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Observations of the paperless office, Part 2

December 6, 2012

By Bob Johnson, NAID CEO

In my last post, I described how a recent article about the decrease in business communications paper drew its conclusion from flawed evidence. In case you missed that post or the article, the author pointed to an overall decrease in all paper consumption to prove his point. The graph included things like cardboard, newspaper and tissue, instead of limiting the graph to office paper. Those other categories have decreased substantially more that office paper. I suggest you read last Tuesday’s post if you want a fuller explanation.

As a follow-up, today I will confront the issue more directly. Specifically, I want to discuss whether there is less office paper being consumed today, the impact on consumption, and how it will affect our industry medium- and long-term.

There are a number of factors affecting office paper consumption, some are linear trends others are cyclical. For instance, the economy is a cyclical trend. When the economy dips, business slows and consumption decreases. On the other hand, the push for electronic health records is a linear trend. While there has been a downturn in the overall consumption of office paper in some sectors due to increased reliance on electronic documents, any noticeable decrease of office paper consumption over the last couple of years is more about the economic slowdown than the long-term trend. That is not to say that the long-term trend is not real because it is. It is simply not progressing fast enough under normal circumstances to be dramatically noticeable over a few years.

With that said and the current economy being what it is, let’s focus on the long-term trend. As I said, it is undeniable that some business sectors are trending toward using less paper. It is also true that most businesses and, in some cases the government, aspire to become paperless offices. However, as we all know, early attempts to create electronic-centric offices resulted in consumption of even more paper because everyone printed backups, and for good reason. Consider that electronic records and the databases required to make them work are the cause of the thousands of data breaches reported annually. In fact, data security is the main source of opposition to the governments push for electronic health records.

Then, there are the issues of record longevity and migration.

Electronically stored records are nowhere near as resilient as paper. In fact, solid state device memory storage, which is the way computing is heading, is currently not reliable for storing data past five years. Yes, magnetic tape and microfilm provide longer term options, but the expense is often not enough to justify turning away from paper. Consider too that electronic storage will inevitably result in data migration challenges. As equipment and operating systems evolve, at some point, long-term data may have to be converted or transferred to another system or media format because the old versions will no longer be supported.

Of course, there are other issues that will prolong the use of business communications paper as well. None of this means we are not moving to electronic-centric systems, we are. It only means there are still a lot of challenges that are impeding the trend and it is not likely to happen in the near future. Again, readers should be careful not to attribute the reduction of paper due to the economic downturn with any long-term trend toward electronic records.

Now let’s look at it from the secure destruction perspective, specifically paper shredding. I know many people in the secure destruction industry would argue with me when I say there is still a large, unvended opportunity out there but I maintain there is. Yes, it is the proverbial high hanging fruit but it is there. It includes tens of thousands of doctors’ offices, for instance, and hundreds of thousands of medium and small businesses that do not outsource destruction of their daily paper waste. Put another way, U.S. businesses consume upwards of eight million tons of business communications paper per year. I promise you our industry is not destroying half that amount. Seems to me like there’s plenty of room for growth and decades of opportunity lie ahead.

And, let’s not forget about the decades of stored records. ARMA International once estimated that 22 percent of all office paper ends up in boxes on shelves. Not only are there millions of tons of paper records currently being stored, paper records continue to be the method used by the vast majority of businesses. Sure large Fortune 1,000 and others are transitioning, but they are in the minority at this time.

Do I think the use of electronic records is increasing? Yes. Does the fact that it has not created the paperless office yet in any meaningful way mean it never will? No. But everything I see tells me the transition to electronic records will take decades to unfold and paper will continue to play a role in documenting business transactions for the rest of my life.