Go Green with Document Management

The Truth about Document Management - Part 2

Posted by Diane Mitol on Mar 25, 2015 2:50:44 PM

The Truth about Document Management – Part 2

In our previous blog post, we discussed the fact that whether you manage paper files or use an EDM system, you will encur document management expenses.  The only question is which form of document managment makes sense for your firm -- paper-based or electronic.  In that post, we focused on the various capitol and overhead costs involved with the use of paper files.  This post focuses on the personnel costs associated with a paper-dependent office.  In most cases, these human expenses actually exceed the physical expenses. 

The Truth about Paper-based Office Personnel CostsUsingPaperFiles

Recent research from Price Waterhouse provided these statistics on the time and money spent on paper in today’s typical organization:

  • Of all the pages that get handled each day in the average office, 90% are merely shuffled.
  • The average document gets copied 19 times.
  • 5% of all documents get lost, 3% of the remainder get misfiled.

Based on employee surveys, one large organization calculated that 80% of its employees wasted an average of half an hour per day retrieving paper-bound information, while 60% spend an hour each day re-doing or duplicating work that had already been done by someone else.   While these numbers may vary from company to company, what is consistently reported across all kinds of businesses is that paper-bound firms pay employees for inefficient processes like these: 

  • Moving paper from one place to another (the paper-shuffling that Price Waterhouse alludes to above)
  • Making paper copies of paper documents (when the copier works and there’s not a waiting line)
  • Processing paper invoices (studies estimate the median cost to be $15.00 per invoice,  with little or no correlation between the cost to process and the size of the company)
  • Filing paper documents (estimated to cost $20 each and to take at least 6 minutes to pull and re-file)
  • Retrieving paper documents from within the office (can account for up to  40% of an employee’s total working time)
  • Finding missing paper documents (estimated to cost $120 to locate each missing document)
  • Recreating or replacing lost documents (estimated at $220 per document)
  • Locating and retrieving documents stored offsite (while the storage cost can be as low as 19 cents per cubic foot, locating, retrieving and transporting files when you need them can add quite bit in additional costs, as can monthly administrative fees, fuel surcharges, move in and move out fees and more.    One example we saw for storing 1,000 boxes for three years and then disposing of them would have cost the customer $8,208 for the actual storage, plus $10,971 in additional fees. File level tracking can be even more costly)
  • Handling paper at audit time (any or all of the above tasks will be multiplied when an audit is due.)

Less Tangible Human Costs

There is far more at stake for the paper-based office than the quantifiable costs presented above.  There are also qualitative costs such as:

  • Staff Productivity and Focus: Traditional paper shuffling eats into the time that employees could spend more productive activities, from customer relationship building to increased sales.
  • Employee Frustration: When employees do work that is obviously unnecessary and unproductive, like paper-shuffling, they have lower job satisfaction, which usually lead to lower job performance.
  • Objectives Tracking: With important information buried in file cabinets, managers don’t have easy access to information needed to monitor and improve performance.
  • Decision Making: Lack of readily available information and data hampers management’s ability to act—or act quickly enough—on important strategic and tactical issues.
  • Lost Effectiveness: Time spent by upper-level employees handling paper inhibits the expertise and experience they are being paid to deliver.
  • Audit Compliance (and Possible Penalties): Having data distributed among various locations makes it difficult to produce information needed during audits and other compliance checks.
  • Regulatory Compliance: Paper documents present difficult challenges in protecting confidentiality and data privacy, which are increasingly important issues for many businesses.
  • Diminished Collaboration: Relying on paper documents limits the ability of various departments to communicate and collaborate, which can lead to lower productivity and lost opportunities.
  • Security and Data Integrity: Paper files are far more likely to be compromised than controlled digital files due primarily to the increased opportunities for information to be lost, stolen or damaged.
  • Mobile Access: Use of paper filing and documents means data is not available through mobile devices, which are quickly becoming the tool of choice for customers and employees.
  • Customer Service and Retention: Delays caused when employees need to take the time to locate paper documents can lead to customer dissatisfaction, reducing repeat business.

What could your business do with the recaptured costs if you eliminated paper?  Would those recaptured costs pay for an EDM?  Would you save money with an EDM?  

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