Paper Record Storage is Still Rising but Why?
Updated: May 24
A recent article in Forbes highlights Jim Thompson and his mega-successful paper storage business. This is confounding when most information today is created and stored electronically, and most companies recognize the risks and costs associated with retaining physical assets such as paper documents and backup tapes.
Digital vs. Paper Information Management
When comparing digital and paper-based information management, the advantages of digital storage are apparent in most situations. They can include some of the following:
Cost Efficiency: Physical storage costs can add up quickly, with an average cost of around $20 per document over its lifetime. In contrast, digital storage costs mere cents, resulting in significant cost savings for your organization.
Accessibility: Digital assets provide instant access and efficient retrieval capabilities, saving valuable time and increasing overall productivity resulting in a 30% to 50% increase in productivity, as reported by McKinsey. Physical files, on the other hand, can be time-consuming and cumbersome to retrieve and manage.
Security: Digital storage offers robust encryption, access controls, and backups, minimizing the risk of data breaches. Physical files are more susceptible to theft, loss, or damage.
Cost During Litigation, Investigation, or Audit: The cost associated with finding, searching, recalling, transporting, copying, returning to storage, and managing physical files during legal proceedings, investigations, or audits can be substantial. Going digital significantly reduces these expenses. A study by AIIM found that organizations spend an average of $880 per day on managing physical records during legal proceedings, while going digital significantly reduces these expenses.
Harnessing the Value: Information stored on paper content becomes challenging to leverage in tools like Artificial Intelligence, Machine Learning, data lakes, and data warehouses. Digitization opens up new possibilities for extracting valuable insights from your information assets.
Privacy Risk: Managing personal data on paper and backup tapes over time can introduce significant privacy risks. Going digital minimizes these risks and ensures compliance with privacy regulations.
Billionaire Jim Thompson: Parlaying Paper Storage into Profits
In the Forbes success story of billionaire Jim Thompson (Moving Billionaire Jim Thompson Parlays Paper Storage Into Profits (forbes.com)), we witness how paper storage can become a lucrative business endeavor. Thompson recognized the increasing demand for offsite third-party storage and capitalized on it. While Thompson's achievements highlight the profitability of paper storage, it is crucial for organizations to assess their business and legal requirements and associated risks related to storing physical content like paper, removable media, and backup tapes. In today's electronic world, it's imperative to question why organizations continue to store large amounts of paper when nearly all content is created electronically, and the electronic version is readily available, cost-effective, and provides comparable legal validity.
Assessing Third-Party Offsite Storage Practices
Companies should initiate a project to assess onsite and third-party storage practices and set the direction for the future, including remediation efforts. On average, organizations can reduce their physical document storage needs by 30% to 40% through comprehensive assessment and disposal efforts, as reported by ARMA International. The assessment project should include the following:
Comprehensive Assessment: Conduct a company-wide search to identify who is utilizing offsite storage, examining purchase orders, conducting surveys, and reviewing invoices to determine which vendors are being used for storage services.
Content Classification: Determine which content is eligible for disposal, categorizing poorly indexed or indeterminate files and applying reasonable and defensible criteria to establish retention requirements.
Access and Frequency Analysis: By reviewing recall records and consulting relevant departments, such as litigation, audit, investigation, and tax, determine the need for accessing specific content and its frequency.
Duplicate Identification: Identify paper content that duplicates electronic files already stored in structured applications with easy access, allowing for efficient disposal.
High-Risk Content Identification: Identify high-risk content containing personal information, trade secrets, or other sensitive data to ensure it receives appropriate protection and handling.
Legal and Regulatory Compliance: We conduct thorough research to determine the true business, legal, and regulatory requirements related to paper storage, providing guidance on the acceptability of electronic versions.
Remediation Plan: Develop a comprehensive remediation plan tailored to your organization. This plan may include digitizing frequently accessed documents, disposing of content that has met its retention requirements, and implementing efficient document management processes.
Future Storage Policy and Practices: Develop robust policies and practices for all future storage needs. This ensures that content is stored appropriately, with expiration dates assigned and disposal processes in place. We can assist in reviewing contracts with offsite storage facilities to address costs that hinder disposal efforts.
Case Study: Transforming Offsite Storage
Kahn has teamed with many clients to reduce their paper footprint. A financial services client had over a million boxes and 200,000 backup tapes in storage. Our team executed a thorough assessment and identified significant opportunities for improvement using the steps outlined above. We applied defensible criteria to categorize and dispose of a significant portion of the stored boxes. By strategically evaluating the remaining inventory, including duplicates to electronic content and retention requirements, we reduced even more storage needs which resulted in millions of dollars in savings year over year. Similarly, we worked with the client to evaluate and dispose of unnecessary backup tapes, resulting in significant annual savings. To ensure the client didn’t find themselves in the same situation down the road, we developed policies and processes to ensure that only approved content was moved to offsite storage.
Conclusion: Embrace a Secure and Efficient Future
While paper storage may have its historical merits, the advantages of going digital are undeniable. By assessing current practices and setting direction for the future, companies can optimize their offsite storage practices, transition towards a more agile and secure future, and unlock the full potential of their information assets.