Going Paperless-Part 1
The concept of a paperless office has been around for many years. Many companies have tried it, some have been successful, but most have either failed, or not tried in the first place.
From a technical perspective, setting up a paperless office is a realistic objective, from every other view it is a different story. Paper provides a convenient medium for the transmittal & storage of data. Paper doesnt run out of power, it doesnt catch viruses; it doesnt break when you drop it. Most of us have been working with paper since our early childhood.
In reality, we are not ready to give up paper completely, but that should not be an excuse to nothing about the inefficiencies that result from our excessive use of paper. We can use less paper most companies could cut their paper consumption by 70 to 80% with ease.
Paper filing systems versus electronic documents?
In the Philippines more than 95% of companies rely on paper as opposed to electronic documents.
Paperless Trail promotes technology that helps our customers migrate to a paperless environment.
Throughout this article we will make reference to a typical company. Our typical company is modeled on the average of more than 50 LLCs that we have dealt with over the years. This company has 30 administrative (admin/legal/HR/finance) staff. They will store up to 1 million pages in their head-office, with perhaps as many more spread across branch offices throughout the country.
Tangible costs:We have identified three measurable cost areas:1. Storage1. Printing & copying1. RetrievalStorage where do you keep your documents?On average, 13.5% of office space is used for storing documents.A typical filing cabinet requires 0.4 sqm of floor space, but you have to be able to open it so the area required is now 0.8 sqm. You need somewhere to stand whilst you look for your files to keep the maths simple, we will assume that you occupy 0.2 sqm, total 1.0 sqm of space for a filing cabinet. If average rental costs in Makati are 600 Pesos/sqm, then each filing cabinet costs 7,200 Pesos per year (whether it is full or empty). The costs of storing 1 million pages in 4 drawer cabinets will be around 720k Pesos per year (every year).
The rental figures are based on costs in Makati CBD, so if you are based in QC, Pasig or Alabang you can make the necessary adjustments to figure out what it costs you.
Search & retrieval:
Professional & administrative workers spend 20 to 30% of their time searching for documents, and only 5 to 15% of their time reading the documents.Even with the lower estimate, admin staff will spend some 400 hours per year searching for documents. For a team of 30, that adds up to a staggering 12,000 hours per year (that is the equivalent of 6full timestaff). Costs will vary from company to company, but onaverage the annual cost of searching for documents will be in the order of 1.5 million Pesos.
Printing & copying:
We add 20% to the total number of documents every year.Our typical company will produce 50,000 new pages per year. If we assume a cost per page of 1.5 Pesos (paper plus toner), then printing will add up to a relatively small 75k Pesos per year.Unfortunately the story doesnt end there. The average document gets copied 10 to 15 times in its life. If we use the lower estimate, instead of 75k per year for printing and/or photocopying, we are now looking at 825k.Summary:Storage costs approximately 700k Pesos per annum, search & retrieval 1.5m, printing & copying 800k, total costs (excluding equipment) are approximately 3 million Pesos. These are really hidden costs you dont have a supplier who presents you with an invoice at year end for 3 million. The costs are recurring, rents, salaries & wages, utilities, office supplies. Nobody sits down and adds it all up, but hidden or not the costs are real!
In the tech industry a commonly used term is TCO Total Cost of Ownership. The period used for calculating the TCO is usually 5 years. For our paper based system the 5 year TCO is 15 million.
Intangible costs:The costs above are quantifiable, but there are other less measurable costs which if they could be quantified, may match or exceed the tangible costs:1. Customer service1. Business continuity management (BCM)1. ComplianceCustomer service:Customer service, whether it be internal or external customers, usually requires access to documents. As customers, there is nothing more infuriating being put on hold while we look for your file. It is no different when you have to access a file from another department, if it is not available when you need it, there is an associated cost.Business continuity management (BCM):Disasters, such as a fire, flood, or theft, can cripple a company. Many companies will keep only one copy of a file on site, so if key documents are destroyed they may be irreplaceable. 70% of companies that suffer a catastrophic loss of data go out of business. Whether the loss is a result of fire, flood or earthquake, the net result is the same.
BCM is something we talk about only after a typhoon or a fire, and we promise ourselves that we will do something about it, but like New Year resolutions, we forget about them quickly. How much would it be worth for you to know that in the event of a disaster (however unlikely that might be) that your company could continue in operations?Compliance:We cannot quantify the cost of a lost document, but if a document is required for an audit, and you cannot find it, that will result in a non-compliance finding. Between 3 and 5% of a companys documents are lost at any given time. They may not be lost forever, but if you cannot find a document when you need it, then it is lost what does that cost?Summary:The intangible costs are risks. Could you recover if your office was burned down? What is the cost of a lost document? What is the cost if you fail a compliance audit and lose your accreditation?Conclusions:At this point many of the companies that we meet will say, thank you, but we dont have the budget to do this. According to the 2014 AIIM Industry Watch report, 60% of users have seen ROI on their paper-free projects within 12 months, an impressive 77% within 18 months.
For our typical company the 5 year TCO of going paperless is approximately 20% of the 5 year TCO of using an entirely paper based system.
For more detailed information, visit us athttp://www.archive-one.net/