By now, the notion of the "paperless office" should be a familiar one to readers of Financial Advisor magazine. The concept, which was considered way ahead of the curve a decade ago, has since gained wide acceptance, at least intellectually, among mainstream advisors. For those of you unfamiliar with the term, a paperless office is one that strives to minimize the use of physical paper and to maximize the use of digital documents or "virtual paper." The advantages are many; to briefly summarize, they include improved filing, more rapid retrieval, inexpensive redundancy, help with compliance and lower costs.

Recent studies indicate that the majority of advisors use some form of document management software. For example, the 2008 "FPA Practitioner Technology Report" indicated that 61% of respondents said they were using some sort of document management software. A closer look at the numbers tells a different story, however. Of those who said they do use a document management system, 21% said they use Adobe Acrobat. This is a fine application, but it is not document management software. For the purposes of this discussion, such a system must offer, at a minimum, a structured filing system, a retrieval system and storage. Additional requirements for a financial advisory firm include granular security settings and an audit trail.

Nine percent said they use PaperPort. This software has some document management capabilities, but it is not a comprehensive solution for the typical financial advisory firm. Another 22% of respondents said they use some other unnamed document management setup. Undoubtedly, some responses falling into the "other" category do not meet the system definition cited above, either. Even if we assume that 22% of "other" respondents really do use a suitable application, that still means only 31% actually use a true one.

It should come as no surprise that when asked to name their best technology investment, only 19% of the FPA report's respondents named document management software. Clearly some advisors think they own DMS software, but they really don't. Of those that do, some are using products that are past their prime. Others are not making the optimum use of what they have.

The good news is that spending on these systems should remain relatively strong. Fourteen percent of respondents said their next major technology purchase would be a document management system. This is competitive with financial planning software (16%) and customer relationship management software (also 14%). Clearly, more spending on DMS is needed. According to the 2008 Moss Adams/Genworth "Financial Performance Study of Advisory Firms," two of the top three practice management areas mentioned as a challenge by firms of every size were operations/technology and time management. A well-designed document management system addresses both of these needs.

Laserfiche Avante
Laserfiche, one of the leading providers of document management software to financial professionals, believes that there has never been a better time to invest in technology. According to Marcel Tsai, the current distress on Wall Street will lead to significant growth for independent advisors, even if revenue growth and profits will initially be constrained by declining financial markets.

Keeping expenses in check will be a challenge. Demand for talented employees will keep wages high. The fallout from abuses on Wall Street is likely to lead to even more oversight and higher compliance costs. So how will advisory firms be able to take on new business while keeping operating costs low? For small to midsize advisory firms with two to 25 employees, the new Laserfiche Avante product may be the answer.

Tsai says that Laserfiche Avante is more than a document management system; it is a business process management system. What's the difference, you may ask? Well, traditionally, most advisory firms have not fully integrated their document management system with their other office systems.

Furthermore, most firms have not created automated work flows that integrate their document management systems.

Laserfiche Avante, a business process management system, ties together a scalable, robust DMS with integrated automated work-flow software at a price that is affordable to even the smallest financial advisory firm.

It is built on Laserfiche 8, a competent, business-class document management system. Laserfiche 8 allows users to capture documents (through scanning or import from another application), file them using a consistent methodology customized to the firm's needs and then rapidly retrieve documents as needed. Granular security settings allow the administrator to control who can view, modify, delete, print and e-mail files.

A full review of Laserfiche 8 is beyond the scope of this article, but to give you an idea of what a business-class system can do, let's briefly examine some of the controls available to an administrator in a Laserfiche document management system such as the one included with Avante.

An administrator can create individual users as well as groups of users. The administrator can then assign rights, either at the individual user level or at the group level. For example, a financial advisor could be given rights to read, search, create, annotate, print and e-mail documents in certain folders. If a supervisor was responsible for monitoring ten advisors, a group could be created that included all folders the ten advisors have access to. The supervisor would be granted all the rights to the folders that the advisors have, plus some additional ones like the right to edit or delete a file.

Administrators have metadata management rights so they can create filing templates, create fields within those templates and populate drop-down lists of tags within those fields. In addition, they have some control over the recycle bin, index processing and repository options.

Also included with the core document management system is an e-mail plug-in. This enables users to e-mail files stored in the repository using a number of different formats, including PDF, TIFF, JPEG, BMP and PCX. This plug-in is capable of preserving redactions, highlights and stamps in a document.

Redactions are areas of the document that you've blacked out virtually in order to preserve confidentiality. Highlights and stamps are virtual annotations that you might want to add to a document. So if you were working with another professional on a document relating to a client, you might redact the client's Social Security number from the document, highlight a relevant passage, stamp the document as a draft and e-mail it to the recipient.

Laserfiche Snapshot, also part of the package, is a virtual print driver that converts a file in any application that has a "print" function to a TIFF file and stores it in Laserfiche. As part of the file conversion/import process, Snapshot allows the user to specify the destination folder, add metadata, process optical character recognition (OCR) and perform other common tasks.

So far, the Laserfiche Avante functionality we've described falls squarely within the traditional document management category. Laserfiche Workflow is the component that enables automated work flows, propelling Laserfiche Avante into the ranks of the business process management systems.

Laserfiche Workflow is an application with a graphical interface that allows you to map out both simple and complex work flows. In most cases, you can drag and drop work-flow objects from a palette right onto the work-flow diagram, greatly simplifying the work-flow creation process. For example, you might design a work flow as follows: All new account applications get routed to an assistant to make sure no information has been omitted. Then, based on the metadata within the form, it is routed to the appropriate advisor. The advisor can accept or reject the form. If it is rejected, it goes back to the assistant. If it is accepted, it goes to the supervisor for final approval. If it is approved by the supervisor, a folder is automatically created for the new client and the account application is moved to the folder. A copy of the application is forwarded to the custodian by fax or secure e-mail. As the application moves from the assistant to the advisor to the supervisor, an e-mail alert can be triggered at each stop so the appropriate parties know there is a new document in the work flow that requires their attention.

Creating and implementing a new work flow is a four-step process. First, you create a work flow as outlined above. Next, you launch the "publishing wizard." This wizard prompts you to name the work flow, provide a description of it and supply other properties to it. Then you click the "publish" button.

If all is well, the work flow will be published. If there is an error, the application will generate an error code so that you can locate and fix the problem. Finally, you create a "starting rule," which has its own wizard and tells the Laserfiche under what circumstances this particular work flow should be launched.

While Laserfiche goes to great lengths to make this process as easy as possible, it may be intimidating for the uninitiated. Hopefully, Laserfiche will create some work-flow templates for common tasks to get advisors started, though most firms in any case will likely purchase the system through an authorized reseller who can set up the initial work flows if desired.

For a true business process management solution such as this, the price is affordable. An advisory firm pays $1,500 for a server license and a charge of $500 per user, thus an advisory firm with three named users, for instance, would pay $3,000. If a reseller installs Avante and does some straightforward work-flow customization, expect to pay an additional $1,000-$1,500. Laserfiche does offer a number of enticing options that could further raise the cost, however.

One of these is Laserfiche Web Access. Once the Web access software is installed on the server, licensees install a small application on their laptops (or any other computers they want to use to access their Laserfiche information over the Web). Once the software is installed, users can log into and access information from their Laserfiche repository through a Web browser interface. With Web Access, advisors can also set up Web-accessible folders for their clients. This can be done a number of different ways. One method would be to set up a single folder for each client, but only make some documents within the folder accessible over the Web. Another way would be for the advisor to create two folders for each client, an internal one and a shared one the client has access to. One advantage of Web Access is it allows principals and managers to approve and route documents over the Web. It also allows them to collaborate with multiple offices no matter where they are at any given time.

Another option is the Laserfiche Audit Trail. This feature adds comprehensive security by monitoring and recording all actions taken within the Laserfiche system. The system can be configured to monitor any action that might put your data at risk. You may want to record each time an employee logs into or out of the system. You might want to know who edits, prints, copies or even views certain files. Audit Trail can record and supply this information. It can filter and report on the actions it logs so administrators can spot suspicious activities.

Laserfiche Quick Fields captures information from either paper or electronic forms and uses it in multiple ways. If you have a stack of new account forms, you can use Quick Fields to capture the client's name, which would then be put on a folder automatically created by Laserfiche Workflow.

Laserfiche Plus allows the user to "publish" files and folders onto a DVD. This DVD includes a viewer and an index, so the files can be searched and displayed even on a computer that does not have Laserfiche installed. Plus, it is useful as an archiving tool. It is also helpful for those who want to take documents home or on a trip if Web Access is not available.

Finally, Laserfiche Records Management provides life cycle management for all documents. This allows advisory firms to set retention policies for individual documents or classes of documents. The system will provide reports detailing which documents are eligible for transfer or destruction.

I had an opportunity to briefly test the product, and my initial impressions were favorable. Although I think that some advisors may be challenged to create their own work-flow models, with competent help firms should be able to achieve a considerable return on their investment.

Laserfiche is not the only firm offering an integrated document management/work-flow solution. Cabinet NG, Xerox and others have offered them for some time; nevertheless, the launch of Avante is significant. Among advisors, Laserfiche is one of the most recognized names in document management.

The fact that the firm has introduced a competitively priced business process management system for smaller advisory firms suggests that it believes there is a real need for this sort of product, and there is.

In order to remain competitive, advisory firms must do a better job of systematizing and automating tasks in the future. Laserfiche Avante is an affordable means of achieving that goal.