Increasing numbers of organizations are introducing automation into their document-centric (often labeled as transactional, case management or knowledge management) processes. Sometimes the automation covers the entire process, from receipt through filing, while other times, only a subsystem is re-engineered.

The typical investment in automating document-centric processes starts at about $100,000 but can run into the millions of dollars. Few organizations will spend these significant sums without the assurance of a greater benefit than the cost incurred. Once the technology has been deployed, audit and performance reviews require measuring the actual return on investment. In today's difficult economy, with credit not readily available and profits down, the pressure to make a diligent analysis has intensified.

So what are the measures that are appropriate when evaluating these investments? When you are done with implementation, how do you know you have succeeded?

IT IS NECESSARY to implement metrics in order to make a sound judgment about a solution. You shouldn't discard "gut" feelings, but in order to arbitrate between differing opinions, there should be an accepted set of measurable values to make a decision.

Measurements can be grouped into two major categories: hard and soft benefits. Hard benefits are tangible contributions to organizational objectives. Usually, they are measurable in real currency as either reduced cost or increased revenue. However, some benefits are not as tangible, cannot be converted into dollars saved or are hard to measure or prove. These soft benefits should also be included into an evaluation, but there generally is a subjective aspect to them, with a tendency to often discount them. For example, the ability to be more responsive to customer requests is likely to contribute to future customer retention and positive word-of-mouth, but the bottom-line impact is impossible to predict. Often, the soft benefits are ignored, but they may represent significant competitive impact. Whenever possible, by defining a measure for a soft benefit, you can "harden" it.

Before implementing the metric strategy, the first step should be to gather the values for all of the measures; these form the basis for making the investment case and, later, measuring success. The analysis one makes before implementing a solution differs vastly from those done afterward. The first (and perhaps most obvious) difference is the purpose. Pre-implementation, you are looking to justify the budget approval and funds allocation. Therefore, you are using estimates and predictions of the future. Post-implementation, the organization is evaluating the success of the sponsors and their team, using real information and comparisons with the prior state.

DOCUMENT AUTOMATION projects involve major investments and process changes that affect many people. There are some prominent measures in which organizations can use to evaluate these solutions. The prime metric used in evaluating an automation strategy is manpower. One way to cut costs is to reduce the labor involved, and, since Henry Ford's time, automation has always been associated with work reduction. While total labor costs are important, the labor per unit of product or service is a better value. Automation may enable an organization to handle more with the same staff. Workforce costs do not just include salaries and benefits, but extend to incidental costs such as office space. In some situations, document automation allows an enterprise to build in-home offices for its staff, which doesn't eliminate labor but does eliminate the facilities needed while retaining the trained worker. It is also important not to neglect incidental labor costs, such as administrative tasks.

Another measure to consider for automation is the end-to-end elapsed time for a transaction. Besides the potential to increase customer satisfaction, it can enable the ability to take discounts and reduce the cash float in processes. It can also provide a competitive or service quality advantage. For example, in health care, faster processing can improve patient outcomes. Therefore, speeding up payables can allow for discounts or enable preferential credit terms.

Automation within an organization can reduce errors and improve the quality of decisions. In fact, a computer can perform validation on values and prevent paper from going astray. By codifying a process, it ensures that performance is consistent, which may be required for regulatory (FDA, Sarbanes-Oxley, etc.) and ISO 9000 compliance. The observed error rate (again, per transaction) is measurable, as is the cost to repair an error. Error handling is often one of the most expensive components of a process.

Finally, document automation systems provide a mechanism for tracking and measuring performance. They can load balance work across a team, while transactions that do not move can be identified and rerouted. Moreover, individual and team processing times and queue lengths can be recorded and used to fine-tune operations and identify high performers and low ones.

Now more than ever, investments that enterprises make must produce greater results to justify their expenditures. However, just a few key quantitative measures can prove the benefit of a transaction automation solution.

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BERNARD CHESTER [], CDIA+, ICP, edp, is a principal of IMERGE Consulting, where he is an authority on designing and implementing document management-based solutions.

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