But how many managers take a sufficiently broad "systems view" of the document capture process? And how many recognize that decisions made at every step — especially in the purchase of the scanner itself — will affect costs throughout the system? In fact, the failure to view document capture as an interrelated system, and to purchase equipment and software with the system in mind, is often the cause of higher-than-expected scanning costs. These costs include the "cost of poor quality," which an organization might incur months or even years after a document has been scanned, when the document is found to be unreadable and unusable.

From the input of paper documents to the output of digital images, there are eight major steps in the document capture value chain. Every step offers opportunities for cost reduction and efficiency improvement. The steps are described below.

Steps in the Document Capture Process

Preparation

Staple and paper clip removal, damage repair, sorting, batching.

Scanning

Document Input
Feeding scanner, clearing jams, cleaning and maintenance.

Image Capture
Convert documents to digital form. Document output and disposition (documents filed away, disposed of, or held for rescanning).

Image Formation
Adjustments and corrections made to the scan (compensating, filtering, noise removal, binarization).

Post-scan Processing

Image Enhancement
Images deskewed, cropped and rotated; borders removed.

Quality Assurance
Image quality verified. If necessary, documents sent back to the document input stage for rescanning.

Indexing and Extraction
Document capture software does its work: forms recognition, data capture, optical character recognition, indexing, input into databases, information extraction. Digital document might be combined with other information. Images put into proper file formats and organized into directory structures.

Export and delivery
Images routed and presented to the system for workflow and database management. Storage for later access.

Note that only three of these steps — document input, image capture, and image formation — are part of the actual "scanning" procedure. Preparation occurs before scanning, while all of the steps after image enhancement — quality assurance, indexing and extraction, and export and delivery — can be grouped in the category of "post-scan processing." It can be instructive to consider the costs associated with each of these three categories — preparation, scanning and post-scan processing — over a three-year period in a mid-volume scanning environment (see Figure 2 at the end of this article). Surprisingly, the costs associated with scanning, including the purchase and maintenance of the scanner itself (about $25,000), will represent only about 24 percent of total document capture costs. (In a high-volume document capture environment these costs drop to only 10-15 percent of the total.) The preparation stage, however, represents about 37 percent of total document capture costs. Even though capital outlays are small, involving only the purchase of tables and, at most, a document jogger, the combination of labor costs and charges for expensive office space dwarf the costs of scanning.

The post-scan processing stages incur the highest costs of all, at 39 percent. These operations are much more labor-intensive than scanning, and the space requirements are more than double.

The Costs of Quality
A complete examination of document capture costs should also consider the thorny issues related to the cost of poor quality. These problems tend to appear during or after post-scan processing and are often harder to quantify because they are scattered over a variety of functions. The costs of quality can be categorized into three groups:

• Failure costs, both internal and external.
• Appraisal costs.
• Prevention costs.

Internal failure costs are those associated with defects (errors, nonconformance, etc.) found in the process and include such items as rescans. External failure costs are associated with defects found after the process has been completed. An example of this would be an unreadable image found by a customer service representative while performing his or her job. In this case, special action must be taken after the defect is found, such as requesting an original copy of the document, in order to provide the required level of customer service.

Appraisal costs are incurred in determining the degree to which a scanned document conforms to quality requirements. In the world of manufacturing, this generally involves inspection and audits. In document capture, it means image quality assurance prior to release.

Finally, prevention costs are related to the activities that keep failure and appraisal costs to a minimum, such as time spent cleaning a scanner to prevent jams and maintain high image quality.

The Scanner is the Key
The best way to avoid these kinds of costs is to invest in scanners and image processing software that will provide high-quality images in the first place. Purchasing a scanner that employs dynamic image processing technology — which helps bring out information in low contrast originals and reduces the need for pre-sorting documents and subsequently scanning with different contrast and threshold settings — will pay off in the long run. Likewise, it makes sense to purchase scanners that feature automatic deskewing, border removal, and other features that ensure clean, crisp usable images. The up-front investment in quality will reduce the need for rescans, speed up the quality assurance step in the value chain and minimize the chance that a poor quality image will slip through undetected, creating problems down the road. Investing in quality can also have a favorable impact on costs associated with document preparation. Scanners capable of reading barcodes can reduce the need for batching and separating documents. When the scanner reads the barcode, the digital image is automatically batched, so the separating process is largely automated.

In many other ways, the scanner itself is the key to cost reductions throughout the document capture process. For example, one way to reduce labor costs would be to replace two low-volume scanners with one high-speed, high-volume machine, eliminating the need for one operator. Other opportunities for cost reduction are less obvious. A scanner might have a low price and a high rated transport speed. But buyers must also consider the time-intensive work involved in clearing paper jams, photocopying torn pages, removing sheets from oversized plastic protectors and other laborious chores like removing and cleaning feed rollers. These hidden factors are as important to the bottom line as the more obvious retail price and pages per minute rating. A scanner will be less costly to operate over time if:

• It is well designed and simple to operate. Good ergonomic design can enhance operator productivity. Scanners should allow operators to perform as many tasks as possible from a sitting position. Controls should be easily accessible. Operators should be able to view the documents being scanned, and retrieve them after scanning, from a seated position. When operators can work comfortably, they require fewer breaks and are less likely to develop health problems from needless reaching and stretching over months or years.
• It is difficult to jam, and easy to clear if it does jam.
• It is easy to maintain. Every scanner requires routine maintenance. Paper dust must be removed and rollers cleaned at regular intervals to achieve maximum performance and image quality. But how easy is it to perform such maintenance? If primary parts are difficult to access, operators will tend to clean the machine less frequently, leading to poor image quality and, eventually, a service call, which might incur a charge and will certainly result in costly downtime.

Other Cost Factors
Several other factors also contribute to the overall cost of scanning, though these factors are often not considered when a purchasing decision is made.

Managers sometimes overlook the question of throughput. Most vendors determine their throughput rate by measuring the raw transport speed, a theoretical maximum speed with everything operating perfectly - including the person feeding documents into the scanner. But rated transport speed does not account for gaps between documents, slowdowns that result when different types of documents are scanned, when batches are different sizes, whether documents are in landscape or portrait mode, or operator productivity. Some operators, and some scanners, are significantly more productive than others. A far better comparison than raw transport speed is a measure of productivity: How long does it take to scan standard batches of mixed documents? This measure takes into consideration limitations in the feeder, delays due to jam clearance and re-scans, and restrictions in the scanner's electronics that result in lag times to process and deliver images to the host.

Meanwhile, managers must consider whether important accessories are part of the scanner's price or must be purchased separately before the scanner is "fully functional." These accessories can include automatic document feeders — which can have a big impact on worker productivity — and interface boards. A video board, which is required for many scanner interfaces, can cost up to $6,000. Duplex scanners that simultaneously scan both sides of a document require two boards. On the other hand, a scanner that uses a SCSI interface requires only a SCSI card costing about $150, if it's not already built in to the computer.

Finally, scanner buyers should consider how well the scanner will hold up over the months and years. Few manufacturers assign or, more importantly, publish an estimated life for a piece of equipment. This useful life is not the time between belt changes or cleanings, but the life before repair is no longer economically feasible. A more expensive scanner might offer considerably more value if it lasts three times as long as a low-end model, which might also require more frequent service calls.

Conclusion
Determining the total cost of scanning is more than a simple equation. But as a rule of thumb, managers seeking to reduce overall document capture costs would do well to invest in high-quality scanning equipment, as long as that equipment helps them reduce preparation and post-scan processing costs. Robust document feeders, high image quality, and productivity features such as barcode readers can help reduce those costs and thus alter the value equation. In the long run, better scanners save significant money, often more than covering their price premiums through lower labor costs alone.

Figure 2
Document Capture Costs: An Example

 

	Preparation	Scanning	Post-scan Processing	Total (3 years)
Capital	Tables, jogger, $1,500	Mid-volume scanner plus PC, $25,000	Two PCs, printer, software, $12,000	$47,500 (11%)
Maintenance	None	8% per year $2,000 per year	8% per year $1,000 per year
space filler
Labor Space	Two people $40,000 per year 120 square feet $12,000 per year	One person $20,000 per year 40 square feet $4,000 per year	Two people $40,000 per year 100 square feet $10,000 per year	$300,000 (71%) $78,000 (18%)
space filler
Total (3 years)	$157,500 (37%)	$103,000 (24%)	$165,000 (39%)	$425,500 (100%)

Calculations are based on the following:

• Three-year time period.
• Labor with benefits @ $10/hour x 8 hours x 250 days = $20,000/year.
• Space (roughly 6 foot by 6 foot area) of 40 square feet per scanner at a cost of $100/square foot/year.
• Capacity (based on scanning and assuming other operations can sustain) is roughly 1,000 documents per hour x 6.5 hours x 250 days x 3 years = 4,875,000.
• Cost per document is $425,500 / 4,875,000 = $0.09 (8.7 cents)

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Last modified: 08/25/2004

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