Real Solutions – Business to Business – Global Media and Advertising Lease System Case Study

This company provides advertising, strategic media planning, direct and promotional marketing, public relations and other specialty communications services to in excess of 5,000 clients in more than 100 countries.

This company provides funding, financial advice and support services such as third party payment, liquidity management and other treasury/financing related programs. They also have oversight responsibility for managing the portfolio of equipment leases at various subsidiary agencies. Having one system to house all corporate leases enables them to improve its lease accounting. As a public company, they must accurately calculate the financial obligations of its leases in accordance with guidelines for leasing arrangements set forth by the Financial Accounting Standards Board (FASB), specifically FASB 13.

The responsibility to manage all leases was important to ensure that they had a central resource to report consolidated lease accounting information. Initially, they implemented a comprehensive paper-based process in one of their offices to compile the necessary

documents, perform the financial evaluation and approve the leases. After about a year of operating this way, they sought advice from two wellknown consulting firms about how to automate the solution. “Starting out with a paper process was a great experience because it allowed us to think through the flow and business process, “ said Director of IT. “We had worked out all the processes and refined them so that by the time we were ready to evaluate a document imaging and workflow solution, we knew exactly what we needed to do and what we had to automate.”

Because they had done such extensive analysis and planning of its lease testing and approval process, it was able to publish very specific requirements in its RFP. The criteria for selection included off-the-shelf functionality that minimized custom development, required no re-keying of information, could be adapted for treasury processes as well as leasing and worked within the existing IT infrastructure. In addition to secure storage of documents, the solution had to include robust reporting capabilities, provide a comprehensive audit trail and be easy to use.

They chose Computer SI and OnBase®, an integrated suite of enterprise content management software solutions from Hyland Software “OnBase gave us the best combination of features and functionality for the price,” recalls their Director of IT. “After spending a day here, Computer SI mocked up a solution in an hour. It was exactly what we had been looking for.”

Applying Complex Business Rules Automatically

Their process has about 150 lease requests each month and tracks a total of about 5,600 leases through various stages of their lifecycles. Business growth, the acquisition of new companies has increased volume of leases. Mimicking the manual system OnBase replaced, leases pass through four phases:

preparation, testing, approval and reconciliation. The process is very complex as every combination of lessor and lessee has potentially different business rules. When an agency wishes to enter into a new lease, it sends the lease documents electronically to them. The primary means for doing this is via their intranet portal; users enter keywords and upload the required documents, which are then transferred via FTP to the leasing workflow. The portal imposes some business logic of its own, ensuring complete and accurate submissions the first time.

They also receiving a large number of emails and paper documents that are now easily imported into the OnBase repository to ensure a complete lease submission. Once a lease enters into the workflow, an e-form is used to “bind” all of the documents into a single complete package for testing and approval.

Lease Processing Reduced from 3 Days to 3 Hours

Once the preparation workflow has collected all of the documents and verified the presence of a master lease agreement, the file goes to indexing where a testing date is determined. The workflow then associates the appropriate backup documentation based on that testing date. Scripts have been written to perform tests to determine whether the lease meets the four criteria required by FASB 13 to be classified as an operating lease. This includes mathematical calculations specified under the accounting standard.

If the lease passes the testing phase, it moves to an approval lifecycle, where it is reviewed and approved by four employees with different specialties.

These employees travel regularly, so the ability to sign on to OnBase using a standard Web browser and access this workflow is critical to timely approval.

Once approved, e-mail notifications are sent via their existing Outlook environment, the lease documents are executed and a copy is scanned back into the OnBase repository.

Throughout the entire process, agencies have visibility into the status of the lease through the portal via an OnBase WorkView application. All static data, such as contact information and other details necessary to process a lease involving a particular lessor/lessee pair are stored. They were able to apply the existing company hierarchy thereby complying with internal company security requirements.

Once the lease is fully executed, lessors send files to a separate database, known as the Lease Liability System, also maintained by them. The Lease Liability System compiles data from the third-party leasing companies. OnBase automatically creates an electronic form that is used to reconcile the information recorded in OnBase with the records in the Lease Liability System. Once a match has been confirmed, OnBase and the Lease Liability System are updated to change the status of the lease to “live.”

Prior to implementing the OnBase solution, they estimate that completing the lease approval process required a minimum of three days. Now the entire process can be completed in as little as three hours, increasing the level of service to their agencies. By automating the process, they have also reduced the labor requirements from four to five full-time people to part of one person’s time, making it possible for employees to focus on higher value tasks within the company.

Increased Productivity, Convenience and Peace of Mind

One factor contributing to the success of the project is the high level of user satisfaction. They now actively developing additional ways to leverage its OnBase® investment. Computer SI has been introduced to new business units within their organization and is exploring additional business intelligence possibilities for the OnBase® data such as incorporating tools from other vendors.

Eliminating the hundreds of binders full of documents has freed up space while making the documents more readily available to users. Unlike paper-based documents, the OnBase® repository can be backed up to support disaster recovery and business continuity initiatives.

OnBase® is also expected to eliminate much of the disruption and complexity of the auditing process. They can quickly and easily provide auditors with any requested documents for any of its companies.

Because of its modular architecture, OnBase® can be readily and economically scaled to address the needs of additional departments without violating the integrity of the individual operations. With more than 5,000 commercial and governmental organizations using OnBase®, Hyland and its international network of authorized solution providers have expertise in specialized vertical business applications as well as the back office functions required in every organization.