Scan v Store, Which Costs More? A Common …

1 Copyright DocSolid, LLC 2014. All Rights Reserved. V 1 Page 1 scan v Store, Which Costs more ? A Common Sensium for Legal RecordsSteve Irons, President DocSolid The thinking that it is cheaper to store paper records than it is to scan them is misguided, simplistic, and just plain wrong. As our study shows, the comparative hard Costs of scanning and storing are close enough to consider the choice, and give weight to the digital advantages of scanning. Most firms today are looking to reduce the Costs of paper records storage, and this study s findings provide a framework to quantify your paper storage Costs , and consider the digital options. DocSolid worked with Records and Technology executives (the Working Group) from nine large law firms, to quantify the full cost of records storage, to bring the storage cost and contents model down to the box level, and to compare a production scanning operation that would substantially eliminate the flow of paper to offsite records storage.

2 DocSolid called this a Common Sensium to distinguish the project from an academic study with a definitive finding. Instead, this study developed a framework to guide a firm through its own analysis of the topic. There are variables and estimates in the data templates employed, and the soft benefit considerations are as important as the hard cost conclusions. Yet the study succeeds in establishing a usable decision framework for any firm to apply to its own unique data and situations. CONCLUSIONS Let s start with the end. Though our study s intentions were not to specify that one option was better, there are some helpful conclusions that can be drawn from our efforts. v Store - Which Costs more ? The comprehensive hard Costs of each are close by comparison,and worthy of review.

3 Note that some of the identified cost categories remained unaccounted forbecause they were difficult to quantify or make relevant in our comparison. Our study scomparative cost numbers are interesting, but the more important utility of this study is that youcan use the framework to assemble and analyze your own full cost of records storage is much higher than the simple cost to store a box per year,multiplied by the number of years of storage. Prepping and staging for storage, pickup and retrievalfees, and eventual disposition-destruction Costs represent multiples of the hard expenses foraccrued annual box the intersection of retention and destruction process for retired records is a darkhole in the operation of most firms today.

4 As a result, most firms store records in bulk, indefinitely,at a high, continual cost , well beyond legal retention periods, at the risk of both the firm and theirCommon Sensium (noun, new): 1. A study intended to examine a complex choice by clarifying related data and enabling a decision framework. 2. A cross between a consortium and a symposium of experts, with a heavy dose of Common sense. As in: We studied the comparative Costs and advantages of scanning versus records storage for legal records, and rather than attempt a conclusive result, we created a decision framework for firms to use to draw their own conclusions. Copyright DocSolid, LLC 2014. All Rights Reserved. V 1 Page 2 clients. Destruction of old records tends to be regularly deferred, or undertaken on an occasional project basis.

5 Proper policy, process, accountability and applied disciplines for destroying inactive records are lacking. Therefore a choice for continuous records storage tends to win out by default. 50% of the paper heading to offsite storage is already electronically filed and available online, or actually duplicated in the same storage box. This excess paper document storage can becorrected by more disciplined management of the paper file in its active lifecycle, or by integratedscanning in the active lifecycle of the matter. Both approaches require significant business processand cultural change in the practice areas. Doing nothing about this paper storage duplication drivesup the cost and risk of stored paper studied scanning of newly-retired matters because that s the easiest time to quantify the scanning paper documents when they become inactive is not the best time to scan paper documents in their active lifecycle is the best time to scan , because active digitalfiling and retrieval provides an impactful productivity benefit.

6 Scanning inactive records Costs morebecause the file is most voluminous, often disheveled, and physically battered. Despite the badtiming, scanning newly-retired paper files is a cost -competitive option to storage. Therefore theadvocacy for scanning is foundational, and the cost -benefit advantage moves up as the scanningprocess moves up into the active records scan v Store choice must weigh factors other than hard Costs , related to digital advantage, risk,and the timing of each expenditure. But because scanning retired records is cost -comparative tostoring them, firms should study this issue to find a way to incorporate serious scanning into theirrecords strategy, as a blended solution with physical storage, or as a gradual replacement for How we compared storage v scanning Costs The study built the scan v Store comparison using these steps: the comprehensive, average, lifespan cost for storing a box of the average paper document contents in the box, to the file, folder and page count a best practice and cost for scanning and disposition of the box contents.

7 This sets up the scan v Store Costs , identify key data variables and soft business factors that must beconsidered outside the data set, and make this decision framework re-usable so that a firm couldplug in their own numbers and get their own numbers provided by the Working Group were averaged. No individual firm s numbers are depicted in any published materials. This working average gives a blended, validated set of data from the participants. Additionally, for the storage Costs and the box contents data, DocSolid reviewed these averaged results with industry consultants and vendors, for broadened affirmation. The Working Group averages are a guide for initial consideration, and a firm can plug in its own numbers for relevancy and accuracy.

8 The comprehensive, average cost for storing a box of the comprehensive cost for records storage involves identifying and quantifying all the related Costs . To make the data digestible, we wanted to bake the result into a cost of records storage per box, over a selected number of storage years. That meant we needed to divide many of the cost elements into box Copyright DocSolid, LLC 2014. All Rights Reserved. V 1 Page 3 inventory numbers, and average broad expenditures into a per-box model. For example, only 5-15% of boxes sent offsite are ever retrieved. So the $ cost per box for retrievals represents a much-higher per-incident retrieval cost , averaged across the total number of boxes subject to retrieval. The Working Group helped refine the expense categories shown in Table 1.

9 Then, participating Working Group members submitted their specific costing numbers. Table 1 reflects the average of the submitted costing numbers from the Working Group. Disposition/Destruction was the cost category that varied most between the Working Group submissions, reflecting the broad legal market s struggles with the disposition-destruction process. Notes: T he set of Costs listed as Other Costs were not included in the total, because these Costs tended to be more random, or difficult to apply into the average, or of questionable relevance to the comparison. This is not to suggest these Costs should be ignored. These Costs , if applied, can be significant and would drive up the storage cost numbers. Also, the Working Group was comprised of large firms who have economies of scale in their operations, and well-negotiated rates with their vendors.

10 Undoubtedly, medium and small firms without these advantages would have a higher overall cost for records storage. Finally, 10 years of storage was selected for the cost calculation, based on a widely-varied set of retention practices among the Working Group, and in the broader market. The longer a box is stored, the more attendant Costs will accrue over time. These factors argue that the represented storage Costs are conservative, and are likely to be higher than the $ depicted. Table 1 shows the average cost per box of records, to store for 10 years, and then destroy the box. the average paper document contents in the box, to the file, folder and page count s in the box? If we must prep and scan the paper instead of storing it, the job is scoped by the volume, organization and condition of the paper.