IT Best-Practices Don’t Have to Involve Big Dollar Budgets

June 1st, 2007

By Michael P. Binko, APR
CEO and President, Kaulkin Information Systems

June 2007

In recent issues of The Bulletin, we’ve taken a look at how federal, state, and industry-mandated regulations are changing the way business needs to be done for the majority of small and medium sized businesses – no matter what industry they operate in (see the May 2007 issue).

We’ve also taken a “100,000-foot view” of the changing landscape for enterprise software. The emergence of “Software as a Service” (SaaS) technologies, which are accessed through the Internet, is opening a window of opportunity for mid-sized businesses (see the April 2007 issue).

This shift to Web-based, outsourced software allows management to quickly and efficiently deploy applications and capabilities that were traditionally only available from “big iron” providers at price levels that usually started at six figures per year.

This month, we’re going to take a closer look at an example of how SaaS technology is directly benefiting owners, CEOs, COOs, and IT professionals in the middle-market.

The case study comes out of the financial services sector; however, the business issues – business process management, document archiving/retrieval, workflow, compliance, and best-practices – are exactly the same for just about any industry segment, including collections.

Alan Pransky is principal, partner, and the Chief Compliance Officer for Patriot Financial. Located in Boston, MA, Patriot is a branch Office of Supervisory Jurisdiction (OSJ) for Jefferson Pilot Securities – a securities broker-dealer company with more than 400 branch offices similar to Patriot.

Being an OSJ, Patriot is regularly audited by Jefferson Pilot’s internal compliance officers, auditors from the National Association of Securities Dealers (NASD), and audit teams from the Securities Exchange Commission (SEC). During a typical audit, Alan and his team have less than 24 hours to turn around answers or information that relate to specific questions asked by auditors – and the clock begins running as soon as the office is notified of the impending audit. As a result, Alan and his team usually budget for between eight and 24 hours of down-time per audit.
In 2006, Jefferson Pilot’s corporate IT teams reviewed and approved various technologies, including SaaS technologies, for use at their branch and OSJ offices for audit response and risk mitigation. Collection agencies should do exactly the same thing. Patriot, which is one of their largest OSJ offices, quickly deployed our SaaS technology offering called KIS Track – a comprehensive suite of business process management, document management, workflow, and compliance tools.

To use the technology, Patriot first converted any hard-copy account records into digital data using optical character recognition (OCR) scanning, and then simply uploaded all their electronic information to the SaaS platform. Beyond simple electronic storage, KIS Track incorporates complex search and retrieval functions and a full workflow capability that allows team members and management to share records in a secure environment with an audit trail of accountability baked-in.

In March 2007, Alan was on a business trip when he was contacted by his office manager. An auditor had arrived at their Boston offices and wanted to begin an audit of Patriot’s new account activation and records retention processes. Alan simply asked the office manager to walk the auditor through the KIS Track database and instructed her to also create a temporary user account that the auditor could use to access and review Patriot records via the Internet.

To make a long story short, the audit was concluded in less than an hour, and the auditor left thoroughly impressed with Patriot’s organization. Alan estimated the hard-dollar savings during that single audit to be more than $10,000. To put that into perspective, Alan’s full SaaS software costs for a year are less than $10,000. Beyond the audit preparation and response, Patriot has also tallied considerable savings on a daily basis through greater productivity and by being able to put client investment dollars to work quicker.

The ability to allow selected users to have instant, secure access to specified documents can substantially improve efficiency and compliance in a number of business situations, from audits, to legal actions, to client communications.
In summary, mid-market businesses should take a closer look at their business processes and the new landscape of outsourced enterprise applications. The total cost of ownership is often very low, security is maintained, and the return on investment is usually realized in a very short period of time.

Also, adoption of SaaS/outsourced applications can begin small and scale infinitely. So, go ahead, pick a pilot program, develop some tangible metrics for success, and execute. You might be surprised how easy and effective these technologies can be.

Mike Binko is President and CEO of Kaulkin Information Systems (KIS), a leading provider of secure, affordable document management, workflow, and compliance technologies and solutions services. Mike can be reached by email, or at 301-907-0840 ext. 115.

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