The 7 Steps to Go Paperless - Florida Government Finance Officers

Report
The 7 Steps to Go Paperless
A Hands-On Workshop
For
Florida Government Finance Officers Association
2012 School of Governmental Finance
Presented by :
Kurt Wachtendorf
V.P., National Product Manager - EIPP
Senior Solution Consultant
1
Your Workbook
• You received a workbook when you registered
• This workbook will be used throughout the workshop
– All content is in the workbook
– Your exercises are in the workbook
– Use it to take notes, write down ideas and follow-up items
• The workbook will become the first draft of your Solution Design
2
Making Sense of the Alphabet Soup
EDM (Electronic Document Management): the management of
different kinds of documents in an enterprise using computer
programs and storage.
ECM (Enterprise Content
Management): the
technologies, tools, and
methods used to capture,
manage, store, preserve and
deliver information, content,
and documents related to
organizational processes
DM (Document
Management): The capture
and management of
documents within an
organization
Workflow: The automatic routing of documents to the users
responsible for working on them
BPM (Business Process Management ): a systematic approach
to improving an organization's business processes
DI (Document Imaging): The online storage, retrieval
and management of electronic images of documents.
EIPP (Electronic Invoice Presentment
and Payment): The Commerce Bank
Solution
3
Business Challenges
• Paper-intensive, inefficient business processes
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Need automated workflow functionality for AP and other processes
Gain new levels of efficiency without adding staff
Eliminate paper processing and reallocate staff to value-added work
Solve issue of processing and distributing paperwork across
departments and locations
– Missed discounts
– Streamline audit preparation and response time
– Manual data entry is prone to error
4
What drives organizations to go paperless?
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Intensive, paper-based, manual processes
– Time consuming activities (shuffling paper, copying, filing, etc.)
– Difficult to track (lost documents, filed in wrong folder, setting on someone’s
desk)
– Matching invoices to PO’s and/or Receivers
Managing high volume of documents from different sources
– Receive faxes, emails, EDI and LOTS of paper from many locations
High document processing and storage costs
– File cabinets occupying expensive real estate
– Paying for outside storage
Lack of visibility of invoice and other documents in the process
– What happened to that documents I sent you?
5
Small or large, size doesn’t matter
• “We have years of paper documents stored everywhere. Our hallways are
overflowing with file cabinets filled with paper. We can’t afford not to be in
control of how our paperwork is processed. Our environment demands it.”
• “Even as a private organization, our paperwork trail for doing business
day-in and day-out is incredible. Getting control of how we process
documents means time and money saved. And in today’s aggressive
business environment, that gives us a competitive advantage.”
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Why are you here?
7
What Would You Like To Accomplish
• List 5 things you’d like to accomplish today
1.
2.
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4.
5.
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What would you like to accomplish?
• 5 things you’d like to accomplish
today
 What can a paperless process do for me?
 Learn what other organizations are doing
with their processes
 How to get my project on track
 Calculate ROI and present a business
case for my project
 Network
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Have you ever asked yourself…
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Why exactly are we doing this?
How do we implement this solution?
Do we know the expectations of the solution?
Why have we started with this process?
How long will it take?
Who will manage the project?
Has anyone seen a project plan?
How much will this cost me?
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It’s like there is a wall between us
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The answer: Solution Design
Solution Design is a tool that helps
you understand the problem,
design a solution, and plan the
approach in a way that gives you
complete control over the project
and its outcome.
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Taming your projects
The Solution Design helps you:
– Solidify your understanding of the problem and the
desired solution
– Select the best solution provider
– Ensure everyone is on the same page
– Document clear objectives
– Create a feasible schedule
– Get commitment to implementing the solution you need
– Define a common language among the team and when
talking with solution provider
– Describe the requirements and the expected results
– Avoid surprises!
13
The 7 Steps to Go Paperless
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Step #1
Understand the Problem
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Step 1: Understand the Problem
• Involve key users/departments and understand the problem:
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Paper reduction in the workplace
Too many file cabinets
Difficulty in finding information (time + costs)
Distributed offices make it challenging to share documents
Need for increased security in accessing information
Industry/Government regulations
Too many systems, not integrated, difficult to distribute documents
Time and cost to retrieve and distribute documents
Managing the approval process
Fax machines, MFD (Multi-Function Devices), scanners, etc.
Sorting and delivery
Slow response to inquiries
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Mails / Faxes PO to
vendor
User fills out
requisition form
Walks to Purchasing to
deliver requisition
Sends copy to
Accounting
Enters PO in the
system
Prints approved PO
File copy in Purchasing
Sends copy to Receiving
Locate receiving
document
Match to
packing slip
Notate
exceptions
Sends copy to
Approver
AP receives
documents
Accounting files
copy
Sends copy to
Accounting
Advanced Shipping
Notification
A/P
Receiving
Purchasing
P2P Process – Executive View
Makes copies
Matching of
documents
Accept order
Make copies of
documents
NonConforming
Reconcile
process
Files in
receiving
Sends copy to
Purchasing
GL Coding
Purchasing files
copy
Voucher entry
Print checks
Conforming
Match checks
with paperwork
Approve /
Sign
Mail
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P2P Process – User View
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Purchasing Process – Real World
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Receiving Process – Real World
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AP Process – Real World
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Step 1 Exercise
• List the top 10 problems / bottlenecks of your Purchase-to-Pay process from
your perspective.
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Step 1 Exercise
• List the top 10 problems / bottlenecks of your Purchase-to-Pay process from
your perspective.
23
What others say…
• Customer AP Problems - Examples:
Average time taken
from receipt of invoice to
payment: 42 days
On average, 3.6% of
invoices handled by AP
have errors
Cost to reproduce
documents for audits or
customer research
Lack of control during
approval process
Cost of manually
handling, checking and
processing a paper
invoice and cutting a
paper check: $8 to $12
dollars
Taking advantage of
vendor discount offers
due to processing time
2 Way & 3 Way matching
of PO’s, Receivers, and
Invoices are manual
Multiple AP processing locations creating
redundancy and delivery cost
Increased cost of postage for mailing purchase orders
and checks
Average days in payables is too high / too low
Average cost to process vendor payment: $8.15
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Step 1 Exercise Review
• Tips to help you out:
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Think about the process you go through every day in your functional areas
Where does the process break down?
How much time is your payment process taking?
What keeps you from taking advantage of discounts when paying invoices?
How can you improve the process?
Does it take too many people to get things done?
What is it about your process that keeps you up at night?
What other departments interact directly and indirectly with you? Who sends
you requests, approvals, etc.? Who asks you for reports?
– How many (and who are they) external entities do you interact with? Vendors,
customers, partners… how do they affect your process?
– Sit down with your users and managers and document your process
– ASK YOUR USERS
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Action Step – write this down
• Ask the users to list their Top 10 Problems/Bottlenecks
• List their names
• Verify whether their list matches mine
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Step #2
Identify Goals and Requirements
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Step 2: Identify Goals and Requirements
• What would you like to accomplish?
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Eliminate paper-based retrieval
Provide immediate access to AP related documents
Automate routing of exceptions to the proper person
Streamline workflow and exception handling process
Provide automated audit trail to meet regulations
Reduce people costs / time
Eliminate off-site storage
Notification of exception invoices
Make more space available
Take full advantage of AP discount opportunities in a more timely manner
Consolidate operations in one single office, eliminating redundant processes at
other locations
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Step 2: Identify Goals and Requirements
• What would you like to accomplish? (Continued)
– Utilize immediate access to information for more timely and accurate analysis
– Provide access to all authorized users at any location from their workstation
– Electronically capture invoices when they arrive and utilize electronic workflow
for approval and processing
– Reduce or eliminate the need for multiple copies of certain documents
– Reduce labor expense for processing these documents (printing, copying, filing
document research, etc.)
– Reduce mailing and shipping costs associated with delivery of documents to and
from remote locations
– Reduce time and work effort for audits with imaged documents
– Reduce cost of check payments
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Step 2: Identify Goals and Requirements
• Key questions
– What are the manual steps in the process (photocopying, delivery, sorting,
following-up on approval)?
– Can we automate anything in the purchasing process?
– Can we centralize any of the Purchase-to-Pay processes?
– How do you handle receiving documents (invoices, other docs, etc.)?
– How do you send your payments?
– Who and how do you get your checks signed?
– Who needs to review and approve invoices with exceptions?
– How do you file and retrieve the documents?
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Step 2 Exercise
• List the goals you would like to accomplish with a paperless solution.
• You can break it down by functional area (purchasing, receiving, and
accounts payable) to make it easier.
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Step 2 Exercise
•
List the goals you would like to accomplish with a paperless solution.
Functional Area: ________
Functional Area: __________
Functional Area: __________
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Action Step – write this down
• Do my goals match the organization’s goals?
• I will NOT let my current situation cloud my vision for the future!
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Step #3
Map the Current Process
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Step 3: Map the Current Process
• It’s more than just technology
– Think about the documents you receive or create
 Invoices, Packing Lists, Bills of Lading, Purchase Orders, Credit/Debit
Memos, AP Checks, Receiver Reports generated from your business
application
– Think about the ways in which you send/receive documents
 Faxes, Emails, Mail
– It is more than simply transforming paper into image format, it includes:
 Scanning, Indexing, Archiving
 Searching, Retrieving
 Sending it out to other people for approval, getting alerts and notifications,
etc.
 Integrating into your business application
– AND it includes integrating your business process into the equation
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Step 3: Map the Current Process
• How to map the current process:
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Identify points of origin, decisions and where it ends
Map the process, not only one task
Identify all personnel involved
Identify potential user issues
Identify all integration points with core applications
Identify document-related as well as activity-related tasks
Identify the ‘problem areas’ or ‘opportunity areas’
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Step 3 Exercise
• Map your current process:
– Create the flow for your current Accounts Payable process, using the previous
example as a template
– Tips to help you out
 Think about the functional areas first, and list all activities that happen there (e.g.
Purchasing)
 Think about the activities that cross functional areas
 List exceptions - There are always exceptions
 Are all invoices handled all the same way?
 How does email play in the process?
 Do you have a clean audit trail?
 How many people are involved in handling each document?
 Is the process the same in other locations?
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Action Step – write this down
• I will remember to always keep the following in mind:
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What
Who
When
Why
… and what if… ?
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BREAK?
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Step #4
Design the Solution
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Step 4: Design the Solution
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Explore different scenarios to solve the problems identified
Validate chosen scenario with key users
Identify the technology required
Identify changes to business processes, business rules, etc.
Prioritize implementation plan
Schedule review of solution design with executive management
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Example Accounts Payable Before:
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Example Accounts Payable After:
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Step #5
Calculate ROI
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Step 5: Calculate ROI
• Hard Savings
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Reduction / Reallocation in personnel
Business operating costs (paper, photocopying, postal mailing, courier services)
Reduction in infrastructure costs (sell a building, remove filing cabinets, etc.)
Increase in productivity measured by man hours saved not handling paper
(standing at fax machine, looking for lost or misplaced files, etc.)
– Increased cash flow (vendor discounts, improved terms, payment options, etc.)
– Reduction in cost of processing invoice
– Go Green
• Soft Savings
– Improved vendor/user service
– Better and faster access to information
– Faster internal communications
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Step 5: Calculate ROI
• One of the best ways to fully capture ROI is to understand what the current
costs are (Step 3) and identify how much you will save by implementing a
paperless solution (Step 4)
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Step 5: Calculate ROI
• Areas to look at for savings:
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Legal mandates and regulatory compliance – Sarbanes-Oxley, SEC Rule 17
Off-site storage costs and retrievals for existing documents
Labor reductions possible or additional labor required in the future
Employee retention
Remote access to documents – no need to FedEx, fax, and/or courier documents
Electronic voucher entry
Filing, retrieving, document, matching, audit preparation
Lost documents (a lost document may cost as much as $150 to replace)
Misplaced documents – search
Allows increased productivity around shared documents
Reduced printing, mailing, faxing, special delivery costs
Reduced storage costs from eliminating paper
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Step 5: Calculate ROI
• Areas to look at for savings (continued):
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Electronic payment options
Overall document management costs for existing resources and facilities
Cost of file cabinets/cost of file cabinet real estate
Cost of off-site storage and retrieval
Cost of paper, paper clips, staples, folders, index cards, etc.
Cost of printing and printers (total cost of ownership for printers)
Moving documents between departments/locations and making better
decisions quicker
– Improved security
– Disaster recovery
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Step 5: Calculate ROI
• Examples of areas to analyze – Accounts Payable
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Invoices sorted into groups (PO vs. Non-PO)
Delivery of sorted invoices to users
Coping/scanning and emailing problem invoices
Delivery of problem invoices to approvers
Delivery of resolved invoices back to AP
Invoices sorted and packaged for delivery to corporate from remote locations
Copying and filing each location
Wasted time trying to track problem invoices
External auditor - AP user’s time
Filing of completed invoice packets
Invoices matched to related documents
Filing of invoices, statements, order acknowledgements
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Step 5: Calculate ROI
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The cost of handling paper:
– Knowledge workers spending >20% of their time on document management
tasks
– The average document is copied, either physically or electronically, nine to 11
times at a cost of about $18
– Documents cost about $20 each to file
– Retrieving a misfiled document costs about $120
– Average cost of faxing a document: $2.60
– Average cost of printing and distributing a paper form: $0.17 per page
– Average cost of the process of creating, modifying, printing and distributing a
paper form: $1.26 per page
Going “Green” can save money and the environment:
– One tree yields 8,333 sheets of paper
– Each office workers print 1,000 pages per month (10,000 to 12,000 year)
– 45% of documents are thrown out within 24 hours
– 768 million trees to produce world’s annual paper supply
– Energy consumption (12% of total manufacturing energy)
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ROI
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ROI
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ROI – Results
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Step #6
Document and Present
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Step 6: Document and Present
• Helps solidify your ideas, the goals, the analysis and all other steps
you took until now
• Gives other people an opportunity to review the Solution Design as a
whole (some people may have only participated in parts of this
process)
• Good way to ensure everyone is literally on the same page
• You can always go back to the document to check why certain things
are (or are not) being done
• You have something to hold the Solution Provider accountable
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Contents of a Solution Design
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Executive Summary
Goals and Requirements
Current Process
Solution Overview
Proposed Solution
Benefits
Return on Investment
Implementation Methodology
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Now what?
• You’ve presented the Solution Design and your team has bought in, it’s time
to kick-off the Technical Design.
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How technology projects are usually
carried out!
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What the user requested
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What IT specified
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What the vendor suggested
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What the proposal described
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What the team implemented
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The tech support you received
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What you were charged for
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What was really needed
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The results are well-known
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Lack of communication between IT and users
Lack of understanding from the vendor of what the problem really is
Resistance from users on changing the way they usually do things
System integration issues
Short-term focus sacrificing long-term viability
Scope creep
Missed deadlines
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About that project management thing…
• 49% of IT projects fail 1
• Total U.S. project waste is $55 billion ($38 billion in lost dollar value and $17
billion in cost overruns) 1
• 55 % to 75 % of IT projects fail to meet their objectives 2
• 40% are never fully implemented
• Executives from 117 organizations stated that support costs after software
implementation were 20% over original estimate 3
• 86% of projects fail for reasons other than technology 4
• 32% of project failures occur due to poor project management skills 4
1: 2010 CHAOS Report, Standish Group; 2: META Group; 3: The Conference Board Survey; 4: KPMG Information Risk Services study
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So Solution Design is the…
or
Business Design
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Step #7
Implementation
(Activation)
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Implementing a Solution
Initiate & Plan
•Strategic Vision
•Current Process
Review
•Statement of Goals
& Objectives
•Executive Sponsor
Meeting
•Solution Design
Control & Execute
•Onsite Workshop
•Revise Solution
Design
•Project Plan
•Payment Solution
Installation
•Integration & System
Conversion
•Status Updates
Stabilize & Close
•User Training
•Project Launch
•Project Summation
•Ongoing Support
• Post Launch
Recommendations &
Next Steps
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Implementation Plan should include:
• Project Management
• Defined Process
– Phase 1 – PLANNING
– Phase 2 – EXECUTION
– Phase 3 – STABILIZE
• Responsibilities / Requirements
– Client Responsibilities
– Provider Responsibilities
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Did we accomplish everything?
• Let’s go back to the list we created in the beginning of this workshop.
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Wrap-Up
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The Seven Steps to Go Paperless
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Things to keep in mind
Involve key users along with management
Understand how things are done today
(the flow, the documents, the systems, etc.)
Identify the costs associated with current processes
(this will be later used for ROI)
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Things to keep in mind
Look at the full process, not just an activity
(functional areas)
Accept change
(change really can be good)
Use the Solution Design to guide your
selection for the correct solution provider
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Things to keep in mind
Document your findings, your goals,
requirements, etc.
Plan, then review, then stick to the plan
Take pride in what you accomplished!
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Summary
• Paperless projects are more than just technology
• Use the Solution Design to understand the problems, how to solve them and
set goals
• Select a solution provider that can help you with a Solution Design…
• … or use the Solution Design to help you select a solution provider
• Beware of those who say “you don’t really need this, just trust me”
• Project management is key to any implementation. Be on top of it and make
sure there is a methodology and a process in place
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About Commerce Bank
Strength, Stability and Growth for over 140 years
 Established in 1865; Family operated
 Top 50 bank holding company based on asset size, assets of $18 billion
11.5% annual EPS growth over past 10 years
 One of the largest banks in the country that declined TARP funds
 Issuing commercial cards for more than 40 years
 Top 10 on Forbes magazine’s list of Best Banks three years in a row
 Consistently ranked in the Top 10 Best Performing Banks by Bank Director
magazine
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Next steps
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Review your workbook
Get together with other users/departments
Use the workbook and start planning your Solution Design in detail
If you’d like us to help you with your Solution Design, contact us
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How do you feel?
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Learn more
Kurt Wachtendorf
Vice President
National Product Manager – EIPP
Senior Solution Consultant
[email protected]
918-622-8489 - office
918-691-7911 - mobile
www.commercebank.com
www.commercebank.com/eipp
83

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