Fragmented Document Practices Add Cost, Undermine Productivity and Compliance Efforts

This article, the first in a series of four, is designed to provide you with an overview of the issues and costs associated with enterprise document management.  Subsequent articles will focus on specific print environments and opportunities for improvement.

Documents are at the heart of every business process.  No matter the business or industry, documents are essential to managing every aspect of a business. Proposals, sales contracts, checks, statements, invoices, purchase orders, receiving and shipping documents, training materials, product labels and instruction manuals. Not to mention marketing, investor and employee communications. Documents facilitate the processes that are critical to a company’s success and its very survival.

Despite their importance, however, documents can be expensive, wasteful, and a drain on the time and resources of an organization. According to industry analyst InfoTrends, the average company spends 6 percent of its annual revenues on document production alone. Moreover, for every dollar spent on printing, ten more dollars are spent on managing those documents.

Fragmented Structure, Disparate Activities
Most firms lack a complete understanding of their total investment in creating, printing and managing documents.  They tend to view document management in a highly fragmented way, often only within a specific department or function, rather than looking at the process company-wide.  As a result, opportunities for cost containment and process improvement are overlooked.

For most organizations, printing occurs in several distinct environments, each with its own discrete management and reporting structure. For example, office printing is typically under the auspices of the computer network group, while copiers and faxes have traditionally been the responsibility of administrative services or purchasing departments.  Centralized reprographics, more commonly known as the print shop or copy center, may be a part of mail or graphics services, whereas data center printing remains staunchly part of the information technology organization.  The marketing department most often contracts with outside providers of commercial print, while various individuals and work groups procure their ad hoc print jobs from local copy shops.

With this disconnected document activity, most companies do not have a clear view of their total document-related expenses and they can’t be sure whether associates’ printing habits are in the best interest of the organization as a whole. In fact, little if any attention is paid to how, where and why users engage printing resources.

More cost-effective and efficient printing methods may indeed exist, but they are overlooked because of lack of information, force of habit or urgency of their need.  The prevailing perception among users may be that printing is “free” with the cost of copying or printing either falling outside of their particular budget, or the expense considered only in passing as a price of doing business.

A High Cost for Flawed Processes
Printing expense is only part of the cost equation. Inefficiencies, rework and error are also expensive in terms of lost productivity, missed deadlines and customer dissatisfaction.  If documents and the processes they support are flawed, the overall performance of the enterprise is greatly impacted. As a result, organizations must address the entire document-related life cycle and all associated supply chains, not just the output.

Risk management is another way enterprise documents strategically impact the organization.  Increased regulations and the risks associated with fraud, identity theft and litigation have given rise to a new set of strategic concerns about privacy, data protection, electronic discovery and information security. A corporate-wide document policy and strategy is essential to effectively assure regulatory compliance and reduce corporate risks.

The Total Cost of Ownership
When companies look at the documents they produce as a whole, they are destined to find undiscovered opportunities for savings.  Research indicates that more than 30 billion documents are used each year in the United States and the total cost of producing and managing them is estimated to reach as much as 15 percent of annual corporate revenue.  That is about $1.2 billion annually for an average Fortune 500 company. 

By closely examining the entire enterprise document supply chain, including documents produced internally as well as those procured externally, organizations find that much of their supply chain is more costly than necessary and that the resulting expense is significantly higher than anticipated.  According to Gartner, most companies could reduce their printing expenditures by 10 percent to 30 percent.  Looking at it from another perspective, operating costs can be reduced by 20 percent to 30 percent when a company implements strategic supplier agreements, coupled with electronic catalogs and e-procurement, according to Granada Research.

From High-Cost Liabilities to High-Value Assets
Only by stepping back and building a more holistic view of document management and printing, does an organization develop an effective document management strategy that will transform its corporate documents from high-cost liabilities to high-value assets that can improve business performance.

Next Insight: Office Printing
The next issue of Insight will give you a closer look at office printing – costs, trends and best practices for reducing expenses in this environment.  However, if you want immediate information about gaining a comprehensive view of your enterprise, contact us now.