We all know that capture is the original enterprise content management (ECM) technology. In my previous three posts, I’ve shown how capture applications can give great return on investment (ROI), especially with workflow. But as my last best practice (for now), I will leave you with a couple of the best capture applications ever: applications in the category of inbound document processing.
Think of an application like loan application processing or mortgage application processing. These are line-of-business applications – decidedly front-office, used within revenue-generating business processes. Any costs you can wring out of these processes represent pure gravy for the business. Any efficiency you can achieve to move the processes along more quickly means more money for the organization – faster time to revenue, or fewer penalties for late processing, or better-satisfied customers, or all of the above.
We typically see organizations deploy capture and workflow to inbound document processing to improve process efficiency and quality (or accuracy). They may have other business objectives, such as improving customer satisfaction and customer retention, or reducing risk, but basically, you’ve got to improve efficiency and quality if you want to see improvement in those other areas.
I want to take a look at a specific example of how capture can be used to streamline loan application processing.
Here’s a process flow of a typical loan application processing scenario which relies on paper documents and a lot of manual or unmanaged process steps. Don’t worry about the details – just focus on the shapes and colors, and keep in mind that Pink = Manual Process Step, Yellow = Unmanaged Electronic Process Step, and Blue = Managed Electronic Process Step.
The rows, or swim lanes, represent the relevant roles: from top to bottom, the mail room, the application processing group, application adjudication and underwriting, and enabling technology.
What you see is a preponderance of pink and yellow. The pink boxes show the manual steps, like sorting and routing mail and paper documents. The yellow boxes are unmanaged electronic process steps, like sorting and routing emails, images, and e-faxes.
Now here’s the same scenario, with capture to digitize the documents upfront and workflow to move the documents along:
In this scenario, the inbound documents get captured in the mailroom and then get moved through three to five different sub-processes.
Same swim lanes, same roles – but look at the dramatic reduction in the pink (manual) and the yellow (unmanaged electronic process) steps, not to mention the reduction in the total number of steps in the process. Simply adding capture and workflow transforms the loan process from an inefficient, paper-based, manual process to one that’s electronic, largely automated, managed, and efficient (and mostly blue).
The good news is this is very doable – it’s not magic, and there are many proven deployments that have done this kind of application. It’s also achievable in phases or chunks, where you can declare victory at each phase if you want to or if you have to stop for budgetary or other reasons.
What kind of ROI can you expect if you do do this? Doculabs has developed calculators to model this kind of process to show how capture and workflow can yield ROI for another document-intensive inbound document application, retail mortgage processing. Here, we run the numbers:
At the top of the calculator is a schematic of the workflow. In the middle are the three technologies often used to improve loan processing: capture, e-forms, and workflow. (For simplicity, I’ll focus just on capture and workflow here.) The bottom tracks four important performance indicators: cycle time, FTEs (full time equivalents), serviceable volume, and customer satisfaction.
Looking at the numbers for this completely paper-based mortgage processing scenario, it takes 85 FTEs 45 days to service a maximum volume of 10,000 mortgage loans.
Now let’s turn on imaging (capture) and workflow, and see what kind of improvements we can get:
This time, the calculator shows it will takes 51 FTEs 22.5 days to service a maximum volume of 23,333 mortgage loans. Looking at the process steps at the top, you can also see that doing imaging and workflow allows you to eliminate some steps in the beginning (see the Xs) and also do some automated straight-through processing for a subset of the applications. Even just imaging by itself with OCR eliminates manual data entry and improves cycle time, lowers the number of FTEs required, and increases the serviceable volume of loans. You get good lift even though you’re still routing the images around manually.
So in closing, let me recommend that you take a look at the capture opportunities in your own organization and model them, preferably using a calculator like ours. Start with really simple models, using industry standard or benchmark numbers, and see which scenarios are most promising.
And get in touch with us at Doculabs if you’re interested in our own modeling tools.