Unlocking Productivity to growth
1 – Understanding the lack of productivity gains
In 2021 the total IT spending is projected to top $3.6 trillion. It is a staggering number. Just to put it in perspective the auto industry is worth $2 trillion, or just 55% of the IT industry.
And yet, with such huge investments, the total productivity keeps falling year after year. Unlike societal disruptions like sanitary or auto transportation during the earlier and mid-1900s, the current influx of technology is only bringing incremental growth performance. But why, with such astronomical spending in IT does productivity not grow at a faster pace?
The answer for that lies in the often ignored yet trivial and simple reality: we are humans. Consider you have a business process with 20 tasks and steps—one (1) is done by a human, and nineteen (19) are done by IT systems. Imagine you consider productivity as the number of processes you can run per day. If that single human task takes 1 hour and you are running 8-hour days, then your company will only complete 8 processes per day.
This is a typical example of what it could be like for a bank analyzing home loan contracts. You can have whatever risk analysis or financial scoring systems, but at the end of the day, a bank teller will have to process documentation. In the last 20 years, the way documents and information are exchanged has radically changed. But it does not mean that productivity increased radically. Why?
Gene Amdahl stated this beautifully in what became known as Amdahl’s law. Imagine you are traveling from London to Washington D.C. and you take a plane from London to NYC and a walk from NYC to Washington. Traveling across the ocean by plane will take you 7 hours and the walk will take you 83 hours. In relative terms, while the plane trip covers a lot more distance, it accounts for only 8% of the total time. And the walk accounts for the remaining 92%. It doesn’t matter if you take a supersonic plane and cut 3 hours from the flight. After the total trip, the overall time will be reduced from 90 hours to 87 hours and you will still have to walk for 83 hours.
However, if you replace the walk with a car trip between NYC and Washington, you can now reduce the total trip time from 90 hours to 11. Now, the split has changed and it is worthwhile to invest in reducing the ocean crossing with a supersonic flight.
This simple example shows what has happened in the last 2 decades in information systems across the globe. While we are investing heavily in some areas, taking the most from artificial intelligence and machine learning, we still keep huge amounts of processes based on human tasks.
Even worse, as the world economy is increasingly global, we have to exchange information across millions of companies. Although every company has IT systems, each system is not necessarily talking “computer language” with each other. Thus, we actually are investing a lot of time and money to build systems that produce human-readable documents, ie, PDFs. Why? Because humans can translate, read, interpret, copy, and paste information from the source PDF into the IT destination system.
As the volume of available information increases, this problem only tends to increase as well. We can now generate and send a multitude of documents related to applying for a bank loan in 5 minutes. We can receive PDFS for the IRS, utility bills, a photo of an ID Card, and send that by email to your bank manager.
It is irrelevant how sophisticated the bank IT systems are (i.e., the supersonic plane). The bank manager (the walker) still has to open the email, download the files, read each file, and input the information by hand into the IT systems. It actually doesn’t matter if it is the bank manager or any BPO service—the bottleneck still relies on the human factor.
2 – Shifting the problem doesn’t solve the problem
For some time, large corporations relying on heavy internal processes already figured out part of the problem. 1. The current approaches rely on shifting the problem to its origin. Instead of paying the productivity tax in their back offices, they pressure the origin, either the consumer or the corporate customer, to digitize information in their IT systems and deploy internal portals.
However, this approach has a huge drawback—it heavily hinders the user experience. Now the customers feel it is working for the bank, instead of being the bank working for the customer. And even if the customer is willing to take on that task, a large number of other problems arise. Is the information correct? Is the customer committing fraud? How do you validate that information?
Therefore, the solution must not rely on shifting the human burden. The solution must reside entirely in removing the human factor as much as possible. In our earlier example, the best possible move would be to find a direct flight between London and Washington D.C.
Sending and receiving documents took some time until the popularity of email. You had to gain access to a document, Xerox it, and then deliver it. That operation could take hours or even days. Thus the time of processing the documents was in the same range as the time that the customer took to deliver the information. Because of that, the expectations of service level between customers and suppliers were aligned. All that changed with emails, then internet sites, instant messages, and social networks. We navigated from email to a photo on Facebook, to WhatsApp, to a 15-second video on TikTok. Time was compressed, but a core part of the corporation’s processes remain basically the same.
The COVID-19 relief programs showed this reality beyond any doubt. The bottleneck is not at the source (the citizens, companies). The bottleneck relies on the back-offices, which require human intervention to process documents.
3 – Unlocking Digital Transformation
At DocDigitizer, we have been focused on measuring and understanding the specific area of processing and extracting information from documents. This goes well beyond just running OCR software and receiving some results. In order for the information extracted from the documents to be useful, that information must be curated and validated.
The solution relies on removing the human factor as much as possible when extracting information while improving accuracy levels of the current status.
This enables companies to regain untapped productivity. The good news is that it does not mean radically changing the digital transformation strategy. What it does mean is releasing the current bottleneck.
DocDigitizer enables corporations of any size to reduce total process lead times from weeks to hours, delivering real value both for our customers and our customers’ clients. We help process various types of documents from loan contracts, to account payables, logistics, or insurance claims.
We also deeply understand how IT projects are approved and deployed. We designed DocDigitizer to have an almost immediate deployment, low intrusion, and pay per use. By removing all three main obstacles to new solutions—risk, time, and fixed cost commitment—DocDigitizer is able to quickly navigate between a proof of concept, proof of value, and full-scale deployment.
DocDigitizer is a Portuguese startup founded as a spin-off of Infosistema in 2016. It is dedicated to the development of intelligent process automation technologies through the use of machine learning.
Since its founding, DocDigitizer has recorded annual growth rates in excess of 100% and is now supporting leading companies in the banking, insurance and financial services industries in more than 6 geographies.
Visit the website to learn more: www.docdigitizer.com
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