Hammer Home Imaging With Paper File Practices A progressive records management methodology that combines paper and electronic files will allow this VAR to increase sales by 25% this year. Business Solutions, October 2004 Written by: Ken Congdon

For sports fans, the month of October is synonymous with one event—the World Series. During the fall classic, we forget about the contract negotiations and drug scandals that have cast a shadow on the game of baseball in recent years and focus on the simplicity and nostalgia of America’s pastime. One company that focuses on simplicity and nostalgia in its business dealings is family-owned records management VAR Southwest Solutions Group (Round Rock, TX). In the mid-1990s, when imaging technologies began to mature and gain acceptance in the marketplace, many VARs seasoned in physical file management shifted their focus from paper to electronic records. Southwest Solutions Group, on the other hand, refused to abandon its 30 years of experience in paper records management. Instead, the VAR has prospered by taking a middle-ground approach that uses imaging technologies to enhance its core physical file solutions where appropriate for customers. Southwest Solutions Group expects to increase revenue by 25% and gain $3 million in annual sales as a result of these hybrid filing solutions.

The VAR attributes the success of its hybrid approach to its common sense nature. “Imaging technologies can be confusing and foreign to customers when presented on their own,” says Troy Menchhofer, VP of Southwest Solutions Group. “We start from the beginning and ensure that a customer is first comfortable and efficient in its physical filing processes. Then we systematically introduce imaging technologies into this environment. This helps the customer better understand how the technology works and how to most effectively leverage imaging throughout its organization.” To make its hybrid filing solutions even easier to digest, Southwest Solutions Group illustrates its methodology using a baseball diamond.

Round The Bases To Filing Efficiency
Like a baseball diamond, Southwest Solutions Group’s hybrid filing sales strategy includes four bases (first, second, third, and home plate). The VAR positions its prospects on the diamond by evaluating their comfort level and efficiency within their current filing systems. A customer with an organized, physical file structure may be able to move directly to third base, while an organization in a state of complete paper record disarray (i.e. cramped file cabinets, poor or nonexistent indexing methodologies, frequently lost or misplaced files) must start at first base.

For Southwest Solutions Group, first base consists of an equipment or shelving solution that stores and organizes physical files in a cost- and space-efficient manner. The VAR offers several file shelving solutions from Spacesaver (Fort Atkinson, WI) and MegaStar (Marietta, OH) to help customers reach this base.

Once a client is safely aboard first, Southwest Solutions Group aims to advance the customer to second. Second base involves determining a classification and indexing strategy that accelerates the filing and retrieval process of paper records. Southwest Solutions Group works with customers to identify consistent indices that provide all the information necessary to find a specific record within the filing system. These indices vary depending on the customer. For example, a doctor’s office may organize its files based on the indices of patient name and number, while a legal firm might organize its files according to case name and number.

Another step in this process is to input all of this classification information into a database that allows the customer to generate an on-demand label to be affixed to the folder. This helps automate the creation of physical files. Also, incorporating color-coding as part of the labeling process can further enhance the efficiency with which a customer retrieves a file. For example, colors can be assigned to represent different letters of the alphabet, or different numbers (0 through 9) for records filed numerically. Studies by ARMA (Association of Records Managers and Administrators) indicate that color-coded, open-shelf filing solutions expedite the filing and retrieval process by 35% to 50%, while helping to eliminate misfiles.

Third base involves incorporating some imaging components (i.e. scanning devices and imaging software) as well as records management software that allows customers to track the usage and life cycle of their physical and electronic files. For physical files, this may include a bar code-driven check-in/check-out system that provides customers with an audit trail of how frequently a file is viewed as well as which employees are accessing the information. Electronic files are similarly tracked by recording system user access to files within an electronic record repository. Records management software also allows the client to apply retention schedules to both file types to keep track of how long a record must be kept on premises before it can be destroyed.

For Southwest Solutions Group, home plate is reached when a customer takes advantage of the VAR’s professional business services to help get around the bases. “Clients often need some additional support to reach third and become fully functional on one of our hybrid filing solutions,” says Menchhofer. “Our customers don’t always have the time or expertise necessary to convert physical files to electronic, manually enter information into a database, create file folders, transfer file contents, or organize folders on a shelving unit. We provide these types of services to customers and help them become more efficient more quickly.”

Why Imaging Shouldn’t Be In Every Company’s Starting Lineup
While you may find Southwest Solutions Group’s base-by-base approach to selling filing solutions interesting, you may ask, “Why not just image everything up front?” Imaging components are a large part of the VAR’s hybrid solutions, but Southwest Solutions Group warns of the inherent dangers of implementing imaging technologies too quickly. “If a customer isn’t organized in its current method of managing paper files, then it will never become organized just by switching everything over to electronic,” says Menchhofer. “Filing disciplines must be fully understood to gain optimal organization, and these disciplines are more easily grasped in the paper medium that is familiar to the customer. If a customer doesn’t fix the filing problems within its hard copy environment first, the same problems will exist in electronic form, and the customer will simply waste money on scanning devices and imaging software.”

Southwest Solutions Group also maintains that an imaging-only solution may not be a sound financial decision for many organizations. “Most file room environments follow the 80/20 rule, meaning 20% of the records receive 80% of the activity,” says Menchhofer. “So why pay to image the 80% of the documents that aren’t regularly accessed? By using a bar code-driven check-in/check-out system to track physical files, a customer can pinpoint files with the heaviest rotation and slate only those records for imaging. This can save a customer money on the entire solution.” For example, if a customer has 1 million documents, it may cost them 5 cents a page, or $50,000 to image everything (when you take into account hardware and software prices, as well as labor). By combining a bar code tracking system with imaging components, the per-page image price may increase to 7 cents a page, but it allows the customer to identify the 200,000 documents that actually warrant scanning. Therefore, this technique will cost only $14,000, saving the client $36,000 on the entire solution.

The Future Of The Records Management Playing Field
Like most VARs in the industry, Southwest Solutions Group believes the future of the file room is the electronic record. That being said, the company believes its hybrid filing approach will remain profitable for at least the next 10 years as companies behind the technology curve seek a partner to help them catch up.

The hybrid filing approach is giving Southwest Solutions Group ample time to train its staff on new technologies and gain the expertise necessary to be a player in the electronic era. Furthermore, its base-by-base methodology is structured in such a way that encourages the development of long-term customer relationships. Customers that partner with Southwest Solutions Group beginning at first base generally stick with the VAR through third. The add-on sales opportunities that accompany business relationships such as these have contributed to the VAR’s consistent sales growth.

“It’s exciting to think I’ll be part of an industry that will change entirely during my career span,” says Menchhofer. “Our goal over the next 10 years is to migrate companies toward the electronic record by first getting them up to speed on effective physical file management. This approach helps customers make sense of the technology by combining it with something that is already familiar to them. Our customers’ path to the electronic record was once obscured by a lack of understanding, but with our help, they can finally see how to get there.”

Integrated Document Management Is A Triple Threat Integrated document management software is a crucial part of the hybrid solutions Southwest Solutions Group (Round Rock, TX) deliver, and Smeadlink by Smead (Hastings, MN) is the VAR’s software platform of choice. “Smeadlink was designed with the file room in mind, as opposed to other document management software packages that focus on the business requirements of senior level executives,” says Troy Menchhofer, VP of Southwest Solutions Group. “Because of this, Smeadlink can help filing personnel take that next step in technology and migrate physical files to electronic.”

Smeadlink provides users with a single interface in which to collectively manage all document types, including physical files, document images, and PC files (e.g. Microsoft Word documents, Excel spreadsheets, Adobe PDF files). Physical files are managed through automated creation of color-coded and bar code labels and bar code-driven tracking of files through a check-in/check-out system. Smeadlink also provides imaging capabilities that allow users to scan documents into the system and create workflow procedures that provide instant and simultaneous access of select records via a PC.

Smeadlink can also manage documents created on PCs. For example, when a file is saved in Microsoft Word, Excel, or another program, a record is created in Smeadlink that points to the original document. An authorized Smeadlink user can then select the document, which will launch the native application and open the file. Many of Southwest Solutions Group’s clients have saved time and money because of this feature.

“One of our clients sells insurance policies to all the county officials and county governments in Texas,” says Menchhofer. “Every week they would receive three or four file boxes full of documents updating the policies. It would take forever to organize this information into files or to scan and index that information into the system. These updates are now sent to this client as PDF images which can be immediately accessed through Smeadlink with its PC Files feature.”