Document Automation: A Complete Guide

I’ve been frustrated by the amount of money wasted by companies when an employee fails to forward a folder containing a contract or when they take a week to approve one piece of paper when the decision itself took 15 minutes or less. In the past two years, I’ve had 12 Web3 projects approach me for assistance and each time I end up seeing the same pattern — the lack of both time and energy for the arduous process associated with paperwork. One of my clients told me that approximately 40% of the time that they work is spent trying to figure out who last edited the document and trying to find the correct version.

What’s interesting is that, on average, the time required to process email has increased by a factor of 5 to 15. The error rate during the approval stage has dropped by 78%. One of the projects we worked on allowed us to reduce from four administrative clerks to one and used the other three people to retrain them to be analysts.

“When a lawyer spends six hours each day circulating contracts, having discussions with accounting about payment issues instead of assessing business risk, the dual business impact is the attorney salary plus lost opportunity.”

Next, I will demonstrate how to move to automatic logic document management without programmers.

Transitioning Document Management to Automatic Logic

Rather than tracking down an invoice by multiple managers manually and waiting for their response or reminding them, you can have a system do this automatically. The system provides routing, deadline tracking, reminder messaging, and archived copies of final signed documents.

Document automation is the use of an application or software to manage processes via established rules. Creation, approval, storage, searching for and retrieving documents — all handled without the need for continuous human input.

Be mindful when distinguishing between this and traditional electronic document management (EDM). While EDM simply means having your documents stored on a computer in Word instead of on paper; document automation denotes an automated process that executes itself without requiring human assistance. An automated process involves routing a document through a pre-defined chain of people within a business (i.e., lawyer → finance → CEO), provides a deadline reminder capability, and archives the document with all related metadata. Document automation has been reported to help companies save approximately 60% of their time spent performing routine tasks; 42% of errors in Contract Review were also eliminated.

What is Document Automation?

Let us now clarify what the purpose of document automation is. The three primary objectives of automation involve removing three areas of loss.

• Lost Time: Long wait to receive a signature, long wait to locate an old version, lack of clarity on status.
• Lost due to errors: Sending out an old document; omitting an approver's name; losing a document.
• Lack of organization: Having to sift through multiple documents to find the right one.

Automation removes these three areas of loss by utilizing three approaches:

• Routing: The movement of a document along a predetermined chain of approval (i.e., the lawyer sends the document to the finance department who sends the document to the CEO) without manual involvement.
• Deadline Management: The system sends automatic notifications when a deadline has passed to remind the individual responsible for completing the task; deadlines may also be re-assigned if a delay occurs.

Types and Stages of Document Management

There are five phases to a document management system. Each can be automated.

1. Create
   A document is created in Word prior to using the document management system. You entered information in the template and copied it to create each document. It now will automatically generate all documents based upon the information stored in the CRM saving an average of 15 minutes per document due to the entire process being automated.
2. Approve
   Before the document management system; you sent the document through email to the person who was going to approve it, nothing was tracked, and you just sat in their inbox until they approved it and sent the final version via email to the counterparty. Now the document management system has a defined routing process that tracks all comments and provides reminders to the approver until approval is received.
3. Sign
   Prior to using document management systems; a document was printed, signed, and scanned into the system to send to the counterparty. Now you will electronically sign the document in the system without printing it on paper.
4. Register
   Documents before the document management systems were registered using a log. Each document now has a system assigned number, date registered, and will be stored with the other documents in the registry.
5. Store
   Documents were stored within folders prior to the document management system. To find the document you searched by name; now with document management systems documents are stored with tags/codes, full-text search capability/automated indexing.

Document work systems are typically broken into four categories: internal workflow (orders, memos, etc.), incoming workflow (business letters from counterparties), outgoing workflow (contracts, invoices, etc.), and contractual workflow (the entire lifecycle of all documents related to the same contract).

Reasons Why Automation is Important for Business

• Speed at which decisions can be made: Every minute counts in the world of crypto lending. If your competition has signed their partnership contract within one day while it takes you seven days to sign the same contract you will have missed an opportunity. In effect, automation can make a time-consuming process take hours rather than days.
• Scalability: Scalability of document requests is directly related to the growth of a company's activity — hiring staff to manage every aspect of a transaction simply won't work! Automation allows you to handle 100 documents with the same amount of resources as you would to manage 10.
• Manageability: Manageability of manual document management is like trying to work in a black box — how do you know where your document is, and who may be slowing it down? With automation, you can track each document through all stages (the document status will be visible) and see where the delays happen and when they will occur.

For example, we discovered that a single employee was responsible for creating 40% of all delays in the document process because he did not respond to notifications. To fix this, we developed an escalation process so that once a notification has been sent; the next stage of the task would automatically be passed to his supervisor. As a result, the delay was eliminated.

Main Advantages of Automation

Time and Cost Savings

Here are some before and after examples from the project:

• Contract creation reduced from 20 minutes to 2 minutes using templates and inserting data from the CRM.
• Approval timeframe shrank from 3 – 5 days down to 4-8 hours.
• Document search time was decreased from 10-15 minutes down to 10 seconds.

In an average week of 50 documents, the time saved is 35 hours. With 125 hours saved each month, this means saving the equivalent of one person working full-time for an entire month. Therefore, using an automation system may equate to a savings of $7,200/year/employee.

Reduction of Errors and Delays

The leading cause of error in the document management process is the human element of the process. Typical types of errors include:

• Sending an old version of the document.
• Not getting an approver's signature on the document.
• Not meeting the deadline established for the signing of the document.
• Losing a document in the email inbox when other documents have been received.

With an automation system, errors such as these can easily be avoided with the following controls:

• Versions: All versions of a document will remain within the document management system, so you will be unable to send an older version of the document.
• Stage approval: Stage approval will be required prior to moving to the next stage, ensuring that all necessary approvals will have been obtained in accordance with the contract between parties.
• Deadline control: Receive reminders 2 days before due date, 1 day before due date, and on due date.
• Centralized Storage: All documents are easily accessible, no chance of losing them.

Greater Competitiveness

The ability to respond quickly can be a significant benefit. When a client requests a proposal from a company, Company A prepares the proposal according to instructions, confirms it with the owner, and submits it two days later. Meanwhile, Company B creates a proposal using a template in five minutes and submits it immediately. The client selects Company B because they submitted the proposal the quickest. Speed can be a critically important factor in Web3 where changes in the marketplace are more rapid and time-limited. The company that could sign a partnership contract and receive an investment opportunity the fastest did so.

Data Protection and Change Control

There are three levels of data protection/change control that exist:

• Separation of Access Rights: Employees only have access to their own documents.
• Change Audit: We document who has changed what and when.
• Backup: Automated backup will protect you from losing all of your data.

This reduces the risk of leak by 54%.

Principles and Processes of Document Automation

Automating the process is not simply a matter of purchasing document automation software; rather, document automation is about rethinking how your work is done to accommodate the capabilities of the automation tool. There are three successful principles of automation:

1. Standardization of Process: It cannot be done without documentation of processes; i.e., Who creates contract? Who approves contract? In what order is everything done? What are the deadlines for all aspects of the process? An example of this would be a contract approval process where approval was based on a manager's mood; it was first necessary to standardize the process before it could be automated.
2. Interconnection: Software that provides document management is essential for customer relationship management (CRM), accounting, or project management. A clear example of how much more functions well when you have an integrated platform — that is dependent upon multiple factors, one of which is how well you can exchange information among all these systems — can be illustrated by the fact that by creating an opportunity (deal) in CRM, you receive an automatically created (template-based) contract once it's signed — and would immediately have received an automatically created (template-based) invoice as soon as the contract was signed.
3. Route Variability: Not all documents flow in the same direction. For example, a contract for $1,000 signed by the department head would not be presented to the CEO for signature, whereas a contract for $100,000 would need to be signed by the CEO in addition to the department head. In these cases, the systems impose a fair requirement that an additional approver be added to those contracts that are over the established amount threshold in the course of managing the document.

Integrating Document Management with CRM: In addition to faster approvals resulting in a 23% increase in conversion rates, the integration of these two processes produced improved workflow and efficiencies.

Specific Attributes of Automated Electronic Document Management System (AEDMS)

Two characteristics of AEDMS that make it different from traditional “electronic” document management systems are:

• Automated (auto-running) triggers: A trigger is any event that begins a chain of processes.
• Structured metadata: A document is an object that possesses attributes including number, date, counter-party name, contract value amount, and date created.

Tasks and Benefits of Digital Document Automation Systems (DDAS)

Five primary functions of DDAS:

• Speeding the approval process: By providing a method to perform parallel work (multiple people working at once), using automatic reminders (for those people who’ve not yet completed their portion of a project), and using escalation models to escalate a project that is delayed.
• Reducing operational costs: By minimizing paper usage due to duplication and eliminating errors created by manual entry of data.
• Increased visibility into all activities: Allowing all parties involved with an electronic document creation project, including managers and those responsible for overseeing project delivery, to see how the process works in real-time and have a clear understanding of their roles in creating the document.
• Ensuring legal compliance: By having electronic records of all transactions associated with a contract and having those documents maintained in accordance with how long a document must be kept is required by law.
• Increased velocity: DDAS increases the velocity at which people will be able to complete documents: two to five times faster.

There has been a reduction in approval error by 60% – 80%, an administrative cost reduction by up to 50%, a 30% increase in employee satisfaction as there was less routine work to perform and 89% of companies reported improved quality of decisions because they received relevant and timely information.

Types of Document Automation Systems

Any organization that takes its information system seriously requires a document automation system. There are three classes of systems available on the market:

• Boxed — A complete and pre-packaged solution can be installed on your physical location or hosted in the cloud.
  Pros: Fast deployment and improvement; standard business processes have been established and are ready for use.
  Cons: Limited flexibility as they are configured for standard processes; do not work with all companies and may need additional configuration and customization.
  Examples: 1C:Document Management, Directum, Docsvision.
• Cloud-Based — Software as a Service (SaaS) solutions are accessed over the Internet from any web-enabled device; control and ownership of data is retained by the cloud service provider.
  Pros: There is no requirement for additional servers, and the provider handles maintenance; the user has access to all software and collaboration tools from any device using a web browser.
  Cons: The user’s dependence upon their service provider; security issues.
  Examples: Google Workspace; Microsoft 365 with SharePoint; Bitrix24.
• No-Code Platforms — These are platforms or constructor tools that allow the business user to configure their own business processes (i.e., workflow).
  Pros: Requires minimal training; can be easily modified and are cost-effective.
  Cons: Training time for the user; limited capabilities to develop complex scenarios.
  Example: ASCN.AI is an all-inclusive no-code pipeline automation platform with artificial intelligence (AI)-driven workflow and AI long-lived agents; you can automate your work without involving an IT department or needing any setup, simply by using pre-defined templates, visual editor, etc.

In terms of cloud solutions within the crypto industry, there is usually some benefit to using them as distributed teams can always access them on an as-needed basis. Additionally, cloud-based systems can easily scale, which is what most businesses require.

Criteria for Choosing an Automation System

Five major factors when considering what automation system to utilize to provide a positive return on investment:

1. Business process alignment: Making sure the processes in the automation system correspond to the Company's processes such as having multi-tiered approvals and routes based on defined conditions.
2. Interoperability: Being able to share data with CRM, Accounting Software, email, and instant messaging systems.
3. Usability: Will the employees utilize the system or go around it?
4. Total Cost of Ownership: The cost of the system when purchased, plus the cost of implementation, training, support and upgrades to the system.
5. Scalability: Will the processes within the system scale effortlessly?

The average company that considers all 5 of these factors when selecting a system sees a 40% faster payback from the implementation of the system.

Electronic Systems and Capability Integration

Four levels of integration with automation systems:

• Level 1 — Communications: Notifications sent to an employee will be sent to applications that the employee accesses on a daily basis such as Telegram, Slack and e-mail. An employee receives a message from his manager in Telegram informing him that he has 2 days to approve a document for signing. In addition, he can immediately access the document and approve it.
• Level 2 — Business Systems: Exchanging of business critical information between the different systems in your organization will occur. Examples of this would be when a document has been signed, updating the status in CRM, and an accounting department requests the data to create an invoice.
• Level 3 — External Services: Performing concurrent actions accessing external services information. Examples would be during contract generation being able to perform a counterparty check based on tax information via an API.

Modern systems have Electronic Digital Signatures (EDS); therefore there is no need for paper signing and are able to utilize Optical Character Recognition (OCR) technology to scan and automatically extract features. Electronic systems also offer mobile access for approving.

Practical Stages of Document Automation Implementation

1. Decision with the team and supporting structure: Identify stakeholders, what's covered and who the audience is, location, who will be the target audience, when will the checkpoint occur, how will the result be evaluated? Why the project charter will be created and signed off by your management and departmental heads; define the goals, establish the budget, appoint responsible parties, etc.
2. Analysis of Processes: Who will analyze and identify bottlenecks? With the help of an analyst and key users, the team will map "as is".
3. Goals and Criteria: The project team will document the output to develop metrics to support their output.
4. Selection of Systems: IT and project manager will review the options for selecting a System and establish trials.
5. Templates and Policies: Creation of templates and description of how templates are to be used will be done by an attorney and clerk.
6. Setup and Testing: The System will be configured by IT and users will complete testing and installation.
7. Training: Users will develop training materials on product use and write instructional material and will provide training and support as required by users.
8. Transitioning and Support: The project team will define the transition from the old method of completing the function to the new System, will gather employee feedback and fully execute optimal process requirements.

Total duration for small businesses will be 2-4 months; total duration for larger companies will be 6-12 months.

Analysis of Existing Processes

Order of actions:

1. Collect Materials — Speak with Users.
2. Create "Current State" Diagram — Visualization of the Process Flow.
3. Identify Gaps — What are the causes for slow performance and where are there timing delays?
4. Develop Requirements — What can be improved upon?

A thorough assessment can yield an ROI 2.3 times greater than those who do not perform a thorough assessment.

Defining Goals and Automation Criteria

Establish measurable and clear goals.

Example of a Bad Goal: Improving Document Workflow.
Example of a Good Goal: Reduce Time for Contract Approval from Five Days to One Day.

SMART Goals Examples:

• Reduce time from twenty minutes to five minutes to create contracts.
• Improve document preparation accuracy by 70% minimum.
• Access to documents in less than ten seconds.
• Reduce Costs by 40%.

Success Measures: average processing time, percentage of incorrectly processed documents, average time spent by user managing documents, user satisfaction. It is important to identify the current state before implementation.

Importance of Team Involvement and Role Division

This automation is a change project which will rely upon people rather than technology. The main roles are defined below:

• Project Sponsor — High Level Management that allocates resources.
• Process Owner — Responsible to their department for a specific process.
• Project Team — Represents all departments.
• Key User — Tests and Assesses the System.
• IT Specialist — Configures and Supports the System.

Those who are involved in the development phase will reduce the resistance to change. Projects where people have been involved early will yield significantly better results.

Document Drafting and Regulatory Preparation

The automation of every single contracted document would not yield the same result if we started from scratch with each document and did everything in a completely automated way.

1. Establishing document types.
2. Establishing templates that have variables.
3. Establishing approval routes.
4. Establishing operational rules and procedures.

System Setup and Testing

Includes: storing documents, having templates available in the system, determining how an approved document is stored in the system, integrating it with the other systems to make it work smoothly, and testing with real business scenarios and adjusting until it is perfect.

Employee Training

Training can be provided in multiple ways:

• Online eLearning and videos.
• Instructor-led practice sessions.
• Step by step procedures.
• Support hotline.
• Gamification (reward-based learning modules).

Effective training improves product utilization by 45%.

Scaling and Optimizing Processes

Scale process — optimize in phases and improve on a continual basis based upon pilot results; consistent monthly reports indicate that the time taken to approve a document has been reduced by over 30% compared to pre-automation.

FAQ — Common Questions and Answers

What is meant by Automatic Document Management?

Automatic Document Management refers to a system where all phases of creating a new document (consolidating, approving, signing and storing the new document) occurs without any human involvement throughout the entire process; therefore, the process is initiated automatically when a particular triggering event occurs (e.g., creation of a new document).

What are the subtle differences between Electronic Document Management and Automated Document Management?

Electronic Document Management (EDM) occurs when documents are in an electronic form (i.e., on a computer), and the processes associated with managing those documents through their life cycle (i.e., creating, storing, retrieving, sharing/distributing, and signing) are not automated processes; instead they remain manual processes. Automated Document Management (ADM) occurs when all of the processes of managing documents throughout their life cycle are managed by the automated Document Management System Software (i.e., the processes of managing documents through their life cycles are completed automatically by the software, rather than by a human).

What automation systems does a small or medium-sized company use?

Small businesses (fewer than 50 employees) typically utilize a no-code automation platform (e.g. ASCN.AI) to create an automated workflow. This is a flexible, user-friendly way to automate workflows without the need for programmers. For mid-sized businesses (50 — 500 employees), a combination of cloud based services with no-code automation systems provides both ease of use and flexible automation options.

How ASCN.AI Helps Earn Through Document Automation

There are three ways a client can earn money (through automated document management), based on the automation process built using ASCN.AI:

1. Selling Automation Services to End Users: ASCN.AI provides a complete automation solution (including software development, installation and training services) to assist to automate client end-user (client) document management processes. The average price for a client project is between $2,000 and $10,000. The average pricing for configuration of a contract automation process for a law firm was $1,500 – $5,000, with an average project length from 1-2 weeks to complete.
2. Building Your Own Product: You can build your own niche-as-a-service software (using ASCN.AI as your software platform) using ASCN.AI and the White-Label Option to provide third-party developers/web designers with a software-as-a-service (SaaS) solution, which can be sold for $50 – $500/month per end-user client.
3. Automating Your Own Business: By automating work processes, the client can recover at least 10-20 hours/week to spend on growing their business. For example, by automating document creation processes of a client – a cryptocurrency exchange – the client had recovered 15 hours/week and increased the number of coin listings by 40%.

Disclaimer

The information provided in this article is general in nature, and should not be construed or relied upon as providing any form of investment, legal or securities advice. When using an AI agent-based system, one needs to apply a very conscious and rational approach and have a proper understanding of the functionality of various types of automation systems.