A Case for Centralized Mail Processing of Communications through a Virtual Mailroom

By Jim Vickers
Chief Marketing Officer
Captiva Software Corporation

As businesses continue to automate their information processes-enterprise content management (ECM) systems replace file cabinets, document and data capture technologies replace manual data entry-one domain of the information flow remains unchanged: the mailroom.

In the mailroom, it's business as usual. Piles of paper are sluggishly, erratically pushed into the workflow, with crucial information being trapped, delayed and oftentimes lost. Regardless of the industry, businesses today universally manage communications through a multitude of mailrooms-each specializing in a particular medium. Many large businesses maintain several mailrooms at different locations, often serving different business functions. If you add faxes, e-mails, web forms, manually entered call center data as additional "mail mediums," these inefficiencies are evermore widespread and increasingly detrimental. With countless sources and myriad formats, businesses still face a tremendous challenge in processing mission-critical information accurately, and in getting it into the right hands quickly.

The Inefficiency of Paper

The primary reason inefficiencies persist, however, is that paper continues to be the dominant medium for communications-especially for incoming external information such as forms, contracts, invoices, and correspondence. And businesses and government entities have simply been unable to find a way to accurately and ably process the unstructured data (i.e., the so-called "white mail") in conjunction with the structured data (e.g. data contained in online forms). Various analyst groups have estimated that of all data contained in an enterprise, 80 percent is unstructured information. Yankee Group furthermore concludes that content itself is growing at 200 percent a year.

The time and energy wasted by an enterprise in handling paper documents is astounding. A PricewaterhouseCoopers study found that professionals spend 5 to 15 percent of their time reading information, but up to 50 percent of their time looking for pertinent data. Additionally, the average organization:
. Makes 19 copies of each document
. Spends $20 in labor to file each document
. Spends $120 in labor searching for each misfiled document
. Loses 1 out of every 20 documents
. Spends 25 hours recreating each lost document
. Spends 400 hours per year searching for lost file

Gartner too has forecasted that the amount of time wasted on document management related tasks continues to rise. In 1997, Gartner estimated that knowledge workers were spending about eight hours a week-or 20 percent of their work time-on document management tasks. Gartner has since updated these estimates; that this time now ranges from 20 percent to 30 percent, and expects this range to increase to 30 percent to 40 percent this year.

Centralized Mail Processing

The need for a centralized, automated mailroom has never been more acute. If excessive paper-handling costs can be drastically reduced, if not even eliminated, then there could be a vast increase in the efficiencies in entire mailing systems both within and between enterprises. However, the traditional mailroom isn't up to the job. It has no means of processing electronic data. In turn, e-mail systems aren't, obviously, up to the job of processing paper.

Today's competitive business is calling out for a centralized solution for all incoming information, a virtual "single point of contact" that can classify and route all incoming correspondence regardless of its medium or point of origin. Currently, there is a strong business case to amalgamate all communications though a central mailroom, a kind of "virtual front door," to manage the receipt, analysis, routing and delivery of communications. A complete virtual mailroom operation could consolidate all mailrooms and provide reduced operational costs, strengthen system efficiencies and accelerated mail processing for optimized customer satisfaction. Additional drivers include recent regulatory legislation, such as HIPAA, the Government Paper Elimination Act (GPEA) and, perhaps most acutely, the Sarbanes-Oxley Act.

To manage the exponential growth of inflowing paper documents, progressive firms, especially B2C (business-to-consumer) companies with large numbers of customers (such as banks, credit card issuers, insurance companies, governments, etc.) have turned to document imaging as a way to transform cumbersome paper into more manageable electronic content. Over the last decade, the electronic assimilation of structured documents and forms via scanner and software systems has shown proven, rapid return on investment for thousands of companies. These firms are now looking to expand upon these successes by capturing every incoming document regardless of format, and centrally managing all of their inbound communications into their enterprises. Pioneering companies who have seen positive early results with customized versions of existing software solutions have only fueled interest within the IT realm.

Numerous analysts within the ECM and input management markets agree there is a strong, emerging business justification to amalgamating all incoming communications. According to Andy Warzecha, Senior Vice President and Service Director at META Group, "As organizations attempt to address the growing number of data input sources, both traditional and Web-based, we see an increasingly stronger case for strategic data input systems capable of centrally managing various data sources and mediums. By the end of next year, we believe most organizations will be forced to either adopt a strategic data capture framework or outsource these functions. Solutions that offer centralized document processing of all incoming communications streams fulfill a specific, prevailing need in the market and should be well positioned for success in this burgeoning new segment."

The Virtual, or Digital Mailroom

The technologies of a virtual mailroom that recognize, identify, and route mail and document types is predicted to be in especially high demand in the years to come, according to Harvey Spencer Associates and Strategy Partners, two leading independent industry analyst firms that specialize in the document capture and input management market segments. The firms predict that the market for intelligent document classification software alone will grow at a compound annual growth rate (CAGR) of 36.7% from 2000 through 2005. They contend this niche will be the fastest growing segment within the entire input management realm.

Emerging software technology now offers a systematic virtual mailroom that captures, classifies and delivers all critical information of an enterprise. The "virtual front door" captures information from paper (which is scanned and made into an image) or electronic sources (such as e-mail), classifies it according to its content and an organization's business rules, and delivers that information to a database, e-mail server, workflow, or back-end system.

The heart of a virtual mailroom is where information is classified and categorized, accomplishing in seconds what would typically take hundreds of hours to accomplish by hand. Much incoming mail is received in a semi-structured format, such as insurance claims, tax forms, and invoices. If it is identified as a form it is routed to the delivery branch; if it is something other than a form (such as a correspondence or contract), it undergoes a full-text analysis to determine its type and content, and once established it's sent to on to delivery. Delivery occurs in multiple formats (such as TIFF, JPEG and PDF) through multiple exports, depending on the type of data, addressing the complex needs of businesses that have more than one kind of content to export to more than one place. In addition, users can change format before delivery, turning TIFF's into JPEG's, or JPEG's into PDF's. Security settings can also be applied as desired, and tracking and auditing settings keep tabs on every critical statistic of the various modules running within the system.

Best practice virtual mailrooms should be completely scalable, and adjust easily to the ever-fluctuating volumes of incoming information. It should be designed to adapt to the system of an enterprise, not the other way around, to maximize data processing through eliminating the delays of the typical mailroom.

Additional benefits offered by a digital mailroom would include reduced mail processing costs, improved mail security (anybody remember the Anthrax scare?), ensured capture of business-critical information and the quick delivery of time-sensitive data to streamline business practices. The concept essentially changes how information is collected, distributed and utilized across an enterprise. It is designed to substantially reduce the delays, communications bottlenecks, overflowing in-boxes and the perennial 'lost mail' problems that have existed in business for decades.

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