The Hidden Cost of Paper

“Where’s my jet pack?”, Daniel H. Wilson (author of Robopocalypse and Amped) opined in his 2007 book of the same title. In the book, he laments our society's current lack of ray-guns, robot maids, unisex jumpsuits, and space vacations. To this list we would add, “Where’s my paperless office?”

The first time that phrase, “Paperless Office”, is thought to have been put into broad business use was in the June 1975 issue of BusinessWeek. In it, Vincent E. Giuliano of Arthur D. Little Inc, an international management consulting firm, predicted paper’s rapid decline by 1980 and almost total demise by 1990. Here we stand almost 40 years later, and the average business is still drowning in paper, not just physically, but also in bottom line costs.

According to a 2012 report by AIIM, the Association for Information and Image Management, the average business uses about 15.3% of office space just to store paper. For a typical firm with about 500 clients, it costs more than $28,000 a year just to manage paper, according to Thomson Reuters Corporation, a multinational media and information firm. The costs of using paper in the office can run 13 to 31 times the cost of purchasing the paper, according to the Minnesota Pollution Control Agency. So, that $5 ream of copy paper you bought might actually cost you $155 (or more) over its lifespan.

A 2012 study of the Insurance and Banking industries by Aberdeen Group, a provider of fact-based business intelligence research, found the following pain points with regards to document management:

  • Using / processing documents and data takes too long
  • Volume of documents is growing too fast
  • Need better security, audit trail, and compliance
  • Need to tie data to better decision making

Paper cannot answer these pain points --- in fact, it exacerbates them.

Why are we having this problem? In his book, “Physics of the Future”, Michio Kaku, an American theoretical physicist, explained that our biological heritage, the Cave Man Principle, locks us into a mindset of wanting “proof of the kill”. He wrote that we want hard copies whenever we deal with files because “we instinctively don’t trust the electrons floating in our computer screen, so we print our e-mails and reports, even when it’s not necessary.”

So, what can solve the problem?

Another 2012 study by Aberdeen Group found some surprising answers. The average organization in their study used 51 full-time-equivalent (FTE) employees working 102,500 man hours per year just managing documents. The top performing organizations, in contrast, employed document management software and processes, and used 9.4 FTEs working 18,750 man hours per year. Bottom line cost difference between the average and the top performers: an estimated $3M annually.

So, how can you put this into practice?

First, get a good grip on what your true costs of handling paper are. We’ve included links to several online calculators that will help you start the brainstorm.

Next, automate those documents, and share/collaborate those electronic versions within your organization. How? We can help.

Paper Cost Calculators:

Further Reading: