Kofax Intelligent Capture & Exchange Automates Records Processing to Enable the DGA to Direct with Care

(By Gordon E.J. Hoke, eVisory)

Delivering these services creates a mountain of paperwork and records. The effort required for document management and records management is arduous. Every day, dozens of payments arrive for allocation. Every day, the Plans send hundreds of payments to participants. In between, the Plans customer service department addresses scores of inquiries, mostly regarding documents.

Several government agencies from the U.S. Department of Labor to the state Department of Revenue closely regulate institutions like the Plans. Proving compliance with myriad regulations and statutes is a painstaking challenge.

"We wanted to better serve our participant base," explains Operations Department Assistant Manager Paul LaMotte, a veteran of document management. "We handle a lot of paper, and I dont think the totally paperless environment is possible here. But we have to share a lot of documents among multiple users. Operations Manager Gary Chang and I saw no way to do that without document imaging. We knew the road, but the road was not paved. We chose imaging to pave it hoping, knowing that as soon as it was paved, people would jump on it and start using it."

Chang and LaMotte defined five goals for document automation:

1. Accelerate the Plan's processes and reduce its costs. For example, to serve participants better, the Plans wanted to deposit funds faster, pay claims faster, improve studio compliance, and deliver better customer service. At the same time, there was unending pressure to lower the cost of administering the Plans while meeting stringent regulatory requirements.
2. Flush the expense, frustration, and snails pace of microfilm.
3. Share documents among multiple users while improving security.
4. Eliminate onsite file cabinets and offsite storage.
5. Set the stage for forms processing and workflow.

A vital corollary to these goals demanded that any installed imaging solution be extremely reliable, low maintenance, flexible enough to meet disparate needs, and capable of significant growth.

From Goals to Procurement

Chang and LaMotte were certain about the solution to their paper problems. They also knew their first step was to gain the support of top management. This required painstaking research to build a compelling economic case for a document automation system. It also included showing how paper storage was physically squeezing the departments and slowing operations. Further, it meant convincing the administrator of the very real danger to records from a disaster, noting the potential losses and cost of recovery.

For their second step, Chang and LaMotte assembled a project team representing different departments. Notably, the team included IT Manager Garth Tuma, who played a vital role in the search process. The team researched technology through the resources of professional associations ARMA (www.arma.org) and AIIM (www.aiim.org). Next, they projected an imaging systems likely costs versus the benefits. Then they felt prepared to look at individual vendors.

The team made a strategic choice to consider only open-architecture solutions, avoiding vendors with proprietary hardware and/or software. "We didnt want our growth path to be restricted to the development plans of a single vendor," explains LaMotte.

Next, they asked, "What vendor would provide a total service package, including training? What vendor would keep us current with developing technology?" The project team came to see the need to find a specialist whose only business was document management.

"First off, Kofax is rare in that it is non-proprietary," states LaMotte. "That was key for us. They are capture specialists and dont get distracted selling scanners or whatever. If you have an imaging problem, they have a solution."

"Kofax wasn't less expensive," he continues, "but because of their open architecture and their serious commitment to research and development, we were confident they would offer solutions for our future needs as well."

Matrix priced its proposal, and Chang presented it to the Controller who analyzed the costs and recommended acceptance to the Plans administrator. He, in turn presented the proposal to the Administrative Committee, which recommended it to the full Board of Trustees. The Board gave final approval. Strong support from top management, especially Plans Administrator Gavin S. Gervis, proved vital to the process. Gervis clearly saw the advantages of digital imaging for archiving, efficient retrieval, space conservation, cost savings, and disaster recovery. In general, management's comfort with the proposed changes grew throughout the gradual, inclusive procurement process, and staff acceptance followed.

Implementation responsibilities fell to the Operations Department, and Chang and LaMotte led the project. They identified the Plan's most critical applications that would enjoy the most immediate impact from Kofax's Intelligent Capture & Exchange solution. Management agreed that if these key departments could be successfully implemented, the whole project was likely to succeed.

LaMotte knew that technological change is not easy for every staff member. However, between strong support from top management, an immediately successful implementation of Kofax Capture software, and LaMotte's expertise and experience, employees quickly saw the advantages of digital imaging. Once exposed to its advantages, they wholly embraced it.

Chang applauds the results: "After initial training from Matrix, LaMotte programmed each and every one of the 61 current Plans applications, despite all the myriad and idiosyncratic requirements of each department. Every single application has been successfully implemented."

How It Works and What It Does

The entire system resides at the Los Angeles headquarters, so geography plays a minimal role. Matrix Imaging installed all of the software.

Capture hardware consist of high-speed, duplex scanners from Kodak. Kofax Adrenaline cards in the host PCs connect each scanner and automatically correct for skews, speckles, and other inconsistencies while running the scanners at their rated speeds. At the same time, Adrenaline reads the barcode sheets that separate batches.

Tuma explains that the system is client/server based: An image server works together with a Hewlett Packard line-of-business server running MS Windows 2000. The main database is MS SQL 7.0. On the image server, 1.3 terabytes of RAID 5 storage preserves images. This server holds the configuration settings and application definitions, and it manages batches while providing access to client workstations. It also integrates barcode sheets from the HP, which contain the date and other indices.

Kofax Capture  software controls the capture process. At Kofax Capture scan stations, clients scan batches, control quality, and add additional index information. Kofax Capture automatically releases the improved, identified images to document management software from Legato (www.legato.com). Users view the images using Legatos WebXtender. The clients are all browser-based, which, according to Tuma, made the client configuration straightforward, fast and simple.

Matrix Imaging worked closely with the Plans' Operations staff to create the first two top-priority applications. Matrix also trained the Plans' system administrators so they could create their own applications later. Matrix supports the installation via email, phone and site visits as needed.

Matrix also installed and configured a separate scan station and a Kofax Capture workstation in the Operations Department. Subsequently, the Plans purchased another Kofax Capture workstation license to gain additional indexing capabilities.

"Kofax Capture is essential and integral to the Plans' operation because they have so many different applications and types of documents," notes Janet Nathanson, of Matrix Customer Support. "Its flexibility and ease of use are key."

"I am most proud that they learned the software and use it to its boundless ability," she continues. "Once their imaging leader [LaMotte] learned the technology, they could do almost anything with the Kofax software."

"We sell other capture software too, but it is so limiting...all you can do is scan. Kofax is better for document separation, auto-indexing, and database validation. Also their image enhancement is better than anything else Ive seen. It can make a lot of images perfect."

The Results

Having started with just two applications, the Plans' solution now serves the entire enterprise. At this writing (Q3, 2003), there are 63 active applications, all developed in-house. Each of the 11 departments uses the Kofax system in different ways.

For example, the Contributions & Collections Department scans contribution reports from studios as they arrive. These reports indicate how much each Plan participant worked during a given period and how much money (from $50,000 to $1,000,000 per day) the studios are contributing for health insurance and pension. C & C staff key the information into the Plans' database.

A third example comes from customer service where participants' questions keep workers retrieving many documents, quickly. Before the Kofax solution, customer service personnel took phoned questions about documents, but they had to hang up, retrieve documents (sometimes from offsite), and call back. Now they answer questions on the first call, retrieving images in a matter of moments.

Benefits Let Me Count the Ways

Each of the 61 applications delivers its own benefits, from minor to monumental. Among the highlights:

1. The hardware and software are remarkably reliable. Any performance problems have been resolved within hours. Hardware has been down only for scheduled maintenance.
2. The system has been near-infallible: Since installation, the Claims Department has never lost a claim
3. The Plans earned very substantial interest from the rapid deposit of contributions and collections.
4. In the Claims Department, the processing time for claims shrunk from 30 days to 10 days. Workers are more productive and efficient.
5. The document solution virtually eliminated the need for offsite storage. Laws require the Plans to retain claim documents for seven years. Before the Kofax solution, this meant offsite storage for most documents. Retrievals required considerable travel time and a $7-per-box retrieval fee.
6. Efficiency is improved. Before automation, the Operations Department observed staff behavior while retrieving paper files. Staff members leaving their desks to get papers often made two unrelated stops per retrieval in addition to their stop at the filing cabinets. With the new system, image retrieval occurs at workers desks in moments.
7. Staff members do internal audits that previously were outsourced. This has resulted in great cost savings for the Plans, according to Irene Cheung, manager of the Contributions & Collections Department.
8. As backfile conversion progresses, the Plans empty large alcoves of file cabinets. Expensive local office rates mean this conversion potentially saves thousands of dollars in rent.
9. Administrators save hours of time preparing reports for the Board of Directors. Paper-based research was inordinately time-consuming and tedious.
10. The IRS, the Federal Department of Labor, and industry agencies regulate the Plans. Internal and external audits come frequently. Providing electronic images instead of paper or microfiche reduces time and energy consumed by these audits.
11. With the old microfiche system, new documents were unavailable for a week during photography and film development. Now, most scanned documents are available for retrieval the next day.
12. User-based security ensures privacy. The previous security system was department-based.
13. Electronic file sharing curtails inter-office requests for information and inter-office deliveries.

The Plans' management considers each of the original goals accomplished. Productivity, efficiency, and customer satisfaction have improved while the cost of processing documents has declined. There are expenses saved and costs avoided.

Having insisted on flexibility and plenty of room for growth, Chang and LaMotte recognize the current system, for all its success, is really a foundation for future applications. With Gervis, they continue to plan expanded use of document technologies.

The Plans' leadership takes satisfaction in knowing that the Plans handle claims, pensions and contributions with cutting-edge efficiency.

Gordon E.J. Hoke, vice president of eVisory Consulting (www.evisory.com) has observed, analyzed, and reported on document technologies since 1989. His 150-plus publishing credits give a unique perspective as he helps organizations procure document solutions. Contact him at (507) 534-2293 or gordon.hoke@evisory.com.