Angèle Boyd // Joseph Pucciarelli // Melissa Webster

An IDC White Paper sponsored by RicohSeptember 2012

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

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Executive Summary

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.

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.

Contents:Executive Summary 2

Essential Guidance 3

Improving Document Processes Yields Strategic, Top-Line Benefits 4

Improve Revenue an Average of 10% 5

Reduce Risk of Losing Customers 6

Speed Time to Market by up to 13 4% 7

Ineffective Document Processes in Supply Chain Are Costly 8

Intersection of Tablets and Document Processes Is Critical But Ill-Defined 9

Still Room for Cost Takeout 10

Appendix 11

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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.

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.

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.

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:

• 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.

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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• 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 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.

Improving Document Processes Yields Strategic, Top-Line Benefits

Document-driven business processes are vital organizational information arteries, governing a wide range of functions in nearlyeverycorneroftheenterprise.Thisresearchfoundthatover40%ofallbusinessactivitiesrelyontheinformation(oftenunstructured)thatiscapturedindocumentsandthatbetween31%and39%oftheseprocessescontinuetorelyonpaper, depending on the type of process.

Resultsfromthesurveyclearlyspeaktotheimportanceofoptimizeddocumentprocesses.84.1%ofrespondentsrated effective and efficient document processes as “very important”tobusinesssuccess.Only1.9%saidthattheseprocessesare“notimportant”(seeFigure1).

Figure 1: Effective/Efficient Document-Driven Processes Are Very Important to Business Success

Very important 84.1%

Neutral 14.0%

Not important 1.9%

Q2. Overall, given where you sit in your organization, how important are effective and efficient document-driven business processes to the overall success of your business? n = 1,516 Source: IDC’s Document Management Thought Leadership Survey, February 2012

“ We live on the paperwork and the documentation for so many different aspects of the business.” — VP, HR of Multinational Import/Export Firm

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Figure 3: Over 83% of Respondents Believe Optimizing Customer-Facing Processes Would Improve Revenue

Increase revenue 83.2%

No effect 15.3%

Reduce revenue 1.6%

Q14. If you waved that magic wand and fixed all the issues in effective-ness and efficiency in your customer-facing document-driven business processes, what effect would it have on your organization’s overall revenue? n = 1,100 Source: IDC’s Document Management Thought Leadership Survey, February 2012

Thesurveyalsoaskedrespondentstoestimatetherevenueimpact of optimized customer-facing document processes. 24.3%ofrespondents—thelargestgrouping—estimatedthatoptimizingtheseprocesseswouldleadtoa6–10%improvementinrevenue,and28.0%estimateditwouldimproverevenuebyover10%.Whenweaveragedtheresponses together, we found that respondents expect optimized customer-facing document processes to increase revenueby10.1%(seeFigure4).

A10.1%revenueimprovementisadramaticpotentialincrease. In today’s economy, many businesses are facing sluggish market growth and are challenged to find ways to expand their top-line revenue growth. If they can achieve10%growthsimplythroughimprovingthelevelofservice, communication, and support to their customers by optimizing customer-facing document processes, this has the potential to be a huge win. For a hypothetical organization with $1 billion in annual revenue operating at a 70%grossmargin,a10.1%top-linerevenueincreasewouldyield a bottom-line improvement of more than $70 million.

“ If we’ve got dissatisfied clients, that’s a bottom-line hit.” – VP, Strategic Planning, Large Insurance Company

Fixing document-driven business processes has meaningful economic upside, starting with revenue-generating, customer-facing issues. Given that critical customer-facing processes — including sales and marketing, customer communications, customer onboarding, service and support, developing new products, and billing and collection — are highly dependent on documents for smooth operation, breakdowns in these processes can have a direct impact on revenueandcustomers.Respondentsagree:77.6%saidthatimproving these processes would help them more rapidly addresscustomerneeds,65.0%saiditwouldhelpthemmorerapidlyrespondtochangesinthemarket,and62.7%saiditwouldimprovetheircompetitivestance(seeFigure2).

Figure 2: Fixing Customer-Facing Processes Helps Address Customer Needs, Improve Competitive Stance, and Improve Revenue

% of respondents who agree/strongly agree

. . . 77.6%

. . . . . . 65.0%

. . . . . . . 62.7%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Would allow us to betteror more rapidly address

customer needs

Would allow us to morerapidly respond to changes

in market

Would improve ourcompetitive stance or

differentiation

Q13. If you could wave a magic wand and fix all the issues in effective-ness and efficiency in your customer-facing document-driven business processes, what overall effect do you believe it would have on your organization? n = 1,112 Source: IDC’s Document Management Thought Leadership Survey, February 2012

Over 83% of Survey Respondents Reported That Optimizing Customer-Facing Document-Driven Processes Can Improve Revenue by an Average of 10%Respondentswereaskedaboutthedegreetowhichfixingtheir customer-facing document-driven processes would improve revenue to their business, and the results were striking.83.2%ofrespondentsbelievethattherewouldbeapositiveimpactonrevenue(seeFigure3)becausecompanies would streamline business functions that enable them to effectively get their products and services to market and provide superior service to customers once theyareonboard.Theseprocessesincludesales,customercommunications, customer onboarding, customer service, andnewproductdevelopment.Alsoincludedareindustry-specific processes such as insurance/claims processing in the insurance business and patient medical records in the healthcare industry.

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Figure 4: Average Expected Revenue Improvement Is 10.1%

0% 5% 10% 15% 20% 25%

Increase by more than 50%

Increase by 36–50%

Increase by 21–35%

Increase by 11–20%

Increase by 6–10%

Increase by 3–5%

Increase by up to 2%

No effect

Reduce revenue

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6%

. . . . . . . . . . . . . . . . . . . . . . . 9.9%

. . . . . . . . . . . . . . . . . . . 12.3%

24.3%

. . . . . . . 19.3%

. . . . . . . . . . . . . . . . . . . 11.5%

. . . . . . . . . . . . . . . 15.3%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6%

% of respondents

Q14. If you waved that magic wand and fixed all the issues in effective-ness and efficiency in your customer-facing document-driven business processes, what effect would it have on your organization’s overall revenue? n = 1,100 Source: IDC’s Document Management Thought Leadership Survey, February 2012

Ineffective Business Processes Significantly Increase Risk of Losing CustomersOneofthemajorwaysthatineffectivedocumentprocesses can affect revenue is through the risk of losing customers.Inoursurvey,72.6%ofrespondentssaidthatit is important to them as consumers that the companies they do business with have efficient document-driven business processes. Unfortunately, on average across the sevenindustriesstudied,57.9%ofrespondentssaidthatthey are not completely satisfied with the document-driven processes in the companies and organizations they interact with(seeFigure5).

Thedegreeofdissatisfactionexpressedbyrespondentsissurprising. Business services are dependent on customer-facing processes for a wide variety of activities, yet they appear to fall wide of the mark with most customers. For example, in the legal field — the industry segment with the mostdissatisfaction(64.9%)—wills,divorcefilings,andsmall customer claims are highly dependent on document processes, as are accounting services, tax preparation, and

other business services. In government filings, documents are used to manage virtually all aspects of constituent relationships, and broken processes can have a severe impact. In the healthcare segment, where providers use documents for a wide variety of purposes, including admissions and patient care management, filing claims, andhandlingbillingandcollections,63.1%ofrespondentsreported that they are dissatisfied. Similarly, the education, insurance, telecommunications, and banking industries are dependent on document-driven processes for a wide variety of customer-facing activities. When document-driven business processes break down, and these findings show they often do, customers feel the sting.

Figure 5: Consumers Are Dissatisfied with Document Processes at Key Service Providers such as Legal Firms, Government Agencies, and Healthcare Providers

% of respondents who are not satisfied with the process

. . . 64.9%

. . 63.9%

. . 63.1%

. . . . 62.3%

. . . . . . . . 54.3%

. . . . . . . . . 51.8%

. . . . . . . . . . . . 45.2%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Banking/financial institutions(credit card, loan approvals,

establishing an account...)

Business services (legal: wills, divorces, small

claims; tax preparation...)

Government (filing taxes,auto registration,

voter registration…)

Healthcare providers(admissions, filing claims,

billing and collections...)

Education (applying to schoolsor financial aid, paying tuition,

checking and receiving grades...)

Insurance (establishing apolicy, filing a claim...)

Telecommunications and utilities(paying bills, changing plans,

disputes resolution...)

Q50. As a consumer, what is your level of satisfaction with the docu-ment-driven business processes you have come into contact with over the past 18 months? n = 1,516 Source: IDC’s Document Management Thought Leadership Survey, February 2012

Unfortunately for businesses, the fallout from broken customer-facingprocessescanbequitedramatic.Acquiringa new customer is usually more difficult and expensive than retaining an existing customer; however, based on these research findings, it appears that inefficient and ineffective document processes are actively driving customers to

Average increase: 10.1%

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otherproviders.Respondentssaidthattheywouldshiftto another provider if they encountered issues with document-drivenprocesses:68.7%saidthattheywouldbeless likely to do business with offending companies in the future,while60.1%saidthattheywouldtaketheirbusinesselsewhere.Further,56.8%saidthattheywouldtellothersnottodobusinesswiththesecompanies(seeFigure6).

Each of these outcomes can have materially negative consequences. When measuring customer experience, most providers generally strive for customer experience satisfactionlevelsabove95%.Incontrast,thelevelofdissatisfaction with document processes observed in thisstudycanbeobservedinFigure6.Over6in10respondents said that they will switch providers and avoid doing business with them in the future.

Figure 6: Consumers Will Defect When Companies’ Document Processes Are Deficient

% of respondents who agree/strongly agree

68.7%

. . . . 60.1%

. . . . . 57.0%

. . . . . 56.8%

. . . . . . . . . . . . . . . . . 34.5%

0% 10% 20% 30% 40% 50% 60% 70% 80%

I am likely to writenegative reviews of them

on online forums

I am less likely to dobusiness with them in

the future

I am likely to switch toa different company

or provider

I am likely to call theircustomer service line and/orgo online to obtain support

I am likely to tell othersnot to do business with

them in the future

Q51. As a consumer, what is the impact of companies’ inefficient or ineffective business processes on your willingness to do business with them? n = 1,516 Source: IDC’s Document Management Thought Lead-ership Survey, February 2012

In today’s competitive and hypersocial marketplace, customers have at their disposal a much more efficient platform to share their dissatisfaction, with many options to negatively impact the reputation of companies with which they are dissatisfied. Customers regularly share their experiences and provide feedback to companies and peers on online social media, and with bad word of mouth being passed along to eight people compared to good word of mouth passed along to only three, the negative customer consequences can compound.

Thefindinginthisstudythatmorethan83%ofsurveyrespondents reported that improved document-driven business processes would increase revenue may seem counterintuitive to some readers — especially readers who believe that their organizations do a reasonable job ofmanagingtheirorganization’sprocesses.Thefindingshighlighted in Figures 5 and 6 paint an unpleasant picture — one of dysfunctional organizations with dissatisfied customers readily sharing information about their unhappiness.Anyoneresistingtheideathatdocument-driven processes could positively affect business outcomes should contrast that point of view with these blunt findings. Accordingtothesurveyrespondents,thedocument-driven processes in many organizations are a source of underlying customer friction and dissatisfaction — which is undoubtedly affecting broader business outcomes.

Improving Customer-Facing Processes Can Speed Time to Market by up to 13.4%Thisstudyshowsthatdocument-drivenbusinessprocessesare important to an organization’s revenue, but they can haveanevenbiggerimpactontimetomarket(seeFigure7).90.5%ofrespondentsbelievethatfixingcustomer-facingdocumentprocesseswouldspeedtimetomarket,with20.8%believingitwouldyielda6–10%improvementand40.4%statingitwouldspeedtimetomarketbyover10%.Onaverage, respondents believe that optimizing customer-facing documentprocesseswouldspeedtimetomarketby13.4%.

For businesses in many industries, time to market is critical, and being a leader or a laggard in bringing innovations to market can be the difference between success and failure. Improvingtimetomarketby13%canbeapowerfulsource of competitive differentiation and a lasting means of gaining competitive advantage.

Busted Myth: Customers don’t feel the effect of broken document-driven business processes.

IDC Finding: Less than half of consumers — 42.1% — are happy with the document-driven business processes of companies in a variety of industries: Of those consumers, 60.1% would switch to another provider and 56.8% would tell others of their dissatisfaction.

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Figure 7: Fixing Customer-Facing Document Processes Can Speed Time to Market by 13.4%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3%

. . . . . . . . . . . . . . . . . . . . . . . 12.6%

. . . . . . . . . . . . . . . . . . . 17.2%

20.8%

. . . . . . . 16.9%

. . . . . . . . . . . . . . . . . . . 12.5%

. . . . . . . . . . . . . . . . . . . 8.6%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9%

0 %% of respondents

5% 10% 15% 20% 25%

Speed by more than 50%

Speed by 36–50%

Speed by 21–35%

Speed by 11–20%

Speed by 6–10%

Speed by 3–5%

Speed by up to 2%

No effect

Slow ability to addresscustomer needs

Q16a. If you waved that magic wand and fixed all the issues in effective-ness and efficiency in your customer-facing document-driven business processes, what effect would it have on your ability to address customer needs or respond to changes in the market? n = 1,100 Source: IDC’s Document Management Thought Leadership Survey, February 2012

Ineffective Document Processes in Organizations’ Supply Chains and Distribution Channels Are Costly

Anotherareaofpotentialdisruptiontodocument-drivenprocess efficiency and effectiveness is the company supply chain.Ascompaniesrecoverfromtheglobaleconomicdownturn, they have three fundamental options to scale: hire more staff, improve the productivity of existing staff, or partner with strategic vendors and suppliers. Given the nature of this lean recovery, companies have avoided hiring new staff, and many have already run up against the limits of productivity they can squeeze out of their overstretched workforces. In contrast, reliance on partners has continued to rise, which also allows companies’ internal staff to focus on higher-value activities while outsourcing everything that doesn’t fit into their own core competency. It also allowscompaniestoscaleinaflexibleway.

“ Sometimes — because you’re dealing with a third party — when a mistake is made, it takes a long time to correct.” — GM, Hotel Chain

Butrisksareassociatedwiththistrend.Ascompaniesoutsource more operations, they become more dependent on those partners’ document-driven processes. IDC believes it is critical to select and manage partners to ensure effective document processes in one’s supply chain and distributionchannels.Surveyrespondentsagree:75.8%ofrespondents think it is important that supply-side partners haveeffectiveandefficientdocumentprocesses,and76.5%think it is important that distribution-side partners have effective and efficient document processes.

Unfortunately, many respondents also see deficiencies in theirpartners’document-drivenbusinessprocesses.45.4%,or nearly half, of respondents believe that their suppliers’ processesarenotfullyefficientoreffective,and43.1%arenot fully satisfied with the processes of their distribution-sidepartners(seeFigure8).

Figure 8: Partners’ Document Processes Are Often Inefficient or Ineffective

% of respondents who are not satisfied with partners’ document processes

45.4%

. . 43.1%

0% 10% 20% 30% 40% 50%

Suppliers, servicesproviders, other vendors

Distributors, resellers,other channel partners

Q43/46. How would you characterize the level of effectiveness and effi-ciency of the document-driven business processes of your [supply-side partners (suppliers, services providers, or other vendors)/distribution-side partners (distributors, resellers, channel partners)]? Are their processes ineffective or inefficient? n = 594 for supply-side partners, n = 500 for distribution-side partners Source: IDC’s Document Manage-ment Thought Leadership Survey, February 2012

Busted Myth: The impact of document- driven business processes ends at the enterprise boundary.

IDC Finding: Nearly half of enterprises think that their partners’ document-driven business processes are broken (45.4% for suppliers and 43.1% for distributors), and over half said that partners’ ineffective processes increase costs (56.9%) and reduce their organization’s business agility (53.9%).

Average improvement: 13.4%

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Brokenprocessesinstrategicpartnersarecostly:56.9%of respondents said that inefficient or ineffective partner document-driven processes increase operational costs. In addition, more than half of respondents said that such processes reduce their ability to respond quickly to changes in the marketplace and impair overall business agility (see Figure9).Thelessonisclearthatoutsourcinganyprocessthat is broken simply results in an outsourced mess.

Figure 9: Inefficient/Ineffective Partner Processes Negatively Impact the Business

% of respondents who agree/strongly agree

56.9%

. 55.4%

. . 53.9%

. . . . . 49.0%

. . . . . . 46.8%

0% 10% 20% 30% 40% 50% 60%

Increases our organization’sregulatory compliance risk

Increases our operational costs

Reduces our organization’sability to respond quickly tochanges in the marketplace

Reduces our organization’sbusiness agility

Increases our organization’sinformation security risk

Q48. What is the impact on your organization when your business partners have inefficient or ineffective document-driven business processes? n = 1,516 Source: IDC’s Document Management Thought Leadership Survey, February 2012

Intersection of Tablets and Document Processes Is Critical But Ill-Defined

Despite the recognized importance of effective and efficient document-driven processes, potential disruption looms in the form of the media tablet. Media tablets are making inroads into the enterprise at rates that many would have considered unthinkable only two years ago, before the first tablet was even released to the general market.Therapidpaceofadoptionisevidencedbythestudy,inwhichfully17.7%ofemployeessaidthattheyare currently using tablets to support customer-facing document-drivenprocessesand17.6%ofemployeesareusing them for non-customer-facing document-driven processes(seeFigure10).

Figure 10: Rising Adoption of Tablets in the Enterprise

Use tablets for customer-facingprocesses — today

Use tablets fornon-customer-facing

processes — today

Will use tablets for work-related activities —

next 12–18 months0% 5% 10% 15% 20% 25%

. . . . . 17.7%

. . . . . . 17.6%

20.7%

% of respondents who agree/strongly agree

Q26/27/28. What percentage of employees use [tablets] for customer-facing document-driven business processes? What percentage of employees use tablets for non-customer-facing document-driven busi-ness processes? Over the next 12–18 months, what percentage of your organization’s employees do you think will use tablets for business purposes? n = 1,516 Source: IDC’s Document Management Thought Leadership Survey, February 2012

Theadoptionoftabletsintheenterprisecorrespondsto what IDC sees as part of the next wave of enterprise computingandthenexttransformativemomentforCIOs.JustasPCsredefinedmainframecomputinginthe1980sand the Internet redefined client/server computing in the 1990s,today,cloud,bigdata,mobility(includingtablets),and social business are redefining the way employees interact with applications and, by extension, with customers, suppliers, and coworkers.

Thisfindingwasborneoutbythestudy.Whilemanyexecutives believe the adoption of tablets has reduced thenumberofpagesprintedintheirenterprise(59.2%of survey respondents believe tablets reduce the number ofprintedpages),whatismorestrikingisthestrategicroletabletsareplayingintheorganization,with49.2%ofrespondents saying tablets would enable their organization tomorerapidlyaddresscustomerneedsand47.5%sayingtablets would improve the speed at which document processesoperate(seeFigure11).

“ An outsourcing arrangement has to be governed. I think we have something like 26 different governance processes just to deal with the outsourced provider, and it’s very document driven.” — VP, Global IT, Large Cosmetics Manufacturer

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Figure 11: Tablets Have Strategic Impact

% of respondents who agree with the benefits

49.2%

. . . . . . . . 47.5%

. . . . . . . . . . . . . . . 33.6%

. . . . . . . . . . . . . . . . . . . . 32.3%

. . . . . . . . . . . . . . . . . . . . . . . . . 29.5%

. . . . . . . . . . . . . . . . . . . . . . . . 19.7%

. . . . . . . . . . . . . . . . . . . . . . . . 19.7%

. . . . . . . . . . . . . . . . . . . . . . . . 19.5%

0% 10% 20% 30% 40% 50% 60%

Would allow us to betteror more rapidly address

customer needs

Would improve the speedat which document-driven

business processes operate

Would allow us to morerapidly respond to changes

in the market

Would reduce our overalloperational costs

Would improve ourcompetitive stance or

differentiation

Would increase ouroverall revenue

Would reduce businessand/or compliance risk

Would reduce businesscontinuity risk

Q30. Over the next 12–18 months, if and when employees begin using tablets for business purposes, which, if any, of the following benefits do you expect they will bring? n = 1,516 Source: IDC’s Document Manage-ment Thought Leadership Survey, February 2012

But many organizations are not prepared for the changes that tablets will introduce to document processes. IDC believes that tablets will increase friction in the enterprise and its document processes until organizations deal with theimpactoftablets.Thestudyshowsthatover30%ofprocessesstillrelyonpaper,andmanymoreprocessesflip back and forth from paper to electronic. With fewer defined routes to move documents from electronic to paper and vice versa via tablets (e.g., with fewer tablet-based scanning and printingoptions),theuseoftabletsindocumentprocessesis introducing new roadblocks and issues.

Busted Myth: Tablets have relatively little impact on document-driven business processes.

IDC Finding: Tablets are playing a profound strategic role in document-driven processes, and there is a significant need to ensure the two play well together.

For many enterprises, the intersection of tablets and document-driven business processes is not clearly defined, and there is a significant need among businesses to ensure that tablets play well with document-driven processes.Reflectingtheimportanceofthisissue,33%oforganizations in this survey have initiatives under way to adapt their processes for use with tablets. IDC believes enterprises will need to continue to invest to adapt their processes for use with tablets and will need to continue to roll out these reengineering efforts to all critical document-drivenprocessesthatinvolvetablets.Opportunitiesforimprovement include the need to scan to cloud and print from tablets and the need to address security issues around tablet printing both inside and outside the firewall, all while providing a seamless user experience and conforming to necessary organizational compliance guidelines.

The Bottom-Line Benefits Compound: Top-Line Revenue Growth with Still More Room for Cost Takeout

Ofcourse,thebenefitsofaddressinginefficienciesindocument-driven processes go beyond improving top-line revenue. Common wisdom is correct that documents drive many back-office, non-customer-facing processes ranging from demand planning and supply chain management to asset management, IT/infrastructure support, legal, and HRprocesses.Butwhilemanyorganizationsmaybelievethey have already driven maximum efficiency into these processes, this survey found that there is plenty of room forimprovement.Fully86.6%ofrespondentsbelievethataddressing inefficiencies in non-customer-facing processes would allow them to reduce their operating costs, with 22.2%estimatingitwouldreduceoperatingcostsby3–5%and23.4%judgingitwouldreduceoperatingcostsbymorethan10%.Onaverage,respondentsestimateditcouldreducetheiroveralloperatingcostsby8.3%(seeFigure12).

Thesebenefitscompound—theyaccrueinadditiontothe top-line revenue increase achievable by addressing customer-facingdocumentprocesses.Thesamehypotheticalorganization discussed previously in the paper — with $1billioninannualrevenueanda70%grossmargin—wouldpotentiallyachieve$58.1millioninoperationalcost savings, on top of the $70.7 million in gross margin contribution from an improved top line — a total improvementof$128.8milliontothebottomline.

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Figure 12: Fixing Non-Customer-Facing Document Processes Can Reduce Costs by 8.3%

0% 5% 10% 15% 20% 25%

Reduce by more than 50%

Reduce by 36–50%

Reduce by 21–35%

Reduce by 11–20%

Reduce by 6–10%

Reduce by 3–5%

Reduce by up to 2%

No effect

Increase operational costs

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9%

. . . . . . . . . . . . . . . . . . . . . . . 6.6%

. . . . . . . . . . . . . . . . . . . 12.9%

. . 21.1%

. . . . . . . 22.2%

. . . . . . . . . . . . . . . . . . . 19.9%

. . . . . . . . . . . . . . . 11.4%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0%

% of respondents

Q22. If you waved that magic wand and fixed all the issues in effective-ness and efficiency in your non-customer-facing document-driven business processes, what effect would it have on your organization’s overall operational costs? n = 1,067 Source: IDC’s Document Manage-ment Thought Leadership Survey, February 2012

Again,IDCisstruckbythemagnitudeofthisfinding.Overthepasttwotothreedecades,drivenbyexamplesin Six Sigma manufacturing, enterprises in industries around the world have focused on improving efficiencies in processes centered on factories and supply chains. Many organizations have optimized those processes to the extent that they are now struggling to squeeze some improvement out of them. In contrast, this survey shows not only that efficiencies can be gained in a much wider range of non-customer-facing processes but also that fixing these processes can yield significant bottom-line benefits.

Busted Myth: Organizations have already achieved all available cost takeout from improving document-driven business processes.

IDC Finding: 86.6% of respondents said that costs can be further reduced and that full optimization of document-driven processes could achieve overall operational cost savings of 8.3%.

Appendix

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

Average reduction: 8.3%

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GlobalMarketing,ChiefSecurityOfficer,VPGlobalResources,SeniorVPTechnologyPlanning,VPGlobalIT,Corporate VP Finance Technology, and VP/Treasurer.

DefinitionsThefollowingdefinitionswereusedforthisstudy:

• 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,ortheycanmigratebetween paper and electronic during the end-to-end life cycleofthebusinessprocess.Thetermisalsoshortenedto “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.

Related Research Thiswhitepaperisthesecondoftwowhitepapersbasedon IDC’s global Document Management Thought Leadership SurveypublishedinFebruary2012.Thefirstpaper,“It’sWorsethanYouThink:PoorDocumentProcessesLeadtoSignificantBusinessRisk”(IDCwhitepaper#6352,June2012),explorestherelationshipbetweeninefficientand ineffective document-driven business processes and businessrisk,describeshow75.9%ofrespondentshaveexperienced serious business risk and/or compliance issues as a direct result of broken document processes, and explores some of the business drivers and ramifications.

Participant ScreenersThefollowingscreeningquestionswereappliedto target respondents:

S6.Areyouinvolvedin,ordoyouhaveoversightof,anydocument-driven business processes for your organization? (Examples might include sales order processing, customer onboarding, customer communications or correspondence, customer service and support, billing and collections, and newproductdevelopment.)

S7. Which of the following document-driven business processes are you involved in or do you have oversight of ? [Check all that apply]

Dark Blue = Customer-Facing Processes Blue = Non-Customer-Facing Processes Red = Risk Mitigation Processes

a. Customer onboardingb. Salesc. New product developmentd. Customer servicee. Marketing/customer communicationf. Insurance/claims processingg. Billing and collectionh. HR (employee onboarding, benefits, dismissals)i. Demand planningj. Manufacturing (shop floor, inventory)k. Distribution channel managementl. Vendor/supply chain managementm. Engineering/R&Dn. Legal (contracts, litigation, etc.)o. Medical (patient medical records, etc.)p. IT infrastructure/desktop supportq. Financial planning and reportingr. Asset managements. Business continuity/risk assessmentt. Compliance/auditsu. Change/problem managementv. Business monitoring and controlsw. Information security

S8.Areyouresponsibleforowning/implementing/managingany of these document-driven business processes?

S9. For each of the document-driven business processes you have visibility into and insight over in your business, what percentage of the documents would you say are paper (asopposedtoelectronic)?

AbouttheAuthors

AngèleBoyd—GroupVicePresident,GeneralManager,Imaging/OutputDocumentSolutions&SMB.Angèleisresponsible for IDC’s worldwide research practice in the areas of imaging, output, and document solutions (printing, scanning,business-criticaldocumentworkflows,andmanagedprint/documentservices).Sheisalsoresponsiblefor IDC’s U.S. small/medium-sized business research spanning the IT industry. She has conducted research and consultingatIDCsince1986.Duringthistime,shehasbeenrecognizedasaChairman’sAchiever,andshehasreceived the company’s award for research excellence, the JamesPeacockAward.

JosephPucciarelli—VicePresident&ITExecutiveAdvisorforIDC’sITExecutivePrograms.AsanITexecutiveadvisor,Josephuseshis20-plusyearsofbusinessandtechnologyexperience to provide ongoing insight and guidance to business and technology executives seeking to leverage the critical technologies of cloud computing, mobility, social business, and big data/analytics that have begun transforming both business and consumer technology usage and interaction models.HisresearchispublishedinIDC’sCIOAgendaandIT Cloud Decision Economics research programs, and he also contributes to an ongoing series of in-depth special research reports on a range of technology management issues.

Anotedanalystwithbroadbusinessexperienceinthefinancing and technology industries, Joseph has held a variety of consulting, product marketing, risk management, and senior management positions with companies including Gartner, GE Capital, Peregrine Systems, and his own company, Strategance.

MelissaWebster—ProgramVicePresident,ContentandDigitalMediaTechnologies. Melissa leads IDC’s Content and Digital Media Technologies researchprogram.Thisprogramtracks,analyzes,and forecasts markets and trends in document and content management, records management, Web content management, digital asset management, and documentandrichmedia(audio,video)authoringandpublishingsoftware.Shehasmorethan20yearsof experience in the software industry with enterprise software vendors and Internet companies ranging from the Fortune 500 to venture-backed start-ups and has held senior management positions in marketing, business development, and product development at Oracle,InformationBuilders,ObjectDesign,andRetailExchange,amongothers.

AboutIDCInternationalDataCorporation(IDC)isthepremierglobalproviderofmarketintelligence,advisoryservices,andeventsfor 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 opportunitiesandtrendsinover110countriesworldwide.Formorethan48years,IDChasprovidedstrategicinsightstohelp our clients 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. CopyrightNoticeExternal Publication of IDC Information and Data – any IDC information that is to be used in advertising, press releases, or promotional materials – requires prior written approval from the appropriate IDC Vice President or CountryManager.Adraftoftheproposeddocumentshouldaccompanyanysuchrequest.IDCreservestherighttodeny approval of external usage for any reason.

Copyright2012IDC.Reproductionwithoutwrittenpermissioniscompletelyforbidden.

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