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More than a century has passed since the filing cabinet was invented to improve efficiency in the back office. According to The Filing Cabinet: A Vertical History of Information by Craig Robertson, prior to the 1890s, files were “bound into books, stacked in piles, curled into slots, or impaled on spindles.” By comparison, the simplicity and efficiency of the filing cabinet was a remarkable advancement, consolidating documents into manageable subsets according to a company’s preferred organizational schema.
Fast forward to the 21st century and you’ll find that many companies still use filing cabinets to organize their documents. In fact, some companies use dozens (even hundreds) of filing cabinets both on- and off-site to manage their information. You can even take a trip to Burlington, Vermont to see the “World’s Tallest File Cabinet” — if you are an authentic filing cabinet historian or enthusiast.
Regardless of the quantity or sheer height of filing cabinets, there’s no escaping their inherent limitations. Today, companies around the world are swapping physical paper storage for digital repositories that allow them to store all of their documents digitally using devices that don’t take up valuable in-office real estate. Not only are they cutting costs and freeing up space but they are also improving efficiency by making it easier to store, search, retrieve, and handle documents from a computer or mobile device.
The era of the filing cabinet has officially drawn to a close, while the future of the digital repository has never been brighter.
A digital repository acts as a single source of truth (SSOT) for your organization, providing the space and structure to collect and organize important documents.
The Texas Digital Library describes a digital repository as “the electronic equivalent of the library stacks” — and, for the most part, this is a fitting description. However, a digital repository makes it significantly easier to find the desired file by providing additional features, such as metadata searches and automated retention policies to help users find what they are looking for while streamlining file maintenance. Top digital repository solutions can even help companies automate portions of their compliance procedures by instituting programmatic policies for saving and disposing of specific document types.
From a single, persistent, and reliable location, all documents are stored securely. And because document retrieval doesn’t require users to manually remove documents from a file cabinet for review or processing, the chance of losing or destroying a document accidentally is nullified entirely. Therefore, a digital repository not only provides a safe space for business-critical content but also preserves its integrity.
When considering a digital repository for your business, the most important question to ask is how will a digital repository help us reduce costs? Needless to say, any digital solution will require an upfront investment to provide the license and technology, so determining how quickly you can recoup this investment is paramount to making the best decision for your organization. There are many factors to consider while calculating your potential ROI, including:
According to Record Nations, “The average office worker in the US will go through roughly 10,000 sheets of paper each year.”
When you factor in the average cost per case ($40) and the number of sheets per box (5,000), you can expect to pay around $80 per employee each year to provide the paper required for them to complete their duties. However, $80 per employee is only your raw paper cost. You must also factor in:
Let’s crunch the numbers with conservative estimates and see how much the cost of paper and physical storage is affecting your business. For our calculations, we’ll use 20 employees, $20 per square foot of office space, $400 per file cabinet in an office with a dozen file cabinets, and $20 per hour wages.
The cost of paper alone can be found by multiplying the number of employees (20) by the annual per-employee cost of paper ($80), giving us a total of $1,600.
Next, we’ll calculate space and file cabinet costs. If the cost per square foot of office space is $20, and each file cabinet takes up 5 sq. ft., then it costs $80 to host each file cabinet. Since we have a dozen, that’s another $960 in costs. Additionally, there’s a cost to purchase and maintain a dozen file cabinets ($400 each), so that adds another $4,800.
Finally, we must calculate the labor costs for employees whose jobs require them to perform paper-based tasks. At an average of $20 per hour multiplied by 2,088 working hours per year, that’s another $41,760 per employee. Since paper-based tasks can take up to 53 percent of your workers’ time, we’ll cut this number in half to get a more realistic idea of how much time is spent on tasks that require paper: $20,880. From here, we must factor in the total number of employees (20), bringing our total to $417,600.
When you add it up, the total annual cost (including some fixed costs like file cabinets) of paper and physical storage is $424,960 for a company with 20 paper processors.
Compared to the cost of paper and physical storage, calculating the cost savings of a digital repository is simple.
First and foremost, you can eliminate all paper-related costs including file cabinets and the physical space required to host them, which comes out to $7,360. You can also defer resources away from paper-based processes like tracking down files and preparing for audits since these functions can be streamlined and automated with a digital repository.
Depending on how you approach these new-found efficiencies, you could save upwards of $417,600 in paper-related labor costs by letting your digital repository handle the bulk of the work. This doesn’t necessarily mean a decrease in headcount as these important team members can focus on big-picture initiatives that help you refine customer experiences and grow your business.
In other words, you can wipe out the cost of paper and physical storage ($424,960 in our example) by transitioning to a digital repository.
Your potential cost savings aren’t strictly based on reduced consumption and paper processing, either. Increases in efficiency, such as faster processing and fewer instances of human error, can yield significant savings over time, too.
Is your organization doing everything it can to stay ahead of the curve? The first step in any company’s digital transformation is to eliminate paper and transition to electronic documents. Once your business content has been digitized, a digital repository can help you organize and manage it with ease.