I am not calling myself old, but when I started in this document management business, I was wearing Z. Cavarriccis, neon-colored shoe strings, and Coca-Cola shirts. I would like to share some of the things I have learned over the years about the compelling reasons that companies go paperless.

So, the big question is:  Why scan paper documents and convert them into electronic records?  What sort of challenges do businesses face where an electronic document management system could help?  There are plenty of valid reasons to embark on an EDMS project. These reasons include cost reduction, less storage space and more office space, increased efficiency, better collaboration, compliance, and risk mitigation.  This is not an exhaustive list, but it is some of the high-level topics talked about most often by consultants like myself.  Let me break these down for you one at a time.

Cost reduction

Costs are usually broken down into two main categories; hard costs and soft costs.  Although soft costs are real and measurable, it is usually the area that gets the most contention.  For example, this might include lost productivity. Think about the time difference it would take a worker to find a paper file in a file cabinet versus pulling up an electronic record on his or her computer.  I'll spare you the calculations, but this might equate to a savings of $0.66 every time a document is retrieved with a time savings of 2 minutes by retrieving that document electronically. That's assuming the sheets of paper were filed correctly in the first place.  I could extrapolate that out to a month or year and come out with some pretty large numbers, but I can see the eyes rolling already. There lies the point of contention I already mentioned.

Let's talk about something more tangible: hard costs. This might include shipping costs, copy machine-related costs, office supplies, storage costs - onsite and offsite, etc.  Pick up one piece of paper and look at it.  Feel it.  Throw it around.  Seems insignificant, huh?  Now pick up a ream of paper and do the same; a case of paper; a file cabinet. You get the picture. 

Moving paper around and storing mounds of paper costs money - a lot of money.  I remember implementing a scanning solution for an HR department because they literally had no more room to move in their area.  They couldn't squeeze another file cabinet in the room if a life depended on it.  They would have had to sign an agreement, a costly one at that, with an offsite storage company to handle their overflow.  Instead, they partnered with my company to implement an EDMS and get on track toward being a paperless office.  Not only did they save money by not storing their documents offsite, but they were able to get rid of most of their file cabinets—the physical advantage of digital document management systems.  Now they retrieve clou-based documents from their desktop (or mobile devices) faster than ever before with management software.  Now THAT'S increased productivity and streamlined business processes at a lower cost!

Increased efficiency

Imagine you own a company with a call center to provide service on the products or services you sell. Now imagine your service reps have instant access to all the electronic records they need to do their job quickly and effectively.  Having documents at your fingertips is near impossible with paper documents, especially if these documents are shared among a group.  It's hard to put a price on good customer service, but it makes sense that your customers' happiness is directly proportional to the amount of time they must be on the phone with a service rep.

"An average company spends 400 hours per year searching for lost files" - Pricewaterhouse Coopers

Having multiple index values associated with an electronic document makes it easier to locate in case one of the fields gets indexed incorrectly.  The less time an employee spends managing documents, the more time he or she has to dedicate to core functions - and profitability - of the business.

Better collaboration

If a document is stored electronically and the technology is configured appropriately, then it can be accessed anywhere in the world, at any time of the day, by anyone who has the proper security clearance to do so.  This is irrespective of whether the information is stored on internal servers or in the cloud via a hosted solution.  EDMS solutions can be setup to take advantage of either topology. 

Compare that to a document, for example - a contract, that needs to be viewed and edited by several people.  If that contract was stored in a file cabinet, then it would be difficult to collaborate on it when only one copy of the document exists.  This issue is magnified if the team members live in different geographical areas.  Even if each team member had their own copy and each was performing some revisions, then everyone's document immediately becomes out of sync.  This is true even if the documents were scanned and emailed.  Just because documents can be sent digitally, doesn't mean they are managed effectively.  Most EDMS systems these days have built-in version controls and utilize features like CHECK-IN, CHECK-OUT, and REVIEW-ONLY modes.  This allows for a much more systematic way of tracking changes to documents that are collaborated on my multiple people—a major benefit of going paperless.

Stop in next week to read more reasons why companies are getting rid of paper in their offices.