How Paperless Offices Work

If you've ever spent too long hunting through stacks of paper for an invoice or searching through paper files, you may have wished for a paperless office. You wouldn't be alone.

As soon as computers began appearing on office desks more than 20 years ago, so did the idea of paperless, electronic communication. But despite all the time that's passed, most businesses are far from operating without paper.

The arguments for tossing the piles of paper are strong. By eliminating paper in file cabinets, for example, a company can create more room and reduce off-site storage costs. By exchanging information electronically with vendors and customers, a business can make information quickly accessible -- and conversely more private and secure through the use of encryption, passwords and other security measures. For some businesses -- like those in the healthcare industry, which are governed by the Health Insurance Portability and Privacy Act (HIPAA) -- paperless records may be a regulatory requirement.

But the process of going paperless can be daunting. There are the costs of new equipment and software to consider, as well as that of converting paper records into electronic files. And there are decisions about how to make the move and when, how much existing paper to convert, how to handle paper that continues to flow in from vendors and customers, how to get employees onboard with the idea and trained in new systems, and how to simply keep doing business as usual during the conversion.

Add to that the fact that, no matter what, a company probably can't be completely paperless. Some papers -- like signed, sealed deeds and legally binding contracts, or paper records for audits and IRS tax filings -- need to exist in their original form for legal or financial reasons or, particularly in the financial services industry, to show regulatory compliance.

Still, many companies will agree that becoming paperless, or at least paper-less, is well worth the effort. In this article, we'll take a closer look at how you can move your company closer to paperless -- from possible steps in the transition process to the available technology. We'll also look specifically at document management and consider how you can make your home office paperless, too.

On the next page, let's look first at the benefits some companies have realized by going as paperless as they can.

Benefits of a Paperless Office

There are many benefits with a paperless office, beyond simply having less paper to deal with. While you're unlikely to have a completely paper-free office, electronic communication and other systems can eliminate much of it. Let's take a closer look at how this has benefited some businesses:

Reduced costs and quicker access to information. MajesticInvites.com is an eight-person company that designs online invitations. Being paperless saves the company about $100,000 per year on printing, mailing, paper and storage space, reports Alina Uzilov, the company's president. And because employees can access electronic documents more quickly than paper, they can almost instantly respond to customer questions or make their changes [source: Small Business Computing].
More space. When he got ready to switch locations after making his office paperless, real estate broker Ed Branson of Branson's California Property noticed that he didn't even have half as many file cabinets as before going paperless [source: Microsoft.com]. Photographer: Peterfactor | Agency: Dreamstime Many doctors' offices are transitioning to electronic medical records.
Document security and easy information sharing. Obstetrician Rose Kung, M.D., found storing and retrieving paper patient charts was time consuming for her practice at Women's College Hospital in Toronto. Switching to an electronic document management system reduced chart filing and finding time -- and improved security of patient information. Password protection at different levels limits the access that office staff have to the information. Kung can also send electronic copies of patient records to physicians anywhere in the world [source: A&L Computer Software Limited].
Ability to handle company growth. Transervice Logistics in Lake Success, N.Y., helps companies manage their delivery systems. The human resources staff found they had more than 30,000 pieces of paper to track and store in their 1,000 employee records. With that information now stored electronically, the department was able to handle the addition of 500 employees (potentially 15,000 more pieces of paper) without needing additional space.
Access anywhere and electronic prescriptions. South Shore Skin Care Center, near Boston, has switched to an electronic medical records (EMR) system from paper patient charts. With the EMR, doctors can access patient information from anywhere at any time. They can also send electronic prescriptions directly to pharmacies [source: dBusiness News].
Less paper in. A company plans to accept paper faxes from customers. However, the company uses electronic faxing to intercept those faxes, turn them into electronic documents and keep them from coming into the company as paper.
Less temporary paper. At dentist Kambiz Moin's office in Manchester, N.H., not only are patient charts electronic, but also patient arrivals. A patient who arrives for an appointment types his or her name in a waiting room computer and puts a finger on a biometric reader. Their arrival is then posted on the office computers, color coded to show an early, on-time or late arrival [source: Orthodontic Products Online].
8. Less paper out. Tax professional Joseph Anthony in Portland, Ore., files clients tax returns electronically, eliminating paper returns, and then turns the return into a PDF document that he gives the client on a rewriteable CD. The next year, the client brings back the CD to have another year's return added [source: Microsoft.com].

Taken one step at a time, moving toward a more paperless office doesn't have to be difficult. Go to the next page for some steps to put the process in motion.

Transitioning to a Paperless Office

If you're considering the transition to a paperless office -- or at least a more paperless office, you may be wondering where to start and what you'll need. Many companies offer document management systems, hardware, software and consulting services to help improve electronic communication on the road to having no paper. We'll look at some of those later in this article. For now, let's explore the process.

Here are some decisions for you to consider before you start the transition to a more paperless office:

How much of your paper do you want to convert? How far back do you want to go in converting paper files?
How will you handle the paper that still comes in from vendors, partners or customers? Or, that you can't convert, like legal or tax-related documents?
How expensive is new equipment or software, or both, and how does that fit your budget?
What's your proposed process for going paperless and your time frame?
How will you inform staff and get them to buy into the process so they accept the changes you want and don't slide back into heavy paper use?
How much help do you need from outside? (This could be a consultant to manage the conversion process, a vendor for new equipment and software, a firm to do actual data conversion, a hosting service to move electronic files off site, security experts, or employee trainers.)
How will you handle paper reduction on an ongoing basis? For instance, whose job will it be to scan and electronically file incoming paper?

Based on recommendations from experts and companies who have gone through the process, here are some basic steps for the transition process.

Commit to going to a paperless office, and convince staff to go along with it by explaining the advantages for each of them individually, and as a group, and involving them in the process.
Check your existing computer hardware to make sure it's robust enough to handle added applications and file storage. Make sure you have a reliable backup system for all the files you will be adding.
Analyze what you need and plan to accomplish. Think about what you're likely to need in the future with a growing business, as well as now. Think about which documents need to be accessed often or quickly, which need extra security, and which could be weeded out after a certain time.
Develop a transition plan and a timetable.
Start small with just a single department or area of our business so you can address any problems before broadening your scope.
Research the available tools to help you (document management systems, electronic faxing, scanners, data backup systems, security systems, document conversion companies, process consultants).
Select and arrange to buy the tools you plan to use. For software, consider fit with your needs, ease of use and implementation, cost, and integration with your existing systems. And don't neglect backup needs to keep electronic data from being lost.
Do a small test project; make any needed changes; and then move to the transition in your first department.
Develop a plan for ongoing company-wide use. Include a document storage plan for employees with specific guidelines.
Gradually take your paperless transition through the company.

Next, let's look at a key part of any paperless office -- the document management system.

Managing Digital Documents

Digital documents, like paper, need to be stored so they can be retrieved and used as needed. For a paperless office -- or more likely, a near paperless one -- you'll need a way to turn paper documents into digital, or electronic documents.

That type of communication transformation is handled by a document imaging system. Since not having paper is unlikely, you'll probably find an ongoing need to turn paper into electronic files. A document management system usually goes beyond that transformation to deal with all documents -- computer generated, as well as those that are faxed, scanned or e-mailed.

The basic document imaging system consists of a scanner and software that allows paper documents to be scanned, converted to electronic images and saved in PDF, TIFF or other formats for storage on CDs, DVDs, a computer hard disk or a network server.

Most document imaging systems include optical character recognition (OCR). This allows the images to be recognized as text when saved as searchable PDFs or copied into programs like Microsoft Word or Excel. With OCR, you also can search for specific words or phrases within a scanned document.

Document management systems provide the electronic file cabinets and filing system tools. They combine data storage space with software that goes beyond document imaging to include functions such as audit trail and reporting tools, document expiration controls to delete documents at specified dates and Web-based document viewing.

More advanced document management systems offer extras such as:

User authentication for increased security
Automatic e-mail notification
Digital signatures
Data encryption for secure sending
Custom keys that provide prompts for correct indexing
Targeted solutions for industries such as health care, financial or manufacturing
Multimedia filing, bringing together various types of files such as visual images, video, text and spreadsheets

If you have large quantities of paper documents to turn into electronic files or need help getting the job done quickly, you may want to outsource document imaging to a company like microMEDIA. One of the company's current on-site conversion projects includes OCR and fully searchable PDF files with more than 25 million images.

And if you don't have a robust enough server or want to store electronic files off site, many document imaging companies offer a hosted server solution. Web-based document hosting allows you to store or back up your files on their server and then access them securely anywhere, any time. The advantage is that valuable files are off site in case your company's server goes down or cannot be used on site, like during a hurricane.

Beyond your company's paperless needs, employees may have a home office. On the next page, we'll look at how to bring a paperless look to your home office.

Going Paperless at Home

Whether you're a solo entrepreneur or a telecommuter working full or part time from home, there's no reason your home office can't be as paperless as possible. In fact, given limited space and available time, the move to electronic communication and reduced paper may be even more important at home than in a conventional office. Most of the same concepts apply, only on smaller scale.

Start your at-home push to paperless by taming your inner pack rat. No, you probably don't need marketing materials from five years ago or every scrap of paper related to completed projects. Reduce junk mail by calling 1-888-OPT-OUT (1-888-567-8688) to stop receiving credit card offers. Once you've cleared out the unnecessary, you can work to keep those newly cleared spaces clear permanently.

Next, switch to electronic with everything you can. Electronic banking eliminates statements and checks. Online credit card and financial statements knocks out more paper. Check to see what other accounts, like insurance, you can make online. The same goes for project proposals, resumés and invoices. When paper comes to the door, handle it once, and recycle or shred as much as you can immediately.

Make PDF documents of your receipts and save them online instead of printing out paper copies. Create an online filing system that's easy to understand. And develop a regular back-up system that you do at least weekly to make sure you don't lose important documents. A flash drive or CD can work, unless you have enough data to need an external hard drive for back-up.

Consider getting an inexpensive scanner, if you don't already have one, to scan and save receipts, contracts and other documents. If you need to return a signed contract and your employer or client is willing, you can scan the contract, sign it and fax it back. If not, you can at least scan and save the signed contract for your records.

Take that concept a step further, and consider signing up for electronic fax services. Several companies offer this service and accompanying software for as little as $40 per month. With electronic faxing, or Internet faxing, as it's sometimes called, you can send and receive faxes without a paper-using fax machine. Any document you create on your computer can be sent to a fax machine via e-mail or the Web.

Add a firewall and evaluate your software to make sure you have adequate security for your electronic documents and can protect them from cyber-thieves. If you think you need more, buy something more robust.

Work on one area at a time to gradually build to a nearly paperless office. Plan an annual end-of-year clean-out. Go through files, and move everything that simply needs to be stored onto CDs.

And accept the fact that some paper won't go away. Deeds, birth certificates, notarized documents and some tax-related items just need to be stored securely. Fortunately, by the time you've made the other changes, you probably won't need a large box to store the paper you've left!

Next, let's consider paperless office solutions beyond document management systems that can make a paperless office work better.

Paperless Office Solutions

While document management is an important part of the paperless office, other technology can help make the switch to electronic communication easier. If your goal is to eliminate paper, take a look at these options.

Data Back-Up -- For a paperless solution to work, a company needs the security of knowing digital documents are duplicated. This can be done through on-site back-up to a disk, hard drive or server. However, some less-used data can simply be archived, or stored on or off site for record keeping or in case it's needed at some point [source: Digital Assets].

Companies providing document hosting services frequently offer data archiving services. They may also offer data mirroring, in which an exact copy, or mirrored repository, of your database is kept off site so that your company can connect to it and use it at any time.

Electronic Faxing -- With electronic faxing, a company no longer needs paper-using fax machines. Incoming faxes are converted to digital images and sent to individual e-mail boxes. Similarly, documents created on the desktop can be sent to a fax machine via e-mail or the Web. Faxing also is more secure because paper copies can't be lost or left on a fax machine for everyone to see.

Security Solutions -- While electronic documents provide a level of security beyond paper on their own, you may want to go beyond the security offered as part of a document management solution. In choosing a security solution, consider the three main points of security: Does it provide confidentiality by protecting against unauthorized entry? Does it have integrity in that data within the device can't be altered? And does it limit availability by requiring authorization before the database can be used?

As technology advances, other solutions to the paper problem will undoubtedly emerge. One in development is Xerox Corp.'s electronic paper, which allows notations on thin digital displays with a stylus. The notations can either be erased or saved digitally. Another, Anoto Group's intelligent paper, also allows notations with a stylus, but using a magnetic ink. The notations appear on the paper and simultaneously on a computer screen.

For more information about paperless offices and related topics, check out the links on the next page.