When a business considers a long-term investment like electronic document management the first question is almost always “what’s the ROI”? This is standard for most of the people we meet, and understandable because many businesses are unaware and unfamiliar with the potential such a system has for their business. Unless you take advantage of a provider’s free trial, there is no way to really conceptualize how electronic documentation can transform your company.
Before we get into numbers and figures, consider the time and manpower necessary to maintain paper documents. It has been estimated that a company spends up to 10% of their revenue on managing document creation, distribution and related devices like printers, scanners and other equipment. The time and manpower necessary to carry out each of these phases in a document’s life-cycle are costly and time consuming as well. Let’s not forget to mention that the life-cycle of a hard copy document poses various risks for organizations both big and small. The cost and risks associated with managing paper documents are oftentimes enough to justify the cost for an electronic document management system.
So, what is the ROI?
The first step is to determine how much is spent per year to store hard copies in filing cabinets. Use this equation to determine cost:
Number of Filing Cabinets x 21 square feet x Cost per square foot = Annual Storage Cost
The next step is to determine how much it costs you to have employees spend time managing documents. Use this equation to determine cost:
20% X # of Employees X Average Annual Wages = Personnel Cost
These calculations are pretty basic, but also very telling. The amount spent per year for storage and the cost to have employees manage documents put business methods and practices into perspective. It illustrates just how much money is spent utilizing very outdated, traditional document management systems. For more information on how electronic document management systems provide a solid ROI, contact ILM today!