Remember when we thought that e-business would actually reducethe amount of paper we handled? In reality, paper use continues toincrease. The number of sheets of paper used by printers andcopiers across all industries will have jumped to 2.3 trillion bythe end of this year, up from 1.6 trillion in 1996, according toPriceWaterhouseCoopers.

Here's irony for you: The printing increase that results simplyfrom the introduction of e-mail to a business averages 40 percent!We can't seem to get over our need to hold physicaldocuments.
Insurers are particularly notorious paper factories. On the lifeside, for example, 70 percent of files are paper-based, accordingto Irene Macauley, president of Business Solutions ConsultingInternational, which specializes in document management forinsurance.

“Just 20 percent are electronic documents, and 10 percent areCOLD-related (computer output to laser disc),” she said, addingthat paper-use percentages are only slightly less at P&Ccompanies-about 65 percent of file documents.

Therefore, the benefits of taming the paper tiger via a documentmanagement solution can be immense. While the price tags ofdocument management systems are also immense, Macauley's experiencehas shown an average 30 percent return on mission-critical documentmanagement systems. “Generally a 10 percent return comes fromdocument management, and 20 percent comes from workflow,” shesaid.

Consider Pacific Life Insurance-it implemented a documentmanagement system incorporating a FileNet optic storage, EMC diskmanagement to provide redundant storage and images caches, and COLDstorage and archiving of mainframe application output. Today, mostof its service areas are fully imaged.
Pacific Life's return on its investment took five years;hard-dollar savings alone amount to $600,000 per year. Equallyimportant are the systems' secondary benefits, such as productivitygains: They have approached 25 percent.

Evolving Document Management Solutions

Part of the challenge of choosing a document management solutionis determining what the term “document management” actually means.“Some customers view document management as a process from start tofinish,” said Albert Bonfiglio, vice president for CGI, whichrecently launched its own document management services operation tohandle document printing and distribution for clients. “When theyphysically get a document in the door, they'll start to use sometype of workflow package internally and externally. Other customersare thinking only about the end process of document creation-whenthey're starting to create a physical piece of paper.”

But even if an insurer chooses only to manage printing-or anyother individual initiative level of the document workflowprocess-the result can be successful if the system is designed withfuture enterprise needs in mind.

“[Even with a] minimalist print definition…we can seedistribution changes that can be made to streamline the process.From that you can grow into workflows, imaging, and other areas,”said Karen Furtado, CGI's vice president of consulting services.“You don't need to bite off the whole thing.”

“In the imaging and e-doc management world, you often seemultiple systems across departments,” Macauley said. “But sooner orlater these systems need to be supported and interfaced with yourlegacy systems.” Therefore, even if a departmental solution is thestarting objective, an enterprise document management solutionshould be the long-term goal, or at least be considered in systemrequirements. “The day you put in [a content management system], itis a mission-critical system,” Macauley said. “You absolutely,positively, gotta have the docs.”

Component requirements of document management systems haveremained essentially the same. However, document managementtechnologies have seen significant changes and improvements overthe past two years.

Global content management association AIIM (the Association forInformation and Image Management) reports that key areas ofimprovement include increased scalability of document managementsystems, greater use of Web-based viewing and collaborative tools,and improvements in scanner throughput and image quality control.Systems have also increased their support of XML, which allowsrepurposing of a document's content to any number of print andelectronic formats.

Systems have also become more approachable to business users.Scanners are turning up frequently in the workplace as componentsof copiers and fax machines, and familiar tools such as instantmessaging, online meetings, and Web-based collaboration systemshave been integrated with document management systems.

“[A] significant change in the industry as a whole is that usersare becoming more knowledgeable about the technologies and thetechnologies are becoming more commonplace in the workplace,” saidBetsy Fanning, standards director at AIIM. According to a recentAIIM study, imaging has been implemented or is currently beingimplemented by 60 percent of the respondents, with another 20percent planning to implement the technology.

From Policy to Policyholder

For the most part, changes in document management technologyhave been defined by incremental improvements: faster, better,cheaper. But there have been some key shifts in document managementstrategy as well.

First, insurers have shown an increasing preference forprepackaged software and a tendency to choose insurance specialistsversus horizontal document management vendors. “When I'm talking to[insurers], I'm hearing, 'We need to have the system up and runningin 90 days',” said Kevin McKinney, industry manager for insuranceat FileNet. “We're seeing [insurers] wanting more functionality outof the box.”

Second, within document management itself there has been afoundational shift from IT control of documents to author control,particularly as document management systems have become moreapproachable to nontechnical users. This latter feature allowsmultiple documents to be created for different formats, includingthe Web, from a single source file.

But perhaps the most significant change is that insurers arelooking to document management as a tool to not only streamlinedocument production and reduce costs, but also to improve customerrelationships.

“What we saw when we brought out Calligo about three years agowas that customers were integrating it into their e-businessplatforms,” said InSystems' Ross Orrett. “They were using thetechnology to manage relationships with customers.”

As a result, InSystems shifted the focus of its documentmanagement platform. “We started building a whole set of extensionsand in the last two years we've focused on extended relationshipmanagement, or XRM.”

By simply improving the production process-providingstandardized print formats, speeding distribution, and reducingerrors-document management enhances customers' perceptions ofinsurers. More important, by centralizing document storage andproviding simultaneous access by multiple users, documentmanagement becomes a key component of relationship management.Document components can be recombined into custom proposals,targeted customer mailings, and policies. Carriers and agents canobtain quick access to customer documents for service and upsellingefforts. And insureds can meet the self-service demands ofpolicyholders, who are increasingly expecting full access to alldocuments, all the time.

Systems and Solutions: Storage

Centralized mass storage has been the traditional approach fordocument management, with magneto-optical devices as the systems ofchoice. However, the continued drop in price and increasedperformance of hard drives (to 80 GB and 15,000 rpm) and CD/DVD-ROMhave made RAID systems and CD/DVD jukeboxes increasingly feasiblefor large storage needs.

The past few years have also seen the rise of network attachedstorage (NAS) and storage area networks (SANs). In both NAS andSAN, divergent and distributed storage devices are added to anenterprise network-the primary difference being that SAN putsdevices on a dedicated, high-speed network. In the NAS/SAN arena,Quantum (www.quantum.com) withits Snap Server and Maxtor (www.maxtor.com) with its MaxAttach haveled the charge.

Systems and Solutions: Scanners

As with most technology, scanners have become faster, better,and cheaper over the past few years. Throughput has increased, withmost high speed models pushing 200 pages per minute (ppm) “simplex”equating to 400 images per minute for duplex pages-in grayscalemode. Image and index quality control has also improved. Butperhaps the most promising change over the last two years has beenthe introduction of color into high speed scanners, which can beimportant for insurers who need to capture print photographs ofproperty risks and claims as well as for automating theidentification of color-coded forms.

Currently, Kodak (www.kodak.com); Imaging BusinessMachines, LLC (IBML, at www.ibml.com); and BancTec (www.banctec.com) manufacturehigh-speed color production scanners. Kodak offers its models 3590and 4500, the latter of which scans in 24-bit color at 150 dpi atthe rate of 57 pages per minute and is designed for productionenvironments handling up to 10,000 documents per day.

BancTec features its S-Series scanners that run at up to 70 ppmin 24-bit color. IBML provides the fastest throughput of the group,with its ImageTrac running at 108 ppm simplex color.

Systems and Solutions: Content Extraction

A scanned document is just an image. Getting information off thedocument and into an insurer's back-end system means eitherrekeying the information on the image-thereby mimicking thetraditional paper workflow-or relying on intelligent characterrecognition (ICR) to decipher a document's content. ICR is theevolution of optical character recognition (OCR), which hasgenerally been limited to interpreting machine-printed text. Incontrast, improvements in ICR over the past few years have allowedit to recognize cursive handwriting as well as machine- andhand-printed text.

OCR and ICR are frequently packaged as a solution with scanningapplications, particularly with workgroup systems-it is alsoavailable via vendor solutions such as Scansoft's Ominpage,CereSoft's FreeStyle, or Mitek Systems' QuickStrokes.

Accuracy of ICR depends on many document and image processingfunctions, including pre-processing to adjust page orientation,image cleaning, and decomposing the image into text and non-textareas-all of which have improved over the past two years. Afterprocessing, recognition engines using the latest neural networksperform lexical checking, assigning confidence scores, andaccepting results based on predetermined tolerances.

Even so, the recognition achieved by current systems is notflawless; the systems still route failed documents for humaninterpretation. Because real-world ICR applications seldom exceed80 percent recognition accuracy, some insurers are taking anontechnical approach, forgoing automated ICR software in favor ofoutsourced data entry.

“One of our clients is scanning its application forms andsending them to India in a nightly batch,” said Ross Orrett, seniorvice president of global relationship at InSystems, which providesdocument management and relationship management solutions to theinsurance industry. Once applications are received, typists enterdata based on the image file. “[Character recognition] is still notevolved to where it's completely automated,” Orrett said.

Another option is to not extract content at all. In fact, withmany documents that insurers receive, there's little long-termbenefit to extracting their content to a data repository. “Manyprocesses in insurance, including underwriting and claims, call fora judgment. The more complicated the process, the more the need forhuman review, and the less the need for content management,”Macauley said. “Many documents are simply viewed and dropfiled.”

Systems and Solutions: Workflow

Tying imaging, recognition, and storage/retrieval systemstogether are document management workflow systems. Among the manyvendors serving the space are a number that are most frequentlyfound in the insurance market, including FileNet, ImageRight,InSystems, and Docucorp.

Of these, FileNet (www.filenet.com) has perhaps thestrongest presence in the insurance industry. It offers Panagon, asuite of document management products that includes COLD, imaging,electronic document management, Web content management, storage,automation, and workflow. It has recently developed Acenza, anout-of-the-box workflow system designed specifically for theproperty/casualty industry.

InSystems (www.insystems.com) provides Calligo,its flagship document automation platform for creation, management,control, and distribution of documents; FastForms, for automatingelectronic forms and applications; and Tracker, a workflow systemthat automates the insurance filing process.

Docucorp (www.docucorp.com) features DocuCreatefor creation and imaging, DocuManage for management and workflow,DocuSave for archiving and retrieval, and DocuMaker for highvolume, personalized document production.

ImageRight (www.imageright.com) focusesexclusively on the insurance industry, providing scanning, ICR,printing, and workflow within its self-named document managementsystem. -MPV

Case in Point

When designing any document management system, insurers mustdecide whether-and how-to support the many manual, paper-baseddocument distribution and receipt channels that their agents andpolicyholders have come to expect. An example of an insuranceorganization faced with a bevy of customer-required documentformats is the Insurance Services Office (ISO).

ISO maintains one of the largest private databases in the worldand each year collects about 1.5 billion detailed records ofinsurance premiums received and losses paid. Its data warehousestores, on average, more than 6.1 billion active records. Theserecords are used to produce manual pages, circulars, and filingsthat are printed and mailed; Web-delivered via its ISOnet service;and incorporated into electronic manuals such as ISO Suite, whichuses Folio technology, to meet the various needs ofsubscribers.

Subscribers not only require different document formats fordelivery, but for transmitting statistics as well. “We takeinformation any way [insurers] send it,” said Domenick Yezzi, Jr.,ISO's vice president of specialty commercial lines. “We still getsome stats delivered on punch cards.”

For non-electronic transmission of stats, ISO has to rekey theinformation into its system. “We've tried scanning at differentstages, but found rekeying was faster and easier than scanning andcleaning the results,” Yezzi said.

ISO uses a proprietary document management system that automatesthe creation, approval, and distribution process and results insimultaneous delivery of documents to a third-party printer as wellas ISOnet and ISO Suite. While it has been supporting methods ofelectronic document distribution since 1991, ISO still created morethan 70 million printing impressions in 2000. (This was a decreasefrom the more than 100 million impressions in 1996.) Postage andprinting costs, which were nearly $11 million in 1997, havedecreased to about $7 million annualized for 2001.

Michael P. Voelker is a free-lance writer with EquinoxCommunications in Cleveland, Wisc.