ECM: Managing invoices pays off
Enterprise content management (ECM) systems are best known for handling documents that represent the intellectual capital in organizations—documents such as project deliverables, research reports and reference materials. In recent years, however, ECM systems have diversified to accommodate such content as RSS feeds, podcasts and other digital assets (see sidebar below). Organizations are finding value in having all their content managed centrally, including content from other enterprise systems.
ECM systems also offer accounts-payable (A/P) solutions, which typically have a dramatic effect on performance when deployed in organizations that relied on manual routing. Automated management of invoices expedites payment, which can result in a discount. Additional savings accrue from the reduced labor costs of a more efficient payment process. From a knowledge management viewpoint, having the invoices in an ECM system allows them to be viewed along with other related project or customer data, producing a more comprehensive picture of organizational activities.
"There has been a steady acceptance and growth in accounts payable and accounts receivable solutions offered by ECM vendors," says Ken Chin, research VP at Gartner. "The purpose of the solutions is not to replace the enterprise resource planning (ERP) applications for A/P, which handle the transactions, but to improve the management of documents." The driver for these solutions is to increase speed for the workflow process, as well as to provide documentation useful in compliance. "Routing of invoices is much faster," says Chin, "and discrepancies can be resolved more quickly."
New Plan is a real estate investment trust that owns and manages nearly 500 properties and has assets of about $3.5 billion. The company wanted to improve the process it was using for handling accounts payable. With its portfolio having grown to include properties in 36 different states, New Plan was challenged to manage invoices originating in geographically dispersed locations, and saw the potential for using an ECM system to address the issue. It also viewed an ECM system as part of a strategic plan to gain control over all of its digital assets and meet compliance requirements of Sarbanes-Oxley.
New Plan narrowed its search for a solution to those that could integrate readily with its ERP system, JD Edwards EnterpriseOne from Oracle. After reviewing the options, New Plan selected Universal Content Management (UCM) from Stellent, which was recently purchased by Oracle. Since New Plan was already using the Optika imaging product (which Stellent had acquired), UCM was a logical choice on that count as well.
UCM integrates directly with EnterpriseOne; invoices are preapproved in the system and the workflow routes the invoices to the correct associate. Previously, New Plan used a centralized A/P model to aggregate invoices. The process included the approval, receipt and review of invoices and the ultimate computerized payment. Routing was manual, and the process took several weeks. Gathering invoices for year-end tenant backup took many months.
"The processing of our invoices is three times faster now," says Robert Lieberman, CIO of New Plan. "We've reduced our turnaround time from 30 days to 10." Other documents have also been put into the system, including leases. Documents are indexed under a variety of fields, including tenant, property, region and account number.
Expediting the payment of invoices is the low-hanging fruit for an ECM, according to Lieberman. "We got a very quick return on our investment. Accounting departments are typically overloaded with work, and benefit greatly from increases in efficiency," he says. "It's amazing when I show people what we are doing, with just a scanner in the corner of the office. No one has any paper on their desk." Paper invoices are sent off-site for storage, and there they stay. "Never have we had to pull back a batch of paper to check an invoice," Lieberman adds.
New Plan is now poised to reap the benefits of having invested in ECM. The company has purchased the Sarbanes-Oxley module of Stellent's UCM, which will eliminate much of the manual work formerly required for compliance. Having financial data in the ECM system facilitates compliance with certain requirements of Sarbanes-Oxley including testing and auditing. In addition, the ECM system provides a repository for descriptions of management processes and remediation plans.
The company has also purchased Stellent's records management (RM) and digital asset management (DAM) components. The RM product will support the automation of a retention cycle for documents including paper records. The DAM solution will store New Plan's photographic library. Finally, using UCM for Web content management will allow New Plan to update its Web site rapidly, and support regionalizing its marketing materials.
Emphasis on cost containment and productivity enhancement is pushing the need to image and document-enable and automate the A/P process. "The concept of a paperless office remains something of a myth," says Art Sarno, marketing executive for the Oracle solutions group at Open Text. "Even now, 85 percent of invoices come in as paper."
Open Text has solutions that integrate with SAP and with Oracle's products, including PeopleSoft, JD Edwards EnterpriseOne, JD