Going Paperless – The Whole Truth and Nothing but the Truth

No, this blog post isn’t about PDF content – but after a recent conversation with a client I felt compelled to clarify – and demystify – what “going paperless” is really about.  My next several blogs will cover the issue of costs and how to approach “going paperless” for substantial benefits and cost savings.

As a separate subject but very much a part of going paperless is the need for a Records Policy.  A Records Policy is the only way you can justify destroying records – and without one – you’re a prisoner to an ever growing library of content.  ARMA (www.arma.org) is the resource on this topic.  http://www.arma.org/pdf/WhatIsRIM.pdf

PART I – The Whole Truth about Costs

A) Going Paperless - The Vision

 The conversation with my client went something like this:

Client:  “Well I’m glad you asked about our 2011 initiatives.  One of the biggies is going paperless.  We think it will save us a ton of money and we're really having trouble locating paper documents”.

Me: “That’s great!  It sure could.  What processes are you planning to automate?”

Client: “Oh, we’re not automating anything really – just getting rid of all of those boxes in storage and putting everything on line.  Our storage vendor said it might reduce their revenues a bit – but will make us much more efficient.”.

Me: “I see.  Are they helping you develop a records policy so you can thin out the old paper records?”

Client: “Not necessary since we’re still keeping everything.”

Me: “And what about the new paper you’re receiving or creating every day?”

Client:  “That’s the best part.  Nothing has to change.  We’ll just box up the paperwork, send it to our vendor, and they’ll put it on line!.  Really simple!"

And with that, I realized that my client was excited about a project which will probably increase costs while delivering little or no benefits. 

B) Some Nomenclature

  • Uniform Photographic Copies of Business and Public Records as Evidence Act (UPA) – This is the law which makes it legal to substitute electronic records for paper copies - and in fact, permits the destruction of the paper records in the normal course of business.  See this link for a legal citation.

  • Records Policy – a set of guidelines which defines how long you must keep any type of record in your organization and when you can destroy that record.
  • Back File – This is your existing collection of paper records, most of which you never or rarely need to access.
  • Day-Forward – This is the new paper you create day to day which is referred to often and must be accessible.
  •  Workflow – a process someone or some people follow when completing a task. 
C) The Economics of Scanning - Backfile Conversion

To figure out whether its economical to “go paperless”, I suggest dividing your universe of paper into two segments:  Backfile and Day Forward.  Lets look at the cost of storing your backfile as paper or in electronic format. 

We need to make a few assumptions which are:

1) we’re working with a bankers box of about 10” high x 12”wide x 15” deep.  This box will contain 2000 to 2500 pages.  PS: this box is about 1.04 cubic feet in size.  Bankers boxes 24" deep will store 4500 to 5000 pages.  (for other estimates - see this resource)

2) A scanned page of paper will average 50k in size so a single box containing 2000 pages (15" deep) will require about 100 Mb of storage.  1 Gb of storage will accommodate about 10 boxes of scanned content.

3) You can get a page of paper prepared and scanned for 8 cents.  Remember - these are my assumptions and your costs may vary.

4) 1 Gb of storage will cost you about $35 per month.

The results are:
  • Cost to scan a box = $160.
  • Cost to store the electronic version of the documents in 1 box = $3.50 per month.
Compare the cost of scanning and storing a box to your cost of storing a box.  Its probably cheaper to store the box. 

In the case of my client the storage costs include $1.50 to receive a box and about 25 cents per box per month to store it.  There are also retrieval, re-file, and destruction fees as well – this is why you may consider scanning boxes that are retrieved often. 

D) So Scanning the Backfile is Break-even or Often may Cost More – So Why Do it?

Under certain circumstances, it may pay to convert some or all of your backfile even though there are initial scanning costs and monthly storage costs.  A few examples:

  • Is a portion of your business subject to time-limited requests for documents?  You may have no choice but to identify the specific documents subject to requests and invest in scanning and storing those documents.
  • Are you the custodian of document records like wills and mortgages which must be accessible for very long periods.  In these examples the paper original may be required but its important to “back up” the paper by scanning the originals to electronic media and microfiche.
  • Are there particular boxes that you seem to be constantly recalling from storage?  It may save you money and will certainly save you time if you scan these boxes and store the electronic versions on line.
  • Are you implementing a records policy?  It may actually be easier to review and cull records in electronic format than in paper format because the electronic version may be indexed with helpful key words and may be full text searchable – making it possible to search and locate electronic records in ways simply not possible with paper documents.

PART II – Day Forward and Workflow – Transforming your Organization

In my next post, I’ll discuss the benefits of going paperless and how it can transform your business into the efficient document machine you’ve always dreamed about.