Document Management Return on Investment (ROI) Analysis
by Andrew Bailey

 

INTRODUCTION

This paper will outline how a document management system can generate a significant return on investment for small to medium sized businesses. The changes in technology pricing over the last 10 years has finally made it possible for small to mid‐sized businesses to enjoy the same efficiencies provided by information technology systems that large enterprises have enjoyed for decades. Think about where we would be today if banks did not have computer systems, or clinics could not provide access to patient folders at remote locations. These advances in technology can now be applied with ease at the small to medium enterprise level.

CURRENT CONDITIONS

In today’s business world the ROI of any project is important as competition increases, it is
imperative that a company make sure investments generate a large enough return. Increasing business efficiency is the most compelling reason for investing money in any project. Obviously technology has helped many businesses over the last 10‐15 years become more efficient. Just replacing typewriters with word processors and calculators with spreadsheets initiated a huge increase in productivity per employee. Taking the next step is more challenging than simply replacing one tool for another as these programs were basically point solutions. It was predicted as early as 1975 that the “paperless office had arrived”. Obviously progress has been made toward this goal, but the amount of paperwork necessary to run a business (particularly a regulated one such as financial services and medical clinics) has increased a great deal since 1975. Just to maintain the status quo requires businesses to move to the next level in office productivity and implement a complete document management solution.

Almost every business in today’s workplace uses some type of document management system (including paper‐based systems) to maintain the documents used on a daily basis. Accounting departments maintain A/P and A/R files for customers and vendors. The sales department maintains orders for each of the customers. Customer service representatives maintain records on service calls and the service needed. A comprehensive electronic document management system (EDMS) can provide a method for storing all relevant documents about a particular customer or vendor allowing office staff to gain a total view of the customer or vendor. If the EDMS can be integrated into the point software solutions that each department uses, significant gains in productivity and efficiency can be gained. For instance the accounting department could access documents (orders, invoices, contracts, …) online from their accounting application. Sales could access documents from their CRM (customer relationship management) software. The goal of an EDMS should be the software glue that ties the different software packages together in such a manner that all departments in a business gain efficiencies.

WHAT IS ROI?

ROI is simply Return on Investment. In layman’s terms this is the amount of time it takes to get the value of the dollars spent on a project or item back (returned to the business). For instance if a large lathe is purchased for a machine shop and it cost $50,000 and each month a profit of $10,000 can be tied to the lathe, then your ROI (in simplistic terms) is 5 months ($50,000/$10,000). This type of formula can be applied to virtually anything purchased although it can be harder to determine for some purchases. Typically the effort to calculate an ROI is only done on medium to large investments, as the time spent can be extensive and requires gathering appropriate data.

WHAT IS A DOCUMENT MANAGEMENT SOLUTION?

Simply put, a document management solution is a system that can replace not only the paper files and documents in an office, but enable the user to send an electronic document through the same steps a paper document or file would follow. For instance, if a financial services firm has a new account form that is filled out for each client account and it must proceed from the agent to the trader and then to accounting, then a document management system must provide the same path. So a true management system not only provides storage, but must provide the same workflow capabilities. Along the way it must also protect documents so that only the necessary people can view them. An example, might be a medical clinic which must comply with HIPAA regulations. Patient records must be kept confidential and an audit trail kept for all record access. An EDMS is a step up from the point solutions like spreadsheets and word processors as the entire office must be capable of using them. Therefore they must be easy and straightforward to use and ideally would integrate with other applications the office is already using with a minimum of effort.

So to sum up the attributes of a document management solution:

• Maintain a repository of electronic documents.
• Provide a mechanism of securing the documents.
• Integrate with other software solutions being used.
• Provide a method for putting the documents into a defined workflow.
• Supply audit data providing the four W’s (Who, What, Where, When).
• Capture form data in a database for usage in monitoring and managing the business.
• Comply with any necessary regulatory requirements.

BENEFITS OF A DOCUMENT MANAGEMENT SOLUTION?

There are some statistics attached in Appendix A which outline problems that arise from using a paper based system. The list below is an outline of benefits of a document management system:

• Documents are stored in an electronic format which is easily backed up and can be copied offsite relatively easily. Multiple copies of the documents can be made easily and cheaply. In contrast, a paper based system would require copies of each piece of paper as they are generated. At a $.05 a page this can become prohibitively expensive.
• Misfiled documents can be easily found using the search capabilities built into the document management system. Misfiled documents in a paper-based system can be impossible to find depending on how and when they were misfiled.
• Filing documents is relatively easy particularly if the document management system is
  integrated with other software packages. Filing paper documents requires a trip to the filing cabinet.
• Moving documents from one point in the workflow to another is simple. Determining who has a document or folder in workflow is available at all times. Finding a paper folder somewhere in a workflow can be difficult at best, particularly if it’s buried on someone’s desk.
• Move any paper forms to an electronic version. Data can be captured and populate a database and the paper is no longer necessary. Filling out paper forms can be tedious and prone to human error. Using electronic forms allows data to be pre-filled eliminating these types of errors.

HOW DO THEESE BENEFITS GENERATE AN ROI?

It is relatively easy to take the benefits listed above and the statistics in Appendix A and determine if an office will get a significant Return on Investment. Here are some ways to calculate an ROI for a system.

Physical Costs

• How many filing cabinets do you have – a standard four drawer filing cabinet requires at least 12 sq ft of office space. How many cabinets do you have?
• Do you rent an offsite storage facility – What is the monthly cost?
• Number of copies made of incoming documents – For instance if an order comes in, how many copies of it are made and where do they go? More than likely all of these copies are placed in filing cabinets in separate departments
• How much do you spend on filing supplies per month?

Labor Costs

• How long does it take to retrieve a paper document?
• How many people handle each document?
• How much time does it require to file a paper document?

A SAMPLE ROI CALCULATION

To calculate an ROI for a small office, we’ll use a financial advisors office as a sample. Financial advisors generate paper with each new order, trade or account and the industry is regulated by FINRA and the SEC. This sample office will consist of two advisors plus five support staff for a total of 7 people. Let’s assume that it’s an average office and generates 100 new documents a week (This is a fairly low new document count, but helps prove the point that EDMS systems generate a great ROI). This office has been in business for 10 years and has a row of 10 filing cabinets in the back room. The spreadsheet below demonstrates the payback.

Daily Labor Costs for a paper-based Document Management System	Example	Time Spent	Cost
What is the average hourly salary?	$10
How many people handle documents?	7
How many times does each person retrieve a document daily?	10
How long does it take to retrieve a paper document? (minutes)	3	210	$53
How many new documents are generated a day?	20
How long does it take to file a paper document? (minutes)	3	60	$15
How many paper copies are generated per day?	60	.05	$3
Daily total costs for a paper based system			$71
Monthly total costs for a paper based system (20 working days/month)			$1,420
How much do you spend for off‐site storage monthly?	$100
How many filing cabinets (12 sq ft/cabinet ‐ $15/year/sq ft)	10	120	$150
How much do you spend on filing supplies per month?	$50		$50
Monthly costs for maintenance			$200
Annual cost to maintain paper based document management system			$19,320
Implementation cost for a 5-user document management system
Software (5 concurrent users)			$5,000
Server with 200GB of storage			$2,000
Scanners (3 mid-range scanners @ $500 ea)			$1,500
Training and Setup			$2,000
Total Cost			$10,500
Daily Labor Costs for an Electronic Document Management System
What is the average hourly salary?	$15
How many people handle documents?	7
How many times does each person retrieve or file a document daily?	10
How long does it take to retrieve a paper document? (minutes)	.5	35	$8.75
How many new documents are generated a day?	10
How long does it take to file a paper document? (minutes)	.5	5	$1.25
How many paper copies are generated per day?	0	.05	0
Daily total costs for a paper-based system			$10
Monthly total costs for an EDMS (20 working days/month)			$200
Annual software maintenance contract (20% of software purchase)			$1,000
Annual cost to maintain an electronic document management system			$3,505
Monthly savings			$1,318
Months to payoff			8

 

NOTES ON THE ROI CALCULATION

By now it is evident an EDMS can be a very valuable tool for small to mid‐sized businesses. The ROI calculation portrayed was done without taking into account the following factors. Lost documents become a thing of the past. The powerful search tools built into an EDMS make it virtually impossible to lose a document. In our sample office that generates 100 documents a week, 7.5(See Appendix A) of them will be lost requiring the document to be recreated at a cost of $220 each. If the paper based system being used is very efficient and this loss is reduced to 4%, the total is still a cost of $880/week. If the EDMS is inefficient and has a loss rate of 2% the savings in using an inefficient EDMS is $440/week or 5,280/year. It’s hard to calculate how much time and effort is saved just by not losing documents.

Misfiled document also become a non‐issue. Again the powerful search tools built into an EDMS allow misfiled document to be easily found and re-filed in the correct place. At a misfile rate of 3.5% and a cost of $120/misfiled document, the sample office will save an additional $420/week or $5,040/year. Misfiled documents are a huge problem and can turn an office upside down when looking for misplaced documents.

Answering a customer’s query while on the phone with them is also a source of significant
savings. Imagine the following scenario – a customer calls in with a question about their last order. If the customer service representative can pull up the document on their screen and answer the question right then without having to pull the file and call the customer back, a huge time savings is generated for the business. It is also more efficient for the customer and the telephone tag game is avoided. Being able to email the customer a copy directly has the same benefit.

Another time saving illustration not reflected above is using electronic workflow to distribute and route documents through an organization. Think of the time used in moving paper from one point in the company to another. Some companies still have a person that goes around and picks up paper documents and moves them from one point to another. With an EDMS this function is eliminated entirely.

The worksheet used in this sample ROI calculation can be downloaded at
http://www.cabinetng.com/downloads/ROI-Calculator.xls. Take a look around your office and plug in numbers that make sense for your business and see what your ROI would be.

APPENDIX A

Office Document Statistics (from a Cooper’s and Lybrand study)

• Comprise greater than 80% of corporate memory (contracts, memos, project plans, …)
• 90% of documents that are handled in an office are merely passed along or shuffled through
• The average document gets copied 19 times in it’s life
• Cost
  • $20 to file a document
  • $120 to find a misplaced document
  • $220 to replace a lost document
• Percentages
  • 7.5% of all documents get lost
  • A sample office that generates 200 documents a week will lose 15 of them, costing the company $3300
  • 3% get misfiled
    • A sample office generating 200 documents a week will misfile 6 of them, costing the company $720
• 50% of a professional’s time is spent looking for information. Only 5‐15% is used in reading the information
• There are over 4,000,000,000,000 (4 trillion) paper documents in the U.S. alone. They are growing at the rate of 22% a year or roughly 880 billion a year.

THE PAPERLESS OFFICE: ACCEPTING DIGITIZED DATA

Miles L. Mathieu, Troy State, University College, Pacific Region-Misawa
Ernest A. Capossoli, Kennesaw State, Kennesaw

ABSTRACT

This paper explores the implications of paperless office environments and the realities organizations face in their attempts to go paperless. Of the many industries that have or are currently attempting to go paperless, the insurance industry has been on the leading edge of a completely digital environment. This paper highlights some of the insurance industry's accomplishments, as well as briefly touching on other organizations looking to digitize their offices.

INTRODUCTION

At the advent of the computer technology age, many observers believed mainframe computers, followed later by personal computers and personal computer networks, would address a number of very specific business goals. Computers would make workplaces more efficient by eliminating mistakes blamed on the human factor and slash costs by reducing the need for human overhead by assigning certain redundant tasks to computers rather than to people. Computers would never get tired, would never need coffee breaks and would rarely make mistakes on their own. The computer age would also lead to a more educated nation. Those employees displaced by computers would be forced to educate themselves and take up new trades. Some would even re-enter the workforce to repair and re-calibrate the machines that put them out of a job.

Another argument was that as computers became more prevalent in the workplace, businesses would reduce and eventually eliminate the need for paper. By eliminating paper, information technology proponents believe businesses can cut exorbitant costs and boost efforts to protect the environment. Computer-based business systems, in their opinion, would also vastly improve office efficiency and effectiveness by eliminating certain “face-to-face” steps required in the antiquated paper-based office environment.

Reality has proven that a paperless office has been impossible to achieve thus far. Today’s individuals, computer savvy as they are, have shown they are unwilling to give up the convenience and low cost of paper for more cumbersome and costly digital display devices. Individuals have also relegated printers, copiers and fax machines into the “for granted” category, believing one belongs on everyone’s desk. Until digital display devices transfer data from computer to medium as simply as printers do with paper, the paperless office may never be a reality. More and more, however, we are seeing digitized data creep into our everyday lives; eventually paper will be a scarce resource and digital information transfer will be the norm.

The Paper Chase
Since the Egyptians first used rudimentary writing utensils to communicate on sheets made from reed, paper has been the most common method of documenting information. This method of transmitting the written word has been so etched into the minds of today’s society that giving up this means of communication will be a very long time coming. In fact, studies have even shown that people are able to retain 30% more information if it is shown to them on paper than if they see it on a computer screen (New Zealand Management, 2001; King, 2001). These statistics, however, are sure to drop as society becomes increasingly cognizant of the computer as an information transfer medium. Additionally, technology is advancing to make display devices more paper-like. According to King, “Characters in the movie ‘Red Planet’ use a screen device that unfolds like a thick map or scroll. This technology isn’t too far off; several manufacturers are working on similar technology” (King, 2001). Each generation will become more and more used to digitized data, so much so that eventually the line that separates screen and paper will vanish as digitized information display mediums become more and more like their older brother. Already this transformation in common office vernacular is evident. Almost gone are the days when co-workers ask, “Did you get my memo?” or “Did you see the paper today?” Today’s water cooler conversations are more likely to contain the phrase, “Did you get my E-mail?” or “Did you see the latest on that story on FoxNews.com? They just updated their site eight minutes ago!”

The rise of the Internet has also spurred more paper-averse environments. For example, the insurance industry is currently using Internet and Intranet-based display tools to allow access to policy information, file applications and claims status for customers, agents and brokers, among others (Hilgen, 2000). Proponents argue that Internet-based paperless services are faster, cheaper and more efficient—and friendlier to our environment. The Center for Energy and Climate Solutions recently published an article by Joseph Romm, a former Assistant Secretary of Energy. In this article, Romm makes a largely tongue-in-cheek observation that “during 1997 and 1998, energy consumption remained nearly the same, even as GDP grew 8% and energy prices stayed low. That…has never happened before. The explanation: The use of the Internet is making commerce more efficient, thereby reducing the use of natural resources ranging from oil to paper” (Chen and Lindsay, 2000). But the Internet-based service offered by insurance agencies goes beyond protecting our scarce natural resources. Rather, this service is offered as a way for companies to gain a competitive advantage with their customers over other insurance agencies in order to improve their profit margin. Patrick Watts, assistant vice president of the Alliance of American Insurers, says, “’[The effort is] driven by competition—can you provide the service faster and better than your competitor? If there are people doing this because it’s more environmentally sound, I haven’t heard of them’” (Hilgen, 2000).

Insurance companies are benefiting from this transformation by seeing healthier bottom lines. In fact, insurance companies around the world apply 1.5 – 2% of net written premium on equipment, labor, services and supplies related directly to document maintenance. However, by figuring in certain indirect costs such as queue times, professional productivity losses and business process impacts, documentation shows that up to 15% of net
written premium can be associated with document storage and administration (Finlay, 2001). In an insurance company, that 15% cost eats directly into profits. While it is true that digitizing data has substantially reduced the costs associated with paper maintenance, most insurance companies are unable to accurately document how much going paperless has saved them (Hilgen, 2000).

The ability of certain insurance companies to transform to paperless offices has truly allowed them to do more with less. Hartford Mutual Insurance Company developed an archival imaging system 10 years ago. This precipitated a drop in their expense ratio from levels in the high 30s during the early 1990s to roughly 31 in 2000. The transformation to paperless allowed Hartford Mutual to go from 131 people and $55,000,000 of premium to 114 people and $77,000,000 of premium. “Technology,” according to Philip Raub, president, chairman and chief executive officer of Hartford Mutual, “has allowed us to do that by automating processes that used to be labor intensive” (Hilgen, 2000). Algoma Insurance Brokers of Sault St. Marie, Ontario began to use digital photos for all aspects of their business, from applications to claims processing. After recognizing the value of quick electronic access by multiple departments, they soon made the conscious effort to transform into an all-digital document infrastructure. Algoma expects to save up to $40,000 in labor costs per year with the new digital document center (Finlay, 2001).

A Paperless Government?
There is a wide range of organizations attempting to “go paperless.” The Automated Business Service System, or ABSS, is the Air Force’s answer to a fully computer-based system for the procurement of goods and services. Before ABSS, the requesting office completed a purchase request. This document contained certain information including a description of the item or service being procured, possible sources for procurement, cost estimate, and an appropriate account to which the finance office would charge the purchase. This purchase request was delivered first to the finance office to ensure sufficient funds existed in the account. After verification of funds, the request was signed off by the finance office and delivered to the contracting office. Here, certified professionals who obligate funds on behalf of the government contact multiple sources and negotiate the purchase based on certain criteria. Finally, the purchase was agreed upon by the government contractor and providing company, an official contract was produced and delivered, along with the original purchase request, back to the finance office for final funds obligation. The paper trail did not end there; invoices, delivery receipts and receiving reports were all required in order to make payment. Each of these steps involved paper, lot of paper. Each office was required by regulation to maintain a file pertinent to each request for at least six years and in some cases even longer. Misawa Air Base, a U.S. Air Force base located in Northern Japan, made ABSS the standard in October 2000. During that fiscal year, the base Contracting Squadron took action on nearly 3,000 separate contracting actions valued at well over $18,000,000. If each of these actions had been taken on paper, the amount that would have been needed—and the space required to store all that information—would be absolutely mind-boggling. Now the information previously stored in multiple file cabinets all around the base can be stored on a central server and will eventually be written onto a few CDs. In time, every purchase request, approval and award with everyone’s documented actions for each base will be stored on a few CDs in one drawer.

The Air Force is no stranger to the need to incorporate practices of the corporate sector into their daily work, and the concept of a paperless environment would seem to be a perfect area on which to focus. Recently, companies such as General Electric embraced the concept of a paperless environment, expecting to save some $18,000,000. GE estimates that by the end of their project to eliminate stand-alone fax machines, printers and copiers, they will send some 30,000 machines to vendors, charities or the trash by the end of next year. GE is opting instead for electronic storage mediums requiring employees to store information on company-provided laptops and smart phones (Moore and Prasso, 2001). Additionally, companies have started to offer electronic storage services to select clients. Chase Manhattan Bank, for example, introduced i-Vault! in 1999 as an Internet-based image document storage service for banking customers. They have recently expanded their storage capability and now offer their services to outside businesses. Soon, a total of eighty-four companies will use the i-Vault! service. “Businesses find i-Vault! Valuable”, according to Wagner, “because it offers unlimited, secure storage capabilities without the requirement of investing in and maintaining expensive onsite equipment, and because it allows employees to sort through, search, and cross-reference large numbers of documents at record speed” (Wagner, 2001).

Incorporating the same principles of both GE and Chase Manhattan, ABSS is the paperless method of procuring goods and services while also offering secure storage capabilities limited only by the size and/or quantity of servers devoted to the system. The “drafter” of the purchase request enters a password into the system and describes the type of good or service he or she is looking to procure. The drafter is still required to annotate possible sources as well as a cost estimate. Upon completion, a notice is sent via electronic mail to the appropriate “approver” for that account. The approver then logs into ABSS and approves or disapproves the purchase request. If approved, an E-mail notice is sent to the finance office for their action. At this point, the finance office logs into ABSS and initiates an interface with an independent computer system that determines whether or not sufficient funds exist in the appropriate account for purchase. If so, electronic notice is immediately sent to the contracting office to allow the contractor to log into the system and make final purchasing action. All these actions are done without the use of paper and from individual desktop systems.

As expected, the transformation to paperless is not a painless undertaking. It requires carefully thought out implementation schedules from management and unbridled commitment from the entire corporation. There are four steps, however, that a company can take to start on the road to a paperless office. First of all, the company must place priority on forms based on importance and frequency of use (The Practical Accountant, 2000). Insurance companies, for example, realized multiple people—lawyers, litigates, claims settlers, field agents, clients, etc.—may have wanted access to a particular document at the same time (Hilgen, 2000). Digitized data allows this to happen. Secondly, companies should acquire scanners and Adobe Acrobat software to start digitizing hard copy data for storage (The Practical Accountant, 2000). The i-Vault! system offers this type of service for Chase Manhattan clients since they are allowed to access cancelled checks after the checks have been scanned into the system (Wagner, 2001). Third, companies should attempt to standardize by converting MS Word or Lotus-based documents into PDF format in order to take advantage of the additional options this software offers. Finally, the company should look for ways to distribute forms electronically rather than through hard copy (The Practical Accountant, 2000).

How Close Are We To Paperless?
Given the advantages of a paperless office, why is society not yet there? The answer is deceptively simple: There is no substitute on the market today that is as portable, durable, simple, and accessible as paper. In fact, contrary to the Center for Energy and Climate Solutions’ study, the consumption of paper per capita in the United States has grown 43% since 1980, according to the American Forest and Paper Association. This works out to about 2 pounds of paper per person per day (Hilgen, 2000). Canada is the world’s largest exporter of office printing paper, and they have seen their paper exports more than double in the last 15 years, the same time frame as the computer revolution (New Zealand Management, 2001). There seems to be no retarding the propagation of paper in the office, at least not in the near term. In fact, Hewlett Packard, one of the world’s most well known printer manufacturers, predicts a 50% increase in paper use over the next five years (New Zealand Management, 2001). One of the primary contributors to the rise in paper consumption is the propagation of computers and computerized data communication (Hilgen, 2000).

Over 200 million printers have been sold since 1998 and some 6.3 million printers designed to print digital photographs will be sold by 2003. Additionally, Gartner Group has estimated that laser printer and fax machine sales in the United States has increased 12 and 22 times over, respectively, during the 1990s (New Zealand Management, 2001). The rise in printer sales have to do primarily with the converse drops in cost for these peripherals. Each of these devices requires paper, and for 2001 it is estimated North America will use some 2.2 trillion pieces of paper in printers, fax machines, copiers and other document-reliant machines (King, 2001).

Printed words on paper seem to add some credibility and permanence to the information being transpired. Computers and high capacity printers “have increased paper usage ten-fold,” according to Foote, “simply through their ability to spew out copies faster and more furiously than ever” (Foote, 2001). “Just about every innovation in the digital revolution was supposed to cut out more paper,” reads the year 2000 annual review of the Forest Products Association of Canada. ”Precisely the opposite continues to happen” (New Zealand Management, 2001). Paper is a medium which everyone can use and to which everyone has access. Why transform a business into using a medium of information exchange that is not comfortable to everyone?

Another contributor to the slow transformation to the paperless office is the lack of standardization, particularly in relation to electronic-based office forms. The idea of using electronic-based forms, or E-forms, to conduct normal business operations previously conducted on paper has surfaced along with the rise in the use of networks. The problem, however, is that these E-forms have no real industry standard and exist on some four different E-form categories. E-forms known as Web Forms can be written either in an HTML, with wide browser access but little functionality, or Java script, with specific accessibility but wider functionality. Corporations can also customize their own forms as long as they are willing to accept the front-end costs to design and the recurring costs and personnel expertise devoted to maintaining these forms. Commercial Form Packages are cheaper and less painful than custom-built forms, however, they usually require special software and limit the company’s ability to be flexible in the products offered. Finally, the use of PDF Forms based on the Adobe Software reader is yet another viable option for E-form development due to the commonality and popularity of the software involved (The Practical Accountant, 2000). Aetna U.S. Healthcare offers EZLink, an E-form based program that allows human resource professionals to update healthcare information on employees via the Internet. Doctors can then more readily view the updated information from their office via the Internet. Soon Aetna will offer this service to all employees (Hilgen, 2001). Certainly one can envision the day when policyholders, pending receipt of required documentation, will be able to update information and view changes from the comfort of their own homes.

Another obstacle to going paperless was the belief that a person needed to physically sign a contract in order to make it complete. However, 17 states have already enacted legislation and 28 others are considering legislation that will make electronic signatures acceptable. Until that time, however, insurance companies will still have to be somewhat reliant on paper to complete transactions (Hilgen, 2001). While these reasons may play some role in organizational resistance to digitized data, the foremost reason is that organization, and more importantly, people within organization resist change. Senior management drives revolutionary change within an organization. How they implement this change and whom they involve has everything to do with making the change a successful one.

Dr. Michael W. Mercer in his article “How does Change Management need to Change?” paraphrases his colleagues at Harvard Business School Michael Beer and Nitin Nohria who wrote that two out of every three attempted changes in organizations fail (Mercer, 2001). Mercer further states there are two schools of thought to implementing organizational change. One method is called Theory E in which the manager focuses on the backbone of the organization, its strategies, structures and systems, because these aspects of operations can be changed through top-down action. This method of change uses specific goals such as financial data or shareholder satisfaction to measure its success. Theory O change is more employee participatory in nature, but “isn’t opposed to the creation of economic value—it simply maintains that creating sustainable competitive advantage is the best means of serving shareholders’ long-term interests” (Mercer, 2001).

Competitive pressures drove the insurance industry to move to a paperless environment. Their transformation was driven more by Theory O beliefs since, by digitizing, data companies like Hartford Mutual and Algoma have significant advantages to offer clients. The Theory E school drove the U.S. Air Force to go paperless as very few individuals in the field helped develop or beta test ABSS. Both transformations appear to be successful, so the argument that one method is better than another is driven more on a case-by-case basis rather than on absolute theory.

SUMMARY/CONCLUSION

Modern society may be far away from the day when one can reach into a pocket and unfold a viewer in order to show a store clerk, boss or friend notes made on a digitized piece of paper. Office workers are closer, however, to the day when they can plug a viewer into their computer, access the daily paper of choice, and download the information before they go to work and society accepts this as the normal routine. But until the day when digital viewing devices are as simple to use, disposable, storable, and as widespread as paper, there will never be a truly paperless environment.

REFERENCES

Anonymous. (2000, December). The paperless office. The Practical Accountant, Issue 12: 30.
Anonymous. (2001, July). When in doubt we print it out, New Zealand Management, 48(3), 11.
Chen, C. Y., & Lindsay, G. (2000, March 20). Will Amazon(.com) save the Amazon? www.fortune.com.
Finlay, R. (2001, March). Bridging the paper-digital document divide. Canadian Underwriter, 68(3), 70.
Foote, K. (2001, January 8). The paper chase. Design News, 56(1), 178.
Hilgen, D. (2000, July). Going paperless. Best’s Review, 101(3), 124-127.
King, N. (2001, July). Pursuing the paperless office. Computer User, 20(7), 42.
Mercer, M. W. (2001, January). How does change management need to change? Harvard Management Update, 6(1), 4-5.
Moore, P. L., & Prasso, S. (2001, June 25). GE embraces the paperless office. Business Week, Issue 3738, 10.
Wagner, V. (2001, June). Chase kicks off business document archive service. Bank Systems & Technology, 38(6), 24-25.

This paper was originally presented in early 2002 at the Troy State University, System-wide Business Symposium.

Since its original publishing, organizations from several industries turned to Cabinet NG for a document management solution to address the “Paper Cuts Profit” dilemma.

Cabinet NG software provides the foundation for creating a nearly paperless operation using its Shared Access Filing Environment (SAFE). This approach removes the barriers traditionally associated with moving to paperless, while generating a significant return-on-investment.

This paper explores the implications of paperless office environments. It highlights some of the insurance industry’s accomplishments, and briefly, touches on other organizations move to paperless.

THE PAPERLESS OFFICE: ACCEPTING DIGITIZED DATA is presented in its entirety, with approval from the author, and its contents have not been edited or influenced by Cabinet NG, Inc.