Post on 30-Mar-2015
The 7 Steps to Go Paperless
A Hands-On WorkshopFor
Florida Government Finance Officers Association2012 School of Governmental Finance
Presented by :
Kurt WachtendorfV.P., National Product Manager - EIPP
Senior Solution Consultant
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• You received a workbook when you registered• This workbook will be used throughout the workshop
– All content is in the workbook– Your exercises are in the workbook– Use it to take notes, write down ideas and follow-up items
• The workbook will become the first draft of your Solution Design
Your Workbook
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Making Sense of the Alphabet Soup
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Workflow: The automatic routing of documents to the users responsible for working on them
EDM (Electronic Document Management): the management of different kinds of documents in an enterprise using computer
programs and storage.
BPM (Business Process Management ): a systematic approach to improving an organization's business processes
EIPP (Electronic Invoice Presentment and Payment): The Commerce Bank
Solution
ECM (Enterprise Content Management): the
technologies, tools, and methods used to capture,
manage, store, preserve and deliver information, content,
and documents related to organizational processes
DI (Document Imaging): The online storage, retrieval and management of electronic images of documents.
DM (Document Management): The capture
and management of documents within an
organization
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• Paper-intensive, inefficient business processes– Need automated workflow functionality for AP and other processes– Gain new levels of efficiency without adding staff– Eliminate paper processing and reallocate staff to value-added work– Solve issue of processing and distributing paperwork across
departments and locations– Missed discounts– Streamline audit preparation and response time– Manual data entry is prone to error
Business Challenges
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What drives organizations to go paperless?
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• Intensive, paper-based, manual processes– Time consuming activities (shuffling paper, copying, filing, etc.)– Difficult to track (lost documents, filed in wrong folder, setting on someone’s
desk)– Matching invoices to PO’s and/or Receivers
• Managing high volume of documents from different sources– Receive faxes, emails, EDI and LOTS of paper from many locations
• High document processing and storage costs– File cabinets occupying expensive real estate– Paying for outside storage
• Lack of visibility of invoice and other documents in the process– What happened to that documents I sent you?
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Small or large, size doesn’t matter
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• “We have years of paper documents stored everywhere. Our hallways are overflowing with file cabinets filled with paper. We can’t afford not to be in control of how our paperwork is processed. Our environment demands it.”
• “Even as a private organization, our paperwork trail for doing business day-in and day-out is incredible. Getting control of how we process documents means time and money saved. And in today’s aggressive business environment, that gives us a competitive advantage.”
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Why are you here?
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What Would You Like To Accomplish
• List 5 things you’d like to accomplish today
1.
2.
3.
4.
5.
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What would you like to accomplish?
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• 5 things you’d like to accomplish today What can a paperless process do for me?
Learn what other organizations are doing
with their processes
How to get my project on track
Calculate ROI and present a business
case for my project
Network
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Have you ever asked yourself…
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• Why exactly are we doing this?• How do we implement this solution?• Do we know the expectations of the solution?• Why have we started with this process?• How long will it take?• Who will manage the project?• Has anyone seen a project plan?• How much will this cost me?
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It’s like there is a wall between us
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The answer: Solution Design
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Solution Design is a tool that helps
you understand the problem,
design a solution, and plan the
approach in a way that gives you
complete control over the project
and its outcome.
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Taming your projects
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The Solution Design helps you:
– Solidify your understanding of the problem and the desired solution
– Select the best solution provider– Ensure everyone is on the same page– Document clear objectives– Create a feasible schedule– Get commitment to implementing the solution you need– Define a common language among the team and when
talking with solution provider– Describe the requirements and the expected results– Avoid surprises!
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The 7 Steps to Go Paperless
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Step #1
Understand the Problem
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• Involve key users/departments and understand the problem:– Paper reduction in the workplace– Too many file cabinets– Difficulty in finding information (time + costs)– Distributed offices make it challenging to share documents– Need for increased security in accessing information– Industry/Government regulations– Too many systems, not integrated, difficult to distribute documents– Time and cost to retrieve and distribute documents– Managing the approval process– Fax machines, MFD (Multi-Function Devices), scanners, etc.– Sorting and delivery– Slow response to inquiries
Step 1: Understand the Problem
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P2P Process – Executive View
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ceiv
ing
Make copies of documents
Sends copy to Accounting
Locate receiving document
Advanced Shipping Notification
Match to packing slip
Notate exceptions
Accept orderFiles in
receiving
Accounting files copy
Sends copy to Purchasing
Purchasing files copy
AP receives documents
Makes copies
Sends copy to Approver
Matching of documents Conforming
Non-Conforming
Reconcile process GL Coding Voucher entry Print checks
Match checks with paperwork
Approve / Sign
A/P
Sends copy to ReceivingPurc
hasi
ng
User fills out requisition form
Walks to Purchasing to deliver requisition Enters PO in the
systemPrints approved PO
Mails / Faxes PO to vendor
File copy in Purchasing
Sends copy to Accounting
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P2P Process – User View
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Order Request Form
Completed
Reviewer or ProxyApproves
Order
RequestorMakes
Photocopy of Req.
ManualDelivery of Req.
to Admin
Requestor File Copyof Req.
Admin Sort and Deliver to
Reviewer for Approval
Copy of Approved
Req. Made
ManualDelivery of Req.
to Admin
Order Placed by Admin
Deliver Approved
Req. to Requestor
Order Placed by Requestor
File Approved
Req.
Copy of Approved Req. Filed
by Requestor
Deliver Approved
and Ordered
Req. to A/P
YES
Merge invoice checks printed
Checks are stuffed
MailUPS EFT/ACH
Single signature
checks
Invoice Received
FAX
Invoices Delivery to A/P - Plant
Invoices are
sorted
Look up in ERP to Verify Received
ReceivedY/N
Held until received
NO
Visual Verification – Invoice to ERP
YES
2-3 WayVoucher Entry into
ERP
Copy sent to Approver
for Info/Approve
MatchY/N
NO
Notations made on Invoice
Invoice entered in
ERP by A/P clerk at the
plant location
YES
Invoice is filed at plant
location
Double signature checks
Checks are folded by machine
Mail Room
Require stuffing
YES
NO
Standard Voucher Entry - ERP
Approved & Completed
YESDeliver to
Approver if needed
NO
Packing slip received by W/H clerk
Shipment Received – Changes /
Corrections written on
Packing slip
Packet Delivered
toReceiving
Desk
Copy filed at Plant
Copy delivered to Purchasing
Agent
Packing slip or
Receiver Stapled to
PO
Variance – PO vs
Received
Copies of Receiving
Documents Filed –
pending Invoice
YES
NO
NO
Product Received into ERP
2-WayPO against what
was received
Book accrual to GL in ERP
Plant clerk notifies
Purchasing Agent for resolution
Approved Requisition
Approved Request is
filed
Receiver is filed
Receiver or Packing Slip
Copy of PO for
Receiving awaiting receiver
PO is printed then copied multiple
timesCopy of
PO for A/P
PO is filed
Purchase Order (PO)
Copy of PO for Buyer
Deliver to
Buyer
Deliver to Receiving
Desk
NO
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Purchasing Process – Real World
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Receiving Process – Real World
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The 7 Steps to Go PaperlessAP Process – Real World
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• List the top 10 problems / bottlenecks of your Purchase-to-Pay process from your perspective.
Step 1 Exercise
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Step 1 Exercise
• List the top 10 problems / bottlenecks of your Purchase-to-Pay process from your perspective.
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• Customer AP Problems - Examples:
What others say…
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Average time taken from receipt of invoice to payment: 42 days
On average, 3.6% of invoices handled by AP have errors
Cost of manually handling, checking and processing a paper invoice and cutting a paper check: $8 to $12 dollars
Taking advantage of vendor discount offers due to processing time 2 Way & 3 Way matching of PO’s, Receivers, and Invoices are manual
Cost to reproduce documents for audits or customer research
Lack of control during approval process
Multiple AP processing locations creating redundancy and delivery cost
Increased cost of postage for mailing purchase orders and checks
Average days in payables is too high / too low
Average cost to process vendor payment: $8.15 24
• Tips to help you out:– Think about the process you go through every day in your functional areas– Where does the process break down?– How much time is your payment process taking?– What keeps you from taking advantage of discounts when paying invoices?– How can you improve the process?– Does it take too many people to get things done?– What is it about your process that keeps you up at night?– What other departments interact directly and indirectly with you? Who sends
you requests, approvals, etc.? Who asks you for reports?– How many (and who are they) external entities do you interact with? Vendors,
customers, partners… how do they affect your process?– Sit down with your users and managers and document your process – ASK YOUR USERS
Step 1 Exercise Review
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Action Step – write this down
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• Ask the users to list their Top 10 Problems/Bottlenecks• List their names• Verify whether their list matches mine
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Step #2
Identify Goals and Requirements
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• What would you like to accomplish?– Eliminate paper-based retrieval– Provide immediate access to AP related documents– Automate routing of exceptions to the proper person– Streamline workflow and exception handling process– Provide automated audit trail to meet regulations– Reduce people costs / time – Eliminate off-site storage– Notification of exception invoices– Make more space available– Take full advantage of AP discount opportunities in a more timely manner– Consolidate operations in one single office, eliminating redundant processes at
other locations
Step 2: Identify Goals and Requirements
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• What would you like to accomplish? (Continued)– Utilize immediate access to information for more timely and accurate analysis– Provide access to all authorized users at any location from their workstation– Electronically capture invoices when they arrive and utilize electronic workflow
for approval and processing– Reduce or eliminate the need for multiple copies of certain documents– Reduce labor expense for processing these documents (printing, copying, filing
document research, etc.)– Reduce mailing and shipping costs associated with delivery of documents to and
from remote locations– Reduce time and work effort for audits with imaged documents– Reduce cost of check payments
Step 2: Identify Goals and Requirements
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• Key questions– What are the manual steps in the process (photocopying, delivery, sorting,
following-up on approval)?– Can we automate anything in the purchasing process?– Can we centralize any of the Purchase-to-Pay processes?– How do you handle receiving documents (invoices, other docs, etc.)?– How do you send your payments?– Who and how do you get your checks signed? – Who needs to review and approve invoices with exceptions?– How do you file and retrieve the documents?
Step 2: Identify Goals and Requirements
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• List the goals you would like to accomplish with a paperless solution. • You can break it down by functional area (purchasing, receiving, and
accounts payable) to make it easier.
Step 2 Exercise
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Step 2 Exercise• List the goals you would like to accomplish with a paperless solution.
Functional Area: __________
Functional Area: ________ Functional Area: __________
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Action Step – write this down
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• Do my goals match the organization’s goals?• I will NOT let my current situation cloud my vision for the future!
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Step #3
Map the Current Process
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• It’s more than just technology– Think about the documents you receive or create
Invoices, Packing Lists, Bills of Lading, Purchase Orders, Credit/Debit Memos, AP Checks, Receiver Reports generated from your business application
– Think about the ways in which you send/receive documents Faxes, Emails, Mail
– It is more than simply transforming paper into image format, it includes: Scanning, Indexing, Archiving Searching, Retrieving Sending it out to other people for approval, getting alerts and notifications,
etc. Integrating into your business application
– AND it includes integrating your business process into the equation
Step 3: Map the Current Process
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• How to map the current process:– Identify points of origin, decisions and where it ends– Map the process, not only one task– Identify all personnel involved– Identify potential user issues– Identify all integration points with core applications– Identify document-related as well as activity-related tasks– Identify the ‘problem areas’ or ‘opportunity areas’
Step 3: Map the Current Process
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• Map your current process:– Create the flow for your current Accounts Payable process, using the previous
example as a template– Tips to help you out
Think about the functional areas first, and list all activities that happen there (e.g. Purchasing)
Think about the activities that cross functional areas List exceptions - There are always exceptions Are all invoices handled all the same way? How does email play in the process? Do you have a clean audit trail? How many people are involved in handling each document? Is the process the same in other locations?
Step 3 Exercise
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Action Step – write this down
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• I will remember to always keep the following in mind:– What– Who– When– Why– … and what if… ?
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BREAK?
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Step #4
Design the Solution
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• Explore different scenarios to solve the problems identified• Validate chosen scenario with key users• Identify the technology required• Identify changes to business processes, business rules, etc.• Prioritize implementation plan• Schedule review of solution design with executive management
Step 4: Design the Solution
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Example Accounts Payable Before:The 7 Steps to Go Paperless
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Example Accounts Payable After:The 7 Steps to Go Paperless
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Step #5
Calculate ROI
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• Hard Savings– Reduction / Reallocation in personnel– Business operating costs (paper, photocopying, postal mailing, courier services)– Reduction in infrastructure costs (sell a building, remove filing cabinets, etc.)– Increase in productivity measured by man hours saved not handling paper
(standing at fax machine, looking for lost or misplaced files, etc.)– Increased cash flow (vendor discounts, improved terms, payment options, etc.)– Reduction in cost of processing invoice– Go Green
• Soft Savings– Improved vendor/user service– Better and faster access to information– Faster internal communications
Step 5: Calculate ROI
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• One of the best ways to fully capture ROI is to understand what the current costs are (Step 3) and identify how much you will save by implementing a paperless solution (Step 4)
Step 5: Calculate ROI
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• Areas to look at for savings:– Legal mandates and regulatory compliance – Sarbanes-Oxley, SEC Rule 17– Off-site storage costs and retrievals for existing documents– Labor reductions possible or additional labor required in the future– Employee retention– Remote access to documents – no need to FedEx, fax, and/or courier documents– Electronic voucher entry– Filing, retrieving, document, matching, audit preparation– Lost documents (a lost document may cost as much as $150 to replace)– Misplaced documents – search – Allows increased productivity around shared documents– Reduced printing, mailing, faxing, special delivery costs– Reduced storage costs from eliminating paper
Step 5: Calculate ROI
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• Areas to look at for savings (continued): – Electronic payment options– Overall document management costs for existing resources and facilities– Cost of file cabinets/cost of file cabinet real estate– Cost of off-site storage and retrieval– Cost of paper, paper clips, staples, folders, index cards, etc.– Cost of printing and printers (total cost of ownership for printers)– Moving documents between departments/locations and making better decisions
quicker– Improved security– Disaster recovery
Step 5: Calculate ROI
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• Examples of areas to analyze – Accounts Payable– Invoices sorted into groups (PO vs. Non-PO)– Delivery of sorted invoices to users– Coping/scanning and emailing problem invoices– Delivery of problem invoices to approvers– Delivery of resolved invoices back to AP– Invoices sorted and packaged for delivery to corporate from remote locations– Copying and filing each location– Wasted time trying to track problem invoices– External auditor - AP user’s time– Filing of completed invoice packets– Invoices matched to related documents– Filing of invoices, statements, order acknowledgements
Step 5: Calculate ROI
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• The cost of handling paper:– Knowledge workers spending >20% of their time on document management
tasks– The average document is copied, either physically or electronically, nine to 11
times at a cost of about $18– Documents cost about $20 each to file– Retrieving a misfiled document costs about $120– Average cost of faxing a document: $2.60– Average cost of printing and distributing a paper form: $0.17 per page– Average cost of the process of creating, modifying, printing and distributing a
paper form: $1.26 per page• Going “Green” can save money and the environment:
– One tree yields 8,333 sheets of paper– Each office workers print 1,000 pages per month (10,000 to 12,000 year)– 45% of documents are thrown out within 24 hours– 768 million trees to produce world’s annual paper supply– Energy consumption (12% of total manufacturing energy)
Step 5: Calculate ROI
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ROI
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ROI
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ROI – Results
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Step #6
Document and Present
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• Helps solidify your ideas, the goals, the analysis and all other steps you took until now
• Gives other people an opportunity to review the Solution Design as a whole (some people may have only participated in parts of this process)
• Good way to ensure everyone is literally on the same page• You can always go back to the document to check why certain things
are (or are not) being done• You have something to hold the Solution Provider accountable
Step 6: Document and Present
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• Executive Summary• Goals and Requirements• Current Process• Solution Overview• Proposed Solution• Benefits• Return on Investment• Implementation Methodology
Contents of a Solution Design
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• You’ve presented the Solution Design and your team has bought in, it’s time to kick-off the Technical Design.
Now what?
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How technology projects are usually carried out!
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What the user requested
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What IT specified
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What the vendor suggested
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What the proposal described
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What the team implemented
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The tech support you received
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What you were charged for
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What was really needed
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• Lack of communication between IT and users• Lack of understanding from the vendor of what the problem really is• Resistance from users on changing the way they usually do things• System integration issues• Short-term focus sacrificing long-term viability• Scope creep• Missed deadlines
The results are well-known
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• 49% of IT projects fail 1
• Total U.S. project waste is $55 billion ($38 billion in lost dollar value and $17 billion in cost overruns) 1
• 55 % to 75 % of IT projects fail to meet their objectives 2 • 40% are never fully implemented• Executives from 117 organizations stated that support costs after software
implementation were 20% over original estimate 3
• 86% of projects fail for reasons other than technology 4
• 32% of project failures occur due to poor project management skills 4
About that project management thing…
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1: 2010 CHAOS Report, Standish Group; 2: META Group; 3: The Conference Board Survey; 4: KPMG Information Risk Services study
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So Solution Design is the…
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or Business Design
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Step #7
Implementation(Activation)
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Implementing a Solution
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Initiate & Plan
•Strategic Vision •Current Process Review
•Statement of Goals & Objectives
•Executive Sponsor Meeting
•Solution Design
Control & Execute
•Onsite Workshop•Revise Solution Design•Project Plan•Payment Solution Installation
•Integration & System Conversion
•Status Updates
Stabilize & Close
•User Training•Project Launch•Project Summation•Ongoing Support• Post Launch Recommendations & Next Steps
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Implementation Plan should include:
The 7 Steps to Go Paperless
• Project Management• Defined Process
– Phase 1 – PLANNING– Phase 2 – EXECUTION– Phase 3 – STABILIZE
• Responsibilities / Requirements– Client Responsibilities– Provider Responsibilities
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• Let’s go back to the list we created in the beginning of this workshop.
Did we accomplish everything?
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Wrap-Up
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The Seven Steps to Go Paperless
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Things to keep in mind
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Involve key users along with management
Understand how things are done today (the flow, the documents, the systems, etc.)
Identify the costs associated with current processes(this will be later used for ROI)
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Things to keep in mind
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Look at the full process, not just an activity (functional areas)
Accept change(change really can be good)
Use the Solution Design to guide your selection for the correct solution provider
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Things to keep in mind
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Plan, then review, then stick to the plan
Document your findings, your goals, requirements, etc.
Take pride in what you accomplished!
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• Paperless projects are more than just technology• Use the Solution Design to understand the problems, how to solve them and
set goals• Select a solution provider that can help you with a Solution Design…• … or use the Solution Design to help you select a solution provider• Beware of those who say “you don’t really need this, just trust me”• Project management is key to any implementation. Be on top of it and make
sure there is a methodology and a process in place
Summary
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Strength, Stability and Growth for over 140 years
Established in 1865; Family operated Top 50 bank holding company based on asset size, assets of $18 billion
11.5% annual EPS growth over past 10 years One of the largest banks in the country that declined TARP funds Issuing commercial cards for more than 40 years Top 10 on Forbes magazine’s list of Best Banks three years in a row Consistently ranked in the Top 10 Best Performing Banks by Bank Director
magazine
About Commerce Bank
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• Review your workbook• Get together with other users/departments• Use the workbook and start planning your Solution Design in detail• If you’d like us to help you with your Solution Design, contact us
Next steps
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How do you feel?
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Kurt WachtendorfVice President National Product Manager – EIPPSenior Solution Consultantkurt.wachtendorf@commercebank.com
918-622-8489 - office918-691-7911 - mobile
www.commercebank.com
www.commercebank.com/eipp
Learn more
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