Venturing into a paperless office.

The Broken Hill Proprietary Company Limited ("BHP") is one of the world's largest diversified natural resources companies with a global portfolio of assets in the mining, steel, and energy industries. Headquartered in Australia, BHP has approximately 48,000 employees and more than US$12 billion in annual sales, and is considered a significant player in all of its businesses worldwide. BHP selected San Francisco as its headquarters to manage mineral operations outside Australia and more recently steel activities throughout Canada, the United States, and South America, as well as to assume various administrative functions. Within the San Francisco headquarters, the tax department oversees extensive research, planning, and compliance for a widespread assortment of companies and jurisdictions.

To enhance efficiency and productivity, BHP decided to eliminate some administrative functions previously performed on a centralized basis. A series of events was set in motion that led to a major restructuring of some corporate responsibilities. Decentralization brought with it a sudden sense of independence for those departments that remained. Every department had an opportunity to take broader managerial reins and to restructure itself. The tax department seized this opportunity to enhance productivity and efficiency by taking a major technological leap even though there was inherent risk-the paperless office project.

Definition and Purpose

The paperless office project affectionately referred to as "POP" by the tax department) is an undertaking that seeks to efficiently manage the document filing and retrieval process. Central to POP is the intent to reduce paper from the desks and files of all tax department personnel by storing almost everything in the computer system. This was achieved by integrating existing technology with state-of-the-art hardware and flexible software. The paperless system was designed to facilitate filing, faxing, researching, word processing, financial analysis, and document retrieval, as well as basic communication between department personnel and with the "outside world." All of this is completed efficiently from each individual's desktop and without paper.

Prior to POP, information was received and filed under a variety of inconsistent methods. Although individuals were confident and comfortable with their own personal filing systems, the complexity and inadequacy of this system (or non-system) raised a number of issues pertaining to document access for any project. These issues included, but were not limited to, the time required to find documents, documents being misplaced or misfiled, the lack of a formal process for storing documents, the absence of a central point of contact for filing, and the need to periodically reconstruct documents. The potential costs of these problems in terms of time and money were sobering.

The goal of the paperless project was to implement an electronic filing and retrieval system that addressed all these issues by indexing and storing documents as images in an organized, centralized, and easy-to-access electronic file cabinet. The intent was ultimately to eliminate 80 to 90 percent of the paper and to have ready access for all members to all relevant files without radically changing or disrupting the way each individual had been accounting for and filing documents. Finally, as a result of the paperless project, it was hoped that the tax department would become more skilled, efficient, and responsive to the needs of its clients.

The Challenge

The challenge on the managerial level was substantial. Fortunately, BHP's upper management was supportive and helpful. Based upon the tax department's solid belief in POP, upper management was convinced of the benefits of this project not only for the department but, in the long run, for other parts of the company. Establishing a realistic yet acceptable time frame and assuring management of a smooth transition were essential factors in retaining their support. On a broader level, the department had to take a leadership role as the pioneer for this project and its successful implementation. The tax department also had to enlist the help and support of what proved to be an eager and curious Information Services Department (BHP's San Francisco computer systems support group). This was crucial since the Information Services Department would play an active role and eventually assist in implementing the project for other departments.

Perhaps most importantly, it was crucial to make sure that members of the tax department were comfortable with the implications of this project, and to get as much feedback from them as possible. The challenge was to find a system that met the needs of everyone in the department without effecting any major changes in the way people worked. As could be expected, some department members were skeptical at first. The success of POP required a strong belief in the project, a commitment to its goals, and a dedication to teamwork. Each member was continually given an opportunity to provide input. All concerns, questions, and ideas were taken seriously and given substantial attention. Nevertheless, because of the complexity of the work in the tax department, it was important to initially proceed with caution to avoid too many disruptions in ongoing responsibilities.

The challenge on a technological level was also significant. State-of-the-art hardware and software had to be introduced to the department to ensure the success of this project. The resources to accomplish the task, while expensive, were generally available and reliable. Therefore, the challenge was more in the management of the technology rather than its acquisition.

Implementation

A steering committee, made up of approximately one third of the tax department and including administrative support staff, was established to devote considerable time and energy in designing the system's framework. The Federal Taxation Manager was appointed project leader and a team of tax department advisers from the various functional areas of the department (i.e., State and Local, Federal, International, and Planning and Forecasting) acted as reviewers and evaluators of the project throughout its design, development, and pilot implementation stages. In the end, by integrating the different ideas, styles, and needs of each individual, a synergistic product was developed. The critical success factor was the involvement and effort of the department members themselves.

Since it was clear that an "off-the-shelf" system would not satisfy our requirements, consultants were hired to configure and transform the commercial products into a fully functional and efficient tool specifically designed for the unique issues confronted by the tax department. IBM and an independent consultant were engaged, not to create the system, but to provide advice, guidance, and technical support as the department members fashioned the system to fit their own needs. The complementary combination of IBM's and the independent consultant's excellent technical skills and good judgment allowed the project to develop efficiently and on time. The Information Services Department also provided assistance and comments. Emphasis was always placed on the individual's needs and desires so the department members took ownership and pride in the successful implementation of their paperless project. Quiet leadership and support were provided, but it was crucial that the tax department members themselves bought-in and believed in their undertaking. Heavy-handed direction and mandates could not provide the environment in which the member's own curiosity and desire would adequately conceptualize, construct, and use the paperless system. Training was offered during the testing period enabling each individual to "get their feet wet" and comment as users - rather than designers - of the system. During the training sessions, department members discovered areas for improvement, again providing the members with a sense of ownership in their product.

Problems

Numerous problems presented themselves at each juncture of the project. Initially, overcoming skepticism was crucial. Clear presentation of the benefits, both monetarily and professionally convinced a supportive management of the project's importance. Constant involvement of each and every department member eventually subdued any misgivings on their part. Skepticism quickly turned to excitement as everyone involved began to understand the capabilities and benefits of the paperless system. That excitement continues to flourish as department members become more comfortable and other departments and upper management learn of our success.

An additional problem was the inadequacy of the department's technology before the project. New, more capable computers and larger monitors had to be purchased. Scanners, servers, and new software were acquired to make the project succeed. This new equipment was expensive, but much of it would have been necessary eventually in any event. The consultants were able to advise, based upon their experience and knowledge, what technology would best serve our needs.

Although department members became excited about the prospect of a paperless office, they did not always agree on how the paperless system should be organized and used. Differing views on fax capabilities, filing systems, and access were overcome by designing a system with enough flexibility to allow members to use them in a way that was comfortable to him/her. By incorporating a variety of filing methods, the system became particularly user friendly and effective. An additional issue was that each member would now have the added responsibility of electronically filing documents rather than relying on the centralized filing department and staff that had been eliminated in the reorganization. Once the members discovered the system's functionality and a library of index cards was established, members found that electronic filing was no more difficult than sending hard-copy documents to paper files.

Benefits

Now that the department has been using the system for several months, the many expected benefits (and some unexpected ones) are coming to fruition. The department members are becoming more organized and efficient as documents are within easy electronic access.

Electronic images from around the world are received, reviewed, forwarded, and filed in seconds without a single sheet of paper and without redundancy or duplication of effort. Document retrieval, which previously could take hours (or even days if the files were offsite), now takes seconds as department members search through file indexes that they designed. Documents previously routed through mail are now scanned and distributed to the appropriate people electronically saving paper, time, and money. POP provides instant and concurrent access to information. Audit trails have improved as related documents can be linked together electronically to provide a seamless review. Memorandums can be written based upon electronic research completed without ever opening a book. Review of relevant tax journals and periodicals can be accomplished, either online or via CD ROM, with important articles placed electronically in the appropriate file; all while never creating a paper document.

Members of the tax department have not only enhanced their computer skills but, due to time saved on account of the paperless project, they have also increased their exposure to new areas and have become better tax professionals. Like most tax departments, this one always seems to have too much work and not enough time. The paperless system, however, is allowing the department to be more responsive and more thorough in its advice to its clients. A challenge has always been to get the right information to the right people at the right time. The tax department, through well-managed technology in the form of POP, has become more forward-looking and less reliant on traditional methods to accomplish tasks.

Finally, by successfully venturing into previously uncharted waters, the tax department has gained visibility and exposure within the company as a whole. Tax department members proudly share their enthusiasm for the paperless office with others as they travel the world on behalf of BHP Curiosity and genuine interest have caused department heads from around the world to contact the San Francisco tax department with questions regarding our system.

The Future

BHP may now review the problems encountered and the benefits achieved, to determine if the paperless project may be applied on a wider scale. Other departments may achieve significant savings and efficiencies by moving ahead with technology and making a paperless system work for them. It will always be important to manage the technology and resources carefully. While technology is an important new tax department tool, it is only a useful resource when combined with the knowledge and experience of the department members to produce higher quality and more timely results.