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Pulp friction

Pulp friction

For Yellow Pages, changing an antiquated system based on paper contracts was an imperative. Its new digitised system makes contract processing and customer response more efficient and saves them money too.

As a directory service, Yellow Pages was knee deep in paper contracts. Every one of the entries in the massive volumes for Auckland, Wellington, Christchurch and other cities and regions had its own separate contract and paper trail. Each entry requires some discussion with the customer, and, if there are problems with any listing, details need to be confirmed and seen to immediately. With nearly 500,000 contracts per annum, held for three years or more, that’s a lot of paper to push around. As well, paper records require expensive storage space and are difficult to immediately locate and process. Even more important is the time spent in searching for documents when customers call to talk about their contracts. On a daily basis, the company receives more than 900 inbound enquiries from existing and new customers regarding the details of contracts. These calls are handled by 40 call centre staff that need to locate the related documents and refer to them. Before 2005, Yellow Pages used offsite repositories of physical documents to handle its paper load. The process of storing and retrieving documents was cumbersome and did not yield the benefits of immediate electronic access. “We would record the details of each contract and then would box up the paper and send it off to a storage company,” says CFO Greg Hurn. “If a customer needed to see that contract we would have to contact the storage company, then someone would have to physically visit their storage facility to get the document. The whole process took three days. So, we needed to change things to achieve greater efficiency as well as reducing expense.”

The first step was to move documents to digital form. Yellow Pages contracted with Fuji Xerox to create a new system that would speed up the scanning and access processes, making it possible to provide online access to all contracts the day after they were received. The system had to store and make accessible all documents including contracts, advertisement image and past correspondence — including letters, faxes and email. These documents needed to be stored in a single repository to allow easy retrieval by staff. The chief advantage would be in customer service. When a customer phones the call centre, a representative should ideally be able to email a PDF file of the required documents while they are still on the phone.

According to Hurn, Yellow Pages went with the Fuji Xerox solution partly because of the working relationship with Fuji Xerox that was established through its supply of printers across the company. There were several other bidders, though Fuji/Xerox also provided the best end to end solution. It was also able to provide a large implementation team to set up the system within the shortest possible period of time. In the end, it required 10 people working seven days a week for two to three weeks.

“We needed to do it all at once,” says Hurn. “This made it possible to move to the new system immediately rather than having to maintain two separate document handling processes, as would have been required with a more gradual approach. The workload is intensive and downtime would have been very expensive.”

The complete implementation was done in two phases. In the first phase, completed in 2005, the online archiving system was put into place. In 2007 the second phase was completed, which provided internal scanning — rather than sending all paper documents out to be scanned — and capability to send contracts and supporting documents via email.

As a result customer support and sales administrative functions are now more efficient, due to immediate access to documents. It is also a lot easier to resolve customer queries, saving support time. There have been savings over a wide range of areas that more than offset the cost of implementation.

Among the specific benefits of the new system is the ability to resolve more customer issues on the first call. Before the system was in place, only 25 percent of issues could be resolved on the first call. That has now risen to 80 percent and payback for the system took only 12 months. As well, there was no downtime for implementation. Productivity has also increased, as staff can now handle more customer enquiries and quickly resolve them.

“The sheer scale of this project was the most unique element,” says Hurn. “We have 500,000 contracts per annum. With nearly three years on file, there are more than one-and-a-half million contracts that needed to be available for easy access. We needed to make certain nothing got lost in the process.

“Planning was critical and it was important to engage the right internal stakeholders who would be affected by the changes, and minimise disruption. It was also important to ensure that work could be completed without affecting ongoing processes.”

This project required very little input from Yellow Pages IT staff. Implementation was entirely by Fuji Xerox. For Yellow Pages, the chief impact on the IT side was in integrating the digital PDF documents into existing business processes. For Fuji Xerox, this was a significant project delivered well. Although it may have slightly underestimated the scale initially, the company kept on time and on budget by bringing in additional resources. An important part of the process was to provide appropriate training and get a ‘buy-in’ from staff members who would be using the system.

If Yellow Pages had the chance to do it over, it probably would not have put all of the company’s old records online, but perhaps only the past 12 months. Putting all of the records online greatly increased the workload for initial scanning, according to Hurn. However, it would have been difficult to foresee actual usage needs ahead of time.

Yellow Pages is now looking to further reduce reliance on paper by putting more company records online.

Sidebar: Breaking the paper chain

Hard-copy pay advice slips are a thing of the past at Australian company Drake Foodmarket, with a welcome cut in payroll costs and dot matrix printers.

Analysts are predicting a “green revolution” in hardware, with an emphasis on replacing products less frequently. The old-fashioned paper trails of copies in triplicate are now ancient history in most organisations.

Printer manufacturers, in particular, are expected to be put under pressure on a number of fronts but not just yet it seems, and chief financial officers may well ask: “So whatever happened to the paperless office?”

The answer is not a lot, but there are moves to do more, particularly when it comes to routine tasks. This is where some input from an IT-savvy CFO can make a substantial difference, as Drake Foodmarkets’ Andrew Pulic found.

Drake Foodmarkets is one of the so-called “barons” — or large independent chains — in the grocery industry. With 45 stores across South Australia and Queensland, it is IGA’s largest customer in South Australia.

Until recently, Pulic used the “secretive” pay advices and printed them for the group’s 4500 employees each week. “That was bit of a nightmare and so was distribution — we’ve got stores in South Australia and Queensland,” he says.

“What happens now is that all the pay advices get lodged on a disk drive and employees can access their own information, so we don’t need to send out pay advices in hard copies to anybody any more.

“In each of the stores’ staffrooms we have a computer kiosk where employees can log on and view their pay advice. We’ve also organised a web portal if they want to do it from home.”

The process starts with a high-tech time-keeping system called Chronos, where employees use finger scans to clock in and out. Each store or department manager has access to all their employees records, and at the end of the week verifies the times and signs off electronically.

Impact of printing

“Payroll picks all this information up and imports it directly into its system to process all pays, so we’ve eliminated the use of time sheets,” he says.

It also allows Pulic the luxury of eliminating some “fairly substantial” printers in his payroll office. “Because they were continuous forms, we had to use dot matrix [printers], which were quite expensive to repair,” he says.

Pulic gives a conservative back-of-the-envelope calculation for cost savings of about A$250,000, which is handy in a low-margin, high-turnover business. “Just eliminating pay advices saves a dollar a person a week. So it’s [saving] A$4500 a week, or A$234,000 a year.”

Against annual turnover of A$700 million, this might not sound like much but Pulic begs to differ. “It all helps,” he says. “We’re a supermarket, business and we’re on skinny margins.

“It’s not only the saving in the actual purchasing and printing of the pay advice; we used to get a lot of queries from staff needing information to give to organisations like Centrelink. Now all the information is stored in their own separate space, and with tax time coming up, payment summaries will be done in exactly the same way.”

The costs of processing leave requests have also fallen. “Before, we had forms people had to fill in if they wanted to take annual leave and send it to their supervisor or manager, who’d have to sign off and send it on to the payroll office. Now it’s all done electronically with electronic forms and emails. We’re looking at doing the same with performance reviews in future.”

The majority of Drake’s workforce consists of young, part-time employees and this system suits them well. “These days, young people are very competent with the internet and computers,” Pulic says. “I think we get a few more queries from our older staff members.”

In terms of operational savings, the experience at Drake Foodmarkets is clearly positive. And then, as Pulic points out, the company is not just concerned about paper and printing.

The group, which owns the Angle Vale Foodlands store in South Australia, has received industry commendation for installing the first carbon dioxide refrigeration system in Australia — the first such system to be used anywhere outside northern Europe.

The system, which has been up and running since late last year, does not use HFC refrigerants, which have a global warming potential of up to 3850 times that of the carbon dioxide used at the Angle Vale store.

This represents an enormous environmental saving and is expected to yield much lower costs. Pulic also believes he is in good shape to derive carbon credits when an emissions trading scheme is introduced.

Bernard Kellerman, CFO Australia

Fairfax Business Media

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