Paperless Office

A paperless administration office! Or just our heads in the clouds?

Since the Chinese invented paper over 2000 years ago, annual consumption around the globe has continued to grow exponentially as access to improved production techniques and materials has become available. From humble beginnings in 1818 when paper was brought to the Colony, Australians now use around 1.4 million tonnes of printing and fine paper each year; the product of between 14 and 24 million trees. This begs the obvious question - “Can we ever achieve the paperless office?”

The general consensus, including green groups, is a resounding negative. The love affair business has with paper is enduring, yet as margins continue to be pressured by global economic conditions, the need to find solutions less dependent on paper is growing. This is especially true for superannuation administrators, trustees and fund managers. Statements, member booklets, PDS, statutory reporting, forms, policy documents and correspondence is a significant portion of annual expenditure placing additional strain on margins, member fees and fund profits.

While share registries and banks are utilising more electronic media, the superannuation industry by and large is only starting to embrace technology as viable, efficient and cost effective means of communicating with members. To some extent, this reluctance has been driven by legislation requiring the “delivery” of documents to members, but with Generation Y expected to comprise more than 43% of the workforce by 2020, there is going to be far greater demand placed on administrators to communicate through other means such as SMS, email, internet and video. This is the instant generation demanding instant access, instant response and instant gratification.

Given this future, what is holding the industry back? The answer is embedded in three key areas:

1. Business Processes

Business processes represent one of the biggest barriers to a paperless office on two fronts:

• Embedded processes that drive the consumption of paper simply because “we have always done it that way”. One of the quickest solutions to this issue is the rigorous challenging of the status quo – if no one can explain why three copies are needed (when two get thrown out), then it is unlikely the need continues to exist.
• Technology that supports business operations. All too often businesses find themselves resorting to manual, paper based processes because their new technology fails to deliver the goods. We have all experienced the angst with new (and old) technology that doesn’t live up to expectations and just doesn’t do what we want it to do.

However, the source of the problem that drives a business to revert to paper can be traced to not correctly defining or understanding what it really is that we want the technology to do. In many cases, business processes are not well understood and hence the requirements for technology are not well defined.

The Solution

• Developing a thorough understanding of what, when, who, how and why of communication and paper flows in your office will contribute to identifying where improvements can be made.
• A process efficiency review is a simple and effective way to identify and eradicate irrelevant, redundant or outdated processes in your business.
• Many superannuation processes are excellent candidates for automation. For example: contribution lodgement and payment, investment switches, new member applications, member detail maintenance, forms for straight through processing or even complex claims management processes are some of the many processes using technology to replace paper.

2. Regulations

Ever changing superannuation legislation has been a principal inhibitor to the paperless office. Reporting and statutory obligations as well as compliance and disclosure requirements work to maintain the need for paper. While electronic reporting has admittedly increased over the years, giving trustees and administrators the flexibility to extend the use of internet, email and SMS channels would not only improve the industry’s carbon footprint, but go a long way to reducing the massive costs associated with the production and supply of paper based fund materials.

The Solution

As an industry, maintaining pressure on Government legislators to pursue safe, secure electronic mechanisms to transfer information is needed. At a fund level, a strategic review of communication policies and practices will generally identify a number of areas in which to eliminate paper – without breaching legislative requirements.

3. Target audience

The primary users of superannuation are obviously members and their needs have been a major contributing factor to paper consumption. The changing demographics of superannuation funds will demand trustees and administrators adopt more electronic based communication strategies in order to meet the needs of their membership base. Younger members will be looking to their superannuation provider to utilise current and evolving technology to provide convenience, speed and responsiveness.

The Solution

What members want and/or need is a great debate. However, if trustees and administrators want to utilise more cost effective means of communicating with members, assessing and understanding each stakeholder’s motivation is essential. Can they utilise the technology? More importantly – will they? What issues are likely to arise in relation to security and authentication?

There is a relatively new technology platform that is gaining a lot more exposure, helping business address these issues and allowing the paperless office to become a more tangible reality.

The reality of a paperless office – Cloud Computing

The technology platform for an Administrator is a complex model of components: Communications, Operations Support, Core Administration/Record Keeping, Back-office Services, Infrastructure, Information Management and integration with other players in the industry. Adding to this complexity are legacy systems, unique customisations and poor documentation. It’s little wonder that a paperless office is considered a pipe dream.

Enter “Cloud Computing”; an internet based service that is readily scalable and often virtualised to provide users with the greatest degree of flexibility without the need for the knowledge of, expertise in, or control over the technology infrastructure. In the same way that you would use any other utility such as water or electricity, Cloud Computing is essentially a user pays system that is available on demand, offering far better reliability than on site servers and hardware without the need for a large IT team.

Cloud Computing offers technical mobility with the ability to stay connected to multiple devices. It delivers increased bandwidth improving responsiveness which in turn, translates to improved standards of service and productivity. In essence, the ability to integrate a diverse range of communication channels (including the new social media) means that administrators can make far better use of technology that is cost effective, easy and fast to deploy, simple to use and by its very nature, keeps pace with technological, social and demographic trends.

Within the Cloud is a network of infrastructure, platforms and applications that can be structured to suit any business. It can reduce the need for a large IT overhead and significantly reduce the need for paper based communications, procedural documents, checklists, document drafts, even contracts, signatures and paper files. While the Cloud will not totally eradicate paper in the office, it does offer opportunities for substantial reductions and savings.

At IQ, the Cloud is nothing new; we have been taking increasing advantage of the flexibility and savings it offers our business. We can access our systems from anywhere in the world (provided there is internet access), from our clients’ offices or from home.

From an operational perspective, we use the Cloud for our financial management, time-sheeting, our intranet as well as knowledge and learning management systems. Our consultants make use of the Cloud for backups, CRM, HR & Payroll information, contract execution and surveys. In practice, the Cloud has eliminated the need for printed draft documents, paper timesheets, paper payslips, extensive filing systems (we have four filing cabinets in a company of 80 staff), libraries of reference books, system support manuals, the usual suite of forms and the list goes on.

In a company spanning Sydney, Melbourne, Adelaide and Brisbane, we have an IT department of one person managing our Cloud and would be lucky to use more than three reams of paper a week.

While our needs are somewhat different from a superannuation administrator or trustee, the potential benefits of Cloud Computing extend beyond reducing the demand on paper and better ways to communicate with members: standardised procedures, improved compliance, straight through processing, automated workflow, greater accuracy and better record keeping, reduced storage space requirements are just some of the many ways Cloud Computing can be applied. It is a viable solution to address both the Business Process and Target Audience issues discussed earlier.

Of course, there is always a downside with any new technology. To realise its potential, the Cloud needs bandwidth. In Australia, bandwidth is still relatively slow and expensive, however, this is changing with increasing demand as the market starts to realise that a paperless office may not be a pipe dream after all.