I have conducted hundreds of assessments for companies and government agencies of all sizes over the past 20 years that we interested in document scanning. My consulting style is straightforward and direct, and my recommendations are always based on actual existing conditions as opposed to presumed processes. Although it’s not always easy to hear, most management and executive teams can quickly grasp the big picture of problem identification to resolution. They see it from a three dimensional perspective that includes operations, sales, compliance, and customer service. It is more efficient to gather those who may be vested in the results of a decision at the start of the process rather than trying to repeat and/or “sell” the concept later in the game and expending time and resources on “playing the procurement” game.
Document Scanning ROI is More Complex than Just Line Items and Hard Cost Components
One of the best pieces of advice I received early in my career came from a self-proclaimed dogmatic CFO who had an open disdain for sales; this guy could spin numbers faster than Rain Man. His response to my extensive document scanning ROI analysis was short, but definitely not sweet. He said, “Don’t ever try to sell a ROI to a numbers guy; you will always lose”. There’s no great ending to the story. They didn’t launch the document scanning project, and I didn’t have a slick comeback. His advice, however, made perfect sense. Line item document scanning ROI analyses look great when the hard cost components are equalized, but measuring soft costs associated with the benefits of technology, resource efficiencies (LEAN principles such as wasted human talent), or progress can be tricky.
What’s in the Box?
At the end of the day, some decisions are made because they make sense despite the balance sheet. For example, some organizations dismiss document scanning when compared to storing documents off-site. Why pay $100-$150 to scan a box of documents when it can be stored off-site for $6 a year? It could take 25 years to see a ROI on that expense, assuming the box is even kept that long. And in many cases, this is a solid argument. The problem with this scenario, however, is that the decision is typically made across the board for all documents, each having a unique set of criteria.
Additionally, this scenario is supported by a list of assumptions. For example, this ROI assumes that the documents are never retrieved again (if so, there are costs associated with retrieval, transportation, and re-filing). It also assumes that the contents of each box have been documented and that someone is managing the retention to ensure the box is destroyed at some point. If not, then the yearly cost is infinite. Over time, a combination of loose policy and continued personnel turnover can result in significant off-site storage bills for thousands of boxes. Does anyone really know what’s in most of those boxes? It’s pretty amazing what we find when we do an off-site storage assessment. Un-labeled boxes filled with Christmas decorations, or boxes labeled “John’s right side drawer”. We once located a large volume of boxes that had been labeled “Not sure”. We can laugh about it now, but I can assure you that no one was laughing at the time! Even boxes that have descriptions are destined to live off-site forever because with all the publicity surrounding the destruction of documents; no one wants to pull the trigger to shred.
The Soft Costs Associated with Managing Paper
There is also the litany of soft costs that, although very real, do not have predetermined values. For example, the cost to reproduce documents or information that may already exist is like paying a bill twice; we don’t know what we don’t know. The “simple math” storage cost comparison of document scanning versus off-site storage usually doesn’t include all the costs associated with managing paper: file folders; labels; boxes; storage equipment; labor to create and retrieve files; searching for missing files; interfiling documents; copy documents; or the physical space to store them before they go off-site. Depending on the values each organization might assign to the cost of managing paper, the ROI for document scanning can spin in a million directions. This type of analysis usually focuses on the financial impact of a proposed business decision, but that’s like comparing the cost of typewriters to computers. If we had the same approach back then, we would still be loading carbon paper.
Now don’t go running off to scan everything in off-site storage! The sins of the past may be best handled in a different way. But you can stop the bleeding. At some point, there is a stage in the lifecycle when paper not only starts to lose its value, but also can actually cost more than you bargained for.
Keep Moving Forward with the Digital Data Imaging Migration
Ultimately, there is an element of progress that will be difficult to quantify and yet will likely provide the most sound data towards the digital data imaging migration decision. Remember the typewriter analogy? The cost differential was vast and the benefits were not only uncertain, but also rarely utilized to their full potential. That still holds true today, but organizations nevertheless need to keep moving forward. Hopefully, we will do so having learned something along our technology journey. Forward progress isn’t taken in a single step; it’s a process.
——————————————————————————————————————————————————————————————-Anna Stratton is Director of Information Management Solutions at Southwest Solutions Group headquartered in Dallas, Texas. Anna specializes in records management and business process protocols, document scanning, policy design, and information retention policies and process. Anna has over 18 years of professional business management experience and provides advice nationwide through the SYSTEC Group’s “Ask the Expert” column. Ms. Stratton is also a dynamic national speaker and conducts private corporate seminars on a variety of topics in addition to providing keynote and educational speeches for organizations such as ARMA and the Lorman Seminar Group. Ms. Stratton has been recognized by Cambridge Who’s Who for demonstrating dedication, leadership and excellence in information and asset management.