How To Show Great ROI On Document Management Solutions

Wrap your head around this mind-boggling statistic: U.S. businesses generate more than 4 trillion paper documents. And, says a Cooper's & Lybrand study, those documents are proliferating at an annual rate of 22 percent— that's roughly 880 billion a year. Such overwhelming growth means huge opportunity for IT solution providers offering document management. Here, the president of Cabinet NG, a provider of document management solutions, outlines how a document management system can generate a significant return on investment for small to midsize businesses. —Jennifer Bosavage, editor.

The changes in technology pricing over the last 10 years has finally made it possible for SMBs to enjoy the same efficiencies provided by information technology systems that large enterprises have enjoyed for decades. In today’s business world, 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.

As early as 1975, that the “paperless office had arrived." Although progress has been made toward that goal, the amount of paperwork necessary to run a business (particularly regulated ones 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 paperbased 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, etc.) 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.

How a Document Management Solution Can Help
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.

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The attributes of a document management solution include:

  • Daily Labor Costs for a paper-based Document Management System
  • Example
  • Time Spent
  • Cost
  • What is the average hourly salary?
  • $15
  • 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
  • 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
  • $70.50
  • Monthly total costs for a paper based system (20 working days/month)
  • $1,410
  • How much do you spend for off‐site storage monthly?
  • $100
  • $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
  • $300
  • Annual cost to maintain paper based document management system
  • $20,250
  • 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
  • $10,500
  • 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
  • $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
  • $3,520