Intelligent Document Processing: The Present and Future of Automated Information Management Q3 2021
THE FULL COST OF PAPER
THE RISE OF INTELLIGENT DOCUMENT PROCESSING
Paper has been an essential business resource since its invention roughly 5,000 years ago. Its long tenure as a key human tool clearly shows its value, but it also suggests its impending obsolescence. As better technology is developed, and as the cost of managing paper continues to grow, some level of digital transformation is becoming a business imperative. Paper’s ubiquity may distract us from the full costs of paper-based business processes. The typical U.S. office worker uses more than 10,000 sheets of paper per year. 1 Given current paper prices, that’s about $80 per year, per employee. While that might not seem like a large expense, the true cost of paper extends far beyond the initial purchase. The full life cycle cost of paper has been estimated to be 31 times the cost of the paper itself! The main costs of paper documentation stem from its delivery, handling, storage, and retrieval, with copying costs at 33% and distribution costs at 56%. 1 We must also take into account the cost of real estate, storage accessories like folders and file cabinets, ink, additional staffing needed to manage paper, and, perhaps most importantly, the extra time spent handling paper. A single large filing cabinet can cost upwards of $1,000, and the square footage necessary to use onemight surprise you. The average filing cabinet actually uses 15.7 square feet of space! With the average annual cost per square foot of office space in the United States coming in at almost $39 (with a high of $85.82 in Manhattan), 3 a single file cabinet costs on average about $612 per year, just to store paper. Paper will continue to be a common component of business for the foreseeable future, but companies continue to find that a great deal of time, resources, and money can be saved by migrating to digital processes and through improvements in document management technologies.
As we enter the full-fledged digital age, paper isbecoming increasingly antiquated as better digital options emerge. Many companies are now thinking about digital transformation and developing strategies to achieve it. However, digital transformations are not instantaneous. The middle stages of this transformation are likely the longest, where a hybrid operating model that mixes paper and digital is used. Even companies that have been working toward complete overhauls for some time will likely find that a huge amount of information is still stored on paper. That paper-based information can be a hindrance, but it can also be turned into a major competitive advantage if companies know how to effectively utilize it. The massive growth of the document management market (digitization, imaging, indexing, and archiving) in recent years suggests that many are catching on. One measure put the value of this market at $34.21 billion in 2019, with projected growth to $57.56 billion by 2027. 4 Global trends on Google show the searched term ‘digital transformation’ moving from a score of around 25/100 in 2016 up to 100 in early 2020 and staying mostly elevated above 75 since then. In other words, we are now seeing peak search interest in that idea. 5
Projected Growth of Document Management Market
PaperCosts Money and Time 2
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