IBM Helps Customers Understand the Cost of Paper

Published: June 8, 2009

by Alex Woodie

The average office worker uses about 40 pieces of paper per day, or 10,000 sheets per year, according to IBM. Instead of cutting down those trees and shuffling all that paper, many organizations would be better off, operationally and ecologically, migrating their paper-based processes to electronic content management (ECM) solutions. IBM announced two new service engagements last week aimed at helping users understand how to move to ECM.

There are numerous disadvantages to relying on paper, according to IBM, not the least of which is the impact paper has on the environment. Long lead times are often required to pull up older customer records that are in deep storage. Paper-based processes can be more susceptible to disasters and harder to protect with a disaster recovery (DR) strategy. There are also legal implications of maintaining filing cabinets full of paper-based documents, and the ramifications it can have on the discovery process.

But the biggest driver in going electronic with records is the operational efficiency and cost savings it can bring to previously paper-based processes. Considering the current economic slowdown, this could be a great way to start trimming costs, if an organization hasn't already begun the move to ECM.

To get an idea of the potential savings, IBM sponsored a case study last year that evaluated the return on investment (ROI) that a move to ECM and IBM's FileNet software and associated products brought to a large regional bank. The "No Paper Weight" case study can be found here.

According to the case study, the bank achieved a ROI of 195 percent the first year. That figure is calculated by subtracting the investment in hardware, software, and services ($3.7 million) from the total savings wrought through a combination of labor cuts, elimination of offsite storage, and other savings ($11 million). The total net savings, $7.3 million, is then divided by the investment, resulting in a multiplier of 1.95, or 195 percent. By the third year, after much of the hardware and software was installed, the bank's ROI figure increased to 290 percent.

Those are very compelling figures, and now IBM is trying to build on the success with more "No Paper Weight" initiatives. This includes its "No Paper Weight Half-Day Checkup," a free half-day workshop conducted by an IBM ECM subject matter expert who will help participants estimate the cost that paper-based processes bring to an organization.

Customers ready to go to the next step can enlist in the "No Paper Weight Prescriptive Assessment." IBM says this is a more in-depth assessment that uses actual customer data to get a clearer understanding of costs of paper and the potential savings the organization can get by moving to ECM. This program is not free.

IBM has also posted a "No Paper Weight" ROI calculator on its Web site to get people started thinking about all those greenbacks they can save--and green kudos they can get--by moving to ECM.

Once an organization has started the move to ECM, they should not look back. "Today, most documents are created digitally in business operations, but many clients revert to printing and filing paper copies costing them time and money," says Ken Bisconti, vice president of products and strategy for IBM's ECM group. "Our new offerings help clients work smarter--and greener--while enabling them to do their jobs more efficiently."

IBM offered several other examples of how customers are using its ECM tools, including the State of North Dakota, which cut the time it took employees to access tax records from more than 24 hours to just seconds. Another customer, the German financial services company VR Kreditwerk, was able to reduce the time it took to process a loan from one day to one hour, thanks to IBM's ECM software.

IBM also mentioned that it's currently working on a large ECM project for the U.S. Army with business partner EIM. The Lotus Forms implementation will be used by more than 1.4 million Army personnel around the world, making it one of the world's largest e-forms installations ever, and saving the U.S. government an estimated $1.3 billion.

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