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Dear Sacha,
Do
you want to move to an electronic medium for handling your
paperwork? Maybe you've made the case for the advantages in going
paperless but have been stymied because you didn't have any hard
numbers to back up your argument.
That's the goal of this week's
issue, to give you some hard and fast numbers about the costs involved
in handling files in the traditional manner.
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Document Management
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The hidden cost of paper
Whether you choose to use the ElectronicTender System
or a less sophisticated e-procurement product, one factor will never
change about your online procurement system. It is online.
Therefore the information you have will need to go online. No
matter how efficient and good your paper filing system is, this is one
step you will have to take.
This step will cost you time. This, as the old saying suggests, will also cost you money.
Time
is one of the greatest hidden costs of a paper filing system. Few
people give any thought to how much time it takes them to find a file
and put it away. Studies have shown that, even with a highly efficient
filing system, it takes an average of six minutes for someone to find a
file and then re-file it. Unfortunately, ost offices are not that
efficient.
Assume that, in most cases, it takes seven to ten
minutes to find and return a file. That means if you handle half
a dozen files in a day, you are spending 45 minutes to an hour doing nothing but hunting paper.
A
study by PricewaterhouseCoopers has concluded that of all the papers
handled in an office on a given day, 90% are merely shuffled.
Like trying to shovel sand with a tennis racket, this is 100% wasted
time and effort. Even professionals like you, who may spend 15%
of their time reading documents, spend up to 50% of their time looking
for them.
What does all this mean in terms of dollars? The
PricewaterhouseCoopers study also showed that just the labor costs run
to $20 to file a document, $120 to find a misfiled document, and $220
to reproduce a lost document. Thus it is worth noting that 7.5%
of all documents are lost and of the remaining documents, 3% are
misfiled.
Now for some quick math. Assume that in your office 20 documents must be filed each day.
20 documents per day x 5 days = 100 documents per week
100 documents per week x 6 minutes filing per document = 600 minutes for filing per week
600 minutes per week = 10 hours per week or 2 hours per day
250 working days per year x 2 hours per day = 500 hours per year
500 hours per year x $10/hour salary = $5,000 per year
Even
with a highly efficient filing system, with just twenty documents per
day you spend two hours every day doing nothing but shuffling
documents. This estimate also assumes that no files are misplaced
or lost.
This is just the cost of time. Other costs you
may not think of are the space each filing cabinet requires. The
average filing cabinet requires eight square feet of space. This
includes the space required to be able to open the drawers.
Assuming $1 per square foot of office space, per month, a single filing
cabinet costs you another $96 per year.
To remind you, this is
only the cost of handling paper documents. A high quality
e-procurement product will save you time and money in other areas, as
well. Thus a cost efficient, on demand solution like the
ElectronicTender System that allows you to you handle documents
electronically can more than pay for itself.
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I
need to stress that the example above is very much a best case
scenario. If your office handles more files or has a less
efficient filing system, your costs for handling those paper documents
may be dramatically higher. Also, remember those numbers assume
that no documents are misfiled or lost.
This means that just by taking advantage of one aspect of what an e-procurement product should be able to offer you, you can save at least $5,000 per year.
Sincerely,
Sacha Hartmann
YSER Inc.
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