Mizuho Capital Markets, a midsize New York trading company, used to deal primarily in paper documents, and as such, it did little to automate or digitally protect them.
In fact, until Sept. 11, 2001, all of the companys hundreds of thousands of business-critical paper documents were stored in fireproof filing cabinets in its 80th-floor offices at the World Trade Centers South Tower.
Paper-based systems are common among OTC (over-the-counter) trading companies such as Mizuho because of the nature of the transactions, said Mark Bramante, associate director of Mizuho Capital Markets Corp., a subsidiary of the Mizuho Financial Group Inc., one of the worlds largest financial groups.
“Each transaction can be negotiable as to its terms, so there really arent standard electronic forms,” Bramante said.
The company had paper documents stored in 40 four-drawer filing cabinets that it thought were resistant in every way. “They were even fireproof to 1,200 degrees. Obviously, theyre all gone now,” Bramante said.
Following the terrorist attacks of Sept. 11, Mizuho spent hundreds of hours trying to re-create the lost documents.
“After 9/11, for most of our transactions, we could go back into our database and re-create the contract, but for some, they were so unique we couldnt—or we could, but it would take a tremendous amount of effort—so we had to go back to customers and ask them to send us back copies of the transaction,” Bramante said.
“Of course, people were good about complying after 9/11, but we had to recheck the documents as if we had done the transaction from scratch. We had to work backward from paper supplied to us from customers.” Mizuho spent about 500 man-hours alone on that very minute portion of its transactions, Bramante said.
After the data recovery, Mizuho spent nine months evaluating products to safeguard its documents. “We looked at about 20 solutions—really, at anybody who would show us a product,” said Bramante.
During the search, Mizuho approached Xerox Corp. and subsequently settled on the companys DocuShare document management software.
But to deploy the product, Xerox referred Mizuho to two VARs—one of which was Polgroup Corp., of Hackettstown, N.J.—that specialize in DocuShare solutions.
Working with Polgroup, Mizuho implemented a Web-based disaster recovery system based on DocuShare.
A Web-based document management system with a J2EE (Java 2 Platform, Enterprise Edition) architecture, DocuShare can be used in four ways: for classic document management, collaboration and project management, content distribution, and as an information portal, said Colman Murphy, product manager for Xeroxs DocuShare business unit, in Palo Alto, Calif.
“It provides not just extreme open access but the inverse—you can lock down the system as tightly as you want,” Murphy said.
Mizuho chose the solution, Bramante said, for just that sort of functionality but also for the support Polgroup offered. “Polgroup came out to talk to us about our needs. They were really willing to work with us,” he said.
Another reason was the softwares low initial cost. “You dont have to buy a massive solution to start with, which is nice for SMBs [small and midsize businesses],” Bramante said.
DocuShare is priced at $4,145 for 10 seats, with a 100-seat system costing $9,995, according to Xerox.
Ease of use was also a factor. “The user interface was one of the simpler ones we saw, fairly intuitive,” he said. “We have had no complaints from the pilot group of users, which has been using it now for 15 months. Everyone was amazed at what it can do and how efficient it can be—people keep finding new ways of using it.”
Today, for each financial transaction, Mizuho creates a record using the DocuShare system. As transaction tickets come in, they are first processed by the operations group.
A record, or container, is created for the transaction and other related documents such as correspondence. Employees can access these records via the companys intranet.
The company runs DocuShare on a Unix server supporting employees across seven departments. With traders working out of its offices in New York, London and Hong Kong, “there is a constant exchange of physical documents created by traders at each of the locations, most of which flows to New York,” Bramante said.
Mizuho also uses the system to create legal and human resources records, which it restricts to certain users, he said.
Bramante said that although there were no major problems with implementation, “It was a little bit harder to install than we expected, maybe because of our file structure. There is a limit on the size of groups you can have, or containers, but we worked around that to our satisfaction.”
The DocuShare system has helped Mizuho streamline its business processes, Bramante said.
“Our goal was to prevent another tremendous catastrophic loss of documents, but because we went to an electronic document management system, some natural efficiencies came with that,” he said.
“We are better able to accumulate documents and in a much more efficient way,” Bramante said. “Before, we had to mess with faxes, paper jams and misplaced paper.
Now that everything is electronic and we have a record of everything, we have cut down dramatically on international telephone calls and e-mails trying to track down documents.”
“It also helped us to clear some comments by internal audit concerning critical document retention,” Bramante added.
Polgroup CIO Cecil Murray said keeping good audit trails is one reason financial institutions are increasingly looking for ways to automate the front end of their business processes.
“This is becoming really important, particularly with financial guidelines like Sarbanes-Oxley coming down from the federal government,” Murray said.