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Midrange Stuff - Hardware, Software & Services
OS/400 Edition
Volume 2, Number 10 -- March 12, 2002

Business Documents Go Digital with ACOM

by Dan Burger

The advancing digital marketplaces have many companies evaluating their next steps of preparation. How will IT departments harvest the greatest benefits while integrating their back-end applications to the marketplaces and exchanges? The capability to exchange electronic documents on an application-to- application level is the desired goal. A central focus in the evaluation process involves ERP systems or accounting applications for buyers, and sales order, inventory, and catalog information for sellers.

On the leading edge of this process is the area of document management, which converts key business processes--buying, selling, shipping, tracking, handling products and services, paying bills, compensating employees--from paper-based to electronic operations. Critical to the functionality of document management software is that it be platform independent and compatible with all financial-management and enterprise-resource-planning software. A document management solution needs to support third-party products and interface with them, or it isn't much good.

iSeries and AS/400 shops may want to seriously consider putting their document management solutions on the OS/400 platform to take advantage of its obvious strengths, in terms of scalability and systems administration.

The sell side of this equation is more developed than the buy side at this time, and companies are advancing their e-business initiatives there--with functions such as invoicing and statements--as a starting ground. Because a modular approach is available, a graduated change from doing business on paper to completing transactions electronically is possible.

The targets for increasing efficiencies and lowering costs are preprinted forms and the U.S. Postal Service. Companies are producing their own documents and sending them in electronic format (some by e-mail, some by fax), rather than having them printed and sent via snail mail. The obvious advantages are reduced printing charges, no inventory of forms, and customers get their invoices quicker. Reducing the total number of days in which a company gets paid for its goods and services means more money in the bank. Eliminating printing and postage charges can recoup the cost of the document management system pretty quickly. Another consideration is the savings in "soft costs" for labor. Obviously, there were people involved with generating and presenting the traditional paper documents that are no longer needed.

Mark Firmin, vice president of business development at ACOM Solutions describes the trends as companies transition slowly from the way they do business today. "Most customers have one or two business processes they want to convert to electronic," Firmin says. Usually that involves "generating an electronic form and a couple of invoices and statements through e- mail." Those companies will be adding additional forms, business processes, and functionality later, he says.

Is Change Affordable?

To get a handle on the costs associated with the transition, Firmin suggests taking into account the software costs that include software to design and generate the forms, the e-mail module that enables the company to present the forms, the fax module--if that is a company requirement--and a PDF module, if larger documents are going to be sent via e-mail.

In the ACOM pricing structure, the first software module costs from $5,000 to $10,000, and additional modules cost approximately $5,000. Customers who want everything could spend as much as $20,000 to $25,000. These prices only include charges for software. Services fees are extra and depend on the number of forms being implemented at the launch. "We charge by the number of forms implemented and the number of days it takes to implement those," Firmin says. "On the average, this costs between $5,000 and $10,000. Most companies get in (with start-up costs) from between $10,000 and $20,000.

ACOM's professional services involve converting the documents from paper to electronic format, the implementation of the electronic document management to work within the company's existing business rules, and the training of the IT department staff to do these things for themselves in the future.

"You have to look at the investment and you have to have a budget, but look at the big picture of business processes," he says. "Preprinted (forms) isn't an option anymore. Look at what the return on investment is for making this change now."

As an example, Firmin cites a company that is sending 5,000 forms each month, or 60,000 every year. In some cases, the forms may cost from 50 cents to one dollar to produce. That's a cost of between $30,000 and $60,000 a year to create preprinted forms. An e-mail solution wipes away those costs. In addition to printing costs, an e-mail solution (same for a fax solution) will result in postage savings. Firmin says that even the most favorable bulk-mail rate can only get the cost down to around 20 cents per form. A company that does 5,000 invoices a month, for instance, can save around $1,000 in postage per month, or $12,000 per year. (Of course, bulk fax and bulk e-mail are not free, but they are a lot more cheap and immediate than regular mail.)

One of the primary questions companies are asking is whether to handle bill presentment documents via e- mail or via fax. The answer to that question is another question: What will your customers accept?

A company that is no longer receiving paper forms is reducing its handling headaches as well. Some companies are taking smaller steps in the transition, however, and continue to require paper copies to process payment. An electronic creation of forms with a presentation by fax is an option in these cases. It is most likely a step in the direction of eventually going to e-mail documents.

A large enterprise, Firmin notes, can sometimes dictate business processes and demand that its suppliers, for instance, conform to how it wants to do business. As the digital marketplaces continue to evolve, more small and midsize companies will find themselves responding to the demands of their largest customers.

Digital Efficiency

E-mail is the most efficient delivery method when both buyer and seller are equipped to deal with it.

When e-mail invoices are produced in an iSeries shop, Firmin explains, they are done so in a batch. This involves tapping into an e-mail server that is connected to your ISP. The iSeries produces the batch--let's say 1,000 invoices--and the software is intelligent enough to make sure the right e-mail address coordinates with the right invoice. Then it literally passes it over to the e-mail server that goes to the ISP. The e-mails are sent with address such as "Accounts Receivable at company.com." At the company that receives the statement, the e-mail is then routed to the correct person via Microsoft Outlook or Lotus Notes or whatever e-mail client the company uses.

Firmin says the ACOM product, EZeDocs, is set up on AS/400 and iSeries servers with menu-driven screens. No programming is required. It only involves setting up the business rules.

"Say the IT department has been asked to help the accounting department get the invoices out to the customers a lot quicker. So the problem is how to generate these invoices and present them to the customer in e-mail format. To set that up you need software to generate the form, and software to interface with the e- mail server that's connected to the ISP. You use the AS/400 to set it up and menu-driven screens, where there are options to choose the business rules that you desire without any programming. It's all set up to run in batch, in conjunction with the same language that used to run your invoices. The result is that the users don't even know it is there. They run a batch of invoices, they hit the Enter commands, and automatically the spool file is converted to an electronic form, with the data in the right position; it separates the invoices by e-mail address; and fires it out through the e-mail server."

This is the weather vane for the field of document management, a category that includes aspects such as archiving and Web delivery that are just beginning to show up on the radar screens of companies that are taking note of which way the wind is blowing.

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BACK ISSUES
TABLE OF CONTENTS
IBM Revives OV/400 Migration Tool
Insider's View: A Cure for the Common Form
Business Documents Go Digital with ACOM
Bringing AFP Back from the Dead
Quadrant Adds Improved Client, Change Management with Formtastic Fusion5
Kisco Adds Features, Drops Price of BlueFax
News Briefs and Product Shorts
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