Angèle Boyd // Joseph Pucciarelli // Melissa Webster

September 2012

Organizational Blind Spot:Organizational Blind Spot:The Role of Document-Driven Business Processes in Driving Top-Line Growth

An IDC White Paper sponsored by Ricoh

Executive Summary

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Improving Document Processes Yields Strategic, Top-Line Benefits While Reducing Bottom-Line Costs

Findings from a recent IDC study indicate that document-driven processes — the business processes that are governed and controlled by documents in electronic or paper format — have a profound impact on companies’ customer-facing functions. Furthermore, reengineering these document processes can yield strategic, top-line benefits including revenue growth and improved market responsiveness, which this study found to be the highest-rated business priorities for enterprises today. Despite the belief held by many business executives that document-driven processes relate only to “back office” functions, IDC research indicates that this conventional wisdom is off the mark and that optimizing document-driven processes presents a significant revenue growth opportunity.

IDC’s recent global study of 1,516 document-driven business process owners and information workers suggests that common perceptions around document-driven business processes are mistaken. Businesses have placed a great degree of focus on improving their business processes, and many may believe they have achieved optimum efficiency in their document-driven processes. While it is true that improving document-driven processes can have a strong impact on reducing operational costs — and this study shows there is still room for improvement in this area — it can have an even greater impact on an organization’s top-line potential for revenue.

Specifically:

• Over83%ofstudyrespondentsindicatedthatoptimizing customer-facing document-driven business processes would increase revenue — on average by 10.1%.Thiscouldbeachievedbyimprovingcustomercommunications, streamlining the sales and customer onboarding process, and improving customer support.

• Intheirroleasconsumers,morethanhalfoftherespondents are dissatisfied with the document-driven processes in six of the seven industries studied: business services(64.9%),government(63.9%),healthcare(63.1%),education(62.3%),insurance(54.3%),andtelecommunications(51.8%).

• Amongconsumerswhoaredissatisfiedwithcompanies’documentprocesses,60.1%wouldswitchtoanotherproviderand56.8%wouldlikelytellothersabouttheirdissatisfaction.

• Respondentsestimatedthattheycouldspeedthetimetogetproductstomarketby13.4%bystreamlining new product development, manufacturing, and supply chain functions.

Business partners — suppliers and distributors — play a key role in today’s economy, and the health of their document processes directly affects the enterprise. More than75%ofstudyparticipantsbelieveitisimportantthat their supply-side and distribution-side partners have effective document processes, but only about half are satisfied with the state of their partners’ processes. Enterprises must work to ensure that the partners they select are placing appropriate emphasis on document-driven business processes.

Theintroductionoftabletsintotheenterpriseispartof a new wave of enterprise computing. It is improving employee productivity and allowing organizations to more rapidly address market needs, but at the same time it is dramatically changing the way employees interact with document-drivenbusinessprocesses.Theintersectionoftablets and document-driven processes is still not clearly defined or fully understood. Many organizations are aware of the importance of making existing document processes work with tablets, with one in three organizations currently investing to reengineer existing document processes to account for them. But to make all necessary processes fully tablet compatible, organizations need to increase their focus on this area.

Busted Myth: The impact of improving document-driven business processes applies only to reducing costs through back-office efficiencies.

IDC Finding: Over 83% of study respondents found that optimizing document-driven business processes would increase revenue on average by 10.1% and could speed time to market by 13.4%. Document-driven business processes have a strong impact on strategic, top-line growth objectives.

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Conventional wisdom has clearly missed the key point. Document-driven business processes are not just a back-office phenomenon; they are critically important for strategic, revenue-generating activities. Process improvements can both reduce costs and increase revenue —awin-winscenario.Thisisoneofthoserareareaswhere there is no downside to investing in improvements. Organizationsthatdonotplaceahighpriorityonimproving their document processes are missing a golden opportunity, but companies need to focus executive-level attention and take action — now.

Essential Guidance

Document-driven processes are critical information arteries that drive organizations’ financial results — both top line andbottomline.Theyfacilitateinformationflowsthroughout an organization, between an organization and its business partners, and between an organization and its customers. Customers and partners care about them, and process owners and information workers depend upon them.

Given the systemic impact of document-driven business processes on organizational outcomes, IDC believes that these processes merit significantly more C-level executive time and attention than they currently receive. Survey participantsagree:Over40%believethatinvestmentstoimprove document processes should receive higher priority than other similar investments. In addition, as the pace of business continues to accelerate, the economic stakes associated with these business processes continue to escalate.

IDC believes that many businesses are now at or near thebottomofthecostreductiontrough.Thesebusinessesare now seeking opportunities to improve market share and better position themselves when the global economy resumes sustainable growth. Given this environment, IDC offers the following guidance:

Improving document-driven processes increases top-line revenue and reduces bottom-line costs — a win-win. There is no downside to investment, but companies need to act now.

• Focusondocument-drivenprocessesforstrategicupside.Thereislittledownsidetooptimizingcustomer-facing processes. Many strategic initiatives focus strictly on cost, while other initiatives aim to yield strategic benefits.Optimizingdocument-drivenbusinessprocessesis the rare initiative that achieves both goals: Companies can improve efficiency and benefit from the strategic upside by improving customer relationships — it is a no-lose scenario.

• Recognizethatineffectivedocumentprocessesdamagecustomerrelationshipsandhenceyourcompany.Some executives may believe that their document-driven businessprocessesdonotplayacustomer-facingrole.Oneshouldnotfallvictimtothisperception.Thisstudyfoundthe opposite is true. Customers believe it is important that the companies they do business with have efficient and effective document processes, and many are dissatisfied with the state of the processes of those companies. Dissatisfied customers will take their business elsewhere, will tell others not to do business with the companies, and will post negative reviews of the companies.

• Takeanextendedviewofdocumentprocessestoincludesupplychainanddistributionpartners.In the modern economy, it is no longer adequate to take a traditional wall-to-wall approach. Business processes now stretch across continents and often require intimate connections with business partners and suppliers throughout the valuechain.Addressingtheeffectivenessandefficiencyofsuppliers’ and distributors’ document-driven processes is critical for global enterprises to maximize business results.

• Prepareyourenterprisefortabletusagetoavoidputtingnewstressesondocumentprocesses.Tablets have already made significant inroads into organizations, and in the future, their penetration will only increase. But the intersection of tablets and document-driven business processesisnotclearlydefined.Thereisasignificantand growing requirement among businesses to integrate

Focus on document-driven processes for strategic upside. … These changes can help improve customer-facing potential and reduce overall operating costs.

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tablets into existing document-driven business processes. New requirements in document management include the need to scan to cloud and the need to address security issues around tablet printing both inside and outside the firewall.

• MakedocumentprocessrepairahighpriorityforC-levelexecutives.C-level executives are extremely busy and must constantly balance competing interests and priorities. But the optimization of document processes needs to be among those priorities. Previously published results from this study demonstrate that addressing issues in document processes is not receiving a significantamountofC-levelattention,withabout80%of organizations delegating responsibility for it under the C-level. But only C-level executives have the authority and span of control to implement appropriate change, and C-level executives uniquely have responsibility for both revenue-generating and cost-cutting initiatives. Fixing document processes should be the responsibility of C-level executives.

Addressingissuesindocument-drivenprocessesisoneofthose rare areas where there is no downside to investing in improvements.Thesechangesimproveanorganization’scustomer-facing potential and enable cost savings. It is an item that every organization should actively consider and an item that should be at the top of most C-level executives’ to-do lists.

IDC Study Methodology

Theinformationforthiswhitepapercamefromaglobalsurvey plus two focus groups of U.S. executives, all of which were conducted in 4Q11. IDC surveyed 1,516 process owners and information workers from IT, finance, and line-of-business management from organizations of over500employees.Theseindividualsallhadresponsibilityfor business processes that required multiple documents. Respondentswererandomlyrecruitedandscreenedfrominternational panels and came from eight countries: the United States, Canada, the United Kingdom, France, Germany,Australia,China,andJapan.Globaldatawasderived by weighting the IT executive survey by country GDP.ThesurveywasconductedovertheInternetandadministeredinthelocallanguage.Allnumbersinthisdocument may not be exact due to rounding.

Respondentswereaskedaboutpriorities,issues,andinvestmentsacross23separatebusinessprocesses:customeronboarding, sales, new product development, customer service, marketing/customer communication, insurance/claimsprocessing,billingandcollection,HR(employeeonboarding,benefits,dismissals),demandplanning,manufacturing(shopfloor,inventory),distributionchannel management, vendor/supply chain management, engineering/R&D,legal(contracts,litigation),medical(patientmedicalrecords),ITinfrastructure/desktop support, financial planning and reporting, asset management, business continuity/risk assessment, compliance/audits, change/problem management, business monitoring and controls, and information security. Data was gathered both at the individual process level and in three higher-level rollups: customer-facing, non-customer-facing, and risk mitigation processes.

ThissurveywassupplementedbytwofocusgroupsofU.S.executives.Onegroupconsistedofline-of-businessexecutives, and the other consisted of IT and finance executives.Theindividualsinbothgroupshadoversightof or control over a variety of document-driven business processesfortheirorganizations.Respondentsweredrawnfrom organizations with over $1 billion in revenue and fromarangeofindustries.RepresentativetitlesincludedVP Strategic Planning, VP Sales, General Manager, VP GlobalMarketing,ChiefSecurityOfficer,VPGlobalResources,SeniorVPTechnologyPlanning,VPGlobalIT,Corporate VP Finance Technology, and VP/Treasurer.

About IDC

InternationalDataCorporation(IDC)isthepremierglobal provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 48years,IDChasprovidedstrategicinsightstohelpourclients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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Copyright2012IDC.Reproductionwithoutwrittenpermission is completely forbidden.

Definitions

Thefollowingdefinitionswereusedforthisstudy:

• Document-drivenbusinessprocessesare performed by one or more groups within the organization and are governed or driven by information captured in documents. Documents can be paper (printed, scanned, orentirelypaperbased)orelectronic,ortheycan migrate between paper and electronic during the end-to-endlifecycleofthebusinessprocess.Theterm is also shortened to “document-driven processes” or “document processes” in places.

• Customer-facingbusinessprocessesgovern customer-facing activities including sales, customer onboarding, customer communications, customer service and support, billing and collections, and new product development.

• Non-customer-facingbusinessprocessesgovern non-customer-facing activities including employee onboarding, demand planning, manufacturing, purchasing and vendor management, desktop support, business continuity, audits, and financial controls.

• Complianceandriskmitigationormanagementprocesses cover activities including business continuity, compliance, auditing, customer due diligence, change/problem management, risk assessment, remote business monitoring, and information security.

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