Magazine Article | February 1, 2000

Why Are You StillManually Processing Forms?

Source: Field Technologies Magazine

Automated forms processing technology offers a quick and near-guaranteed return on investment. And, it drastically cuts a company's operational budget. So, why isn't every company implementing this technology?

Integrated Solutions, February 2000
Psst. Hey buddy, look over here. I have a technology that is as close to a guarantee as you can get. You want return on investment (ROI)? This system will pay for itself in less than a year - less than six months in many cases. This technology will help you cut labor costs and increase productivity. Those savings drop right to the bottom line. C'mon, you can be a hero at your company.

Sound too good to be true? Well, it's not. Automated forms processing and data capture systems are a proven technology, and vendors are quick to point out the easily determined ROI. If you haven't heard of the technology, consider this article to be a primer. If you haven't explored this type of solution in the past two years, it's time to give it another shot.

Forms processing technology allows companies to process forms and standardized documents automatically. The information on a credit card application, for example, can be extracted by a data entry employee and entered into a host system. Or, the process can be automated. With forms processing technology, forms are scanned in batches. Software is used to extract typed or printed information. This information is then stored in a company's database. If necessary, a digital image of the original paper form can also be created and saved.

Automated Forms Processing Offers Quick ROI
With many technologies, arriving at concrete ROI numbers can be taxing. There are so many intangibles, like customer service and employee satisfaction, that have to be considered. However, vendors of automated forms processing technology are quick to talk about ROI. "If a company has more than three data entry people, I can cost-justify a new automated system within nine months. The entire system - software, scanners, hardware, and software integration - will be paid for, lock, stock, and barrel," states Marty Greif, vice president of marketing at Microsystems Technology, Inc. (Tampa, FL).

Greg Becker, vice president, imaging systems at NCS (Minneapolis), acknowledges that his company typically develops forms processing solutions for high-end applications. However, he has seen a quick ROI at every level. "If you have the volume (forms), there is an obvious ROI. While we don't traditionally sell low-end applications, we have a simple rule of thumb for benefiting from the technology. If you have five data entry employees, you not only need this technology, but you will get a quick ROI," comments Becker.

Microsystems Technology develops and markets recognition software, including OCR for Forms. NCS reported $625 million in revenue in 1999, and integrates forms processing solutions for many industries. One of the products integrated by NCS is Microsystems Technology's OCR for Forms.

Take Another Look At The Technology
Here is a technology that is almost assured to pay for itself in a short time period. It eliminates pools of data entry personnel. As a result, a company's operational budget can be reduced significantly. So, how widespread is forms processing technology? "Of all the companies that could use this technology, I believe that only 5% of them even know it exists," remarks Greif of Microsystems Technology. The obvious question is, why?

The reasons are twofold, says Joe Busque, president of TiS America, a software developer headquartered in San Diego. The first reason is that companies already have a forms processing solution in place - manual data entry. "It's not like companies are coming to us and asking for a solution. Our true competition is not other software developers. It's manual data entry," says Busque. "Manual data entry may be painful and cost a lot of money, but companies have built their businesses around those people and costs. It's tough to change that mindset."

The second reason for slow adoption of the technology, according to Busque, is that many IT (information technology) executives haven't explored automation in several years. In the past two years, automated forms processing technology has improved significantly. Processor speeds have increased dramatically, and the algorithms being used are much better. "Sometimes IT people will tell you that their friends rolled the dice with one of these systems eight years ago, and they are still getting beat up at meetings," says Busque. "If you haven't looked at the technology in the last 18 months, you should look again."

Cut Data Entry Staff
There are many applications that cry out for forms processing technology, including credit card applications, payroll processing, and educational surveys and tests. However, a simple head count of the number of data entry personnel at a company should determine an organization's need for implementing this technology. "The only thing that should slow down an investment in this technology is the priority of capital allocation within a company," states NCS's Becker. "Once a company sees the ROI, it becomes a matter of funding and moving the project forward."

Moving the project forward is exactly what forms processing vendors would like to see happen. However, changing business processes is never easy. If a manager of a data entry department has 100 employees, implementing forms processing technology could reduce that number by 75%. It is a significant savings for the company. "Yes, but the manager also perceives a loss in self-worth," adds Busque from TiS America. "Or, the manager is close to the employees and now has put the majority of them out of work."

Automating manual data entry is not the "most glamorous" IT project available, according to Greif. However, it is a project that can make a hero out of a department manager. In the end, implementing forms processing technology is primarily a business decision. "The strongest selling point of this technology is the tremendous ROI," explains Busque. "The CIO likes the ROI, but the CEO and business manager love the ROI. There is a big difference between those two attitudes."

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