If I told you that a stack of three months worth of paper used for policy applications at a Fortune 500 insurance company could be higher than an eight story building, you would probably marvel at the vision but cringe at the costs. Now think about being able to tell the CEO that you have implemented paperless solutions that both trims the pile and cuts spending. That's something that would make any CEO smile and the chief information officer shine.
Ask just about any CIO what keeps him or her awake at night and odds are the answer will have something to do with controlling expenses. Always under pressure to deliver best-in-class products and services for customers, both internal and external, IT departments are also under increasing scrutiny to reduce costs and more specifically, help other departments reduce their costs. Today, a smart CIO is looking beyond the bits and bytes, focusing on areas like budget conservation and corporate social responsibility, where IT departments can have a significant impact.
There are several key technologies that insurance companies should have in place to foster a "paperless" processing environment, three of which are vital: the ability to digitize documents, workflow systems management, and the use of the Internet and portals. There are challenges, but also plenty of rewards.
Ability to digitize documents
Digitizing documents can be as simple as storing system-generated reports online for internal corporate customers to access, thus eliminating the need to print and distribute reports while generating savings associated with delivery, storage and destruction of paper documents. It's faster too, which could mean less time waiting to begin your work on a project.
The ability to store a file electronically and then send links to the document enables more rapid and consistent implementation, as will digitizing existing paper documents. However it is important to define a retention policy for the online reports or documents and implement a systematic purge of expired information to control the growth of disk storage.
Not only do these technologies benefit the environment, they also benefit the company by reducing the amount spent on paper, as well as the savings on photocopy toner, printer ink and postage, not to mention paying less for storage space and filing equipment. According to research published by the Environmental Paper Network, these indirect expenses can amount to 10 times the cost of the paper alone.
Workflow systems management
Workflow systems are essential in routing the document images to the necessary people to process business transactions. After all, if the workflow is stalled, so is the business. It is also necessary to prioritize the flow of information to ensure that transactions are being processed in accordance with their level of urgency - as determined by the business.
By incorporating this into your workflow systems framework, the prioritization of transactions remains a business process rather than a decision of an individual employee. Strong workflow systems also enhance ability to readily route documents to multiple resources that may need to take action, thus shortening the overall time required to execute the transaction.
Internet and portal technologies
By taking advantage of the Internet and portal technologies, we can extend the benefits of paperless systems beyond internal processes; while at the same time reduce paper usage, which is important to many consumers. Internet and portal technologies make it easy for a policyholder to file a claim and accelerate the pace of processing the claim. At the same time, conducting more transactions online helps the company capture previously mentioned savings.
Challenges and concerns of going paperless
While insurance companies are not subject to the environmental vulnerabilities that other industries experience, there is no reason why we can't -- and given the savings aspect -- why we would not want to be a positive "green" influence in the community. By digitizing documents, utilizing workflow technology, and taking advantage of the Internet and portal technologies, we can extend our services and provide offerings that better meet the needs of today's customer.
Moving to a paperless environment however is not without its challenges. A first concern is in classifying documents in a way that will enable employees to retrieve them and complete their tasks. This requires a review of the business processes prior to implementation to gain an understanding of how requests are received and how documents need to be routed. Other issues such as access and control are also paramount. In the insurance industry we often deal with sensitive information that requires added security.
To address these concerns, it is important to know your business inside and out to determine the role that each employee plays and assign access to documents accordingly, prior to implementation.
As with everything we do, time is a factor. The volume of electronic documents can challenge any IT unit's ability to deliver reasonable retrieval response times. Appropriate indexing of documents enables more direct access to individual documents, which can help save time, as can storing the most frequently accessed documents on faster tier-1 storage devices.
To offset the higher cost of using tier-1 storage, older and less frequently accessed documents can be moved to tier-2 or tier-3 devices. This will lengthen the retrieval time but this is often found to be acceptable for less frequently accessed documents.
Of course volume increases can exacerbate storage and maintenance issues. As the quantity of electronic documents grows, companies may need to replicate the documents at a recovery site to ensure they are available in the event of a disaster. This could require leasing or purchasing a disaster recovery site, additional hardware purchases, and data circuits.
What about legal issues? Issues such as annotations that may have originally been made on paper documents will need to be addressed in the digitized world. Should certain information become a part of the document or are there legal implications involved? Answer these questions before moving forward to avoid unwanted calls from company lawyers.
Benefits of paperless
At Aflac we align technology initiatives with corporate strategy through strategic planning, governance, and ongoing communication with business partners. As a result, we currently execute 90 percent of applications electronically while 80 percent of accounts receive their invoices online, resulting in more than $4 million in annual savings. In addition, nearly 70 percent of our applications are processed without the touch of human hands, which accelerates decisions and helps us expedite the delivery of commission checks, which is a big hit with agents. By adding online invoice and payment options we have reduced the time of transactions with our payroll accounts as well.
Having a vision of the desired end goals and being able to identify the technologies and process changes you will need to go green and save money for the company is essential to build the framework for success. Understand, however that all of these changes should be incremental; delivering the system and business process alterations in a coordinated way, over a period of time without risking costly and time consuming directional changes. When properly implemented, we have found that an increasingly paperless environment has contributed to company-wide savings and green accomplishments worthy of several awards and accolades.
