Slaying the paper dragon.

• Author: Kalstrom, David J.
• Position: Minimizing paper costs - The CFO's Guide to Information Management: Optimal Imaging

Are paper costs chewing up your bottom line? Optical-disk imaging systems may help take the bite out by saving you time, space and money.

When Sandler Foods, a food distributor, decided to upgrade its microfiche invoice system, it quickly decided to switch to optical storage. Why? The firm's microfiche system cost about $43,000 per year, while the optical imaging system costs $22,000 per year. Sandler, like many other companies, also has used its new system to reduce space requirements, speed up document retrieval and improve customer service. Some companies have even found optical-disk imaging opens up new business opportunities. Could it work for you?

Every day, U.S. businesses churn out over 950 million pages of letters, computer printouts, photocopies and other paper documents. According to IDC, a Massachusetts research firm, the cost of managing these documents is about $100 billion annually.

In addition to filing, retrieving and routing paper records, businesses also bear the tremendous burden of storing them. The average cost of the rental space needed to store a typical file cabinet in New York's World Trade Center is $2,250 a year. In Boston, the cost is $1,131 and in Houston, $917. Paper is one of the biggest stumbling blocks to improving productivity and lowering costs.

Although optical-disk imaging alone won't solve every productivity and cost problem, it can save space and time, improve customer service (not to mention your cash flow) and generate revenue. What's more, it can help you make the most of your employees' time. According to a recent study by the Yankee Group, a Boston market-research firm, an optical imaging system on a computer network can increase worker productivity by as much as 50 percent (measured by transactions per second) and can also reduce staff needs by one-third.

WEIGHING THE BENEFITS

Tempus Fugit -- For Sandler, saving time was an important consideration in installing its optical system. The company has begun to add bar codes to its invoices so they can be scanned right at the loading dock and recorded. Questions that arise about a specific invoice can be routed to the right person, and the resulting decision can be cross-referenced to the optically stored data.

The changes have spurred management to rethink other processes as well. Greg Lee, the company's vice president of finance, explains, "One of the things you learn when you break from the tradition of handling paper is that you have to closely...