ANAHEIM, Calif. -- Want to cut your firm's costs? Creating more effective back-office operations can help yield significant savings, according to a study by Laserfiche -- an enterprise document management company that, conveniently, promises to help RIAs do just that.
In a review of performance figures reported by 1,000 advisory firms nationwide, the study argued that RIAs can reap annual savings of $48,000 for smaller firms up to $360,000 for larger firms by investing to streamline their back offices.
If you are going to transition a business, how can you invest now to get that payoff later on? said Tim Welsh, a Laserfiche consultant, in presenting the findings at the T3 Conference here this week. Welsh said his consulting firm, Larkspur, Calif.-based Nexus Strategy, had tapped existing published data on firms to determine which ones had invested in enterprise content management software, and then compared financial performance.
The study identified several major areas of productivity increases and cost savings: reduced paper storage costs, automation of back-office processes, integration with CRM software, and simplified compliance. Laserfiche defined enterprise content management as including automation of document retention and destruction; rapid identification and classification of documents without manual processing; confirmation of compliance with regulatory requirements; and automatic routing of information for review and approval.
The company cited specific payoffs for firms of various sizes:
- Smaller firms with $500,000 in revenues that had invested in back-office enhancements saved 1,000 hours of employee time and 9.7% of annual revenues, or $48,000; they also increased annual profits by 125.6% and business valuations by $242,000.
- At the high end, Laserfiche said, firms with $4 million in revenue that had made back-office investments had saved 11,000 hours of employee time and 9% of annual revenues, increasing annual profits by 64.1% and business valuations by $3.616 million.
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