Path to Profitability: Reduce Costs and Increase Revenues with InfoPath
Abstract This white paper examines the business benefits that nine companies are realizing as the result of deploying Microsoft® Office InfoPathTM 2003-based solutions in their organizations. Based on case studies published between September, 2003 and February, 2004, the white paper aggregates and quantifies these benefits to help business managers understand where InfoPath can be applied to achieve a favorable return on investment (ROI). Key findings include:
InfoPath has the potential to automate many manual or inefficient forms-based procedures used throughout a company, with annual savings ranging from $250,000 to almost $2 million
Partially automated business processes also are good candidates for InfoPath savings, particularly if they contain manual steps subject to error or are dependent on individual follow-through
A payback period of one year or less is not uncommon in well-run installations;
Solutions targeted at the needs of sales people and business development personnel can add to company’s revenues as well as cut costs
When used in conjunction with other Microsoft Office System family products, InfoPath can increase employee productivity by standardizing workflow and increasing team collaboration
June 2004
The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft or its respective suppliers cannot guarantee the accuracy of any information presented after the date of publication. This white paper is for informational purposes only. MICROSOFT AND ITS RESPECTIVE SUPPLIERS MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO THE INFORMATION IN THIS DOCUMENT. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property. © 2004 Microsoft Corporation. All rights reserved. Microsoft, Windows, and the Windows logo are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners. Microsoft Corporation y One Microsoft Way y Redmond, WA 98052-6399 y USA 0302 This document contains information of a proprietary nature. All information contained herein shall be kept in confidence and shall be for the original recipient’s use only. Any unauthorized reproduction by any other party shall constitute an infringement of copyright.
Contents Introduction.............................................................................................................2 Reduced Costs .........................................................................................................2 Automate Manual Systems ...................................................................................................................... 3 Make IT Systems More Cost Effective ..................................................................................................... 4 Centralize Information .............................................................................................................................. 5 Increased Revenue ...................................................................................................6 Increase Sales and Close Rates.............................................................................................................. 6 Improved Customer Satisfaction .................................................................................7 Encourage Repeat Business, Increase Product Quality.......................................................................... 7 Increase Employee Productivity ..................................................................................8 Increase Collaboration, Knowledge Sharing Among Teams ................................................................... 8 Replace Outdated Systems ..................................................................................................................... 8 Reduce Travel and Training Time.......................................................................................................... 10 Use Human Resources More Effectively ............................................................................................... 10 Recommendations .................................................................................................. 11 Appendix A — Case Study Bibliography...................................................................... 12 Appendix B — For More Information .......................................................................... 13
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Introduction Many organizations depend upon large quantities of information needed to run their businesses effectively, from tracking customer orders to gauging customer satisfaction. While collecting this information is often critical, in many cases inefficient business processes have evolved to capture and process it. Such practices vary from completely manual, paper-based systems to semi-automated steps involving standalone desktop applications, e-mail or redundant data entry practices dependent on reliable human followthrough. Launched in mid 2003, Microsoft® Office InfoPath 2003TM is designed to improve and centralize the process of gathering information using rich, dynamic electronic forms. One of the latest members of the Microsoft Office System, InfoPath enables desktop workers to update, access and share enterprise information more effectively. It is included in Office Professional Edition 2003 and is also available as a separate product. Since InfoPath’s release, a growing number of organizations are beginning to plan and deploy business solutions that are solving real-world problems with measurable results. This white paper documents how nine companies and non profit groups of various sizes realize tangible business benefits in the following areas: 1. Reduced costs 2. Increased revenue 3. Improved customer satisfaction 4. Increased employee productivity This white paper draws on the details provided in nine case studies published between September, 2003 and February, 2004. Links to the original case study documents are provided in Appendix A, the Case Study Bibliography.
Reduced Costs InfoPath has the potential to reduce costs by streamlining or simplifying complex and cumbersome business processes. The companies described in this section are saving money by either replacing paper, largely manual systems with more efficient InfoPath applications or by supplementing expensive legacy systems with more cost-effective user tools. Examples include Digitas, an advertising agency that uses InfoPath to get its financial activity codes under control; M/I Homes, a large customer builder that uses InfoPath to minimize costly construction errors; and the North Carolina State Highway Patrol, where a new InfoPath form is helping state troopers spend more time on active duty and less time filling out paperwork.
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Automate Manual Systems Taking a critical but paper-based process and automating its workflow from electronic forms for data entry through automatic legacy system updates is one area where InfoPath naturally excels. At Digitas, an integrated marketing agency in Boston, Mass., financial activity codes are used to track billable hours spent on each account. Because the codes map directly to time spent by managers and creative teams on company projects, accuracy in assigning and using the codes directly impacts both cost accounting and revenue. With an increasing number of clients, Digitas found that its paperbased activity code system strained to keep up with an average of 150 new codes issued each week for projects. Furthermore, new code requests sent to the company’s finance department using e-mail, fax and phone were cumbersome and time consuming to manage. To solve the activity code problem and to better automate how Digitas stores and tracks documents, the company turned to a Microsoft Office System based on InfoPath forms for activity code tracking and Microsoft® SharePoint Portal Server 2003 for document management. The combined solution automatically manages activity codes as they flow between departments and updates a Lawson® backend ERP system as well. It is providing annual savings of approximately $675,000 in employee time and $325,000 in more efficient usage of document storage Using InfoPath to automate a paper-based process also led to significant cost savings at M/I Homes, a custom home builder headquartered in Columbus, Ohio with revenues of $1 billion. Design coordinators were using handwritten forms to collect customer preferences as customers were shown various home options available to them in the company’s design centers. But the manual forms took the coordinators at least 30 minutes per customer to fill out. Worse, the paper forms were prone to error, often resulting in inaccurate customer information being sent to builders in the field. Management estimated the company was spending on average $500 to $800 per home to correct the mistakes.
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An automated design solution using InfoPath was chosen to fix the problem. Coordinators with notebook PCs now record customer design preferences using pull-down menu selections for accuracy, with forms that instantly update back-office systems feeding information to the field. By increasing the productivity of its employees and reducing problem-solving incidents at the more than 3,500 homes it builds each year, M/I homes estimates annual savings of $1.75 million. Many manual processes responsible for recording company costs are candidates for automation. At Omnimount Systems, a manufacturer of audio-video component fixtures based in Phoenix, Ariz., one such system was clearly identified. A manual bill of lading process that depended on handwritten entries made shipping information difficult to analyze and retrieve. In addition, data entry errors were contributing to Omnimount overpaying on direct freight shipping charges. With direct shipping costs to customers of about $2 million per year, management recognized that its outdated bill of lading system was at least partially responsible for consuming the company’s profits. A new automated shipping management application now goes a long way toward slashing shipping costs. Using InfoPath to reduce data entry errors, speed completion of shipping forms and to automatically update the company’s SYSPRO® accounting system, Omnimount’s costs have been cut significantly. In addition, management has better information for product pricing, marketing programs and vendor negotiations. Annual savings are estimated at more than $250,000.
Make IT Systems More Cost Effective Business processes that are partially automated can also be good candidates for InfoPath savings, particularly where the automation remains vulnerable to human error. The North Carolina State Highway Patrol (NCSHP) had one such system in place to help troopers fill out their Weekly Report of Daily Activity forms. One of dozens of forms used by officers and administrators, the Daily Activity report stands out because its accuracy has a direct bearing on understanding community crime patterns, changes in traffic congestion and accident rates. Although in some cases the form was semi-automated – for example, some troopers completed it on their Mobile Data Terminals (MDTs) and printed it out for supervisory review -– no standardized submission process existed. And because the MDT form lacked data validation, the costs were high in terms of both trooper time and fixing mistakes. The NCSHP has since deployed a new InfoPath form that allows troopers to quickly complete it online and to submit it to a back-end mainframe for processing. It reduces what was a 276 hours per week update task to 138 hours, saving about 7,176 person hours per year. As an added benefit, the new system further automates the business logic defining how department rules are enforced, such as the rule for ensuring a trooper is paid for a minimum of two hours pay when called to work on a day off. The old system had no such capability.
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Lack of consistency in data input coupled with manual data entry into legacy systems can drain resources from any company. At Microsoft Consulting Services (MCS) Canada, a part of the worldwide consulting business run by Microsoft for enterprise clients, this was the case with its contract management process. With no single standard for creating and saving master service agreements, work orders or project set-up forms, MCS staff had trouble finding the latest versions of these documents. Manual data transfer to back-end accounting systems was another concern. The process was time consuming and occasionally led to errors.
Centralize Information Recognizing the deficiencies with its original process, a new contract creation and management application was created. InfoPath, Microsoft® BizTalk® Server and SharePoint® Portal Server were used to streamline the workflow and eliminate data entry between systems. The new system makes it easier to address and resolve queries posed by clients after a project is completed. And with MCS Canada consultants spending less time each month reviewing, searching for and editing contracts, the savings are significant. With an estimated return on its investment (ROI) of 149%, the Canadian team projects project payback in nine months. Future deployment to all 5,000 Microsoft MCS workers worldwide is under evaluation. Sometimes a lack of data centralization is the chief weakness of an existing automated solution. This was the problem at four separate tire manufacturing plants owned by Cooper Tire & Rubber Co., an Ohio-based company with 20,000 employees. Cooper Tire uses tire molds to manufacture tires according to customer specs and it needed a way to track the molds as they moved within and between the plants. Because each facility employed different applications for mold tracking, little information was shared among them. To compensate for the lack of communications, employees resorted to the time-consuming use of phone, fax and e-mail. With each step dependent on human interaction, errors were inevitable. A new mold tracking system based on InfoPath is being deployed for greater visibility among all four manufacturing locations. Managers believe employees will be more productive and less frustrated with their ability to quickly find the molds they need, Path to Profitability: Reduce Costs and Increase Revenue with InfoPath
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whatever their location. As an added benefit, the centralized information will be stored in an Oracle® database server, helping the IT group in its effort to move away from a mainframe environment.
Increased Revenue Besides helping cut bottom-line costs, InfoPath applications can also build a company’s top line revenues. Solutions that directly increase the productivity of sales people and others responsible for generating income can give these workers more time for selling by freeing them from administrative tasks.
Increase Sales and Close Rates Hewlett Packard Co.’s Online Field Communications Group is a part of the Worldwide Brand Marketing team charged with publishing the company’s Web-based sales guides. With more than 15,000 HP employees and Channel Partners using more than 280 sales guides on HP’s extranet, the guides are critical to the company’s sales effort. HP’s marketing team was saddled with a largely manual process that began by collecting product information from sources inside and outside the company through e-mail and phone communications. A copy editor would then reconcile the drafts by hand into a single, electronic master version. Factor in approval time and Web production on HP’s extranet, and it was not unusual for the sales force to wait three months before it had access to vital new-product information. Solving this publishing problem involved the use of several Microsoft Office System products, including InfoPath, Microsoft® Windows® SharePoint Services and Microsoft® SQL ServerTM 2000. To help automate content creation, HP customized an InfoPath form with drop-down menus. The form dynamically pulls content from a SQL Server database and performs complex calculations that reduce data entry and automate formatting. With documents stored in XML format, a custom application was developed that extracts elements from the SharePoint repository and automatically publishes them to the extranet in a layout that is already familiar to HP’s sales staff. Path to Profitability: Reduce Costs and Increase Revenue with InfoPath
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The new system accelerated the release of new-product information to the field by 46%, resulting in an increased sales closure rate of 4.6% during high margin sales periods. Cost saving metrics are equally impressive. Management estimates the new publishing system saves the group $150,000 per month, with a corresponding increase in quality and timeliness. Based on a cost/benefit analysis, the Net Present Value (NPV) of the solution is $1.27 million (or $834 per user). The payback period is projected at 11 months. While HP’s more efficient publishing system directly impacts revenue by making sales people more effective, evidence is growing of other InfoPath applications that more indirectly generate revenue. The new client code system at advertising firm Digitas, for example, frees account managers to spend more time with clients on revenue-generating projects. Similarly, at Microsoft MCS Canada, consultants can focus on new business now that contracts and related documents are better managed. Design coordinators at home builder M/I homes also have more time to explain to customers the various accessories available to them.
Improved Customer Satisfaction With companies increasingly aware of the economic benefits of repeat business, managers are more closely monitoring customer satisfaction levels and related product quality measurements. InfoPath applications based on electronic forms and Web services for database updates are well suited to tracking these types of measurements directly. To date, however, early implementers more commonly report seeing increased levels of customer satisfaction as a favorable by-product from applications targeted primarily at increasing employee productivity.
Encourage Repeat Business, Increase Product Quality Companies in the competitive retail sector are particularly sensitive to customer satisfaction levels. When tire manufacturer Cooper Tire chose InfoPath to help automate its tire mold movement among plans, a primary goal was to define a standardized process for managing what was a time-consuming and error-prone process. However, the company now anticipates an important side benefit: the new system helps guarantee that customers will receive their tire shipments on the days they are needed. That’s important because tire stores potentially lose business whenever they don’t have the right inventory. InfoPath’s instant information availability also dovetails nicely with Cooper Tire’s just-in-time manufacturing objective. Measuring customer satisfaction levels is nothing new at home builder M/I Homes, which prides itself on having a 95% customer satisfaction rating for 10 consecutive years. Yet keeping customers satisfied is largely the result of the company’s policy of correcting any construction error, even if it incurs a $10,000 cost in the process. With a new InfoPath application to minimize mistakes and delays, the likelihood of M/I Homes retaining its high customer satisfaction level is good even as its costs are likely to go down. Path to Profitability: Reduce Costs and Increase Revenue with InfoPath
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Increase Employee Productivity Systems that can help employees do their jobs more productively as both individuals and members of teams can have a big financial impact on an organization. InfoPath, together with other tools in the Microsoft Office System, can be particularly effective in this area.
Increase Collaboration, Knowledge Sharing Among Teams Intel, the world’s largest producer of microprocessors, needed to improve how production processes are shared among its engineers around the globe. With costs at new production facilities skyrocketing, management recognized that the manual system it had in place to capture and communicate best practices for building and operating a semiconductor fabrication plant was lacking. Engineers would typically collect the process information on paper using personal notebooks. But with no standardized forms for data entry, information quality was inconsistent. Moreover, engineers located at various sites often could not track down the information they needed or lost time in doing so. At least some process knowledge was lost because some handwritten notebooks were inaccessible, leading to senior engineers spending more training time in the field teaching Intel’s best practices to new hires. Intel turned to a Microsoft Office System solution using InfoPath forms and SharePoint Portal Server 2003 as a central document repository for content and communications. Known inside Intel as the Knowledge Capture Tool, the system enables engineers to capture and share their production knowledge worldwide. Engineers use standardized InfoPath forms to record basic written instructions and have the option to attach files, link to other sites and contact information. Each form maintains a uniform appearance to ensure global consistency and includes validation logic to make certain they are filled out correctly and completely. Using a SharePoint site running on Intel’s network, engineers are able to retrieve fabrication information quickly regardless of their location. They can view completed forms by Entry Type and Equipment and can call up shared status and summary process information as well. Intel anticipates the increased collaboration will lead to significant financial benefits. By helping its engineers communicate better, Intel expects the tool will reduce by up to 25% the time required for engineers to spend in training at development sites. According to a cost/benefit analysis, the project has an NPV of $782,000 (or $261 per user) and will pay for itself in 12 months.
Replace Outdated Systems Helping employees to work more effectively together is also the primary goal of a sweeping technology overhaul underway at Scripps Health. A not-for-profit healthcare delivery network in San Diego County, Calif., Scripps operates five acute care hospitals and has Path to Profitability: Reduce Costs and Increase Revenue with InfoPath
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2,600 affiliated physicians. With many of its IT systems currently running on aging and proprietary legacy systems, Scripps is committed to replacing them. One of the first systems targeted for replacement is an obsolete, 12-year-old time and attendance application. Using a combination of tools including Microsoft® Visual Studio® .NET, InfoPath and other Microsoft Office System programs, the Scripps IT team has crafted a design for its own time and attendance solution that it says will help it avoid a costly upgrade. Scripps estimates it can save about $2 million by not upgrading the old system, plus an additional $500,000 a year in support, maintenance and licensing fees. Meanwhile, Scripps sees a big opportunity for a new application aimed at helping new hospital hires prepare for their first day of work. By helping to reduce workdays otherwise lost to a new hire’s inability to access key information systems or complete training requirements, Scripps believes this InfoPath solution will help it save additional $850,000 each year. Additional productivity gains are anticipated from a new policy and procedure system Scripps is planning. Using various Microsoft Office System products in addition to SharePoint Portal Server, Scripps intends for this system to be used for creating and updating documents collaboratively – and keeping them in compliance with the U.S. Health Insurance Portability and Accountability Act (HIPAA). Other signs are evident that InfoPath and SharePoint Portal Server combined can help teams work more effectively. HP’s Online Field Communications Group, for example, notes increased collaboration and communication among those producing its sales guides. And while its publishing application was designed specifically to increase the timeliness and quality of its guides, HP’s field technical experts also benefit. They note a decrease in the call volume, freeing them for other tasks.
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Reduce Travel and Training Time An important business benefit of InfoPath is its ease of use. Because applications are based on electronic forms, many of them resembling their paper predecessors, training time is usually minimal. The mold tracking application at Cooper Tire is a good example of this quick learning curve; training the marketing department to use the new account code system at Digitas is another. Similarly, state police at NCSHP are finding the drop-down boxes and check-off buttons in their new activity report to be quick and easy to use. By centralizing information and making knowledge more accessible, InfoPath can also help companies scale back on expensive travel time. The Knowledge Capture Tool in use at Intel illustrates this, where engineering travel time required for training has been reduced by up to 25%.
Use Human Resources More Effectively Because many InfoPath applications are aimed at workers who are at least partially mobile, additional business benefits are possible by leveraging InfoPath forms in combination with notebook and Tablet PCs. Intel engineers, for example can remain productive in the field as a result of Intel’s increasing investment in wireless LAN connectivity for its workforce. NCHSP troopers can likewise enter their daily activity reports while using notebook PCs in their police cars, and then upload the data to a mainframe-based system when synchronized back at the station. A few solutions based InfoPath and other Microsoft Office System products have even allowed companies to redeploy employees to more meaningful tasks. For example, one fulltime employee at MCS Canada previously dedicated to data entry work was shifted to other assignments after the company’s new client engagement system was launched. Meanwhile, at Digitas, one full-time IT administrator who previously focused on file server maintenance was moved to more pressing assignments after SharePoint Portal Server and InfoPath simplified the server environment.
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Recommendations Based on the information presented in this white paper, business managers should consider the following recommendations to increase revenues and reduce costs: Paper-intensive or manual processes that sap money and time are good candidates for possible automation with InfoPath Business processes that update back-end databases can often be streamlined economically by using InfoPath forms and Web services for integration Whenever possible, strive to achieve system payback in one year or less Combine InfoPath and SharePoint Portal Server implementations to create a costeffective workflow and document management solution Consider the needs of mobile workers, now and in the future, when evaluating application development tools.
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Appendix A — Case Study Bibliography Information used in this white paper was drawn from the following published case studies.
Company
Case Study Title
When Published
Link
Cooper Tire & Rubber Co.
Cooper Tire Lowers Operating Costs with New Mold-Tracking System That Goes the Extra Mile
October, 2003
Cooper Tire
Digitas
Marketing Agency Cuts Costs, Improves Productivity with Powerful Collaboration Solution
October, 2003
Digitas
Hewlett-Packard
Hewlett-Packard Saves U.S.$1.27 Million by Streamlining Online Sales Guide Production
September, 2003
HewlettPackard
Intel
Intel Captures the Knowledge to Globally Transfer State—of—theArt Fabrication Processes
September, 2003
Intel
M/I Homes
Integrated Business Processes Save Home Builder $1.75 Million Annually
October, 2003
M/I Homes
Microsoft MCS Canada
ROI Case Study: Microsoft Office InfoPath MCS
2003
NCSHP North Carolina State Highway Patrol
NCSHP Reduces Costs by Automating Form Processing
November, 2003
NCSHP
Omnimount Systems
Manufacturer’s New Shipping Solution Dramatically Lowers Freight-Related Expenses and Helps Make Better Business Decisions
March, 2004
Omnimount
Scripps Health
Healthcare Network Anticipates $2 Million Savings with Time and Attendance Solution
February, 2004
Scripps
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Appendix B — For More Information More information about Microsoft InfoPath 2003 and other Microsoft Office System products is available at the following links: Microsoft InfoPath 2003 Homepage InfoPath 2003 Case Studies (All) InfoPath 2003 Video Case Studies InfoPath 2003 Usage Scenarios Top Ten Benefits of InfoPath 2003 Introducing InfoPath 2003 Overview InfoPath 2003 News & Reviews SQL Server 2000 Homepage SharePoint Portal Server Homepage BizTalk Server 2004 Homepage Microsoft Office System Product Information
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