This guest blog post* is courtesy of Mary Anne Osborne, SPHR, and principal of the Osborne Group. Mary Anne is a people-centric HR professional and consultant with over 25 years of HR experience in telecom, finance, manufacturing, healthcare and higher education. 

While there are numerous benefits to going paperless, there are a lot of questions to answer before you take the plunge and commit yourself and your business to a paperless software solution.

Businesses are increasingly being forced to address these questions because of a complete shift in how HR operates on a basic level. Using electronic records is efficient and cost-effective and quickly becoming a standard function. According to statistics cited by marketing provider iPost, an eight-employee company, is estimated to achieve annual savings of $10,000 after going paperless. For a 370-employee company, the savings are more significant—a whopping $1 million annually. The U.S. government predicts an approximate savings of $1 billion over the next ten years as a cumulative result of going paperless.

Yet before the larger issues are faced, simple questions about going paperless can be answered. Like: “Does it streamline workflow and cut costs in the long run?” The answer is a resounding yes.

An average four-drawer file cabinet holds about 16,000 sheets of paper, and approximate costs can total $25,000 to fill and $2,000 to maintain every year. It’s estimated that the average office worker uses 10,000 pieces of paper a year. According to PricewaterhouseCoopers, organizations spend $20 on average to file a document, $120 to find a misfiled document, and $220 to reproduce a lost document. Of all documents, 7.5 percent get lost; 3 percent of the remainder get misfiled. You get the idea.

The weight, scope, and expense of using paper is staggering; understandably, businesses want to avoid those costs by implementing paperless solutions. Yet before rushing into a decision, there are several factors that merit consideration, and firms need to come in with an idea of what solutions will do for them and what the process will entail.

Know What You Want and What You Need to Do
Whether you are considering changing your existing software or are preparing for your first paperless venture, you’ll want to first ask yourself: What do I want to accomplish by going paperless? Yes, efficiency and cutting costs are great reasons. But there could be more, and, depending on the software vendor, you don’t want to miss out. Will your software allow you to create recruiting strategies more easily? Improve internal or organization communication? Build an integrated compliance strategy? In what ways can your employee evaluation process take advantage of technology to be more effective? Think about the critical components for your business.

What does your business or industry require regarding HR compliance? Document security? How and where are you going to store the electronic files? Is the archive searchable? Intuitive?

The questions don’t have to be heady, either. What’s your budget? What’s the timeframe? Who’s going to manage the system? Will you need professional assistance to implement and install the system? Will you need help converting old paper files to electronic ones? What hardware will such a system need to operate reliably? Is your corporate culture ready for the shift?

Converting Paper Files
This is probably the most challenging period during a company’s paperless transition. The conversion of old files is a task that requires a heroic amount of work, and most companies make the mistake of misjudging how much time and labor it will actually take to complete. It’s important to understand the benefits your business will experience during this stage of the process. Once digitized and archived, your files will be searchable, electronically shareable, and modifiable—all within seconds.

Once a document is scanned, it needs to be labeled, indexed, and placed in an appropriate database. If done right, this will consistently save time and money and significantly reduce misplaced or lost files.

It is generally recommended to take baby steps, converting one department or section of the office at a time. Some companies perform a pilot test first on a small scale to work out any bugs and equipment needs as well as gauge employee reactions.

Once You Are Paperless
After your old files are converted, you’ll need to answer a new set of questions concerning your business. Clients, vendors, and customers will continue sending paper documents—and some tax documents cannot be converted electronically—so you’ll need to decide how you are going to assimilate these hard-copy documents into your paperless system. How and when will employees be trained using the new system?

You’ll also need to evaluate how your system will be backed up. Do you have an emergency power supply or plan of action? In regards to document security, will you need user authentication? Digital signatures? Data encryption? Are your servers robust enough to support your business activity?

The transition to a paperless work environment isn’t as easy as it sounds, but once you make the choice to change and select a software vendor, your business will begin to save time and money, and before you know it, you won’t be able to imagine how you did business without a paperless solution.

*This post was originally published on the Sage Employer Solutions blog.