Increased Profits – Take the Paper out of Paperwork
Posted by Michael Gardner on Tue, Dec 21, 2010 @ 01:13 PM
Many times when we meet with executives at financial services organizations, insurance companies and brokerage firms they aren’t asking us why they should go with a fully paperless contract and document management system, but instead they are asking us why now? The simple answer is profit.
There have been a lot of studies done around the world regarding the savings associated with paperless initiatives but one of my favorites was done by Canadian researchers. In this study they looked at two key factors. The first was did the companies actually save money? The second was what they did with the money they saved?
It should come as no surprise that the overwhelming majority of companies saved money. In our own studies conducted with Recombo clients, we have found that their average transaction cost falls by more than 95%! A key distinction here is what we mean by transaction costs. We look at the entire process from the assembly of the documents, through data entry, storage and eventual retrieval. Many firms that purport to be in our space limit themselves to just the signing transaction. This is the electronic equivalent of counting only the cost of ticket when you go to see a movie. If you don’t include the transportation to and from the theatre, the popcorn, soft drinks, and the time you spent in the entire process you aren’t really capturing the costs. When we say 95% cost reduction, we mean from ALL costs.
Researchers in this study found that the majority of the savings came from the elimination of manual tasks and activities. Again, this is why our research covers the entire process. The results were very appealing. The study showed that 22% of companies applied their savings to increasing profits. That means that 22% of the companies put their savings directly to the bottom line. Equally as impressive, a whopping 20% of the firms used their savings to pay off debt.
The role of any business leader should be to maximize the benefit for shareholders. Going paperless clearly increases profits, which is a clear benefit to shareholders. So when should you start on your paperless project - how about right now.