Cost Benefits of Digital vs. Paper Filing Systems

Posted: 13.02.09  |  Created by: Kurt Carlsen

A large hidden cost that most businesses take for granted is the time it takes to work with paper files. For example, say it takes a $20/hr employee five minutes to get up from their desk, find the right file drawer, place the file and return to their desk. Assuming they file four files a day, they could spend over 86 hours a year = $1700 in wages just in filing. And that's only one employee.

The power of Electronic Document Management (EDMS)
How much more efficient would your business be if all your information (regardless of the format) was in one place and as easy to find as using an internet search engine?

This is the power of electronic document management. Every Word and PDF document, every spreadsheet, every piece of paper, every email, searchable by every word and at your fingertips within seconds, from anywhere in the world via the internet.

Imagine you are sitting in an internet lounge in Timbuktu. You need to get hold of a specific contract, but it's buried somewhere in a filing cabinet in Sydney. With an Electronic Document Management you would have this vital document in seconds.

Five reasons to manage your documents electronically
Here are some excellent benefits an EDMS can provide your business:

1. Greater security and confidentiality
The filing cabinets in most companies are unlocked and people come and go as they please with the files. Most of the time they put them back in the right place, but sometimes they're lost or misfiled.

This is a huge problem in many sectors because the documents being stored (like contracts, financial details and medical records) are confidential. But if the company locked the filing cabinets and had a gatekeeper controlling access, business operations would significantly slow down. So it's just not feasible.

With a document management system you can determine who sees what documents - and what they can do with those documents. Document security is now being legislated in many industries and is mandatory in some cases.

2. Massive reduction in the cost of searching
According to Price Waterhouse Coopers:

• 50% of a professional's time is spent looking for information
• 5-15% is used in reading the information
• 7.5% of all documents get lost forever and must be constantly recreated

What a massive cost this is to a business. With document management you can access any information, from anywhere in the world by every word in seconds. And rarely does it go missing. This is where electronic documents have a massive advantage over paper-based documents.

3. Easier, cheaper and faster to share
Paper-based information is very difficult to share with multiple people without copying the document many times. This wastes resources and time - another cost burden for the company.

With an EDMS many people can securely view a document at the same time, add comments and collaborate without the document ever leaving the system or being duplicated. Tasks that would have taken hours to achieve in a paper system can be accomplished in minutes.

4. Frees up valuable floor space to make money
Many CBD offices are using large areas of their valuable floor space to store paper - space that could be used to generate income for the business.

In a 2008 report, LexisNexis and Setec Investigations stated that a 500GB hard disk could store over 520 4x drawer filing cabinets of paper. Many Notebook PCs now have a 500GB hard drive.

A 100 person business might have hundreds of filing cabinets, costing thousands of dollars each year in dead floor space. Wouldn't it be smarter to have staff using the floor space to deliver better customer service and generate valuable income?

5. It could save you significant legal costs
Possibly the biggest cost for some businesses will come via the Courts. Many Western countries and industries are now legislated to protect information and make it available on call to authorities. A breach of these laws could cost a business many thousands of dollars.

In 2002, Morgan Stanley was made to pay $13 million by the US Securities and Exchange Commission for failing to retain vital email records. A Document Management system would have eliminated this massive cost.

Australia has its equivalent legislation. Current economic conditions will only make accountability even more necessary and in many case a Document Management system is mandatory.

Written by Kurt Carlsen, Sales Director, Redmap.

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