By Leong Khay Mun , 1-Sep-2002

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The idea of a paperless office was mooted some 30 years ago, and technology has since been doing everything in its power to bring it to pass.

The arguments in its favour are absolute: You save operation costs, save space, and save the environment. Yet, if we look around our offices today, it is clear that we are nowhere near to realising this vision. If anything, technology itself, including the very tools that are supposed to bring paper-based processes online, is guilty of adding to the mounds of paper and files that surround us.

What is the reason behind the paradox? Let’s call it the Principle of Subconscious Subterfuge.

This principle states that mankind has an innate aversion to change, which actually sabotages its conscious effort to build a paperless office. In other words, despite our best efforts, we will always find reasons not to go 100% online.

The truth of the matter is, the whole basis behind the creation and development of IT actually conspires against the vision of a paperless office.

Open conspiracy
The Hard Copy Observer, a publication serving the printer and other hardcopy-related industries, states in its report titled Why Hard Copy Will Survive, that the adoption and use of IT actually increases paper use.

The higher a country’s gross domestic product (GDP), the more paper it consumes, it says. More significantly, the more technologically advanced a nation is, the more dramatically that consumption goes up. Hence, the US, with the greatest per capita PC penetration rate in businesses and homes, uses the most paper per capita.

Further backing the conspiracy theory is how printing and writing paper—the types most commonly used for business and personal communications—are the fastest-growing segment in the paper industry, despite the popularity of the Web and e-mail.

Why paperless?
Against such damning data, why should anyone try any further to pursue a paperless office?

Consider this: A company can save one-man-hour per leave application just by allowing employees to apply for leave online, according to studies conducted by JustLogin in Singapore. And since it is estimated that each employee fills in five forms per month, bringing the five forms online means five-man hours can be saved per month.

This savings of five-man hours may seem meagre until translated to dollar savings. “Each employee has about 170 productive work hours per month and this means productivity improvement of 3%. Given that the average wage per employee in Singapore is about S$37,000 (US$21,217) per year, [which translates to] S$18.10 (US$10.40) per hour, the savings can be S$90.60 (US$52) per month, per employee, said Kwa Kim Chiong, CEO and founder of JustLogin, an application service provider (ASP) offering a suite of office collaborative applications over the Internet.

Caltex has a real-life example of reaping savings by going paperless. By using JPMorgan’s e-payment solution, items that previously cost the oil giant US$145 to US$160 to transact and ship, now cost just over US$5—a decrease of 96%.

The common sentiment among managers, however, is that they do not understand why going paperless can be beneficial, since they still need to invest in the paperless solution and at the same time, keep the same amount of staff, said Kwa.

“Although they know there are productivity gains, they just can’t see how it contributes to the bottom line.”

This is where the Principle of Subconscious Subterfuge comes in.

Working against nature
Ask the people around you if it is possible to work in a totally paperless office, and the common answer is: “Not in our lifetime.”

“We can have a totally paperless office in a laboratory environment. But in the real business sense, it will not happen,” said Kwa.

One reason is because the existing workforce is simply not used to reading a lot of information off a monitor, having grown up with paper-based education, said Jordan Reizes, marketing manager, SEA and Pacific, Adobe Systems. The future workforce might be different, he believes, as more and more people interact and learn with the help of computers.

Another argument against a totally paperless office is that it may not be cost efficient, based on what Kwa calls the “80/20 rule”. This rule states that while we can build an 80% paperless office at 20% the cost, it would cost more—at 80% the cost—to turn the rest of the 20% paperless.

“For instance, if you want to make the expense- or transport-claims process 100% paperless, you will need to scan the receipts. To do that, you need to buy the scanner and get people to scan it in. There is a lot of effort involved and that is not the aim of bringing paper-based processes online, which is to increase efficiency,” he added.

Not so, says Kenneth Lim, vice-president of Technology Development, CrimsonLogic. He argues that scanning can go a long way in creating an efficient workforce. “Some receipts fade after six months. So companies make a photocopy of the receipt, which is the same as scanning, except that there are hidden costs associated with the paper copy. Employees have to file it, store it in a cupboard, or even move it to remote location for protection,” said Lim.

But with scanning, information is stored in electronic form, which is more cost efficient than storage in physical form, he added.

Obviously, different people have different takes on how extensive a paperless office can be. That is why market observers conclude that our workplace can only be a partly-paper one.

“Global advances in technology are enabling us to toggle between the realms of electronic and hard copy information,” said Tan Lee Chew, general manager, Shared Printing & Imaging, and Digital Publishing Category, Imaging and Printing Group, Hewlett-Packard (HP) Asia Pacific.

“Paper, along with its intrinsic values and capabilities, still has an important role to play and HP foresees that paper and digital media will coexist peacefully in the future.”

Overcoming obstacles
So the arguments for and against going paperless are plenty, with most detractors wishing they could go paperless if not for the cons. But are their concerns valid?

Managers that reject the idea often give the excuse that paper proof and “wet signatures”—ink on paper copies—are a necessity for legal and accounting reasons.

Kwa disagrees. “I don’t see legal obstacles. It boils down to management’s reluctance to change.” He added that legal and accounting obligations can be met by tweaking internal processes.

For instance, companies that insist on having receipts as proof can ask employees to submit claims online to the boss for approval while sending the receipts straight to the finance department. The finance department still gets the paper receipts and efficiency is increased, as this method removes a lot of redundant processes.

For internal business processes, there is no need for wet signatures, since it is really up to the managers to state what is required and what is not, said Kwa. In the claims-processing example, all that the manager needs to do is to set a guideline that allows claims of under, say, US$100 for administrative staff, to go through the online system and straight to the finance department. When the amount exceeds US$100, the system will alert him to investigate. This change eliminates the tedious task of going through and signing every single claims form.

SAP Asia is one such company that tries to do away with wet signatures as much as possible when dealing with employees and suppliers (see SAP Zaps Paper Trail Away).

In fact, its CFO took a while to recall which of the business processes—namely payroll and HR-related processes, procurement and payment, business travel request, and employee self-services—he brought online required wet signatures from senior managers.
“Wet signatures? They are few and far between,” said Colin Sampson, senior vice-president and CFO of Asia Pacific, SAP Asia.

“Sometimes, you need them when you’re dealing with the bank, for instance, because some of them are so outdated. We do keep paper receipts for taxation purposes. Invoices and contracts are usually scanned, although sometimes we keep the hard copy for legal reasons.

“But generally, for the processes we’ve brought online, wet signatures are not required.”

Many managers, however, do not want to change. They fear that doing away with hard copies and wet signatures would make them lose control—this boils down to the fact that many employers do not trust their employees.

So for a company to be successful in bringing processes online, Sampson said managers need to trust their employees and those who are concerned about losing control can perform regular internal audits to prevent dishonest employees from abusing the paperless system.

But changing people’s mindset without exacting the necessary, correct changes in the infrastructure can be detrimental in a company’s strategy of building a paperless office.

“Building a paperless office involves a change in mindset. It also involves re-engineering the standard processes that are already there... and requires companies to look at the regulatory environment, business risks and get senior sponsors to push the idea down. You cannot put the application online straight away without re-engineering your business processes,” said Jenny Reynolds, vice-president, Treasury Services, JPMorgan Chase Bank.

JPMorgan has been providing electronic payments-related tools for 15 years now, and the processes that they have brought online and made paperless include the tracking of receipts, accounts reporting, invoice presentment, dispute resolution, and trade documentation and tracking.

Sampson added it is also crucial that companies do not adopt a big-bang approach—implementing all changes are one go—during their re-engineering efforts, and that is why SAP Asia brings processes online one-by-one instead.

“We could have taken all our processes and put it online at one go but that’s too much,” he said. And because people think their jobs are threatened when processes are brought online, Sampson said it is important to keep employees informed of the changes that are taking place.

Support from senior management is important, said Sampson. “This is so that they know the decision to change comes from the top... this takes nervousness and the ‘FUD’—fear, uncertainty and dread—factor away.”

Making cents
Admittedly, multinationals may enjoy greater economies of scale and other benefits from paperless solutions compared to small and medium enterprises (SMEs). After all, at SMEs, it is harder to justify the outlay for bringing processes online as they have fewer resources to cut and the savings would thus be really minimal.

“You have to look at the size of the operation,” said Sampson. “If you have a small operation and deploying a paperless solution would only reduce, say, from two administrators to just one, how much can you gain?”

Kwa disagrees, reiterating that the ultimate goal of having paperless processes is to increase efficiency and productivity.

In other words, the general consensus is that going paperless is ideal, but to what extent, in what environment, and how far people are willing to change, is continually up for debate and subjected to the Principle.