Introduction

Screen Shot 2014-03-06 at 7.04.30 AMGovernment processes are more paper intensive than processes in the commercial sector, and — despite IDC studies showing that paper-based processes are not necessarily less efficient than electronic processes — government document processes are also less efficient than document processes in the commercial sector. In a recent IDC study, only 35.9% of government respondents characterized their constituent-facing document-driven processes as efficient and effective, while 51.7% of commercial sector respondents characterized their customer-facing processes as efficient and effective. Government had one of the lowest ratings for document process efficiency of any industry surveyed.

Screen Shot 2014-05-27 at 2.30.18 PMGovernments around the world have long been striving to reduce paperwork and facilitate improved document management. The U.S. Paperwork Reduction Act of 1980, while focused on reducing paperwork burdens on citizens and commerce, created an awareness in the U.S. federal government of both the high volume and the high cost of document management and has been foundational to subsequent efforts to more efficiently manage paper-based processes. Likewise, in 2005, the European Commission issued a decree on the common provisions of document management in public administrative bodies.

However, today, fixing document processes may be less of a priority for government because agencies are under great budget pressure at the national, regional, and local levels to reduce spending. The resulting challenge is how to cut costs while still maintaining current levels of service to the public in the face of growing populations and demands for government services. Optimizing existing workflows might seem to be a luxury, but our research uncovers clear opportunities to improve services in a cost-effective manner. Government respondents told us they could achieve significant cost savings approximately in line with savings obtained by commercial sector respondents by optimizing document processes. This research finds that there is real opportunity to reduce costs and improve constituent services at the same time.

This Market Spotlight is based on a recent IDC global study sponsored by Ricoh of 1,516 document- driven business process owners and information workers from organizations of over 500 employees across a broad range of industries. Respondents were asked about priorities, issues, and investments across 23 separate business processes, including customer/constituent-facing

processes such as customer communications, sales, and support; back-office processes such as IT infrastructure, financial planning, and asset management; and compliance processes such as audits and business monitoring and controls.

Government Lags Commercial Sector in Focus on Document Processes

Over the past several years, austerity measures have placed great pressure on governments worldwide to implement dramatic cost controls. The budget pressure that governments are facing is often so great that many government agencies have postponed strategic initiatives in areas such as process reengineering while devoting available resources to delivering core services to the public.

IDC research confirms the lack of focus on improving document processes. According to our survey, only 32.9% of government respondents placed greater importance on projects to improve the efficiency and effectiveness of document-driven processes than on other IT projects, compared with 43.1% of commercial sector respondents. Similarly, 23.8% of government respondents placed less emphasis on improving document processes than on other IT projects, compared with 13.9% of commercial sector respondents (see Figure 1).

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Government respondents are also less likely than their commercial sector counterparts to have budgeted projects for fixing document processes. This is true across many processes, including constituent (customer) service, constituent (customer) communications, billing/collections, HR, legal, financial planning/reporting, IT infrastructure/desktop support, and asset management, as well as risk mitigation document processes such as compliance enablement and disaster recovery. And where projects are underway, governments generally have less budgeted for those projects; the two notable exceptions are IT infrastructure/desktop support and financial planning/reporting (see Figure 2).

This data indicates that governments are underinvesting in improving document-driven processes.

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Government Investment in Document-Driven Processes Would Yield Significant Cost Reduction

Given the current budget climate, many governments have postponed plans to improve document- driven processes. The imperative to contain costs is understandable, but we also believe that this should not be done in a shortsighted way. Indeed, when governments use a brute-force approach to cutting costs without improving processes, they do so at greater long-term expense.

Our research supports this. Government respondents said that improving their document processes would yield cost savings in line with those cited by commercial sector respondents. Government respondents said that if they could fix all issues in their constituent-facing (customer-facing) processes, their overall operating costs would be reduced by 9.1%, compared with 9.7% for commercial sector respondents. Fixing back-office (i.e., non-constituent-facing) processes would yield a similarly high 8.4% reduction in costs, compared with 8.3% for the commercial sector (see Figure 3).

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More importantly, IDC research finds that fixing these document processes not only drives cost savings but also would improve services in areas that are highly visible to the public. Examples abound, but one of the most paper-intensive and highly visible areas is tax and revenue. From tax reporting to returns filing and supporting documentation, the importance of timeliness and the need to avoid introducing errors mandates process improvements. Governments are sensitive to high-profile incidents where tax refunds and revenue collections aren’t processed in a timely manner because of paperwork errors. Likewise, governments are very focused on reducing improper payments in human services programs, representing benefits erroneously paid because of the inability to accurately assess eligibility and/or duplicate payments due in part to inefficient document management.

Government Document Processes Are More Paper Intensive and Less Effective than Commercial Sector Document Processes

The public sector relies on documents more than many of the commercial sectors covered in this survey. Our study shows that more constituent/customer-facing processes are document driven in government than in the commercial sector (57.8% for government compared with 49.6% for the commercial sector). About the same amount of non-constituent/non-customer-facing processes (i.e., back-office processes) are document driven (45.9% for government compared with 44.1% for the commercial sector). However, the picture is even starker when looking at specific government processes that are still being driven by paper at rates much greater than those in the commercial sector and have yet to be converted to electronic format.

The greatest discrepancies between government and the commercial sector are found in areas such as claims processing (government respondents said that 97.5% of their claims processing is paper based as opposed to electronic, compared with 44.4% for the commercial sector), legal (80.0% of processes are paper based compared with 52.9% for the commercial sector, HR (63.1% are paper based compared with 43.8% for the commercial sector), and compliance/audits (44.1% are paper based compared with 36.4% for the commercial sector) (see Figure 4).

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Managing and storing documents in paper-based format is more expensive and labor intensive than handling them digitally and makes it more difficult for officials to access critical documents when required. This problem is particularly acute at the regional and local government levels, which are the most paper intensive.

IDC views the greater paper tendencies of government as notable given that governments have been working hard in the past several years to reduce paper-based transactions and records. One major inhibitor slowing the evolution of the current paper records management process is the need to conform to regulatory requirements. Another is that government agencies must deal with constituents of all ages and incomes, some of whom do not have a computer or Internet access.

Government respondents are much less likely than their commercial sector counterparts to characterize their processes as effective and efficient. Only 35.9% of government respondents said their constituent-facing (customer-facing) document-driven processes are efficient and effective, compared with 51.7% of commercial sector respondents. This was among the lowest rates for all industries surveyed.

The story is similar for back-office (non-constituent-facing) processes: Only 35.8% of government respondents feel their non-constituent-facing processes are efficient or effective, compared with 48.3% of commercial sector respondents. And only 21.6% of government respondents believe compliance/risk mitigation processes are efficient or effective, compared with 57.0% of commercial sector respondents (see Figure 5). IDC believes that governments can achieve parity with best-in-class organizations in any industry if they place sufficient emphasis on education and prioritization and have the will to carry out document process reengineering initiatives.

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Governments that optimize their document processes also benefit in other ways, such as reducing the loss of employees due to broken processes and PR incidents. Although a slightly smaller share of government respondents (70.2%) said they experienced significant incidents as a result of broken document-driven processes than commercial sector respondents (76.3%), there were a few problems government is more likely to experience as a result of document-driven process failures.

These include key employees leaving the organization (suffered by 46.1% of government respondents compared with 29.1% of commercial sector respondents) and major PR crises (suffered by 27.3% of government respondents compared with 18.6% of commercial sector respondents). IDC believes the data shows that both the public and employees are frustrated. As governments experience accelerated workforce turnover, younger workers entering the government workforce have high expectations for information efficiency and expect that technology can facilitate efficient document management in a government paper-based environment. This is yet more reason for governments to optimize their document processes.

IDC Guidance

Government agencies, even within an austerity context, have great opportunities to drive out costs and reduce spending while maximizing service quality to the public. This can often be done by taking a more strategic approach to cutting costs, by leveraging existing technology and supplier partnerships, and with relatively little incremental investment. Indeed, governments can improve citizen services — so that citizens are happy and not frustrated with the services — while still focusing on cutting costs or containing spend.

But governments must also overcome another challenge. Budgets not only are often limited but also are usually specific to individual units, departments, and levels of government. Addressing document- driven process issues often requires coordination between multiple departments, jurisdictions, levels of government, citizens, and even outside entities such as contractors. As a result, governments often take the view that the workflows are too complex to fix.

The challenge is understandable, and IDC’s guidance is that the hard work to go beyond the demarcation lines of an individual department or agency and coordinate with other departments and groups to focus on the end-to-end processes will maximize the payoff. Government units might even join forces to develop shared document services (either in-house or outsourced to a third party). No agency (or commercial business) is an island, and some vital document processes do require working beyond an organization’s four walls.

Finally, we recognize that governments are unable to invest in IT solutions without first building strong business cases with benchmarking. To do so, any government unit can partner with an IT vendor that specializes in optimizing business document workflows to conduct a formal assessment to build the appropriate justification.

Click here to download this full study as posted on MDS.Ricoh.com

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