Paper vs. Electronic Document Management

Documents are very important in any organization. They convey information, keep records, and help run day-to-day business processes. How documents are stored affects how smoothly business operates. With efficient document management, organizations can streamline their business processes, make efficient use of resources, save money, and ultimately provide better customer service. What business doesn’t want that?


In a typical organization, estimates show that 80-90% of records are paper-based, while the remaining 10-20% is stored electronically. While we are starting to see a trend toward paperless businesses, the majority of organizations have a lot of catching up to do.

The Downsides of Paper

While paper has its benefits, there are several problems with keeping a paper-based filing system. Let’s get down to the nitty-gritty first: cost. Storing paper is expensive. In addition to the obvious costs such as file cabinets, hanging files, and overhead, paper is expensive to classify, file, and retrieve. For example, if your organization receives 100 new paper documents each day for filing, and they take an average of 5 minutes each, it would take 8.3 hours each day. If the hourly rate is $14 including benefits, you’ve just spent $26,261.20 (8.3 x $14 x 226 work days) annually.

In addition to cost, there are several inefficiencies with paper-based systems. According to Cooper and Lybrand:

• Of all pages that get handled in an average office, 90 percent are merely shuffled.
• The average document gets copied 19 times.
• Companies spend an average of $20 in labor to file a document, $120 in labor to find a misfiled document, and $220 in labor to reproduce a lost document.
• 7.5 percent of all documents get lost, 3 percent of the remainder get misfiled.
• Professionals spend 50 percent of their time looking for information, and only 5-15 percent reading it.

The Answer?

Moving away from a paper-based system to an electronic solution is not easy. At least, that’s what most people think. There are several things to consider. Among them: Should you scan your backlog of records or simply manage ongoing records electronically? Should you attempt an in-house solution or outsource? Should you purchase document management software or use what you already have? The answer is simple: it depends.

Each organization is unique in its business processes, so the answer is unique as well. Why not analyze how you manage records and determine what will be the most beneficial and the most cost effective?  There are several IT companies that solely push their software or other "universal" solution in order to meet sales projections and not meet customer needs.  Is it the answer for your organization?

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