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Document Process Outsourcing (DPO) Services: Streamline Workflows & Drive Innovation

Author: Gretel Digo

Posted: March 26, 2015

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Document-intensive business functions account for about 5 to 15 percent of an organization's revenue, according to a paper published by a leading document process outsourcing providers.  Document processing is a key area where businesses can realize significant savings, improve the bottom line, streamline workflows, and drive innovation.

A growing number of Document Process Outsourcing (DPO) providers are offering document processing solutions beyond traditional, discrete services and moving towards end-to-end process management.  This service delivery model enables buyers to retain control of their brand, achieve end-to-end cost transparency, and achieve an ideal balance of stock quantities.

Key DPO providers offer integrated services that digitize, capture, organize, print, distribute, and archive information.  Providers also help optimize transactional documents through real-time, interactive, and high-volume document creation using market-leading methodologies and advanced technology.  Smaller providers may focus on delivering discrete or individual DPO services that are tailored to a specific industry. 

Document Process Outsourcing Services by Industry

Banking, Financial Services and Insurance

Service providers handle processing and printing of loan, mortgage and credit card applications, tracking and updating applications, creating and maintaining commercial and individual lending documents, storing signature cards, digitizing statements, creating and presenting reports and documents, and financial data entry.

Manufacturing 

In the manufacturing industry, DPO services include order requests processing, scanning of purchase orders, processing warranty claims and safety communications, creating floor plan agreements and updating, tracking, retrieving and maintaining invoices.

Healthcare

The Affordable Care Act or ObamaCare has initiated sweeping changes in healthcare document processing.  DPO service providers are rising to the occasion with broader offerings that include cloud-based services.  Traditional DPO services in the healthcare sector include printing, mailing, management, and production of bills and statements (including explanation of benefits or EOB statements), customizing and presenting medical bills and statements, processing beneficiary changes, and scanning claims.

Consumer and Retail

DPO services in the retail sector include printing, archiving, and storing contracts, creating and presenting bills and statements, bulk mailing, producing electronic bills and documents, scanning invoices, and processing customer surveys.

Public Sector or Government

Government DPO services include managing paper and electronic communications, processing government forms and property tax records, storing sensitive and private data, processing mail room tax returns, scanning and archiving communications from citizens, and digitizing, scanning, and extracting data.

Transportation

For efficient document processing, businesses in the transportation sector hire providers to process, and manage invoices, rental agreements, maintenance records, compliance and regulatory documents, tickets, travel contracts, customer correspondence and scheduling distribution.

Back Office or Transactional DPO Services

Some providers offer only discrete or transactional DPO services using flexible service delivery models.  Individual DPO services include document scanning, data capture, document preparation, printing, data entry and validation, and cloud-based document access and storage.  The provider may also offer workflow engineering, consultancy and other services that are on the high end of the DPO value chain.

Document Preparation

Documents are inventoried, labeled, and organized before they are scanned.  The service provider will scan, route or dispose of related documents (as required) in the preparation process.  When office space is limited, some providers offer mobile scanning to keep information on-site. 

Data Capture and Data Entry

Providers use advanced imaging and character recognition technology to acquire data from paper and electronic sources and convert information into machine-readable format.  Third parties also provide high-resolution scanning for critical documents and linking related documents for easy retrieval.  The technology used is often proprietary to the company, like OCR (optical character recognition), ICR (intelligent character recognition), and ADR (automated document recognition) software.  Some providers offer multi-channel capture at the enterprise level to receive, sort and open documents, and extract useful data from scanned digital images.

Data Validation

Data is checked or validated after it is scanned and entered into a database.  Major DPO providers use advanced automated transaction processing (ATP) technology to automate manual and repeatable processes, especially when processing large volumes of information.

Cloud-Based Storage and Access or Digital Vault

With secure cloud-based document storage and retrieval, managers can tailor a customer's access privileges and security.  Documents can be editable or set to read-only with 24/7 availability via an internet connection.  Providers can make documents accessible from any location for distribution or archiving, regardless of the location of the original document.  Other services include secure records management from creation to scheduled disposal. 

Data Encryption

DPO providers offer encryption and securitization of sensitive information and for meeting regulatory requirements such as the HIPAA (Health Insurance Portability and Accountability Act) and Financial Modernization Act.

Customer Communications Management

The DPO service provider can improve customer relationships, promote corporate branding, promote products, and communicate information to customers by creating and managing personalized communications.  Presentation and delivery channels are tailored based on client preferences.  Customer communications are generated in real time and can be produced in high-volumes through the use of automatic character recognition technologies.

Output/Printing 

Output services include print and mail (creating forms, distributing invoices, financial statements and customer correspondence), design (creating, merging and distributing content to multiple channels), and electronic documents (creating and presenting documents digitally instead of printing paper documents). 

Help Desk Services

Document-related inquiries from staff, vendors and customers can be handled by a third party.  Help desk service personnel are trained and have in-depth understanding of business and customer needs, allowing them to serve as a seamless extension of the in-house staff.

Disaster Recovery 

DPO providers have tested disaster recovery and business continuity plans in place in the event of force majeure or unforeseen circumstances.  Services include dual-site processing and redundant storage.

Workflow Engineering and Consultancy

Document imaging specialists or advisors help organizations reduce errors, speed up processes and eliminate middle layers and needless steps in a document lifecycle.  Document specialists also integrate their services with legacy systems, workflow automation software, and application processing software.

End-to-End Document Process Outsourcing Services

An organization has different document-intensive functions, including customer-facing, technical, marketing, legal/regulatory and finance and accounting.  The DPO service provider takes over management of one or more document-intensive business processes while allowing the company to retain ownership and control.  The third party provides technology and domain expertise to improve process efficiency and reduce costs.

Enterprise Content Management (ECM) Services

Major DPO providers like Xerox and HP offer cloud-based and on-premise document processing solutions to organize and manage data for large businesses.  End-to-end management includes creation, processing, retention, and archiving, as well as automation of business critical processes.

Customer-Facing Services

Customer-facing processes focus on fulfillment of customer requests or orders.  DPO providers handle production, distribution and management of documents like invoices, customer communications, and customer records.

Technical Document Services

Technical document processing is the production and management of technical documents delivered to customers or other businesses.  A DPO provider may handle creation and distribution of repair manuals, product manuals, design specifications, blueprints, supplier documents, and service bulletins.

Sales and Marketing Services

Marketing services are typically external-facing and involves the production and management of marketing and communications documents.  Service providers may manage an organization's communications programs and handle customer collateral fulfillment.  A third party may also optimize transactional-promotional communications by adding marketing messages to post-sales bills, statements and invoices. 

Legal and Regulatory Services

Service providers handle production and management of documents that ensure regulatory compliance, typically in the insurance, product safety and banking and financial services sectors.

Finance and Accounting 

F&A document processes include invoicing and payment of buyers and suppliers, and capture, scanning, reporting, updating, and archiving of financial information.  A third party may handle specific functions like management of invoice matching and dispute resolution or general services like design, storage, and management of operational forms (electronic or paper-based).

Administrative Services

DPO service providers undertake end-to-end administrative document management, production and printing using the latest technologies.

Comparison: Document Process Outsourcing and Business Process Outsourcing

Document process outsourcing (DPO) is the practice of hiring a third party or outside expert to handle an organization's document processing functions.  The service provider employ data entry professionals and use advanced document processing tools to convert data from paper-based or electronic documents into machine-readable information.  Besides providing individual services like scanning and printing, third parties also offer end-to-end document processing and consulting or advisory services.

Document process outsourcing is a special area of business process outsourcing (BPO), which encompasses a wide range of services: front office (customer service), back office (finance and accounting, human resources), information technology (infrastructure, maintenance, support, software development), legal (patents, research), and knowledge processes (core activities).

Differences

Process Ownership

According to the article Document Process Outsourcing vs.  Business Process Outsourcing in 2013 & Beyond published on the AIIM.org blog, one of the main differences of DPO and BPO is how the organization retains ownership of the process.  DPO allows a company to take full ownership of the process and retain responsibility for outcomes, while taking advantage of technology that improves the function.  For example, third platform technologies (like the cloud) have enabled business of all sizes to leverage advanced document processing tools that streamline workflows and improve efficiency.

With cloud-based document processing services, what used to be accessible only to enterprises or large companies can now be easily accessed by small and medium-sized businesses (SMBs) with limited resources.  The cloud-based DPO service delivery model in particular enables business to improve process efficiency without turning over responsibility for the entire process to the third party.  Other benefits of the DPO model over traditional BPO service delivery models are reduced cost (small investment in infrastructure and labor) and shared risk (the third party also assumes responsibility when things go wrong).

Level of Engagement

In its study Document Process Outsourcing: Business Strategies for Successful Market Engagement, InfoTrends reported that traditional BPO contracts differ from DPO agreements in terms of the level of engagement.  While traditional BPO models focus on the delivery of discrete or individual services, DPO focuses on a specific business process and their associated metrics. 

For example, a DPO provider handles end-to-end management of document-intensive processes in an organization's Finance and Accounting department, including processing of accounts payable, insurance claims, sales order, and mortgage applications.  As a subset of BPO, DPO is tied directly to a provider's document processing expertise.  The outsourced process (Finance and Accounting is an example) includes management of multiple document lifecycles and delivery of documents to end-users.

DPO and BPO Trends

According to an InfoTrends study, cost reduction remains the primary driver for BPO market growth, but it is not the only driver.  Today, companies outsource strategically; that is, to improve business processes and drive innovation.  The number of companies using metrics that go beyond cost savings is increasingly growing, indicative of the move towards market-facing outsourcing solutions.  Modern BPO is all about long-term value, and companies that outsource document processing are following that trend.  Like other BPO providers, DPO providers are expanding their offerings to include end-to-end process management.

Another trend that informs BPO is third platform technologies that include big data, mobility, social business, and cloud-based services.  The cloud in particular is changing the way companies process documents.  Service providers are wooing buyers with cloud solutions that will transform businesses into paperless organizations.

Industry analysts said that BPO is headed towards an integration of technology and process outsourcing.  Buyers will be able to improve document-intensive processes while retaining control through advanced workflow automation, intelligent character recognition, flexible solutions, business intelligence, and advanced document management technology that providers offer.  They added that the DPO approach is best used for functions like accounts payable invoice processing, explanation of benefits (EOB) processing, sales order processing, and human resource onboarding.


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