The True Cost of Paper in Your Business Operations

Joe Alvarez
301.840.6264 – Space, Document Management & Asset Tracking (RFID) Professional.
Published Apr 16, 2020

Research firm Gartner estimates that as much as 3% of a company’s revenue is spent on paper. Copy paper, note paper, invoices, letters, file folders…it all adds up, and it’s easy to quantify. But that’s just the hard costs. What is rarely calculated are the hidden costs all that paper generates.

A few statistics from a PriceWaterhouseCoopers study:

· 8 hours – the amount of time an employee spends managing paper documents each week

· $122 – the cost of finding a single lost document

· 750 – the number of lost paper documents per year, per mid-size business

There’s a dollar figure attached to this kind of lost productivity. Even though the math may not show up on a P&L spreadsheet, lost documents alone can be calculated to cost the average mid-size business $91,500 per year.

And that’s before calculating the cost of office space to store all those documents. Paper is undeniably bulky. Just 250 standard file cabinets take up 2,500 square feet. That adds up to a significant sum, too: $135,000 per year, on average.

Knowing those costs could make you think twice about using – and retaining – all that paper. But do you have a choice?

Imaging is the alternative. Converting paper documents to digital documents saves businesses the cost of all that storage space for physical documents. The contents of those 250 file cabinets, after conversion, will fit onto a single hard drive. With imaged documents safely stored on a drive, lost documents are a thing of the past, as is the cost of finding those lost documents.

Even better, businesses can take advantage of the cost savings of a remote workforce. Digital documents, unlike paper documents, can be shared readily with members of a distributed team. And remote teams require less office space, adding to the cost savings.

Of course paper still provides a valuable function even in the digital era. People have a positive response to information presented on paper, and they absorb and retain that information longer. Sales and marketing materials, for example, have a greater impact if they’re presented on paper.

But for many other areas of business operations, imaged documents present a significant value in the form of reduced real estate costs and improved productivity. Take a look at how your enterprise uses paper, uncover the hidden costs, and make a profitable move to imaging.

Joe Alvarez, president of National Office Systems Inc., has over 20 years’ experience helping companies and government agencies to bridge the gap between an organization’s processes and technology when considering storage and asset management systems. Since 1976, National Office Systems (NOS) has been the leading provider of the most affordable and comprehensive storage solutions (high density mobile shelving, automated storage and retrieval, stationary shelving, biometric secure access cabinets) and document management systems. NOS saves money for businesses when they move to a new space, showing them how building smaller spaces and leasing less space provides rapid return on investment for capital equipment projects.

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Joe AlvarezClick
Joe Alvarez
301.840.6264 – Space, Document Management & Asset Tracking (RFID) Professional.
Published Apr 16, 2020
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The Cost of Keeping Paper Documents

March 29, 2021

Storing paper documents for your business can seem simple at first, but over time you will begin to see the overwhelming document overload as well as a drop in your business productivity. According to a Gartner study, one out of every 20 documents is lost or misplaced and companies spend approximately 25 hours recreating those lost documents. Think of all your team could accomplish with that extra time —and the money you could save in labor costs.

Exactly what is the true cost of keeping your paper documents? And how do you avoid it? These are questions that we hear a lot of from our customers. Keep reading to see exactly why keeping your paper documents can be incredibly costly for your business, and how implementing a digital document management system can greatly reduce those costs.

Overall Cost

On average it costs about $4.82 to handle a single paper document and It is estimated that US companies will waste about $8 billion every year on managing paper. If you think about all the paper documents you store within your business and need to retrieve on a daily basis, those numbers start to add up fast. If you keep your documents stored in an offsite storage facility, retrieval costs alone can be expensive. What about when a file goes missing? How long would it take you to find it? Having your team thumb through hundreds of documents just to find one is not what you want your team to be putting their well paid time and effort towards.

You need to also take into consideration the upkeep of storing paper documents as well. According to a Gartner study, each four-drawer file cabinet holds an average of 10-12,000 documents, takes up 9 square feet of floor space and each one costs $1,500 per year. Also the upkeep of printers and faxing machines come into play as well. All of these expenses and time not only hurts the growth of your business, but also puts you at risk of losing important documents.

Lost Documents

Think of how many times your business had misplaced a document, or how many times you couldn’t find a document and had to replace it. According to a Gartner study, approximately 25 hours to recreate each lost document. This is time that could be used toward other, more important business efforts. With 90% of a business’s information stored in documents, you don’t want to put all your trust into a filing system that isn’t very efficient or reliable. What if there was a flood or fire? According to a Gartner study, more than 70% of today’s businesses would fail within three weeks if they suffered a catastrophic loss of paper-based records due to fire or flood. You may be thinking to yourself, “Well that won’t happen to my business!” Unfortunately, that’s a risky way of thinking. You want to be proactive and make sure that if something like that were to happen, your documents are secure, safe, and easily accessible.

Retrieval Time 

One main issue we see with our customers is the retrieval time of paper documents. On average it takes around 10 minutes per paper document to retrieve, copy and re-file.  When working with paper documents, no matter how organized your filing system is, you will run into the problem of not being able to retrieve documents in a timely manner. Say you need to find an invoice for a certain client and it’s not in its normal filing cabinet? You have already spent time looking for it and now you will have to track down this document which increases your retrieval time and can upset your clients.

Security & Audits

Your business may keep certain paper documents due to legal reasons and/or for possible audits. According to an AIIM research, 62% of businesses are strongly reliant on their file-shares. These types of documents are extremely important and by storing them in a filing cabinet or an off-site facility, you are making it more difficult for your business to retrieve them in case of emergency. For example, imagine your business is going through an audit and production must halt until the audit is completed. If you and your co-workers are spending hours going through each filing cabinet to find the exact documents the auditor needs, you are keeping your business from moving forward with production, thereby exponentially losing money.

Overall Efficiency  

Each business is different when it comes to their document lifecycle. You may have processes set in place for when a document is created it moves from one department to the next. However, with paper documents you would need to either hand it in person, fax it over to the correct department, or scan and email it over with the other department reprinting it. Especially with many people working from home nowadays, these processes may not be the most efficient way of moving your documents around.

As a business you want your processes to be streamlined and customized to your business needs. By keeping  paper documents, you are holding back your businesses efficiency and could potentially hurt your business in the long run. The International Data Corporation found that a business with 1,000 employees wastes $2.5 million to $3.5 million a year chasing documents. You may not see the problem within your business right now, but over time if you keep storing paper documents your business will run into at least one of these issues if you are not proactive.

What Can Be Done?

So what exactly can be done to minimize your paper documents? The best path to go down is to start your journey to become paperless with a document management system (DMS) or Enterprise Content Management system (ECM). With a DMS or ECM, you are able to:

  • Build a secure and trusted repository of accessible documents
  • Drastically reduce the cost of off-site paper document storage and per-page retrieval costs with document scanning
  • Address both internal and external auditor’s requests in a timely manner
  • Prevent fire, flood, or theft from putting your company out of business
  • Track and get approval on work as it traverses departments
  • And more!

Over time you will be able to see the ROI on implementing a document management system through reduced labor and physical storage costs. Your business will become more efficient, save money, and reduce the risk of losing documents.

With Optix, we will help you start your process of becoming paperless with a document management system. Our document scanning, document management, workflow automations, and more will help your business grow without the hassle of storing paper documents. Still have questions?

K.J. McCorry is CEO of Officiency a business consulting firm based out of Boulder, CO.

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Why data and the pandemic are ripping up paper processes.

By

Marc Ambasna-Jones

The recovery will be digital, says a recent McKinsey report focusing on how businesses can grow at speed and scale against the backdrop of Covid-19 pandemic-suppressed economies. Nothing unusual there. We’ve all seen the rapid adoption of digital technologies to enable remote and socially distanced workers, but few would have put the paperless office high on the agenda for change.

“Many organisations will need to rapidly reinvent processes that previously required physical documents, to become paperless,” says the report. “Enabling the submission of scanned copies for document verification and supporting contactless servicing capabilities (for example, by creating digital forms to replace physical forms and enabling electronic signature capture) will likely be key priorities.”

This is not the first time paper processes have become a poster child for digital progress, but unlike in previous years, there is now an element of necessity. This is not so much about reducing paper consumption, but more about improving overall document management in an increasingly touchless society. For years, technologies have been capable of reducing paper consumption only to see paper consumption increase.

The key here is the proliferation of data and the management of that data. Paper is increasingly cumbersome within new information processes and organisations are slowly realising the operational value of digitised document management.

According to the Association for Intelligent Information Management (AIIM)’s State of the intelligent information management industry 2021 report, on average, organisations expect the volume of information coming into them to grow from X to 4.5X over the next two years. They expect more than 57% of this information to be unstructured (a contract or a conversation, for example) or semi-structured (such as an invoice or a form).

The problem is that not many businesses are geared up to manage this volume of information, something that Covid-19 exposed as organisations scrambled to manage remote working. While the importance of effective information management may have been recognised in boardrooms, the reality, according to AIIM, is that still too many organisations lack the tools and knowhow.

“Organisations are losing the battle against information chaos and need to rethink outdated manual approaches to information management,” says the report. “Overall, respondents in the AIIM survey give their organisations a grade of C minus (1.64 on a four-point grading scale) in the battle against information chaos.”

This is actually slightly lower than the grade assigned to business/information management alignment. Almost half of participants (46%) graded their efforts at battling information chaos as “needs improvement” or “poor.”

Almost certainly, problems exist because of a lack of insight into the impact of paper-based processes. Knowing how paper is affecting the organisation from a cost and information management perspective is half the battle. Whether it’s monitoring printer use or understanding workflow processes better, organisations need more joined-up thinking.

Print management

For healthcare technology, data and analytics business IQVIA, this need for oversight, especially as a result of remote working during the pandemic, drove its decision to deploy a print management system. The company wanted to see who was printing and why, and where it could use its printing resources more effectively.

The company teamed up with Intuitive to use PaperCut, a business intelligence tool that provides print and process management capabilities via a set of dashboards. Reporting is automated and spreadsheet-free, enabling visibility not just of printer use, but also costs by user or department.

“Due to Covid and the closure of some of our offices, printing is still happening but remotely at home and the consumables are costly,” says Mario Massa, principal technology architect at IQVIA. “We have print volume from over 70,000 employees. The data from PaperCut and the Intuitive dashboard allows us to see all the costs quickly and easily. We have also found that if we hold a candle up to the figures, experience shows that this visibility has an effect on user behaviour.”

Massa says this visibility will enable the business “to change our current process from paper to more digital”, recognising both the potential for greater workflow efficiencies but also reduced costs. IQVIA, Massa believes, will be able to make decisions more effectively on how it uses paper in future thanks to visibility of current paper use. Of course it makes sense, but not all organisations are approaching paper processes from the same perspective.

For North West Anglia NHS Foundation Trust, for example, digitising paper is not just a cost issue, it’s an information retrieval issue. For any healthcare organisation, accessing new and legacy medical records has historically been a challenge.

According to Deborah Dearden, assistant general manager of health records and outpatient administration, keeping up with an ever-growing paper records library used to be tough. The trust’s staff could spend several days hunting for a specific file or chasing down departments. There was a risk that records could get mislaid or lost, resulting in a patient’s appointment or operation having to be cancelled.

Of course, digitising large volumes of records is not easy either. As well as the actual scanning of documents, there are also requirements for secure and compliant digital storage. North West Anglia turned to Iron Mountain to help create a digitisation process with off-site storage that would help deliver patient records quickly and securely wherever and whenever they were required.

The paper-scanning process

According to Dearden, documents are scanned and returned as digital images usually within 24 hours, while legacy patient files are scanned on-demand. The service is delivered by a dedicated Iron Mountain team, backed by weekly update calls and monthly meetings to review service levels.

“When a patient visits hospital, we create an event pack, which moves between various specialists and departments,” says Dearden. “We are also required to retain legacy medical files and corporate material, such as financial and pharmacy-related documents. We needed a supplier that understands our processes and what is involved in managing case notes. Previously, one in every 10 images was lost due to software error. We had no option but to go back to manually retrieving paper files, putting massive pressure on already-overstretched resources.”

It was a similar story at Birmingham Children’s Hospital, another Iron Mountain customer, where paper medical records had become complex to manage and store. The back scanning project involved about 40,000 patient records, which were all digitised at the Iron Mountain specialist facility at Stone, Staffordshire.

Other traditionally paper-intensive industries, such as the legal profession and government, have had to rapidly adapt. One example is the Council of Europe, a Strasbourg-based body, founded in the wake of the Second World War, which promotes human rights, democracy and the rule of law. It regularly produces documents (reports, studies, recommendations or judgments) that are collaboratively produced. These documents are highly sensitive, containing vital information on human rights topics and need to be accessed remotely from offices in more than 23 countries and by over 6,000 external users.

With nine repositories, various field offices, and files being saved on local servers, the organisation was encountering a lack of version control, which meant it was difficult for staff to search for and determine where the final version of a document was located. Also, having several disparate documentation systems made it extremely difficult for its infrastructure and security teams to guarantee a full and comprehensive data backup.

The Council of Europe teamed up with NetDocuments to deliver a cloud-based document management system (DMS).

“It was our aim to store all working documents in a single, shareable DMS that can be directly managed in terms of security, access and folder structure by the different departments within the organisation,” says John Hunter, CIO of the Council of Europe. “Having a central DMS to store documents means that we will be able adopt common working methods and best practice.”

The shift towards digital processes has been welcomed, especially during the pandemic. The Council of Europe had already taken the positive step of enabling remote collaboration, with at least 40% of its staff working remotely in different locations across its member states. A secure, mobile-ready platform, with a central DMS to store documents, has transformed workflows and operations, with NetDocuments ensuring the proper safeguards for the organisation’s data, guaranteeing that documents are protected and secure, from wherever staff are working.

Given the pandemic and working from home, many organisations will recognise these challenges and needs. As the AIIM research found, the two most important information challenges remain “digitising, automating and integrating processes” (25% say this is the top challenge), which is followed closely by “managing information throughout its lifecycle” (24%).

With the rapid growth in data – every day, 200 exabytes of data is generated worldwide and enterprises account for about 42.2% of that number – organisations will need to digitise processes or face the prospect of ever-increasing complexity. Paper, for all its culturally aesthetic qualities, is surely reaching the end of its corporate life.

 

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