Ineffective document-based processes, a blind spot for businesses, have directly triggered serious incidents at three out of four organisations in the past five years, according to a new IDC white paper commissioned by Ricoh.
The report is titled: It’s Worse than you Think: Poor Document Processes Lead to Significant Business Risk.
Document process failures have caused severe consequences: 36% of responding companies failed to meet compliance requirements, 30% lost key employees, and 25% lost major customers. Other consequences include major IT security breaches, getting pulled into a major audit, suffering a PR crisis, and being sued.
“The IDC analysts also found in their report that proactively taking care of potential failures can save businesses substantial numbers,” says Michael Barnett, MDS business manager at Ricoh SA. “The IDC estimates are that: ‘… the overall cost of process failure, in terms of employee time and executive oversight for activities such as required rework and process reviews, as well as opportunity costs associated with lost customers, is at least 10 times the direct out-of-pocket costs, such as paying financial settlements’.”
The report states: “What many [business executives] may not appreciate is the degree to which document-driven business processes affect their organisation’s risk profile: there is a high risk of breakdowns in these processes causingseverely negative business outcomes, and the costs of these breakdowns are worse than many executives think. Although most invest significant resources to reduce low-probability/high-impact risk events, high-probability/high impact risks introduced by broken document processes are lurking dangerously below the corporate radar and merit C-level attention.”
The Ricoh Document Process Imperative is an ongoing initiative to help businesses understand the risks, opportunities and best practices around the documents that drive their critical business processes.
The first findings are based on a global survey of more than 1 516 business process owners and i-workers from large and medium-sized organisations, supplemented by focus groups. Respondents were randomly recruited and screened from international panels and came from eight countries: the US, Canada, the UK, France, Germany, Australia, China and Japan. Document-driven business processes were defined as processes that are governed and controlled by information captured in documents, whether paper or electronic.
Document process inefficiencies and ineffectiveness afflict all industries, geographies and company sizes, according to IDC. Serious business and compliance incidents have occurred at roughly equal rates in organisations in North America, Europe, and Asia, the data showed, with the highest rates (79%) in Asia.
More than one in three respondents reported personal knowledge of inefficient or ineffective document-driven processes. And though between 31% and 39% of document processes are paper-based, the research found that paper isn’t necessarily a risk factor in itself. “Having effective processes depends on the underlying workflows,” the report states. “The medium is not necessarily the problem.”
Proposals for improving document processes sometimes fail because they don’t make it onto the agenda of C-level executives, the research found. That’s an important threshold because document processes span multiple teams, departments and organisations. Many subordinates don’t have the scope of responsibility to architect and execute the broad-based changes required. “Truly effecting change requires C-level attention,” the report states.