Increasingly, business records are “born digital.”  Of course, there will always be instances where using or storing paper is required for legal or business purposes, but, by and large, a balance should be struck between ownership of physical and digital copy. Not only will doing so aid in digital transformation efforts, but it will also mitigate the below drawbacks of an overdependency on paper:

The costs of paper extend far beyond the price of a few reams. A recent study estimates that associated paper costs (storage, copying, printing, etc.) could be as much as 31 times the initial purchase cost. So, for instance, a ream of paper bought for $5 could, in actuality, cost close to $155² .

While hackers steal headlines, the majority of information loss is due to breakdowns in processes and procedures, such as employees losing files or documents that contain sensitive information³ . With the average large organization misplacing a single file every 12 seconds, it’s not hard to see how easy it is for things to go wrong.

Consider this in the face of the European Union’s General Data Protection Regulation (GDPR*). Violations are punished by legal action and penalties of up to €20 million or 4% of global turnover—whichever is higher—per infraction.  And mind you, an infraction can be as minor as an employee losing a single piece of paper containing personally identifiable information.

First, dependency on paper and, by extension, manual processes and procedures means more time managing files and performing various administrative tasks and less time focusing on strategic, high-value initiatives.

Second, as each year more and more of your business is conducted digitally, the continued use of paper creates a hybrid physical/digital information landscape, which is difficult to manage, duplicates efforts and increases business risk. 

Understand what you own

Before beginning any type of digital transformation, you must have a complete understanding of the records and information you possess. This can be achieved by conducting a thorough information audit. 

Yes, combing through every last filing cabinet and storage closet may seem daunting, but the payoff—enabling digital transformation—far exceeds the investment.   

There’s a tendency, especially among mid-level businesses, to keep paper records indefinitely; the logic being you’ll never know what you may need.  But while that mentality may be tempting, it’s also potentially damaging.

That’s because:

• Cost:  The more you store, the more you pay.
• Compliance:   With more to keep track of, there’s an increased likelihood of data loss and industry, privacy and regulatory violations.
• Speed:  The average employee spends 25%⁴ of their week filing, copying, indexing or retrieving documents.  Why waste so much time? 

Those paper records that remain integral to your business operations can be converted into digital formats. Originals can be either stored or destroyed, depending on your needs and obligations.

Benefits of digitizing include:

• extracting valuable data and insights from legacy records and documents
• gaining electronic access to records without subjecting originals to wear and tear or loss
• centralizing your information in an electronic repository for easy access and sharing.

You have a few options when choosing to digitize: convert your entire backlog, convert on an as-needed basis or convert only new records and information.  Each, as you’d imagine, has their respective benefits and drawbacks.  

• Converting your entire backlog all at once puts you in the fast lane for digital transformation—but it’s a labor-intensive process. The best approach is to categorize and prioritize your files into smaller conversion projects—for instance, by department—and convert when convenient.  This is known as Backfile Conversion.
• Image on-demand is the process of digitizing individual documents as needed. It’s a great way reduce the upfront burden of going digital, but runs the risk of not having a digital copy of a record immediately available; a problem that could rear its head during the search and discovery phase of litigation, for example.
• Day Forward and Digital Mailroom digitizing scans, indexes and converts new paper documents when they are produced or received in the normal course of business. Typically used in conjunction with Backfile or Image-on-demand solutions, it can be performed separately should converting legacy documents not be a top priority. 

Is the paperless office achievable? It has been an aspiration for decades, but the reality is the complete, one-hundred-percent removal of physical documents is far from feasible.  Consider these stats⁵ :

• The use of paper is actually increasing in a staggering one third (32%) of business.
• Three quarters (77%) of invoices that arrive in PDF format get printed.
• Only a little less than half (45%) of paper documents scanned by businesses were created digitally. 

Could this change over the next couple of decades as we further into the digital age? Sure. But for now, even after destroying and digitizing, you’ll be left with more than your fair share of physical documents. How you store them depends largely on your digital transformation goals. 

Onsite storage is beneficial in that your records are never all that far away. Calling up a needed record could be as simple as walking into the room next door and thumbing through a filing cabinet. And depending on how much inventory you have, onsite storage can be cheaper than moving it offsite; though, unless you’re business is particularly small, the costs of staff and use of real estate for non-productive purposes can quickly offset any potential savings.
 

Offsite storage can improve access to information. Using a partner that can guide you in properly labelling, indexing and storing records can lead to faster access times than if they were stored in filing cabinets in a backroom or in unmarked boxes.
 

Of course, there are other benefits to offsite storage not directly related to digital transformation, including improved security and compliance as well as increased protection from man-made and natural disasters.  If you’re interested in learning more, click on the below resources. 

Metadata is data about data.  It tells what the content is and the characteristics it possesses. Metadata consists of properties, such as Record Owner, Document Type, Dates, Legal Holds and associated values (e.g., John Doe, project plan).

Metadata is indispensable for purposes of locating records, data and information, establishing ownership, applying legal holds and identifying records that have fulfilled their retention period and are therefore eligible for destruction. It can also be used to determine who has authority to view and edit records. Metadata is critically important in legal, audit, compliance or regulatory activities because it helps demonstrate the authenticity and reliability of the requested information.

Metadata is increasingly vital to successful data analytics, a key component of digital transformation.  If high-value information is tagged as such, it facilitates an organization’s ability to mine it for business value. Without metadata to provide context to information (including its authenticity), organizations store record simply for storages’ sake, making it difficult to cut through extraneous noise.

Developing a metadata standard

It is important to establish a set of universally required metadata elements applicable to all records. The development and approval of a metadata standard is a collaborative exercise, requiring input from IT, Legal, Compliance, Enterprise Data Management or Data Governance, Privacy, Information Security, Audit and Records and Information Management (RIM) or others, depending on your organization, and any alternate naming schemes that exist across departments should be standardized to enable consistency.

You can identify additional markers to supplement baselines standards for different business units, record types, location, security, retention periods (more on that in the next section), etc., if needed, but keep in mind, an overly subdivided system can undermine the goal of making locating and retrieving records easier.  

The below chart is an example of a minimum, baseline metadata standard: 

As you can see, together, the five standardized identifiers on the left most column form to provide information on when a recorded was created, how long should it be stored,  what laws are applicable to the record and, most importantly, where it’s located. 

Implementing a metadata standard

Overcome human fallibility 

The more metadata that can be captured automatically throughout the information lifecycle, the better. The typical employee finds entering multiple metadata elements a burdensome process that can contribute to inadequate or inaccurate information about a record. To combat that:

• Take advantage of parent/ child relationships by applying metadata at a higher level (e.g., record class) and enable inheritance by lower level records.
• Use employee roles such as organizational unit or job function to apply metadata based on the type of records he or she creates and receives.
• Leverage business process workflows to apply metadata as the record moves through a repeatable process.

Create and enforce policies

The following best practices which can be taken into account when creating the metadata standard:

• System rules should specify which, if any, metadata fields may be altered by someone or some application other than the creator.
•  Once the metadata standard is in place, it should be a mandatory requirement for all applicable current and future information management systems and applications.
• In general, metadata should be frozen (i.e., cannot be edited by end users) once a record is declared, but it may be editable by administrators and applications in some cases.
• When digital records reach the end of their retention period and are purged, a limited amount of metadata should be captured with a metadata stub retained as a record. The metadata standard should include specific direction regarding which metadata elements are retained in the stub of a purged record.
• Provide instructions when a record is sent outside of your organization that contains metadata and other hidden fields. For example, if the text of a record itself does not include Personally Identifiable Information (PII) but its metadata does contain PII, that record should be protected as PII.
• Outline a systematic destruction process that names the roles required to approve of the destruction of information.

Following a thorough audit of your records AND the removal and digitizing of legacy paper records, the last thing you need is to repeat the process. Five, ten, fifteen years from now, you don’t want to find yourself in a similar position, stuck in an unmanageable hybrid digital/physical state without a complete grasp on what you possess.

A Records Retention Schedule is a policy document that defines an organization's legal, operational and compliance recordkeeping requirements, guiding employees to keep records as long as legally and operationally required and dispose of obsolete ones in a systematic and controlled manner.  

Additional benefits include:

• controlling the unrestrained  growth of records volume
• demonstrating compliance with statutory and regulatory recordkeeping requirements
• improving the ability to locate and retrieve records when required
• reducing litigation risks

How you execute upon a Records Retention Schedule is a matter of choice.  You can opt to manually track and record your records (in an Excel document, for example) and then disseminate policy as-needed via email and/or memos. You can chose to use a third-party platform that automates the more laborious processes. Or you can attach rules to applications or actual records using metadata. What works depends entirely on your needs and to what degree you wish to include automation as part of your digital transformation efforts.

One final note: To be clear, a Records Retention Schedule is not, in the strictest sense, necessary for digital transformation. Rather it’s intended to ensure your digital transformation journey remains on track and compliant—both now and in the future.  Consider it a blueprint.  

With digitizing complete, it’s possible to automate those processes that once involved a significant amount of manual, paper-based tedium. This is especially relevant to the parts of the business that must manage a large number of records, such as Human Resources, Accounts Payable and Receivable and Contract Management. 

To illustrate the benefits of automation as it relates to digital transformation, we’ll use Human Resources as an example.

Records are pervasive in Human Resources, most notably in::

• Recruiting and section:  Resumes and cover letters, applicant correspondence, references and recommendations, interview notes and potential offer letters
• Onboarding:  Emergency contacts, W-4/tax forms, direct deposit forms, EEO information, technology requests, an employment contract, and an I-9 forms
• Employee File Management:  Leave/vacation tracking, employee status change notifications, employee referrals, and travel requests
• Policies and procedures administration:  Changes to company policies and procedures disseminated through email or paper
• Employee separation: Supervising the return of access and equipment, conducting an exit interview, handling the necessary paperwork

Even with the removal and digitization of paper, it’s still time-consuming and difficult to ensure all those newly digital records (sometimes hundreds per employee) are stored and accounted for, are routed to and seen by the appropriate stakeholders and delays in processes and any missing documents are noticed and rectified. Just ask yourself:  How many times has an important emailed attachment you’ve sent gone for days or weeks without acknowledgement?

And these same problems can be extended from HR to virtually every other department.  How often have financial closes been delayed? Or deals with vendors bogged down by unnecessary red tape?  From department to department, breakdowns in the management of records and information force employees to waste time chasing down solutions to otherwise avoidable problems. It’s unnecessary and runs counter to the goal of digital transformation—becoming faster, more efficient and adaptable to today’s digital age.

Automating provides employees with preassigned activities and the necessary documentation from the get-go for any new task (e.g. onboarding), thereby eliminating the need to figure out the next required steps, rely on spreadsheets or track down documents. Dashboards provide insight into the status of people, processes and systems and facilitates fast and easy collaboration between coworkers.

According to IDC, automating workflows can lead to a more than 30% reduction in time spent on document-intensive processes, 30–40% reduction in errors and 25–30% increase in productivity, depending on the specific functional area and process⁶.