Document Capture for
Sales Order Automation
The Value of Moving Document Capture to
the Front Office
Andrew Pery
Presentation Context
• “…physical assets are generally subject to
decreasing returns while Knowledge assets
generally enjoy increasing returns because
knowledge is cumulative -- the more intensive the
use of knowledge, the larger the benefits…”
• Baruch Lev. Intangibles, Management Measurement and Reporting. Brookings
Institution Press, 2001.
Paper Consumption Trends
Average Worker is estimated to
use a sheet of paper every 12
minutes.
Use of email has resulted in a
40% increase in the use of
paper.
Worldwide growth of 600% in
desktop printers since 1998.
Global consumption tripled in
the past three decades and is
expected to grow by 50% by
2010.
Economic Implications
• Storage Space
• $ 40,000 to $ 60,000 to store 2 million pages of documents in file
cabinets
• Lost Documents
• 3% of documents are misfiled, 80% eventually lost
• Cost of misfiled documents is $ 120 per document
• Postage
• Paper and Postage constitutes 70% of customer billing costs.
• Customer Relations
• 37% of time is allocated to discrepancy resolution and
payment reconciliation
The Bottom Line
• “A Lawrence Berkeley Labs study estimates that the cost per
ton of handling paper is:
• 20 times the cost of purchasing it
• 200 times the cost of throwing it away
• Automated processes can increase productivity by 50
percent or more”
The Changing Workplace
100%
90%
Work Styles
80%
Different time and place
70%
Same time, different
place
60%
50%
Same time, same place
40%
Working alone
30%
Percentage of individual’s
performance that will
depend on group input
20%
10%
0%
2000
2005
2010
2015
Source: Gartner
Capture Device Proliferation
Camera Phones
Device Proliferation & Maturity
130M units in US
MFPs
21.2M units in US
Desktop Scanners
14% growth
(2006 – 2007)
370K units in US
$350M in US (2007)
22% growth from
2006 to 2007
Becoming standard
part of all office
infrastructure
3-5+ megapixel
cameras with
optical zoom will
become the
standard on phones
within the next 1 – 2
years
52M camera phones
with 3 or more
megapixels
worldwide in 2007
622M by 2011
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Document Capture Trends
70
60
50
Distributed batch
40
Centralized batch
30
Desktop/shared MFP
20
10
0
Where Does Scanning Occur?
Key Finding: Scanning is frequently introduced late in the process—a missed
opportunity to automate data capture, workflows or information exchange.
100%
90%
70%
60%
50%
Don't know
End
Middle
Beginning
40%
30%
20%
10%
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0%
To
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(% of respondents by choice)
80%
Where Should Scanning Occur?
• 71% respondents indicated that scanning should occur at the beginning of
the business process, with intelligent document recognition, extraction
and notification reducing processing costs.
100%
Agree/Strongly Agree
90%
78.30%
% of respondents
80%
73.70%
70.80%
70%
60.50%
60.90%
60.90%
60%
55.00%
56.50%
52.90%
47.10%
50%
37.50%
40%
30%
20%
10%
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Source: IDC
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Order Processing
Why Automate Order Processing?
Business Challenges of Order Automation
• Fax image quality (90% of orders are
faxed)
• There is no such thing as a typical,
standard purchase order
• Sales orders vary in format between customers,
especially with tabular data, and can span multiple pages
• All sales orders have common elements, but there are too
many different formats to template
• Capture of line item detail is an absolute
requirement
Sales Order Processing: Key Messages
• Reduce the order to cash cycle
• Start workflows as quickly as possible
• Reduce exceptions – wrong shipments
• Control the process as soon as possible
• Improve customer relations
Order Processing Cycle
Improve customer relations by
confirming receipt of order
Data
Capture
Improve
Data Quality
Separation
Classification
Extraction
Detect Missing,
Incomplete,
or Wrong Data
Order
Approval
Workflow
ERP
Data
No error detected
Confirmation
ProcessReady
Data
Validate
Order
Dispute
Resolution
Order Processing Cycle
Improve customer relations by
notifying them of errors
Data
Capture
Improve
Data Quality
Separation
Classification
Extraction
Detect Missing,
Incomplete,
or Wrong Data
Order
Approval
Workflow
ERP
Data
Error detected
Notification
Validate
Order
Dispute
Resolution
Kofax Solution to Automate Sales Order Processing
• Control Paper Flow
1
+ Workflow
• Reduce Manual Labour
2
• Integrate Electronic Sales Orders
3
• Enhance Process Transparency
4
• Improve Data Quality
5
=
Automate the
whole process
& deliver value
at every step!
• Control Paper Flow
1
 Early Scanning
Distributed Capture
Seattle
• Scan at Document
Origination
• Central and distributed
capabilities
Phoenix
Atlanta
New York
Image Quality
Effective scanner throughput:
• User interface/Image processing/
speeds and feeds
Effective paper throughput:
• Increase image quality/Reduce
file size/Data ready
Effective people throughput:
• Ease of use/Focus on
business process
Kofax VirtualReScan
Business Challenges
Step 1 is important because…
Most invoices are still received via postal mail,
often through different entry points..
• Forwarded manually to Order Department
• Are lost / misplaced
• Delayed processing
• No visibility of outstanding payments
• Reduce Manual Labour
2
 Automatically extract invoice
information
 Includes fax, email
(& trailing documents)
Extraction and Classification
1. Classify Document Type
 Invoice
Credit Note
x Purchase order
x etc
Supplier 1
Supplier 2
Supplier 3
Extraction and Classification
2. Extract and validate information
3. Feeds ERP systems (SAP, Oracle, Lawson, etc)
Business Challenges
Step 2 is important because...
• Data has to be manually keyed
into LOB applications.
• Manual intervention results in
• Processing delays
• High / random error rates
• Separate manual processes reg. email and fax
• Elevated costs
• Negative impact on relationship with suppliers
Main Benefits
• Reduced AP labour (time saving)
• Significant cost reduction
• Prioritization of invoices
(for early payment discounts, ...)
• Increased supplier satisfaction:
faster processing & payment times
• Higher employee satisfaction, less frustration
• Integrate Electronic Sales Orders
3
 How to make my customers
send electronic sales orders?
Business Challenges
Why is it hard to on-board most suppliers?
• Lack of IT skills to setup EDI
• EDI is a very costly and complex solution.
Cost to supplier between $8k and $15k
• Limited resources to roll out EDI
Kofax e-Transactions
Seller
Buyer
Invoicing System
Accounts Payable System
ERP
System
eInvoice
Sender
Envelope
Stamping
Mail
Instant electronic
delivery (2-3 sec)
Postal
Service
(2-3 days)
eInvoice
Receiver
Open, sort,
distribute mail
(1-2 days)
ERP
System
• Enhance Process Transparency
4
 Send receipt confirmations
Trigger exception notifications
Business Challenges
Step 4 is important because...
•10% – 15% of suppliers place inbound calls
relate to the status of the transaction
• Up to $30 per call
• Have you received my order?
• Is the order OK?
• Has my order been processed?
• When will shipment occur?
• Improve Data Quality
5
Leverage communication to initiate
exception handling (outsource to purchaser)
Help to automate the matching
Business Challenges
Step 5 is important because...
It is hard to match sales orders due to:
• Data errors
• Business logic errors
• Invoice conformity issues
• Extraction related issues
• AP personnel have the burden to manually fix the problem
Automated Order Processing Features
• Import order from fax server
• Extract order information
• Validate part numbers, unit prices, etc.
• Locate the customer number
• Create order in the ERP system
• Route order to appropriate workflow for
fulfillment
Benefits of Automated Order Processing
• Reduces order fulfillment time and cycles
• Streamlines efficiencies
• Reduces costs
• Enhances accountability,
• Accelerates business processes
• Optimizes corporate performance
Use Case: Promotional Products Company
• Use Case
• Sales orders
• 100,000 customers, 300 fax lines
• Faxed orders
• Business Problems
• Lost/misplaced orders
• Customer service back log
• 11 individuals processing orders (3 just to confirm customer number)
• Service-level agreement of 48 hours to fulfill an order
• Kofax Solution
• 24-hour turn-around time over 48
• Automatic confirmation/notification of incorrect orders
Use Case
• Promotional manufacturer (balls,
hats, calendars, awards, etc.)
• Multi-million revenue, 5 operating
divisions
• 300 fax lines, 100,000 customers,
processing 500-650 orders daily
• 95% of orders received by fax,
4% email, 1% hard copy
• 25% of faxes arrive at the wrong division/group
• 25% of orders result in a customer call asking, “Did you get my
order?”
• 11 individuals processing orders (3 of them just to confirm
customer number)
• Service level agreement of 48 hours to fulfill an order
Integrated Product Portfolio
Kofax Communication Server
Notification
Data Validation
Kofax Capture
Capture
Transform
Deliver
Front-Office
Back-Office
Intelligent
Classification
Release to Multiple
Back-Ends
Kofax
Document
Exchange
Server
Kofax
Transformation
Modules
Integrations
with hundreds
of systems
Kofax
Express
VRS
Image Quality
Order Processing
Questions?
Why More Services Than an Invoice Project?
• Order processing is dependent on line item detail
• Quote includes the definition of up to 75 top customers
• Order processing requires separation of orders
• Without the inclusion of Kofax Transformation Modules Professional,
scripting is added to separate orders upon the
occurrence of a new purchase order number
• Fax receipt date must be parsed from fax
server data file
• Lookup of customer number
• Notifications
• Internal
• External
• Business rules around Ship To Address
• Higher project manager involvement
Thank You !
For further information, please contact:
Joanne Oldfield
Director, Professional Services Americas
Phone: 949 727-1733 ext. 475
Email: joanne.oldfield@kofax.com