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Enterprise Content Management What financial institutions stand to gain. The Unique Alternative to the Big Four ® Audit | Tax | Advisory | Risk | Performance

Enterprise Content Management Briefing Paper

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Thought leadership for banks trying to leverage imaging and workflow

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Page 1: Enterprise Content Management Briefing Paper

Enterprise Content ManagementWhat financial institutions stand to gain.

The Unique Alternative to the Big Four®Audit | Tax | Advisory | Risk | Performance

Page 2: Enterprise Content Management Briefing Paper

Information overload and workflow bottlenecks are holding back productivity advances at financial institutions. The inability to easily access vital information can weaken customer service, increase regulatory risk, and act as an inhibitor to institutional growth.

Financial institutions need comprehensive solutions to address the vast

complexity of information – wherever the data exists and in whatever

format – from an internal control perspective, as well as in terms of

improved efficiency and in the delivery of high-quality service.

Effective enterprise content management (ECM) provides a

comprehensive solution. New information inputs can be integrated

into existing systems, be made accessible to the appropriate

people, and shared securely with external business partners to

streamline workflows. Financial institutions that make a commitment

to implement ECM can realize a competitive advantage.

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Paper FaxesPaper orElectronic

Forms Reports E-mail

Imagesand

Pictures

Productivityand Of�ce

Files

Audio andVideoMedia

At a glance: Business challenge and solutionEven the most efficient organizations are rife with what is referred to as “unstructured content.” Consider documents sitting on desks, in filing cabinets, or on fax machines (Figure 1). Important information can also be found in electronic documents, on shared network drives, or on employee laptops. These multiple categories and locations of content must be integrated and managed, regardless of format differences and within the realm of technologies already in place.

Lending processes require massive amounts of documentation, and financial institutions must operate within multiple layers of regulatory oversight. In litigation, everything – from e-mails to faxes to word processing documents to jottings on note pads – can be requested as part of the legal discovery process. Content needs to be “discoverable,”

and legislative requirements require better and faster records management in order to avoid costly fines.

Without effective systems for content management, financial institutions in acquisition or growth mode may be less able to support their growth strategy with the people, processes, and technologies currently in place. Information adds value, but the value is diminished when the information is not easily accessible, or when content management systems are not flexible enough to interpret data that can help support new opportunities to create value.

Research from organizations such as TowerGroup have demonstrated that companies can expect up to a 30 percent return on investment1 by implementing business process management (BPM) and ECM workflow solutions.

ECM applications and streamlined processes can result in substantial gains in achieving regulatory compliance, as well as in quality and productivity.

ECM provides greater transparency and increased document security. The full stream of documentation can be accessed with the click of a mouse, along with an electronic audit trail. ECM also cuts down on hard copy paper costs and can reduce an institution’s costly “real-estate footprint.”

Intangible gains can be seen in heightened employee satisfaction and more flexible options for remote information processing. Managers can have better oversight of their departments, and employees and managers are able to devote more time to higher-level activities when time-consuming tasks become automated.

Another added benefit is that more attention can be focused on new revenue-producing activities when routine business processes are performed with greater speed and accuracy. Information can be leveraged and managed to create new ways to add value to the organization.

Figure 1: Numerous types of content to integrate

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What is ECM?The Association for Information and Image Management (AIIM) defines ECM as technologies used “to capture, store, preserve, and deliver content related to organizational processes. ECM tools and strategies allow the management of an organization’s unstructured information, wherever that information exists.”2

There are at least seven steps in the content life cycle (Figure 2):

1. Create and author.

2. Capture and ingest.

3. Classify and index.

4. Store, secure, and publish.

5. Act and collaborate.

6. Retain and preserve (archive).

7. Dispose.

A b c

A b c

+

PAPER

+

ELECTRONIC

CREATE & AUTHOR CAPTURE & INGEST CLASSIFY & INDEX

Bar Coding

Indexing

ICR/OCR

ACT & COLLABORATE

Dept. Dept.

Enterprise

Dept.

Integration

AutomatedProcessSteps

Business Rules

RETAIN & PRESERVE

Document Search,Work Search,

and Enterprise SearchManagementDashboards

Reporting

STORE

ContentRepositories

TaxonomyVersioningAccess ControlChange ControlDisaster Recovery

ARCHIVE

DISPOSE

PUBLISH Internet

Fax

Scan

Web

Integration

Discovery andCollection Services

Media

Web

Mail

Form

Doc

SECUREBulk/Batch/Conversion

Figure 2: Steps in the content life cycle

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Well-established systems and processes are used to manage financial and human sources of capital. ECM is associated with a different category of capital – knowledge capital – and many businesses are often slower to recognize this as an equally important asset.

To make the most of this organizational capital, the following should be captured and maintained for each piece of content:

� Classification. Content type, with examples including “form” (major) and “new account application” (minor);

� Attributes. Index values for retrieval, with examples including invoice number, scan date, customer name;

� Recognition. For automated classification, using technologies such as optical character recognition (OCR), intelligent character recognition (ICR), and bar code systems;

� Source. Capture and ingestion point for content, including scans, faxes, e-mails, imports, and integration feeds;

� Security. Authorization to add, view, update, or index by group, individual, author, and function; and

� Retention attributes. Storage medium and life cycle, for purposes of compliance.

Understanding the need for ECM becomes more apparent when considering end-to-

end business processes. These business processes are initiated by the creation, or ingestion, of a new piece of content, and require additional steps to review, approve, and take additional action. These decision steps usually cannot be advanced without the completion or approval of multiple pieces of content. Frequently, additional content is created, exported, transferred, or transmitted as a part of the process.

Methods for intelligent routing between employees and systems are designed to accelerate these content-centric workflows (Figure 3).

Step 1 Step nStep 6Step 3 Step 4 Step 5 . . .Step 2

Third Parties via Internet

Content can be authored or ingested

via scanning, faxing, or

import, which could trigger work�ows in the system.

Based on content, decision

steps may execute

business rules to determine

the path.

Users interact with work-

�ows to take action via

step proces-sors that present

relevant data and content.

Imports and exports of

data can be driven by

content and metadata in

the system for reporting,

feeds, or logs.

Integrations with core and

legacy applications exchange

content and metadata to

external systems.

Background processes

introduce and receive

content for execution of steps that do not require

human tasks.

Content is exchanged with third parties via

integrations through �les, Web services,

or other transports.

Figure 3: Content-centric business process flows

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Which areas in financial institutions are ripe for ECM?ECM is applicable and beneficial to virtually every organization, especially financial institutions, particularly those that emphasize lending. For example,

� The streamlining of back-office processes can result in increased productivity and an improved bottom line. A/P for example, can be greatly improved with ECM. Scanning documents and electronic storage can reduce the number of lost documents resulting from largely manual processes. Easy access to electronic documents saves time, allowing for more work to be done by back-office teams.

� Legal departments can use ECM to store documents with regulatory or compliance implications, particularly contracts that need to be retained for the longer term. Due to the high costs of staffing legal departments, as well as litigation expenses, ECM offers significant cost-control potential.

� Human resources departments can better manage paperwork related to employee life cycles, including résumés, certifications, drug testing, licensing, and benefits administration.

� ECM also enables customer service representatives to achieve faster response times with greater accuracy, thereby saving money and time for financial institutions and their customers, and improving perceptions of service quality.

Recent barriers to ECM implementationConsidering the substantial benefits ECM offers, many financial institutions have not been able to prioritize this actively. They have been preoccupied with complex regulatory requirements, including complying with provisions of the Sarbanes-Oxley Act, the USA PATRIOT Act3, the Bank Security Act, and anti-money laundering laws. In addition, the global banking crisis has diverted management attention from focusing on and implementing ECM.

The likelihood remains that emerging litigation will drive the need for better document management. A recent article in The New York Times alluded to a lack of documentation in mortgage lending: “‘If you look at the way these structures were built up, there were supposed to be safeguards at every step to make sure all these things were done properly,’ said O. Max Gardner III, a lawyer in Shelby, N.C., who represents financially troubled consumers. ‘When you see so many problems across the country with the total inability to produce the documents, then it really makes you wonder: did they really do this?’”4

Few financial institutions, however, have been sued directly as a result of inadequate document management. Many bankers know they could reduce costs with ECM, but have been busy dealing with other financial and economic issues. As some of these issues become less urgent, ECM is likely to receive greater attention from senior-level executives.

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What should financial institutions aim to achieve with ECM?

� Protecting the integrity of documents. Automating folders and subfolders with required content can help ensure adherence to policies and that documents required for compliance are accessible for the life cycle of the record.

� Putting documents where users need them. End users ideally have an ECM interface that makes documents easily accessible from any location.

� Single view of the customer. A shared system means multiple departments aren’t keeping separate

files, updating them separately, and then continuously comparing and reconciling the differences.

� Automated document retention. To reduce manual errors and simplify the process of preserving needed records, documents can be retained automatically.

� Elimination of duplicate documents. One of the key goals should be to purge duplicate and unnecessary documents.

Integrating improved processes with leading technologiesCrowe Horwath LLP ECM professionals guide businesses in integrating the leading technologies with redesigned

workflows and change management strategies, including (Figure 4):

� ECM strategy, road map, and vision definition;

� Business process definition, documentation, and optimization;

� Implementation of content storage, management, and retention solutions;

� Implementation of content capture and recognition platforms;

� Implementation of workflow platforms;

� Implementation of electronic forms, business rules, integration, reporting, and business intelligence technologies; and

� Creation of ECM centers of excellence (also known as competency centers) which help institutions become self-sufficient in managing and governing their ECM deployments.

Figure 4: Stages in an ECM implementation

Initial Preparation Projects Support/Monitoring

Establish strategy and overall architecture for ECM

Establish support organization and provide ongoing support

for ECM solution(s)

Implement ECM solutions across various projects

Execute governance model, and implement/re�ne standards (ongoing)Develop standards,

processes, and governance model for ECM platform

implementation

ECM center of excellence(ongoing governance)

ECM project implementations

ECM center of excellence

(plan and implement)

ECM strategy and architecture

ECM ongoing support

Initiate Analyze Design Develop Test Deploy

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Figure 5: Samples of Crowe’s ECM Accelerator frameworks

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Crowe’s consultants are deeply experienced with leading technology solutions, such as: IBM® FileNet® and Hyland® OnBase®. Crowe has achieved credentials by assisting numerous organizations achieve significant productivity gains. FileNet has proven useful for large implementations with tens of thousands of users, and millions of documents. Crowe also frequently works with Hyland applications, many of which have numerous built-in solutions that are appropriate for smaller and midsize projects.

In addition, Crowe has invested extensively to create user-friendly interfaces and technology tools linked to the industry’s leading ECM solutions. These interfaces and tools (Figure 5) improve

acceptance among users, and result in greater speed, accuracy, and gains in productivity and quality.

Crowe® Industry VantageSM Content Management (CM) Accelerator offers rapid deployment of scan, store, and retrieve capabilities built on multiple ECM repositories. CM Accelerator allows administrators to configure interfaces with relative ease and minimal assistance from IT resources. Crowe’s role-based security model provides for authentication, access control, and authorization, and CM Accelerator provides an end-to-end capture, store, index, and search and retrieve solution using a “least number of clicks” approach. Crowe Industry Vantage Business Process Management (BPM) Accelerator provides a framework

for speeding development of custom applications for content-centric workflows. These solutions link BPM with a business-rules engine to help ensure that steps are implemented in the correct sequence. And, as needs change, business rules can be modified. Crowe invested more than 30,000 staff hours to create the innovative BPM Accelerator.

Additional technologies used by Crowe in ECM implementations include Adobe® forms, Microsoft® SharePoint®, Kofax Capture®, Java®, and Microsoft.NET, as well as technologies for integration, data warehousing, and reporting. In addition, consultants have access to other service providers who can provide bulk content conversion and ingestion; hardware and storage device implementations; software platform installation; and software training.

Case study: Crowe streamlines complex workflows for investment management leader.

A large asset management company became frustrated with an aging document management system. Existing systems were becoming less capable of handling the demand.

The company’s transfer agency – where financial and personal records were captured, maintained, and updated by hundreds of employees – was situated more than 1,000 miles from company headquarters. These employees needed to efficiently service investment accounts for individuals, corporations, and institutions.

Seeking greater operational efficiency, the CFO approved a transition to the most recent IBM FileNet platform. Crowe was chosen to implement FileNet and develop associated Web-based applications to make the ECM system more convenient for employees in multiple departments. Crowe helped establish the foundation for a series of projects over five years.

The larger part of the implementation automated workflows for more than 1,200 users. Crowe’s BPM Accelerator enabled the asset management firm to jump-start the development of Web-based applications integrated with FileNet. Members of each functional team received customized training to make sure they would benefit from the system.

As a result, workflows have been dramatically improved and major steps to reduce costs have been implemented. Web-based applications and FileNet are helping to reduce cycle times. Business activity monitoring enables transfer agency managers to track progress in real time.

Working together, an ECM center of excellence has been created to promote standard processes, best practices methodology, and governance related to ECM projects. Additionally, future applications created by the organization’s IT team are more likely to be reusable and integrated into the new platform. Follow-on phases are designed to improve customer intimacy, strategic agility, and product innovation.

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Calculate the benefits.The benefits of successful ECM implementations include clearly tangible financial savings, and less tangible improvements in employee morale and customer service. Here are some of the ways financial institutions can benefit:

� Reduced paper costs. An increasing number of documents can be exchanged electronically, thereby reducing paper, postage, and shipping costs.

� Greater transparency. Managers can track document status within workflows and view a complete electronic audit trail. ECM provides greater transparency into workflows, providing better oversight of workloads and process bottlenecks.

� Streamlined processing. Managing, retrieving, and cross-referencing documents can be done in substantially less time with a much-reduced risk of lost documents.

� Enhanced flexibility. Financial institutions have greater flexibility when documents are accessible in electronic formats, thereby paving the way for remote retrieval and processing.

� Reduced risk. Compliance documents are easily accessible from one system.

� Time savings. Time searching for missing information – or reconciling accounts that should have the same customer information – is reduced.

� Space savings. High-cost space formerly needed for storage devices and filing cabinets can be eliminated.

� Increased security. Files are continuously backed up, thereby greatly reducing the risk of lost documents or destruction of documents due to disaster.

� Employee satisfaction. As staff members are freed from mundane, time-wasting tasks, morale often improves.

� Customer satisfaction. When workflows are clearly understood and documents are easy to locate, employees are able to provide greater accuracy and more knowledgeable service to customers.

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What’s the best way to get started?An independent assessment and review by an experienced ECM service provider – one who understands business processes, bank personnel, management needs, as well as the full range of technology hardware and software options – can help financial institutions make informed choices and create a long-range ECM strategic plan.

A strategic ECM road map can provide a three- to five-year overview of initiatives that can be sequenced and prioritized into a portfolio of projects. Not everything has to be done, or should be done, all at once. Logical progressions can be made to gain maturity in the ECM area within the implementation of the overall plan.

In addition to strategic planning, another way to get started is to implement an electronic filing cabinet system for a specific department. An imaging application can be used to create electronic files from a wide range of information types, and that electronic filing cabinet can then be used to store and retrieve documents. The new system allows employees to import documents directly from their desktops, and offers them document searching and indexing functions.

As a specific department sees the value of electronic document management, the electronic filing cabinet pilot project can be extended to other functional groups, integrated with other electronic systems, gradually leading to institutionwide ECM.

Crowe’s integrated approachCrowe serves financial institutions of all sizes, including 30 of the nation’s 100 largest banks, and tailors ECM solutions to meet the needs of each financial institution’s unique specifications.

ECM is especially helpful to financial institutions with extensive lending operations. Crowe has helped review, redesign, and optimize lending processes for a range of prominent financial service institutions. In addition, more than 100 banks trust Crowe as their outsourcing partner for loan reviews.

Crowe‘s ECM project teams include consultants with hands-on experience in bank management. Combining technology, process, and industry expertise, Crowe’s multidisciplinary ECM teams often include former bank line managers or former bank project managers.

Crowe is known for its ability to offer the valued resources and expertise of the largest international accounting and consulting firms, but without the high overhead costs these firms often need to pass on to their clients. In addition, unlike smaller boutique firms that sell discrete technology products, Crowe provides the full complement of services to help each institution succeed with ECM. Finding the right balance of technology, process knowledge, and change management is crucial for the success of ECM implementations.

By integrating technologies, processes, and a unique industry perspective, Crowe is intensely focused on ensuring that financial institutions realize the tangible benefits that ECM can offer.

1 “Beyond the Paper Scourge: Unleashing the Business Value of Electronic Content Management,” New York: TowerGroup, June 2009

2 www.aiim.org. AIIM is a global ECM community providing education, research, and best practices to help organizations find, control, and optimize information.

3 Complete name: Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

4 Gretchen Morgenson, “Get Ready, Get Set, Point Fingers,” The New York Times, Dec. 12, 2009.

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Crowe Horwath LLP is a member of Crowe Horwath International, a Swiss association. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. This material is for informational purposes only and should not be construed as financial or legal advice. Please seek guidance specific to your organization from qualified advisers in your jurisdiction. © 2010 Crowe Horwath LLP

IBM and FileNet are registered trademarks of IBM Corp.Hyland and OnBase are registered trademarks of Hyland Software Inc.Adobe is a registered trademark of Adobe Systems Inc.Microsoft and SharePoint are registered trademarks of Microsoft Corp.Kofax Capture is a registered trademark of Kofax Inc.Java is a registered trademark of Oracle Corp. and/or its affilitates.Green-e is a registered trademark of Center for Resource Solutions.

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This piece is printed on Mohawk Color Copy Premium, which is manufactured entirely with Green-e® certified wind-generated electricity.

About CroweCrowe Horwath LLP is one of the largest public accounting and consulting firms in the United States. Under its core purpose of “Building Value with Values®, ” Crowe assists public and private company clients in reaching their goals through audit, tax, advisory, risk and performance services. With 25 offices and 2,400 personnel, Crowe is recognized by many organizations as one of the country’s best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest networks in the world, consisting of more than 140 independent accounting and management consulting firms with offices in more than 400 cities around the world.

Contact InformationJeff Frederick is a principal who specializes in automating lending processes in the financial services industry with Crowe Horwath LLP. He can be reached at 630.586.5119 or [email protected].

Chris Sifter specializes in ECM in the financial services industry with Crowe Horwath LLP. He can be reached at 312.899.8412 or [email protected].

If you would like to start receiving information via e-mail about topics of importance to you, please sign up on our Web site at www.crowehorwath.com/emailsignup.