Paperless office - ages-old myth or valuable way forward?

Offices will never get rid of paper entirely - but minimising its use is a relatively easy way for organisations to cut costs, says Ron Condon.

Take a look at any work environment in 2006 and the very idea of that 1980s' dream, the 'paperless office', seems like a sick joke. Despite the growth of electronic documents, email, PDAs, PDFs and the rest, our appetite for paper just continues to grow.

Research from several sources estimates that our consumption of paper in the UK is still rising by about five per cent per year, and that most of the costs of paper, printing, storage and disposal go unnoticed.

So why is paper usage still growing in the electronic age? And how do we manage the costs?

Andy Jones, a director at Xerox Global Services, explains a crucial change in the way we use paper. "Thirty years ago paper was the definitive record of so many things that happened within business. Today it is increasingly the case that the electronic record is the definitive copy, while paper is becoming much more a work-in-progress medium," he says.

He says that while electronic document management (EDM) makes it easy to store, transmit and share information within an organisation, individual users still tend to run off a copy from their nearest printer to read the content and work on it.

Jones adds: "Paper is versatile, flexible and is often still preferable for casual, ad-hoc reading. It is easy to mark up and read."

Nevertheless, moving to an EDM system for many organisations can be a major first step in tackling their paper mountain. The Scottish Executive, the devolved government of Scotland, installed a system from Objective 18 months ago - and now estimates it has binned a stack of paper that would be half a kilometre high and has made annual savings of at least £500,000 in time spent filing and searching for information.

London law firm SJ Berwin says it has saved £700,000 in storage costs by going to electronic document management as well as completely re-engineering its business processes.

And in Liverpool, a major reorganisation of the city's Benefits and Revenues service, with the introduction of an EDM system from Comino, allowed it to reduce the number of post rooms from 15 to one, and to raise £4.5m from the sale of a building that housed paper files and cost £700,000 to operate. The system also helped the city make dramatic improvements in efficiency and customer service.

But all organisations have to deal with paper coming in via the post. And while email has become the predominant medium of communication in business, it is still estimated that around 17 per cent of incoming communications are on paper. That can be slow and expensive to manage, and some companies have outsourced the whole task.

One company handling the job is Stortext, whose clients include Barclays, Carphone Warehouse, Scottish Courage and Virgin Atlantic. Incoming mail is diverted to Stortext where it is scanned and then processed by its staff in India, the Philippines and the UK. It is not just a question of scanning in the mail image, according to chief executive Graeme Scott, but also doing some data entry - for instance for invoice processing or handling an insurance claim.

Scott says: "By using staff overseas we can handle the mail for one-tenth of the cost of doing it in-house." He adds that some companies are happy for the paper mail to be scrapped after it has been scanned into the system, while others insist on keeping the original documents. "We have two car leasing companies as clients. One saves the paper and the other throws theirs away, so there are no real guidelines," he says. "But increasingly companies are happy just to keep electronic records."

To achieve further savings by getting rid of paper, organisations need to look within, where the main expense comes from staff printing out documents at their local printer. Olaf Lorenz, general manager of product marketing at Konica Minolta, says: "If possible, a full audit should be carried out to find out how much paper printing is essential and how much is wasted. But for those without the time or resources to do this, a quick glance in a random waste paper bin may confirm just how many documents are being printed off and just as rapidly disposed of."

It is possible to attack waste at several levels at once, by reducing the amount of actual printing being done, reducing the amount of paper used for printouts and then making sure that all paper goes for recycling once it is no longer needed.

Print reduction can be achieved with the introduction of multi-function devices, which combine the traditional printing function with scanning, copying and faxing. This could help by enabling users to, for instance, scan a document and send an electronic version to 10 recipients instead of making 10 copies of the document.

This can also reduce the number of printers needed - for instance, KPMG is in the process of reducing its population of 2,000 printers with just 240 multi-function devices - saving power, floor space, maintenance and, with luck, a lot of paper.

Even if staff still need to print, there are ways of bring down paper consumption. A simple trick is to make the device default to double-sided printing, while some documents can be reset to use up less paper while still being readable. Putting a simple recycling bin by the printer will also signal to staff that the company takes its environmental duties seriously.

If that sounds like a trivial move which would have little impact on your business, research by document management company Macro 4 says the cost of wasted printing - pages you didn't mean to print or decide not to use - amounts to £400m per year for the average FTSE company. Even allowing for some exaggeration, it is still a sum worth saving.

And yet, according to the same company, only 58 per cent of IT directors monitor or manage office printing costs - while only 28 per cent say they have print spending under control - and just 23 per cent of office workers always recycle unwanted printed paper.

In these cost-conscious days, reducing paper usage represents a golden opportunity to cut costs. And if it can be couched in terms of being more eco-friendly - usually with a campaign to gain BS 14001 accreditation for environmental management - it is more likely to get the workers on your side too.