eGistics Blog About Document Management and Storage

Headlines Provide Reminders on the Importance of Disaster Recovery Planning

2011-08-26T09:59:00.002-05:00

By Bob Lund

Speaking Wednesday on ABC TV's Good Morning America, Craig Fugate, head of the Federal Emergency Management Agency said, "We don't always get to pick the next disaster."

Fugate was referring, of course, to the magnitude 5.9 earthquake that shook surprised residents in the Northeast Tuesday, and the strengthening hurricane that could hit the Eastern seaboard this weekend.

For some businesses, these headlines are a wake-up call to get their disaster recovery plans in order. The good news: cloud services make disaster recovery preparations more affordable than ever.

Higher Stakes
Although disaster recovery was once considered an expensive insurance policy for rare but catastrophic events such as earthquakes and hurricanes, enterprises are expanding their plans to address all sources of downtime, including mundane power outages (the number one cause of data loss for small businesses, according to research from Aberdeen Group), application failures (the top cause of data loss for large enterprises), network outages and human error.

And downtime occurs a lot more frequently than most people think: more than two-thirds of large enterprises (69 percent) need to recover data on a weekly or daily basis, Aberdeen Group reports.

With information technology now such a critical part of daily business operations, even brief business disruptions -- which may begin harmlessly, involve only one part of a company, and not appear as a more commonly thought of "disaster" -- can have a significant impact on a business, not to mention its customers. Consider the consequences of a lockbox processor missing bank deposit cut-offs on behalf of its customers. More often than not, it is these "quiet catastrophes" that generate the most significant threat to a business and its brand, according to research from Forrester.

Quite simply, there is less and less tolerance for downtime in a 24x7 economy, warns Forrester's Stephanie Balaouras.

By making disaster recovery planning a priority, operations can protect themselves from disasters big and small. Businesses get it. Improving business continuity and disaster recovery is the No. 1 priority for small and medium-sized businesses and the second-highest priority for large enterprises in 2011, according to research from Forrester. Similarly, AT&T's 2011 business continuity study reveals a trend towards greater emphasis on planning and responding to potential threats.

The problem for many of these companies is that it's hard to make capital investments in disaster recovery capabilities when they are under pressure to cut IT costs.

A New Model
Cloud-based archive and document management services offer a way for businesses to safeguard critical content and protect against a disruption in service, at an affordable, transaction-based price that requires no upfront capital investment or ongoing maintenance contracts. What's more, with some cloud services, businesses can leverage an infrastructure that includes mirrored, geographically dispersed data centers for real-time business continuity and automatic fail-over.

More businesses are recognizing the benefits of incorporating cloud technologies in their disaster recovery planning. A majority (54 percent) of organizations surveyed by AT&T currently use or are considering using cloud services to augment their business continuity and disaster recovery strategies. These businesses recognize that cloud services offer tremendous affordability and functionality for business continuity and disaster recovery planning.

The Bottom Line
Businesses can't pick when they'll be impacted by a disaster. But they can control how their organization plans for, and responds to, these events. Using cloud services, such as those for electronic document management, can be a critical element to preventing a disruption in service, protecting client data, and safeguarding the organization's reputation.

Bob Lund is chairman and CEO of eGistics, Inc., a leading provider of cloud-based document management solutions. Lund can be reached at 214-256-4610 or via blund@egisticsinc.com.

Process efficiency top IT objective

2011-07-11T16:51:00.000-05:00

by Mark Brousseau, guest blogger

Making business processes more efficient and effective is the top objective of IT investments for 90 percent of the private companies surveyed for PricewaterhouseCoopers' latest Private Company Trendsetter Barometer. Streamlining business processes topped better management of enterprise data (identified by 75 percent of respondents), optimizing business information and analytics (73 percent), making business more agile (58 percent), and attracting new customers (58 percent).

And how do the companies hope to improve their business processes? Forty percent say they are likely to invest in cloud computing. What's more, over half of these companies stated that their investments in cloud-based solutions will be focused on "innovation," rather than "maintenance."

I think these companies have the right idea.

Technology plays a critical role in transforming operations and driving competitiveness for private and public companies. As companies look to better position themselves to take advantage of the economic recovery, they'll need a digital platform in place to capture, manage and deliver mission-critical data as efficiently and effectively as possible -- an area where cloud-based solutions shine.

Leveraging cloud-based solutions enables organizations to take a fresh approach to labor-intensive and error-prone document-driven business processes. For instance, eGistics' CloudDocs on-line document management solution eliminates the burden of determining where to store documents -- in terms of files and folders. It can recognize bar codes, which many businesses use to organize packets of documents, or even load documents into the system for indexing later. And once documents are loaded into CloudDocs, users don’t have to worry about where they are located; with a simple command, CloudDocs retrieves them instantly.

This type of functionality can streamline a wide range of applications -- accounts payable, accounts receivable, human resources and legal, to name a few -- freeing staff to focus more of their time on core competencies, servicing customers or developing innovative new products or services.

In my opinion, that makes IT investments in cloud computing money well spent.
_________________________________

Mark Brousseau, Brousseau & Associates
Mark Brousseau is a noted marketer, analyst, speaker, and writer, with more than 16 years of experience advising leading providers of payments and document automation solutions.

Brousseau is president of Brousseau & Associates, a full-service marketing, PR and business development firm based in Central Pennsylvania. With the largest client base of any independent marketing firm specializing in the payments and document automation arenas, Brousseau & Associates counts among its clients many top solutions and services providers.

You can follow Mark on Twitter @markbrousseau

AP professionals see benefits to cloud computing

2011-05-02T10:21:00.008-05:00

By Mark Brousseau

Accounts payable (AP) professionals see "minimal IT involvement" as the biggest benefit of using Software-as-a-Service (SaaS) or cloud computing for AP processing, according the findings of the 2011 AP Automation Study by International Accounts Payable Professionals. Nineteen percent of survey respondents identified "no capital investment" as the biggest benefit of cloud computing or SaaS, while 17.5 percent cited "lower cost per invoice" and 14.3 percent identified "fast start-up."

Some 12.7 percent of respondents identified "no software or hardware " as the biggest benefit.

Randy Davis, vice president of sales and marketing operations for eGistics isn't surprised that these benefits would rank high in the minds of AP staff. "Cloud offerings have always touted minimal IT involvement, no capital investment, fast deployment, and no on-site software as benefits," he notes.

But Davis believes that the ability of cloud-based document processing solutions to remove paper management from AP processing could deliver even greater benefits to AP professionals. "Today's cloud-based AP solutions significantly improve on key usability factors such as electronic capture, structured indexing, search and retrieval, work allocation, data updates and corrections, and audit and tracking -- things that directly contribute to the smooth operation of an AP department," Davis says.

"eGistics believes that business users will increasingly appreciate and accept the benefits of SaaS and cloud computing for critical tasks such as AP processing and management, and that such benefits will soon be taken for granted. At the end of the day, AP departments are looking for solutions that help them do their jobs faster, more accurately and with better accountability," Davis concludes.

What do you think?

2011-04-29T17:32:00.024-05:00

eGistics is showcasing CloudDocs at Fusion 2011 in Orlando!

by Nathan Khani, CloudDocs Solution Specialist

eGistics’ flagship product, CloudDocs, is on center stage at Fusion 2011 with a focus on Accounts Payable! We are busy putting the finishing touches on our new AP Quick Template, which, along with the Human Resources Quick Template, provides users with a running start to take the sting out of business document management. We are very excited to provide a revolutionary way to manage business documents.

Why the focus on Fusion?

Fusion-istas, as I affectionately call them, love innovative ways that bring efficiency to accounts payable and/or accounts receivable. CloudDocs is right up their alley. It saves time and money with its truly innovative way to capture, index and separate documents. It allows users to focus on what they are doing rather than how they are doing it by providing a clean, easy to use interface, and completely relieving the user of the need to know where documents are located. Instead, users can focus on quickly locating documents required to complete the task at hand, whether it be part of an approval process or related to faster, better customer service.

Furthermore, CloudDocs securely protects your sensitive files in an environment that is Payment Card Industry (PCI) certified, compliant with SAS 70, supports HIPAA privacy requirements. For the last 14 years, we have provided secured hosting for major financial institutions. You can be confident that your documents are protected with the same level of security that we provide our banking customers—without the big price tag!

CloudDocs ensures that your AR/AP documents are safe from the threat of disaster. We’ve all heard horror stories about companies devastated by natural disasters. With CloudDocs, electronic copies of your documents are kept in a geographically redundant environment so that regional disasters cannot damage or destroy them.

Currently, we are offering a 30-day trial version of our Standard and Professional Edition plans! Please click here to find more information or to sign up for your free trial. You can also call me directly, and I will be more than happy to address any questions you may have, and help you plan a solution that best fits your company’s needs!

Nathan Khani

CloudDocs Solution Specialist

972.851.3135

nkhani@egisticsinc.com

CloudDocs Takes Air!

2011-02-08T12:21:00.000-06:00

Visit egisticsinc.com/clouddocs to learn more!

by Randy Davis, VP Sales and Marketing Operations

TAWPI Capture 2011 marks the official introduction of eGistics' new flagship product, CloudDocs^TM to the business world. World, meet CloudDocs. CloudDocs, meet world.

CloudDocs is the culmination of over 14 years' of experience in providing for the capture, storage, protection, finding and management of important documents and data for the nation's largest financial services companies. We now bring that experience to the service of the Small and Medium-Sized Business market.

Let me be clear. This is an introduction, not a launch. We want you to be able to learn about CloudDocs, visit the CloudDocs Web site, give us your feedback, and otherwise let us know if you want to be notified when it is available. To entice you a bit, if you register to be notified we'll automatically enter your name into our drawing for an Apple iPad, to be given away in April.

So what does CloudDocs do? In the simplest terms, it helps you complete document-oriented business processes. From your PC, you can scan documents, index them (for easy search and find), securely store them in our Tier 4 data centers, and then retrieve any document (or related documents) with one or more search terms and a click of the mouse.

CloudDocs organizes the documents for you, so you don't have to struggle with creating folders and sub-folders and sub-sub-folders. Nor do you have to worry about file names. By using one or more search terms, familiar to your business, you (or your authorized users) can be viewing documents in seconds, no matter how long they've been stored. No one has to "figure out the filing system." CloudDocs does that for you.

Please visit the CloudDocs Web site and give us the privilege of letting you know when CloudDocs is ready. There is, as they say, no obligation.

Do You Discriminate?

2011-02-02T15:03:00.000-06:00

by Randy Davis, VP Sales and Marketing Operations

Well, when it comes to electronic document storage management, you should. Discriminate, that is.

In the cloudy skies of storage management (hosted storage, in the now old vernacular. As a further aside, with a wink and nod to Yogi Berra, have you noted that concepts are getting old much younger now?). Anyway, in the cloudy skies of storage management you almost need a vendor traffic controller to work your way through the congestion. There are some excellent choices out there, depending on what one needs.

Ah, that's the crux of the matter. What does one need? A simple needs assessment may start with a need to store stuff: documents, photos, video, audio, databases, images, graphics and so on. There are plenty of solutions in the Cloud to do that.

But many of those solutions seemed aimed at individuals who need a place to collect stuff, and create some kind of organized, hierarchical schematic that will enable them to pigeon hole stuff with the hopes of finding it later via some search term. Even companies that claim to serve the business community seem designed to encourage the ad hoc storage approach.

The business use of document storage is much more stringent. (Let's see, you need to find the invoice that contains the payment amount for account 837394, paid between March 15 and June 30, 2006. Oh, and you need to see if any explanatory notes or correspondence or payments are attached to the invoice. Can you have all that to your boss in the next 60 seconds, please?)

So, a more thoughtful needs assessment should include a way to easily accommodate standard document data that can be indexed; the ability to associate, attach or link related documents and information together; and the ability to find just the information you need so that you can use it. By the way, one of the many benefits of such an approach is the ability to transfer document research responsibilities to others in a group, temporary employees, or new staff.

Why am I discussing this? Part of the reason is to remind you that we have provided the power of the structured document storage management approach to our enterprise customers for many years. Now we are in the process of providing the same capabilities to the Small to Medium-size Business market. In the next few weeks we'll be introducing you to our new flagship product, CloudDocs(TM).

To keep informed about our plans and upcoming launch, be sure to become a follower of this blog. Just use the Follow button in the right hand column.

Also, don't hesitate to add your experience, opinion or question by using the Comment space below.

Changing the CFO’s Perception of AP

2011-01-17T03:02:00.001-06:00

By R. Edwin Pearce

Historically, if you asked a CFO to tell you the first thing that popped into their mind when you mention accounts payable (AP) processing, they likely would have responded with some variation of “cost center.” The fact is, as a percentage of revenue, the costs associated with AP processing typically represent a small blip on the radar of most companies. But as companies have tightened their spending as a result of the recent economic downturn, that blip is now a significant opportunity.

More than 75 percent of AP departments report into the CFO, according to various studies. With CFOs keenly interested in cost containment and improved cash management, AP leaders would be well served to find ways to deliver strategic benefits to the organization. Notably, 56 percent of CFOs believe AP represents a more strategic opportunity for improvements than it did two years ago.

One reason CFOs are changing their tune on AP is that they are seeking ways to avoid further layoffs, while weathering the recession. To this end, most are tightening controls over employee spending and placing greater emphasis on measuring and monitoring the company’s financial health.

These types of activities are clearly in the AP department’s wheelhouse.

CFOs are looking past the traditional paper-encumbered stereotype of AP and focusing more closely on the tremendous amount of financial data that flows through AP. From this perspective, they see AP as a means to improving working capital management, reducing supply chain risk, and greatly reducing the incidence of fraud. Most importantly, CFOs recognize that AP can help a company improve its cash position by extending days payables outstanding, avoiding late payments, capturing early-pay and volume discounts, and ensuring that payments and orders are compliant with contracts.

At many companies, AP no longer is merely a back-office transaction function where efficiency and low cost of operations are the only requisites for success; AP processes are being more tightly linked with treasury functions to help maximize working capital management. This is part of an overall move to align core processes across business functions to support corporate strategic initiatives.

While this increased corporate standing is good news for AP departments, they must also be ready for CFOs to more closely assess their performance based on key criteria such as costs, service delivery, error rates, timeliness of responses to inquiries, compliance, and vendor relationships.

This makes it imperative that AP departments continue their automation initiatives. Not only does automation help AP departments improve on-time payment performance, reduce errors, slash costs and enable greater visibility into financial data. But it also delivers the quantifiable data on process performance that CFOs will require as AP evolves into more strategic partner for their organization.

R. Edwin Pearce is executive vice president of sales and corporate development for eGistics, Inc., a provider of e-document solutions. He can be reached at 214-256-4607 or via epearce@egisticsinc.com.

Seeding the Cloud

2011-01-05T20:41:00.003-06:00

By Randy Davis

A recent article in Banking & Payments Industry Update #1447 greeted the new year with prognostications about the use of cloud computing by traditionally conservative stalwarts such as "large banks" (who have been reluctant to outsource anything). Another article in Document Imaging Report (Dec. 23, 2010) waxed prolific on the growing influence of cloud computing on enterprise software, citing predictions by Saugatuck "that as much as 40% of new software sold in 2014 will be cloud-based."

OK. We experienced similar enthusiasm with the advent of ERP, CRM and the paperless society, and we'll see how this cloud euphoria plays out.

Don't get me wrong. I like the cloud, and believe that it will endure as a viable technology for the foreseeable future. I also like the flexibility it can provide in the rapid delivery of "pay as you go" services. In fact, eGistics has been a "cloud player" for almost 16 years, and is strongly moving forward with new, exciting services rooted in a cloud infrastructure. Using a well-worn cliche, "Watch This Space" for upcoming announcements regarding a new cloud e-document storage management service offering, as well as a "Platform as a Service" offering that enables companies to quickly enable their own applications to utilize e-document capabilities.

In the lyrical words of Bob Dylan, "the times they are a changin'," and, looking back on the economy of 2010, we can only say, thank heavens! We at eGistics look forward to working with you to provide new, cost effective and innovative solutions that will enhance your own service offerings to your customers and users.

By the way, please take our poll at the bottom of this blog page to indicate your company's interest in using the cloud!

Happy New Year!

Cloud computing's "green" credentials

2010-12-08T22:19:00.003-06:00

By R. Edwin Pearce

The market for cloud computing has expanded quickly over the past few years, largely driven by its ability to deliver impressive economic benefits to cash-strapped organizations. But a new study finds that not only can cloud computing keep operations in the black, it also can help them be "green."

Pike Research reports that the growth of cloud computing will have important implications for both energy consumption and greenhouse gas (GHG) emissions. In fact, by 2020 cloud computing will lead to a 38 percent reduction in worldwide data center energy expenditures, compared to a business-as-usual scenario, Pike Research reports.

“The growth of cloud computing will have a very significant positive effect on data center energy consumption,” says Pike Research Senior Analyst Eric Woods. “Few, if any, clean technologies have the capability to reduce energy expenditures and GHG production with so little business disruption. Software-as-a-service, infrastructure-as-a-service, and platform-as-a-service are all inherently more efficient models than conventional alternatives, and their adoption will be one of the largest contributing factors to the greening of enterprise IT.”

To be sure, cloud computing's "green" credentials and environmental impact aren't the top reasons for organizations to deploy the technology. But they are certainly key incremental benefits, particularly for organizations that list environmental sustainability among their strategic objectives.

R. Edwin Pearce is executive vice president of sales and corporate development for eGistics, Inc., a leading provider of hosted document management solutions. Pearce can be reached at 214-256-4607 or via epearce@egisticsinc.com.

Cloud computing growing up fast

2010-12-06T09:27:00.001-06:00

By R. Edwin Pearce

The next year will be big for cloud computing, with the technology transitioning from “early adopter status” into a mainstream platform for IT. That’s according to IDC, a leading research and advisory firm, which ranked the maturation of cloud computing among its top IT predictions for 2011.

IDC predicts that spending on public IT cloud services will grow at more than five times the rate of the IT industry in 2011, up 30 percent from 2010, as organizations move a wider range of business applications into the cloud. Small and medium-sized business cloud use will surge in 2011, with adoption of some cloud resources topping 33 percent among U.S. midsize firms by year’s end.

“[Cloud computing] can no longer be invested in, or managed, as sandbox efforts around the edges of the market. Instead, they are rapidly becoming the market itself and must be addressed accordingly,” warns Frank Gens, senior vice president and chief analyst at Framingham, MA-based IDC.

Gens is exactly right. Organizations of all sizes are taking a hard look at cloud-based solutions as a way to avoid the hefty capital investments and ongoing maintenance and upgrade costs associated with traditional on-premise solutions, and to ensure their IT infrastructure remains up-to-date.

In addition to changing the way organizations access business applications, the growth of cloud computing also will bring mobile banking and payments one step closer to reality, IDC predicts. But this also is true of mobile applications in other industries, most notably healthcare and insurance.

What do you think?

R. Edwin Pearce is executive vice president of sales and corporate development at eGistics, Inc. (www.egisticsinc.com), a leading provider of hosted solutions for payments and document automation. He can be reached at 214-256-4607 or via e-mail at epearce@egisticsinc.com.

Healthcare Payables: From Bad to Worse?

2010-09-30T11:28:00.002-05:00

By Amer Khan (akhan@egisticsinc.com) of eGistics (www.egisticsinc.com)

Effectively managing the payables process is a big job for most companies, but for healthcare organizations, it is a particularly tall order -- and it's about to get a lot more challenging.

The problem in managing healthcare payables stems from the byzantine network of buyer and seller relationships employed by most healthcare organizations, combined with the increasingly complex procurement processes and contracts that healthcare organizations use to purchase goods and services. Every day, the typical healthcare organization receives a mountain of invoices from many different suppliers, most under different contracts with potentially different payment arrangements.

When you mix in the unusually high number of suppliers that most healthcare organizations use -- a hospital might have thousands of suppliers compared to a few dozen for a big law firm -- you can see how the payables process can quickly become complicated. For instance, on a given day, a hospital might receive invoices for everything from Band-Aids to the pricey cardiology equipment it leases.

The healthcare industry's attempts to address the inefficiencies of the payables continuum have delivered mixed results. Several years ago, group purchasing organizations (GPOs) started sprouting up, allowing healthcare organizations to buy a range of goods and services from a single entity, rather than dealing with multiple vendors. While GPOs have enabled their customers to maximize discounts and reduce the number of vendors they do business with, there are still many cases where healthcare providers must source goods and services directly (such as buying from local suppliers), meaning they still must maintain a high number of supplier relationships.

Here's the scary part: the problem is likely to get worse. Every innovation in the healthcare industry -- whether it's new technologies, new devices or new drugs -- may create more suppliers, generating more invoices, contracts, payment arrangements, and, in some cases, acquisition channels. With our nation focusing like never before on innovations in healthcare, providers have no time to waste.

And while healthcare organizations are focusing tremendous amounts of time and resources on "big issues" such as meeting new requirements for electronic health records (EHRs) and ICD-10, driving down the costs associated with payables can deliver significant benefits as well, and in short order.

So, how can healthcare organizations accomplish this?

Since manual processes don't scale, the healthcare industry will need to rethink its approach to payables. The answer starts with eliminating paper at the earliest point possible in the process.

Whether it's converting paper invoices to electronic images, or convincing business partners to provide electronic invoices in the first place, eliminating paper simplifies and automates the payables process. It allows healthcare providers to apply automated rules for processing, and to initiate an electronic payment with detailed remittance information so the supplier can automatically post the receivables. With these types of solutions, providers can solve their current business challenges and lay a solid foundation to manage the increasingly complex payable environment that is sure to come.

What do you think?

Robbing Peter to Pay Paul? NACHA vs Reg E

2010-08-20T16:22:00.006-05:00

Randy Davis, VP (egisticsinc.com)

Looking for winners and losers

On September 1, 2009 NACHA issued a Request for Comment on a proposal to amend the NACHA operating rules regarding the time frame for ACH adjustment entries. In brief the proposed rule change would extend the period during which a Receiving Depository Financial Institution (RDFI) may transmit an adjustment entry to its ACH Operator from 60 calendar days to 90. The rationale of the extension is to give RDFIs enough time to submit adjustment entries for "virtually all" credits owed to consumers under Reg E. The goal is to narrow/close the time gap between NACHA re-credit obligations and Reg E re-credit obligations. The rule change is proposed (though it has yet to be balloted) for implementation in March 2011.

Currently Reg E theoretically could allow a credit to the consumer as many as 38 days past what the NACHA rules allow. Within the Reg E 90-day period, the RDFI is obligated to credit the consumer, but could be left holding the bag if the NACHA 60-day period has expired, resulting in expiration of the automated adjustment period with the ODFI. After that, the RDFI must pursue a warranty claim against the ODFI manually and outside the ACH network. Possible outcomes are as follows: A) Both the RDFI and ODFI incur costs to settle the RDFI's claim against the ODFI's warrant; B) The RDFI could request proof of authorization, which results in costs to the ODFI and Originator; C) The RDFI could decide not to pursue the claim and take the loss.

The Hoped-for Benefits
NACHA believes the rule change will 1) avoid RDFI losses, 2) avoid manual claim costs, and 3) reduce or avoid write-offs.

The Dreaded Costs
ODFIs will have to ensure that their systems can accept adjustments up to 90 days beyond the settlement date of the original entry.

Originators will be subject to more automated adjustments.

Everyone -- RDFIs, ODFIs, Originators and ACH Operators -- may need to store ACH records for "additional periods of time."

Who Wins and Loses?
Possible Loser: The ODFI loses because it will receive more automated claims that off-set any cost reductions.

Possible Winner: The RDFI wins because it reduces costs and write-offs.

Possible Winner: Originators win because it reduces the requirement to provide proofs of authorization.

Possible Winner: The ACH network wins as productivity and efficiency is improved.

Chime In
Do you agree with my assessment of winners and losers? Use the Comment box to let me know what I've missed, and to contribute to the discussion.

Take our poll at the bottom of this page to vote on who you think is the winner from the rule change!

Beyond SAS 70

2010-07-29T07:59:00.001-05:00

By R. Edwin Pearce (www.epearce@egisticsinc.com)

A new study from Gartner confirms something that eGistics (www.egisticsinc.com) has known for some time: there's a lot more to effective security, privacy and continuity than compliance with Statement on Auditing Standards (SAS) 70.

"SAS 70 is basically an expensive auditing process to support compliance with financial reporting rules like the Sarbanes-Oxley Act (SOX)," says French Caldwell, research vice president at Gartner. "Chief information security officers (CISOs), compliance and risk managers, vendor managers, procurement professionals, and others involved in the purchase or sale of IT services and software need to recognize that SAS 70 is not a security, continuity or privacy compliance standard."

Published by the American Institute of Certified Public Accountants (AICPA), SAS 70 provides a service provider's auditor with guidance on how it should report on process-related risks relevant to financial statements and transaction processing. Intended for use by the customer's auditor, the result of a SAS 70 is either a Type I attestation that the processes as documented are sufficient to meet specific control objectives, or a Type II attestation, which additionally includes an on-site evaluation to determine whether the processes and controls actually function as anticipated.

Gartner believes a SAS 70 Type II evaluation does provide a very high degree of assurance that the examined controls are effective. The performance of controls is evaluated over a period of time; it is not just a snapshot of control effectiveness. However, customers should never assume that the provider has implemented all the appropriate controls, Gartner says.

"To ensure that vendor controls are effective for security, privacy compliance and vendor risk management, SAS 70 ... and other national audit standard equivalents should be supplemented with self-assessments and agreed-upon audit procedures," Caldwell explains.

Interested in learning more? E-mail me at epearce@egisticsinc.com.

Cloudy with a chance of Microsoft

2010-07-20T10:08:00.000-05:00

By Randy Davis, VP (rdavis@egisticsinc.com) (www.egisticsinc.com)

Microsoft CEO Steve Ballmer, known for his eyebrow raising antics at company-wide employee meetings, is raising eyebrows again with his provocative and far-reaching statements about Microsoft and the cloud. On July 12 Ballmer told 9,500 attendees at the annual partners’ conference that “if you don’t want to move to the cloud, we’re not your folks.” The cloud, he says, is “inevitable.” Whew.

Actually, even in the summer of 2008 Microsoft recognized that on-line delivery of critical business applications and services was, in fact, “a sea change” in the way businesses and corporations want to be served. On-line delivery was then and is now recognized as part of a “services wave” that is causing some to criticize the traditional software-based delivery model and on-premise execution of business applications as growing “antiquated.”

Maybe yes, maybe no.

Ballmer acknowledges what corporations have been concerned about since the cloud began to form: security and compliance. He implies that companies that get this right are “way ahead” in providing a viable offering to the market.

This brings up a good point in the use and selection of on-line services companies: Choosing one that provides an on-line service is one thing; choosing one that has invested the time, cost, expertise and infrastructure required to provide world-class security, and that supports a variety of compliance mandates, is quite another.

It is our experience that large, security- and compliance-conscious institutions are taking advantage of the growing maturity of cloud services, especially in the area of the management of documents, transactional data, payment images, and reports. As institutions become more comfortable with, and confident in, selective cloud providers, expectations will increase regarding the use of such information for fraud detection and prevention, data mining, analysis, legal discovery, research and customer service.

Is your company catching the wave, dipping its toes in the water, or staying high and dry?

Trends in ACH Dispute Management

2010-07-13T05:22:00.002-05:00

Trends in ACH Dispute Management
Thursday, August 12 at 1 p.m. eastern

As ACH volumes have grown, so too have the number of ACH transaction disputes that processors must manage. Expensive to handle, these disputes are subject to a complex mix of rules and regulations, and can lead to hefty charge-offs if improperly managed. Just how big a problem are ACH disputes? This webinar will share the results of an exclusive survey of ACH processors on trends in ACH dispute management, including volumes, costs, levels of automation, future plans and more. Attendees will be able to benchmark their operations, gain actionable insights from our panelists, and learn what some processors are doing to automate their ACH dispute processing.

To register, click this link https://www1.gotomeeting.com/register/589842392 or e-mail Dave Nitchman of IAPP-TAWPI at dnitchman@tawpi.org.

Panelists:
Rossana Salaris, principal, Radix Consulting
Amer Khan, senior vice president, product and sales support, eGistics

Moderator:
Mark Brousseau, facilitator, IAPP-TAWPI Payments and Receivables Council

Economic risks of data overload

2010-07-12T07:56:00.003-05:00

By Ed Pearce (epearce@egisticsinc.com) of eGistics (http://www.egisticsinc.com/)

When data pours in by the millisecond and the mountain of information builds continuously, professionals inevitably cut corners and go with their 'gut' when making decisions that can impact financial markets, medical treatments or any number of time sensitive matters, according to a new study from Thomson Reuters. The study indicates that when faced with unsorted, unverified "raw" data, 60 percent of decision-makers will make "intuitive" decisions that can lead to poor outcomes.

Many government regulators have flagged increased financial risk-taking, which can be traced in some degree to imperfectly managed data, as a contributor to the recent financial crisis. Moreover, the world is awash with data -- roughly 800 exabytes -- and the velocity of information is increasing, Thomson Reuters says.

The challenge is that the staffing and investment needed to ensure that information and information channels are trusted, reliable and useful is not keeping pace. In fact, it is estimated that the information universe will increase by a factor of 44; the number of managed files by a factor of 67; storage by a factor of 30 but staffing and investment in careful management by a factor of 1.4.

"The solution to data overload is to provide decision makers with what Thomson Reuters calls Intelligent Information: better organized and structured information, rapidly conveyed to the users preferred device," says David Craig, executive vice president and chief strategy officer.

Fortunately, as the Thomson Reuters study notes, the same technological revolution that has resulted in the explosion of information also opens the way to new and improved tools for providing intelligent information: better organized and structured information, rapidly conveyed to the user's preferred device.

"We must use the benefits of the information technology revolution to minimize its risks. This is a joint task that the private sector and governments must closely focus on if we are to avoid systemic crises, in the future, whether we speak of finance, healthcare delivery, international security and a myriad of other areas," comments Craig.

How is your organization managing information overload?

Same-day ACH settlement highlights need for better dispute management tools

2010-07-10T17:47:00.002-05:00

By Ed Pearce (epearce@egisticsinc.com)

Last week's announcement by the Federal Reserve Board of posting rules for a new same-day automated clearing house (ACH) service brought the topic front and center. Everyone from industry analysts and bloggers to trade publications and associations have expounded the pros and cons of same-day settlement. But virtually unmentioned in the all the hubbub is the potential for more ACH disputes as a result of accelerated settlement -- a scenario most banks are ill-prepared to manage.

Starting next month, the Federal Reserve Banks will be offering a same-day settlement service for certain ACH debit payments through its FedACH service. FedACH customers may opt-in to the service by completing a participation agreement. The service will be limited to transactions arising from consumer checks converted to ACH and consumer debit transfers initiated over the Internet and phone. Same-day forward debit transfers will post to a financial institution's Federal Reserve account at 5 p.m. eastern time, while same-day return debit transfers will post at 5:30 p.m.

As a result of the faster settlement, banks undoubtedly will see more consumers coming into their branches complaining of unauthorized transactions. The limitations of traditional in-house ACH systems and the strict time constraints and complex processing requirements imposed by NACHA rules and Regulation E already have led to sharp increases in operations expenses and higher charge-offs associated with ACH disputes. A new influx of consumer disputes will require financial institutions to implement a more centralized, more streamlined approach to dispute management.

Several features will be critical:

Real-time distributed data access to any authorized user, anywhere
Intuitive search capabilities
The ability to annotate comments to disputed transactions
The ability to export data
Expanded search capabilities
Filtering capabilities to block and restrict access to certain transactions
Unlimited data storage

It may be some time before same-day ACH settlement achieves critical mass. But the next generation of consumers will demand it. This means that banks must begin adapting their ACH infrastructure today or risk even higher operations costs, as well as falling behind the competition. And this includes deploying sophisticated solutions to manage the inevitable spike in ACH disputes.

No pennies from heaven: controlling technology costs

2010-07-09T13:33:00.010-05:00

GEORGE BAILEY: You don’t happen to have eight thousand bucks on you?

CLARENCE: Oh, no, no. We don’t use money in heaven.

GEORGE BAILEY: Oh, that’s right. I keep forgetting.

Comes in pretty handy down here, bub.

IT’S A WONDERFUL LIFE

By Randy Davis (rdavis@egisticsinc.com)

While lost on Clarence the angel, the need for capital is obvious “down here.” It you are not raising capital, you are preserving it. Whatever is preserved can help manage cash flow or can be used for other purposes. Cost control is one means of preserving capital.

To my way of thinking “cost control” requires at least the following three things:

Keeping total cost of ownership as low as possible (including maintenance and upgrades)
Paying for something only once if possible
Keeping costs predictable yet variable based on current factors

It is difficult if not impossible to achieve 2 and 3 above with traditional software/hardware or do-it-yourself cost models. Hardware and software require on-going maintenance, upgrade and replacement costs. Although maintenance costs may be predictable, they are in fact a perpetual payment protecting the use of hardware and software. Upgrades and replacement costs are not entirely predictable partly because there are simply too many external factors (end of life, advances in technology, merger/acquisition or divestiture, etc.) controlling the timing of their expenditure. As things stand now, technology approaches obsolescence every three years.

(If you don't think this is a hot -- even emotional -- issue, see my blog below, "Putting the kibosh on the soaring software maintenance and upgrade costs.")

As an example of cost requirements, here are the findings of a Global Concepts study on the cost breakdown of an in-house digital archive:

Explicit base costs (such as servers, communications, disk storage, long-term storage, software, maintenance) are only half the total cost
Staffing adds another 40% on top of the base costs
Replication (disaster recovery/business continuity) requires an additional 36% above base costs
Implementation and Development adds another 24% to base costs

Once you have added all your costs together for a secure and reliable in-house archive, the total cost percentages break down as follows:

Rather than a solution that requires fixed and sunk costs, what would be helpful is a solution with an entirely predictable “pay once” fee structure. A “pay once” fee structure should be the simplest, most predictable and controllable fee structure you can get from any of your vendors – partly because of what is avoided, namely on-going costs for users, hardware, software, and maintenance.

The critical difference between using such a fee-based solution and any other cost structure, is that while all other cost structures require on-going, perpetual costs to keep things going, “pay once” does not. You avoid paying – every day for the life of the solution – for the privilege of using that solution. More importantly, you don't pay for excess capacity that either is waiting to accommodate future requirements or becomes unused because of a contraction in business.

I'm certainly not naive enough to think that a "pay once" fee structure is applicable to all, or even most, hardware, software or services. However, it appears that more and more businesses are demanding such a choice.

What is your experience with fee-based solutions?

Pressure is rising for data center managers

2010-07-08T16:05:00.003-05:00

By R. Edwin Pearce (epearce@egisticsinc.com)

Just when data center and IT managers assumed things couldn’t get any worse, along comes a report from Gartner predicting that the critical issues facing data centers – namely, technology, space and energy challenges – will worsen in 2010. Coupled with the tremendous cost pressures brought on by the economic downturn, the Gartner report provides a heightened sense of urgency for data center and IT managers looking for pragmatic ways in which to deal with their operations issues. In its report, Gartner provides several tips for helping reduce data center costs:

Eliminate those systems that are underutilized or old
Consolidate multiple sites
Better manage energy and facilities costs
Better manage people costs
Delay the procurement of new assets

To be sure, these are all sound strategies. But savvy data center managers already have implemented (or at least considered) these strategies in response to the economic downturn. In other words, many data centers may have already squeezed as much savings as possible from their infrastructure.

However, the following challenges still remain:

Finding ways to implement a variable expense model to take advantage of reductions or slowdowns
Improving security and regulatory compliance
Staffing to support multiple hardware/software environments
Reducing excess capacity while maintaining the ability to grow
Managing the increasing need for backups and redundancy

None of this is new, of course. These are the normal and continuing requirements for doing business, perhaps "heightened," as Gartner says, by the subdued economy.

How are you responding to your own data center information management challenges? If you had your way, what would you have your company do differently than they are doing today?

ACH Dispute Management Survey

2010-07-08T09:33:00.007-05:00

NOTE: The survey is closed. Tune in to the Results Webinar at 1pm EDT August 12 for a discussion of the results and insights into ACH processing and dispute management practices.

Sign up for the Webinar here:

https://www1.gotomeeting.com/register/589842392

Through July 15 eGistics is conducting a survey of ACH processing and dispute management practices. If you have specific knowledge of ACH processing, we encourage you to contribute to the survey. The survey should take 5 - 10 minutes to complete.

All known participants will receive survey results once the survey is completed, and an invitation to access a special Webinar that will present and discuss the results.

We believe that you will find the survey results helpful in better understanding how ACH processing and dispute management are being practiced across the industry, and the various challenges ACH processors are facing.

To protect your privacy, the survey link below enables you to take the survey without revealing any contact information about you or your company.

Please take a short amount of time to complete this important survey.

Survey Closed

Thank you for your participation. Your input will help provide a clearer understanding of how you and others are addressing the challenges of ACH processing and dispute management.

Check back here later for the final survey results and a discussion of the findings.

The state of storage

2010-07-07T16:38:00.002-05:00

By Mark Brousseau (markbrousseau@tawpi.org)

Randy Davis (rdavis@egisticsinc.com) of eGistics, Inc. (www.egisticsinc.com) finds several interesting trends in The 2010 State of Storage Report from Networking Computing.

1. The top planned storage project for 2010 is improved allocation
2. Forty-seven percent of respondents say insufficient storage resources for mission-critical applications is their No. 1 concern
3. Storage area network (SAN) vendors are responding to demands for lower-cost storage
4. Storage virtualization is growing
5. Thin provisioning is catching on
6. There is a significant increase in interest in cloud-based storage

How do these trends reflect your storage strategy?

A welcome cloud during the economic recovery

2010-07-07T16:36:00.002-05:00

By Ed Pearce (epearce@egisticsinc.com)

In spite of hopeful signs that the economy is on the mend, the 2010 State of Storage report from Network Computing finds that the fallout from the recession has left IT execs without the resources necessary to store the rising volume of information required to support their business applications.

Nearly half (47 percent) of the respondents to the survey say they have insufficient storage resources for their mission-critical applications, while 30 percent say they have insufficient tools for storage management. Another 30 percent of respondents say they have insufficient storage resources for departmental/individual use. Nineteen percent say they lack staff for their storage requirements.

And -- regardless of economic "green shoots" -- the situation isn't likely to change any time soon: 34 percent of respondents say they have an insufficient storage budget to meet their business demands.

Against this backdrop, it's little wonder that survey respondents are showing increased interest in cloud storage services (34 percent in 2010 versus 19 percent in the 2009 State of Storage report).

With a hosted variable cost storage model, if your business struggles, and your volumes drop, your operations costs will be aligned with your usage, and you won’t pay for a “just-in-case” capital investment. The variable cost model also eliminates the need for capital investment (software licenses and hardware) or maintenance contracts; customers typically are charged a one-time load fee to archive documents. And when an array fills up, or a server must be replaced, it’s your service provider’s problem. Using a thin-client interface, there may not even be software to install, manage or maintain. In addition, variably priced storage solutions can facilitate more effective operations by providing scalability that would be very cost prohibitive in a traditional, licensed in-house system.

CBA Chief Information Officer Michael Harte spoke for many users when he recently told the Committee for Economic Development in Australia that, "I will never implement an internal solution for a common problem that I could procure on subscription across the Web."

With the economic recovery still gaining strength, the trend for 2010 will be the more efficient use of existing IT resources. That should make hosted solutions a welcome cloud during the turnaround.

Putting the kibosh on the soaring software maintenance and upgrade costs

2010-07-07T16:34:00.002-05:00

By Randy Davis (rdavis@egisticsinc.com)

Finextra reports that in a recent speech to the Committee for Economic Development in Australia (CEDA), CBA Chief Information Officer Michael Harte lambasted legacy technology vendors for their slow embrace of cloud-based computing and their apparent preference for solutions that lock-in users to a "never-ending spiral" of costly maintenance and upgrades.

"We're saying that we will never buy another data center. We will never buy another rack or server or storage device or network device again," Harte said. "I will never let any organization that I work for get locked into proprietary hardware or software again. I'll never tell my teams in the business that it will be weeks to get them hardware provision. I'll never pay upfront for any infrastructure and certainly would never pay for any, or rent any, infrastructure that I would never use."

Harte concluded: "I will never implement an internal solution for a common problem that I could procure on subscription across the Web."

With increasing demand for cloud-based solutions, combined with a general reluctance to pay hefty upfront capital costs, Harte's comments would seem to reflect growing dissatisfaction with the traditional licensed software model -- and its “never-ending spiral” of ongoing expenses.

Are you as fed-up as Harte?