to the paperless culture or electronic document-based processing is quite evident, especially in the financial industry. It is due to the fact the paper-heavy processes call for strict compliance requirements in view of expediting the processes and regulating access to the documents. However, transitioning to digital records is a critical approach for every industry that aims to stay competitive in this modern day and age. So what can the industries expect to achieve by digitizing paper-based documents into electronic files and records that are aligned with workflow management and streamlined processing? Major advantages include:

  • Improving the operational efficiency of business processes
  • Ensuring compliance to regulatory requirements
  • Ensuring the availability of vital and permanent records for business continuity and disaster recovery
  • Discovering new opportunities for revenue boost through multi-platform communications and potentially attract new business partners and customers
  • Enabling re-allocation of workforce to core processes

In this whitepaper, we establish why digitization is crucial to finding new ways of doing business, the models for digitizing documents, and the factors involved in carrying out a digitization initiative.

Factors that Propel Digitization

With today’s fast-paced environment, companies are looking for ways to streamline their business processes and reduce operational cost. One of the key methods to realize this is through digitization. For the past two decades or so, companies across various industries have been implementing digitization not only for client-facing documents but for internal records as well. With today’s cloud-based infrastructure coupled with advancements in mobile communications, it is no surprise that digitization is not just an option but a compelling choice. This trend is notable especially in the banking industry, which has long been known for having document-intensive processes and strict rules when it comes to the access and handling of documents. But this does not diminish the fact that virtually all industries can benefit from digitizing their paper-based documents and vital records. Be it logistics, insurance, healthcare, and even government, they would all benefit from using and processing digitized records instead of paper-based documents.

Digitization helps ensure compliance to government regulations and promote business continuity amidst unexpected circumstances such as health crises and natural disasters. Let’s take credit card applications as an example. Digitizing the application forms and supporting documents can significantly expedite the processing and routing of documents, resolving deficient applications and notifying the applicants regarding the status of their application. Since the critical fields are captured and indexed after scanning the documents, the database can be accurately populated with data that are useful for further processing and other related business processes. The improved efficiency in processing such applications result in higher revenue for the bank and enhanced experience for their customers.

Businesses are transitioning to digital records to explore new business opportunities available in multiple platforms, helping them attract new clientele and ramp up their revenues. For these businesses, it is important to consider that digitization is not merely transforming paper documents into electronic records but actually making the data more useful for subsequent processing. Being able to capture data right from the start makes verification possible at a later stage, even if the original paper document is damaged or lost. With the advancements of the internet and cloud-based technologies, the information captured can be shared to authorized users without compromising the aspect of data security and confidentiality. This would in turn cut down the processing time and enable the workforce to focus on their core functions, resulting in more revenues for the company.

And lastly, digitization makes it possible for businesses to use analytics for the work they process. Work totals are counted automatically, and useful reports can be generated on the fly, providing the businesses a complete insight on their data. From there, critical business decisions can be made, and appropriate tweaks in the processes or workforce can be implemented to resolve any bottlenecks and further streamline the operations.

Why Do Businesses Shift to Digitization

While more and more companies are implementing digitization on their client records and internal documents, many of them tested the waters first by doing process-based digitization. For example, banks may try digitization on their credit card application process whereas insurance brokers may start digitizing at the account enrollment process. The point is that digitization need not be done at a full scale right away in order to see results. On the other hand, some organizations may choose to digitize on a departmental basis. An example for this would be a government agency that digitized its employee 201 records. The volume of paper used for storing these types of records can be significantly reduced, thus allowing for the reallocation of the saved resources for more critical projects or tasks.

To realize even greater benefits out of digitization, a streamlined processing from start to finish is the way to go. The challenge is that most businesses are not equipped with the knowhow and technology to do such processing efficiently. This is where outsourcing such service can make a difference. An experienced service provider can provide the set of tools and methodologies to perform digitization, thus allowing businesses to focus on the delivery of their core products and services.

The prevalence of cloud-based storage solutions makes it even more compelling for businesses to go digital. Back in the day, data storage was very expensive so only a few businesses are able to procure equipment for storing their data. But today’s cloud-based infrastructure presents an inexpensive solution for data storage, further reinforcing the viability of capturing data from paper documents and storing these data for future retrieval.

And lastly, the application of workflow monitoring and business process management have enabled businesses to derive even greater value from digitization. Being able to monitor the documents as they progress through the digitization process, the businesses can apply corrective measures where there are bottlenecks, and even provide retraining to their personnel if deemed necessary. This just adds to the various reasons why it is imperative to digitize incoming documents right from the start. Workload distribution can be optimized as a result of improved production management and real-time reporting of workflow status, further contributing to more savings over the tasks that have been previously carried out manually in a paper-intensive workplace.

Tools, Processes, and Implementation

Digitization is converting paper documents into electronic records that can be accessed via indices in a document management system. Sounds simple enough? In a sense, yes. But for digitization to be effective, there is a need for having the right set of tools and processes as well as the manpower to use the tools and implement the processes. Digitization typically involves using the following tools:

  • Scanning hardwareThese are input devices that convert paper documents into images. It may range from low-speed scanning equipment and multifunction printers with scanning function, to high-speed, high volume scanners. 
  • Scanning and QA softwareThese are applications that take the output of a scanning equipment and convert it into a manageable information asset. It includes image QA and correction software that can be used to crop, rotate, deskew, and despeckle images. Also included is the indexing software that is used for input of the required index fields as well as for inspecting the entered data and making corrections if necessary. Optical character recognition (OCR) application and watermarking tool are also used depending on client requirements. 
  • Document Management SystemThis is basically the repository for the images generated from digitization. It allows for easy retrieval of document images through the input of the index fields. 
  • Workflow monitoring softwareThe main purpose for this application is to be able to monitor the documents as they progress from one step to the next, often supported with timestamps, geotags, and userID of the personnel that performed the processing on the specific document. 

While different service providers may have their own set of processes, digitization has a fairly standard flow that involves different tools. The major stages can be listed as below:

  • Document groomingThis is the stage of preparing the documents to the state required for scanning. Typical steps include unfolding of pages, removal of staples and paper clips, sorting by document size, insertion of page separators and barcoded sheets.
  • ScanningThis stage is the actual conversion of paper documents into electronic format. As mentioned earlier, it may involve the use of low-speed scanners and MFPs. For huge volumes, several high-speed scanners may be used to speed up the process. This stage also involves Image QA and correction, such as image rotation, deskewing, and despeckling. Such features are sometimes integrated within the scanning software or can be applied using a separate software.
  • IndexingThis is the stage of encoding or capturing the data or metadata from the scanned images. Most capture software supports automated recognition and indexing techniques such as barcode recognition and OCR. In addition, most capture software products provide the ability for process workers to manually index an image. QA for the indexed fields is also implemented at this stage to ensure the accuracy and correctness of data.
  • Data transformation and loading to a DMSThe true value of capturing the images and data of documents can only be realized when there is a way to efficiently search and retrieve them on demand. The use of a document management system (DMS) is exactly what’s needed. But before the digitized output can be loaded to a DMS, the data is converted to the format required by the DMS being deployed. Depending on the requirements of the business, the DMS can be configured as a local repository or a cloud-based one. The use of a cloud-based DMS enables the businesses to efficiently access their digitized records from virtually any place with Internet access. There is also the added advantage of cost variabilization and storage scalability for future expansion. Or it could be a hybrid model – day-today and most recent documents are stored in the cloud for fast retrieval, while old and archived documents are stored locally.

Of course, the cost for performing each activity should also be considered. Document grooming is typically the most labor-intensive task, followed by rescanning in case of poor-quality output and exception handling. The scanning process tends to be the most inexpensive among the processes. Meanwhile, the cost for indexing depends on the number of index fields and the accuracy required by the client. Depending on the volume of documents being digitized, the manpower complement and hardware deployed may be adjusted to meet the required throughput, especially for processing time-critical documents such as new accounts and claims.

Selecting the Appropriate Digitization Model

While the major processes remain the same for various projects of document digitization, it is possible to use different models depending on specific project requirements to optimize the use of resources. For instance, the deployment of manpower complement can be tweaked to ensure the efficient performance of digitization tasks within the target time. Significant savings on hardware components can also be achieved with the use of the model that is most appropriate for a particular digitization project.

  • On-site Grooming, Scanning, and IndexingIn this model, all processes (from document receiving down to output submission) are conducted on the project site. Personnel are deployed to the project site to perform grooming, scanning, and indexing of the documents and produce daily output for client acceptance. The qualifications of the personnel are crucial to the attainment of the deliverables for the day. The composition of the team varies depending on the installed hardware for the project.Since the process is sequential, a minor slowdown in grooming can compromise the daily output. Grooming speed is a factor of document size, condition, and age. Indexing is the critical path of the process. Encoding skills can only be developed over time as one gets familiar with the documents being indexed. Recruiting the right people for remote locations can be problematic.

    The key advantage of using this model is that fully digitized outputs can be expected daily. Bottlenecks in the process can be easily identified and resolved since all the steps are done within a single workplace.

  • On-site Grooming and Scanning, Production Site IndexingIn this model, only the grooming and scanning are done at the project site. The indexing task is performed at a designated production site. Only the grooming and scanning personnel are deployed to the project site. The groomers perform grooming and rebinding throughout their shift, whereas the scanner operators perform the scanning of documents and the quality assurance of the scanned images. The rationale behind this model is that the designated production site with seasoned encoders is more efficient in the indexing process and can get the job done faster and more accurate at a lesser cost.Data confidentiality is addressed by redacting the images to conceal the sensitive information prior to transfer to the production sites. Indexing is usually done at two different sites with one of the sites just focusing on the redacted fields. The transfer of scanned images is done using secured VPN links between the project site and the SVI production sites.

    This model is best used when the index fields are numerous and complex to encode. The indexing speed can really be maximized since indexing work is done by seasoned encoders at the designated production site. This is also best used for day forward documents – when documents are turned over for scanning daily, upon receipt from external or internal parties. Grooming and scanning can be done during regular work hours, while indexing can be done during night shift at the production facility to ensure that the output is readily available to the client the next working day.

  • On-site Grooming, Scanning and Indexing, Variable Personnel DeploymentThis model is a combination of the first two models. The grooming and scanning are done sequentially. However, the indexing task is done at the project site after the completion of the scanning of the documents. The hardware installed at the project site are reconfigured from scanning to indexing to optimize throughput. The team composition varies based on the number of pages to be scanned and the grooming speed. There will be as many groomers to keep the scanners at peak speed the whole day.This model is best to used when there is a need to maximize the indexing speed and yet the project requires that all the work is done within the project site.

Conclusion

The shift to digitization and paperless processing is taking the spotlight in heavily paper-dependent work environments. With technological advancements becoming more available, the potential cost savings of streamlining document-intensive processes are compelling companies to rethink their perspective on digitization. Along with this transition, more and more businesses are exploring new opportunities to harness the benefits of workflow monitoring and BPM deployed within their workplace. Aside from being a major driving force behind digitization projects, cost reduction is also a prerequisite for the modern-day approach of doing business, including the advantage of being able to communicate across various platforms, thus helping in the discovery of new business ventures and potential clients,

Digitization of vital records and business-critical documents also enhances compliance capabilities by making it easier to provide information to the concerned parties or government agencies. Moreover, digitization also reinforces the business continuity and disaster recovery capabilities of any business.

The rewards of digitizing far outweigh the risks of taking on a new approach to business. As a result, digitization is making an impact on the cost structures as more businesses are making the digital shift to stay ahead of the competition. As more industries begin to embrace digitization, more business possibilities are being unlocked. Digitization is not just an option. It is the clear-cut choice for businesses looking to remain competitive.

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