About 80% of all business information resides on paper. However, advances over a period of time in imaging technologies have made it possible to move from this traditional mode of documentation to a digital one. This helps in eliminating unnecessary costs from a business. It is exactly the reason why any organization that operates with a huge volume of paper documents should immediately plan and transition to an electronic form of document management.


Businesses usually do not pay a lot of attention to the expense that they incur as a result of using paper documentation. As of now, it might not be possible to eliminate paper entirely, but there are industries that use such tremendous volumes of paper documentation in their day-to-day transactions. From the outside, it appears that people working in those industries are overwhelmed with paper documents. Take, for example, the medical industry, the legal industry, the financial industry, the real estate industry; they are heavily reliant on paper. Efficiently dealing with such huge volumes of data on a daily basis is a huge drain on the organization’s resources.


The offices of insurance underwriters are full of reams and reams of paper documents. Even organizations with well-established documentation procedures take six minutes on average to file or retrieve a paper document. This figure is much higher for other small and medium businesses which do not have a well-structured documentation process. In other words, these organizations are losing money all the while without even realizing it.


Below are some facts that came to light as a result of research by Coopers & Lybrand on the amount that a normal organization spends on paper document management,


1. Of all the pages that get handled each day in the average office, 90 percent are merely shuffled.


2. The average document gets copied 19 times. (150 docs x 19 x 200 employ.= 570,000).


3. Companies spend $20 in labor to file a document, $120 in labor to find a misfiled document, and $220 in labor to reproduce a lost document.


4. 7.5 percent of all documents get lost, 3 percent of the remainder get misfiled.


5. Professionals spend 5-15 percent of their time reading the information, but up to 50 percent are looking for it.


6. There are over 4 trillion paper documents in the U.S. alone – growing at a rate of 22 percent per year.



The cost of using paper


1. A company generates or receives 100 important paper documents per day that must be filed.


2. 100 documents x 6 minutes to file each = 600 minutes filing per day


3. 600 minutes per day = 10 man-hours per day


4. 10 man-hours per day x $15 per hour (inclusive of benefits and burdens) = $150 per day


5. $150 per day x 250 working days per year = $37,500 per year.


Small and medium businesses have comparatively lower volumes of paper documentation to process as compared to large paper-intensive organizations and yet, they use the same manual method. On average, an SMB spends $10,000 per year in time costs. Once we factor in the other associated costs such as cost of commercial real estate, cost of managing a printing set up and supplies, and cost of physically transporting documents, it would take the tally of final costs to a much higher number than the initial figure of $10,000.

Another major drawback of paper-based systems is that documents get lost and not all of them can be recovered. This only further accentuates the loss that the organization is facing as a result of using a paper-based documentation system. The following figures listed by a PWC study help us illustrates this point in a much clearer manner,


1. 7.5% percent of all documents are lost

2. 3% of the remaining 97 % are misfiled.

The costs associated in dealing with both these situations are much more than the normal document expenses.


Commercial real estate dedicated to storing these volumes of paper documents is another major nonproductive expense for all businesses. Large paper-intensive organizations have to maintain separate storage units for their documents. Even though storage costs are as low as 20 to 50 cents per box per month. The cost of retrieval can be as high as $10. The usual four-drawer filing cabinet occupies about 8 SF of office space, and assuming that it costs $100 per SF per month, the cost comes up to $96,000 per year. On the other hand, a 50 GB hard drive can store 1 million pages.


These costs that we have been discussing are tangible and easily quantifiable. The figures are compelling enough to persuade businesses to rethink their document management strategies in the long run. There are several other costs that businesses incur which are not as tangible and quantifying them could be a complex process. 

A paper-based documentation process does not facilitate collaboration between team members like a digital system. A digital allows multiple users to access the same document at the same time. This boosts overall productivity. It is difficult to put a dollar value on this, but it undeniably goes a long way in making an organization successful. Employees shudder at the thought of having to go through the cabinet looking for some document that they do not have much information about. Electronic search is an effortless process as it allows documents to be retrieved using as many keywords as they had been indexed with. It also allows a user to search using different values such as date of creation, figures if any, range of figure, partial search features, etc.


Paper documents are vulnerable to organizations, hazardous to nature, and once lost, their recovery, in most cases, is not possible. Electronic document processing does not have such limitations. Disaster recovery is an established process that allows new installations to be up and running in a matter of days.


Businesses are constantly on the lookout for ways to limit costs and increase revenue. Electronic document management helps organizations eliminate unnecessary costs and helps improve collaboration and boosts productivity. The benefits of implementation outweigh the costs and enable businesses to focus on catering to their customers.