Document Scanning and Data Capture
Should I outsource?

Remember back in the mid 1970s there was a vision of the paperless office, has it eventuated?  The answer is no.  However, we have been surrounded by new technology that provide us with the ability to generate more documents than ever before that we can be for printing, mailing, faxing, and e-mailing.  

In the mid 1990s the evolution to e-Commerce was going to eliminate the need for any paper-based transactions between businesses (B2B & B2C).  There was suppose to be no more hardcopy invoices, purchase orders, sales orders, statements, Proof of Delivery and consignment notes.  Instead we are in the 21st century working in a hybrid environment that is generating more paper than ever before.  

We still have the "love affair" with writing notes on hardcopy documents to remind us of the telephone conversation about a specific account or order or consignment.  The paper record has become our security blanket as the "blanket is to Linus in the Snoopy cartoon".

One of the major areas within business that creates storage problems for hardcopy documents is with Accounts Payable (supplier invoices, employee expenses & Proof of Delivery).  These can all be scanned, data captured and stored as certified image copies that meet both the Australian Taxation recordkeeping requirements and the Electronic Transactions Act 2000.  Just imagine being able to search through your Accounts Payable module, of your financial system, to find the transaction and being able retrieve an image copy of the original document that you could then send to your customer/supplier by fax or e-mail while they are still on the telephone. That's what I call great customer service.

In-house or Outsource!

Now we have established there is a need to do document scanning within your business, lets now examine some of the issues:

In-house

o Purchase hardware

•  40-80ppm scanner or larger depending upon volume of paper, duplex, double feed detection, paper size detection, 200 page hopper, easy operator maintenance(sometimes it could be 2 for minimising risk)
•  PC per scanner
•  PC for QC and Indexing

o Purchase software

•  Scanning software that supports batch, rescanning, Quality Check, indexing, barcodes, Virtual ReScan (VRS), image enhancement (despeckle, deskew, deshading, auto cropping)
•  Recognition software for at least OCR functions
•  Image Database and retrieval or use existing EDRMS

o Operator per scanner plus indexing/QC station depending on volume

•  Document preparation
•  Document scanning
•  Image quality check
•  Rescan of poor quality images
•  Image indexing and storage

o Training of operators (initial, 6 months, then every 12 months
o On-going Support for hardware and software

Outsource

o Purchase software

•  Image storage & retrieval or use existing EDRMS

o Quality service provider

•  Uses high-speed high definition scanning systems
•  Offers FTP and/or web retrieval service not just CDs or DVDs
•  Offers barcode, OCR, OMR and manual data entry

A simple comparison will demonstrate the costs and the potential savings of one solution over the other.  We will consider batch capture system with the following:

•  10,000 documents per day (single page A5-A3 documents)
•  4 data fields per document, averaging 10 characters each (4 seconds per field to data enter)
•  1% rescanning rate (it takes 4 minutes to rescan each document)
•  clerical worker is paid around A$20/hour + on-costs
•  existing EDRMS for storing and retrieving images

In-house Costs

•  Scanner, software & PCs cost around A$30,000
•  Training of operators around A$1,200 per session
•  Ongoing Software support around A$1,800 per annum
•  Preparation takes 4 seconds per page = 4 x10,000 = 40,000 seconds
  
•  Scanning takes 750 seconds per batch (500pages)= 20 x 750 = 15,000 seconds
  
•  QC & Indexing 4 fields per document = 4 x 4 x 10,000 = 160,000 seconds
  
•  Rescan (100 per day) = 240 x 100 = 24,000 seconds
  
•  Total daily cost with capital costs is around A$1,382

Outsource Costs

•  Average per page cost of around A$0.135 (preparation, scan, index, QC)
•  Total daily cost is around A$1,350

Summary

•  Do you have the additional staff necessary for these duties?
•  Do you need to go through the recruitment process to employ new staff for some or all of these duties?

Why not avoid all the disruption to the workplace and outsource this non-core function to a service bureau, that can do the work faster, easier and to a higher quality than could be achieved in the short-term by your own people juggling multiple tasks and responsibilities. With the additional challenges of staff turn-over, holidays and sick-leave. 

Outsourcing wins the day for minimising the disruption to the workplace, but delivering great benefits through fast retrieval of images.

* All pricing is in Australian dollars and exclusive of any taxes

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George has been consulting in the IT industry for some 30 years http://www.scan2archive.com.au