Banking: I hardly write checks anymore, thanks to online banking. And since last year's passage of Check 21, banks can now truncate checks by scanning them and treating the image as legal tender.
Brokerage: All my trades are executed electronically, though confirmations are still sent on paper. Monthly statements are electronic, but quarterly and year-end statements are still sent on paper (and I prefer it that way).
Government: I've been updating my New Jersey car registrations online for a couple years now. I can apply for the Division of Taxation's annual Homeowner Rebate through a toll-free number or online, and the division no longer supports a mail-in option.
Mortgage: My 2002 home purchase and 2003 refinance both involved plenty of paperwork, but perhaps that's because I dealt with a fairly small in-state bank. Friends of mine who dealt with regional and national banks applied for loans online, but the follow-up and closing processes remained paper-intensive.
Employer: For a company that covers technology, I'm underwhelmed by CMP Media's progress toward paper-free transactions. Travel-and-expense reports are handled through an online reporting process, but accounting wants original paper receipts before they'll cut the checks. Contributing writers submit invoices via e-mail, yet accounting wants "original" invoices with authorized signatures sent via interoffice mail rather than "copies" sent by fax.
The persistence of paper shouldn't be surprising given that it has been the de facto standard for business communication since long before Gutenberg invented movable type in the 1400s. What surprises me, though, is the comparatively Lilliputian size of the industries that have grown up to take on the paper problem. The Document Capture Software Market, for example, reached $900 million worldwide in 2004 and is on track to surpass $1 billion this year, according to Harvey Spencer Associates (HSA). (For the uninitiated, capture is the front-end of the document imaging process, and it includes scanning, indexing, data extraction and recognition software. HSA's figures do not include related scanner costs, which range from less than $1,000 for workgroup scanners up to several hundred thousand dollars for high-speed production units.)
Even if the capture market grows 15 percent per year through 2008, as HSA predicts, it's a tiny peashooter up against a Godzilla-sized problem. To put it in perspective, Boise Cascade's Paper Solutions subsidiary alone wracked up sales of $1.8 billion last year. And RR Donnelley alone does a $1 billion-plus business in preprinted business forms each year.
Why is the capture business so small given the enormity of the paper problem? "Solutions for paper have been last on the list for many companies because they've been concentrating on developing electronic processes," says HSA Principal Harvey Spencer. "What's happening now is that remaining paper-based processes are starting to stick out as laggards, and most companies find that they can't convert everything to electronic processes." Capture is growing, says Spencer, because businesses can use the technology to truncate the paper and get up to e-business speeds.
Imaging technology probably missed its opportunity for mainstream adoption as a horizontal technology. Back in the 1990s, the Windows operating system included Imaging For Windows, but the bundled software was little used and few people upgraded to the professional-grade software. Today, the opportunity for capture lies not in a broad, horizontal market but in nettlesome problems where businesses can't eliminate documents. Thus, mortgage and invoice applications are leading examples of the types of solutions that capture vendors are focusing on today.
a. White Paper: Closing the Door on Paper-Based Processes: Delivering Operational Excellence in the Final Stages of the Mortgage Process
b. Presentation: Ascent for Payables
c. Webinar: An Introduction to InputAccel for Invoices, Captiva's Newest and Most Powerful Automated Invoice Capture Solution
d. White Paper: Distributed Capture