UK: The Direct Impact of a Paperless Office on Your Bottom Line

[Anonymous]

UK: The Direct Impact of a Paperless Office on Your Bottom Line
Written by Ronan Lavelle, UK Country Manager, ARX

When discussing the benefits of the paperless office, the emphasis tends to be on the environmental aspects, but the financial argument is also very strong. 

There are numerous cost implications – some of them not immediately obvious – to organizations that continue using paper in their daily processes.  Some of these issues are very measurable, while others are more ‘soft’, but each and every Director of Finance should be aware of them all.
 
Before we look at these costs in more detail, let’s take a quick look at the progress that has been made regarding achieving the paperless office vision (or, perhaps more accurately, the lack thereof). Although the idea has been around since the 1980’s, according to research by document archiving firm Iron Mountain, only one per cent of organisations have actually achieved this goal.
 
In fact, according to WRAP’s Green Office Guide 2013, a UK worker uses up to 45 sheets of paper on average per day, over half of which is considered waste.  In ‘Winning the Paper Wars’, information industry association AIIM says that only 24 per cent of organisations it surveyed even have a specific policy in place aimed at driving paper out of the business.

Naturally, most businesses want to be better global citizens – and there’s no denying that paper consumption is bad news for the environment – but inevitably, other priorities often take precedence.  But what if the paperless conversation turned to its effects on the bottom-line? Would these priorities change once businesses realize how much money they can save by eliminating paper from their offices?
 
The business case

Let’s look at these cost issues in more detail.

·       WRAP estimates that waste could be costing UK businesses four per cent of annual turnover, with paper constituting a large percentage of that amount.  Printing paper also uses up power.  SusteIT says that printing onto paper, for instance office inkjet and laser printers, accounts for around 10 per cent of total ICT-related energy consumption.  Paper often needs to be disposed of securely and shredding companies are not cheap.

·       Storing paper documents also costs money: Gartner estimates that in the US, $25-35 billion US dollars is spent each year filing, storing and retrieving paper.  K2 research says that it costs $25,000 to fill and $2,000 a year to maintain the average four drawer file cabinet, which holds 15-20,000 pages.
Of course, the figures for the UK are probably different, but these statistics do provide a sense of scale for the costs involved in maintaining our paper habits.  Whether it ends up stored in the office with the associated value per square metre, or in a third party storage facility, printed documents are a long-term cost that people hardly consider.
 
YouGov research found that 8 out of 10 UK businesses print documents just to get a legally-binding signature.  Those documents then have to be posted or couriered to the recipients, who then have to return them to the sender.  

I know of one instance where 20Kg of paper documents had to be couriered from the UK to Brazil just to get them signed by the company’s CEO. Just imagine the FedEx cost, not to mention the time spent on printing out and organising that delivery in the first place, as well as the time the CEO wasted on it.
 
That’s just one example of the costs that can be saved by the paperless office.  Here are a few others:

·       40 per cent of mailrooms handle more than 1,000 items per day requiring staff to ensure the efficient routing of documents in and out of the organisation.  
·       Over 40 per cent of processes are interrupted by the need to collect a physical signature, adding 3.1 days on average to most processes.
·       Of the 90 per cent of documents that are paper 7.5 per cent are lost and 15 per cent are mislaid requiring large amounts of time to be wasted looking for the right one.

Looking at all these facts together it becomes obvious that paper-related costs add up, and that’s even before we considered some of the more obvious ones, such as transportation, postage and, of course, buying paper in the first place.  

A blueprint for a paper-free business

On the positive side, AIIM found that of organisations that adopted paperless offices achieved 100 per cent payback in 18 months or less. AIIM also found that using the digital signature solution required to implement fully paperless processes generates a return on investment in less than 12 months in most cases.
 
The business case is clear, but how feasible is it to implement a paper-free environment and what steps can the finance executive take to do so?  Here are a few steps to consider:

·       Audit the organization’s paper use – who is generating paper, where are they doing it and, no less important, why?
·       Calculate the real cost of paper use based on financials models, such as those from WRAP’s Green Office Guide.
·       Find internal champions who will encourage paper-free culture across the organization.
·       Set up a cross-enterprise paper-free steering committee charged with establishing an end-to-end process that does not require ‘breaking out’ into paper usage.
·       Look at the methods that could help take paper out of existing processes, and the IT systems that can assist in reaching these goals, such as content, collaboration, document, workflow and business process management tools.
·       The requirement for legal signatures is one of the biggest culprits, so consider investing in legally enforceable, secure and tamper-proof digital signatures.  
·       Replace filing cabinets (if they aren’t there, people can’t use them) with secure online storage, records and eDiscovery systems. Documents will also become a lot easier to locate, regardless of location, so efficiency savings will be gained as well.
·       Ban fax machines and reduce the number of printers or centralise them (if people have to walk to them, they make think twice before printing).
·       Encourage suppliers and customers to submit content digitally to reduce the volume of paper coming into the organisation
·       Embrace mobile working as more and more people conduct business from their smartphones, tablets and laptops, without requiring printers.  

Becoming totally paper-free cannot happen overnight and for some organisations, may not be 100 per cent feasible.  However, even small steps along the road to a paperless office will yield significant budgetary and efficiency benefits, while continued dependency on paper will eat at your profits. Surely, considering everything written above, it is in the interests of finance executives to increase their own awareness of paper-related costs, and look at ways in which they can encourage the company to reduce paper consumption.

[Author]

March 18, 2014 at 12:42 PM