People are moving in droves onto web systems for considerable savings as new Software as a Service (SaaS) systems move into mainstream and office processing areas. Many legacy systems that were installed under the auspices of Y2K (pre-2000) are now more than 10 years old (last century legacy applications) and are now over-due for serious upgrade or Rip-and-Replacement. Prior buyers viewed applications like home owners to whom appliances like stoves and fridges were something you plug in and forget for 8-10 years. Many of those older systems haven’t had sufficient re-architecting for the products to work well in the web cloud.
You probably don’t want to be told that most of your systems maintenance costs for inhouse systems have gone into an ‘already-sunk’ fund to maintain and prolong inhouse infrastructure life. Between 40% and 60% of TCO (Total Cost of Ownership) of systems in larger enterprises is from internal costs of just supporting operating systems, networks and old applications. By comparison the cost of maintaining virtual systems in the cloud can be as little as one third the cost of on-premise systems.
The cost of upgrading on-premise applications and the related business disruption risk can be prohibitive, whereas web solutions are designed to be transparently upgraded so all customers are always on the latest version. For the software vendor, the cost savings from only having to do one central version upgrade rather than one for each and every customer are considerable.
Office systems have also moved up into the cloud as this avoids copies of documents proliferating onto everyone’s PC, clogging network traffic and leading to version problems. Better to upload once and share rather than download everywhere.
Cloud business solutions are also changing the rules when it comes to even the most traditional core business systems and operations. SaaS solutions are becoming a real threat to traditional on-premise software suites and ERP systems. These are not just for large-enterprises but also SME’s and this is not just an email/office/collaboration phenomenon.
Amidst today’s post-GFC tighter fiscal constraints on Cap-Ex there’s still money available for Op-Ex spend on pay-as-you-go business solutions that can offer innovative efficiency savings and improve operational effectiveness. More and more of your customers will be looking for suppliers who offer flexible, collaborative systems that can deliver inter-company savings from streamlined electronic (paper-less) communication processes.
CEOs are looking for solutions with more speed, agility and adaptability as waste regulations and costs change unpredictably around them. They also seek ways to increase customer loyalty/lock-in with such collaborative cost-reducing systems.
Yet waste collection and disposal companies in their own back office environments have a long way to go to get to the mythical “paperless office”. Rather than paper-free, we should aim for paper-less!
In a recent presentation by Kerry Gordon from Recordkeeping Innovation (www.records.com.au) at the last Coffs Harbour Waste Conference there were some astounding statistics on what businesses waste in typicalpaper-chase processes.
- Australians use 1.7 million tonnes of printing and writing paper pa* (equivalent to 10 million trees)
- Employees use c.19500 sheets of office paper pa*
- 4.2 billion mail items pa cost businesses millions
- An estimated 55% of office waste is paper
- Paper waste is the single biggest component of solid waste** (Paper products make up ~38-40%)
- An estimated 18 million printer cartridges are used by Australians each year, (5000 tonnes of waste)
*Paper-Less Alliance, paperlessalliance.com.au
**Resource NSW 2002, ‘Waste Reduction in Office Buildings”
Huge Manual Handling Costs
Even bigger costs can be found in printing, copying, packing, posting, storing, filing, recycling and disposal of paper that can cost a business up to 31 times as much as the price to buy the paper.
And Then There’s The Cost of Storage Space …
To store 2 million paper documents, an organization can expect to spend between $40,000 and $60,000 on filing cabinets alone. Those same files could fit on fewer than ten CD-ROMs. Adding the cost of floor space required to house filing cabinets, and considering that for many companies 45 percent of files stored are duplicates,paper storage is both inefficient and expensive.
An effective electronic network and storage system could help cut costs dramatically saving up to 80% of office storage space.
Postage and handling costs of delivering documents in a digital format can be less than ½ the cost of postage and delivery in paper format.
Online billing can also dramatically reduce admin costs, combined with self service enquiry/reprints.
Gartner (IT industry-watch specialists) estimate that paperless processing triples processing capacity! (Productivity efficiency is also easier to measure!)
Kelly Gordon cited recent studies that estimated up to 3% of all paper documents are
filed incorrectly, and up to 8 % are eventually lost. A typical office worker may spend up to 40 % of their time looking for information. One USA study estimated that managers spent up to 3 hours per week looking for lost records at an overall cost of $120 per document.
Paperless Office Benefits for Business:
There’s a wide range of paper saving options that businesses can choose to introduce ranging from simply mandating double sided printing, to electronic auto indexing and filing systems for emails up to full blown externally hosted, record keeping systems. Access to the virtual office and online data, which is not location or business hours dependant may also be a factor. A wide range of benefits can vary with the solution chosen so it’s wise to get some independant expert help in deciding what’s right for your business. Some typical business benefits are:
- Accurate tracking/retrieval of decision critical data
- Improved processing capacity and productivity
- Automated workflows processing tracking
- Reduced personnel costs for paper filing
- Reduced ‘lost’ and misplaced records
- Instant access to the virtual office
- Reduced operating costs
- Improved security
- Reduced office and storage space
- Reduced customer enquiry backlogs
- Increased timeliness of information
Some Traps To Avoid
Kelly suggests that simply replicating your paper mess in a poorly indexed electronic equivalent can increase your difficulty in finding items, rather than reduce your staff workloads. Selective rule based filtering of what needs to be stored and retreived electronically over what time periods can avoid over retention of too many records that, in turn, can lead to confusion when staff are presented with too many ‘hits’ on tagged redundant records.
Paperless Proof of Pickup
One of the most paper-intensive areas in waste operations administration is for customers who demand signed driver dockets as proof of collection. Whilst these may only be less than 10% of a regular collection run, the triple handling effort involved often gets glossed over as an unavoidable necessary evil and potential cost savings are often overlooked. Ops staff need to print these and attach to run-sheets for drivers; drivers have to sift, find and sign for specific sites; ops staff then file separate copies in run date bundles; then file correctly in separate customer folders for the month. Then at month end accounts admin staff have to pull out paper copies by customer and attach to invoices for posting.
Copious cabinets of filing systems consume space in waste-ops departments where they don’t have any electronic record capture capability. Yet with onboard systems or simple scanning/auto-indexing of such paperwork, at least the downstream filing and double handling could be cut-out altogether.
Tipping dockets are another area that stands out as a prime candidate for electronic scanning and attachment to skip and hook-lift job transactions.
Invoice delivery and archival outsourcing to external hosted systems is becoming more readily available and affordable while at the same time for the smaller operators, the ability to have the invoices produced in PDF format for auto-emailing out to customers saves days of manual envelope packing and avoids the peril of paper-cuts.
Everyone is getting so used to being able to do invoices online, that companies are able to charge extra for those that want to persist with paper copies
Electronic payment processes have also allowed upstream re-sequencing of pay-times in direct debit or credit card payment postings to improve cash flow and save manual handling costs for both sides.
Co-worker Communication Enablement Systems
As the pace of business gets even faster, switched-on companies are leaping onto new community collaboration systems like Google’s shared documents, presentations and spreadsheets for running web-share meetings with people in different offices. Web based conference sessions can be done at your desk with staff or customers in different locations using Skype, WebEx, GotoMeeting.com or Calliflower freeware to co-author document updates.
Modern business web-apps offer integrated inter-staff task assignment and reminder messaging systems that can attach action request messages to transaction process stages such as new account credit checks, route assignment tasks or bin delivery queues. Integrated web-shared task calendars also help with work-list follow-up reminders that can be echoed in Outlook or Google’s freeware calendars. Web-apps make Cloud to Cloud inter-application communications easier and may often facilitate legacy links back to in-house systems.
In spite of the FUD (Fear, Uncertainty & Doubt) put about by old-school software providers, integration, reliability and data security are no longer top-of-mind buyer concerns for web-apps.
Buyers look for lower-cost pay-as-you-use solutions to deliver savings in:
- Systems that enable & support customer intimacy
- Agile systems that facilitate process excellence
- Product innovation that helps differentiate services
As Rollin Ford, CIO waste-conscious Walmart, says: “Organizations need to keep embracing innovation and new technology models.