Most organizations don’t understand the impact that paper can have on their bottom line. More often than not, the financial benefits of reducing paper are calculated solely by including savings related to the paper only, failing to account for money saved due to a proportionate reduction in the costs related to the management of that paper. Some organizations are aware of elements of these downstream costs, but they lack a mechanism to quantify them, while others likely have more pressing things to worry about.
And let’s face it – paper just isn’t all that glamorous. The environmental and sustainability policies of companies aren’t often top-of-mind for consumers in making the purchasing decision. They want innovative and tailored products, and this is where the focus of executives has traditionally been. But along the ever-continuing journey to trim the fat, paper has increasingly found itself in the spotlight, driven by technological advances that reduce its need, the impetus to reduce cost and, to a lesser extent, the desire of companies to be seen as more environmentally conscious.
It’s one thing to quantify the savings from purchasing less paper – that’s the easy part – but calculating how much you can actually save by eliminating the need to photocopy, distribute, store, retrieve, and get rid of paper can be eye opening. It’s also worth noting that those savings – even if quantifiable – may be difficult to realize for individual business units, and thus, the incentive for most managers to care is lacking. Many organizations, particularly those that are larger in size, are left vulnerable to the inability to track and account for savings at an enterprise-level. The needed oversight to understand the aggregate paper savings achieved, and the realization of these savings as true benefits, is often not in place. However, this doesn’t change the reality that substantial benefits are nevertheless captured within the parameters of the enterprise, and hence, the senior leadership would be well served to understand how paper impacts their organization’s cost structures.
The first step in understanding the true cost of paper begins with understanding the Paper Lifecycle. It’s important to conceptually recognize that the costs associated with paper do not end when the paper is purchased from the vendor and shipped to the office. In fact, it has been uncovered that the cost of the paper itself makes up only a fraction (2-5%) of its fully loaded cost. It is the costs related to the other processes that paper is put through once it has reached the office that are commonly overlooked. As a rule of thumb, take the dollar value of the paper purchase cost, and multiply it by 20. That is approximately how much an organization is spending on paper.
The Paper Lifecycle, as we have defined it, includes six components:
- Procurement – The unit purchase cost of a single sheet of paper (includes delivery to location).
- Processing – The handling and processing of paper belonging to organization, including processes such as: photocopying, scanning, faxing, and printing.
- Distribution – The delivery of paper from organization or its partners to customers and vendors. Also refers to the disbursement of paper between departments and/or business units.
- Storage – The storage of processed and unprocessed paper either internally within organization or externally at a third party vendor.
- Retrieval – The retrieval of paper either internally from internal filing space or externally from a vendor.
- Disposal – The elimination of paper belonging to organization either by way of recycling or shredding.
The cost that paper incurs at each stage of this lifecycle can be approximated with reasonable certainty on a per-sheet basis through a combination of research, the analysis of existing service contracts, and the input of best practice assumptions. Put together in a logic model, the true cost of managing paper within an organization can be determined.
Granted, some paper is easier to reduce than others depending on its type, its weight, and how it’s being used. Many organizations will need appropriate systems and procedures to make paper reduction meaningfully occur, and adopting new practices may take some time. But when an organization is able to facilitate the change, it’s often a win-win: the environment benefits; and even with the associated costs of paper reduction programs considered, the company often generates savings it can give back to shareholders or customers.
For more information on the Paper Cost Calculator, check out this informative brochure.

Natural Language in Data Visualization: A Showdown Between Tableau and Power BI
Two industry-leading data visualization tools, Tableau and Power BI, both offer the ability to query data using natural language. But how do they stack up?

Steering Through Uncertainty: The Impact of IFRS 17 on Risk Management and Control Strategies
With a strong emphasis on accuracy and integrity, insurers are faced with the task of redefining their control environments and governance structures for financial reporting.

Analytical Data Mart vs. Data Lake: Which Approach is Better for Your Analytics?
Welcome to the world of data-driven organizations where it is crucial to have a well governed repository to efficiently store and manage your valuable data.

Mastering IFRS 17 with a Strategic Target Operating Model
When applied specifically to the realm of IFRS 17, a strategic Target Operating Model provides a high-level view of the end-to-end solution design, processes, controls, and close schedule required to execute the new finance model.

The Push for Companies to Prioritize Leadership Development
Leaders have been expected to do more than ever in the past few years. Navigating through uncertainty, dealing with new challenges, and responding to rapid change have all become commonplace demands for management teams.

Navigating a Hybrid Work Environment with Gen Z Employees
Millennials, who have dominated the workforce for the past decade, are now ceding the stage to the next generation of employees – Generation Z.

Developing Early Career Talent: 5 Strategies for Success
A robust and effective early career talent development program is essential for companies looking to grow their future leaders from within.

How to Capitalize on Your IFRS 17 Investment
With guidance and support insurers can move from IFRS 17 compliance to business as usual (BAU) and fully capitalize on their investment.

Leading & Engaging Gen Zs – The Bold Approach
Gen Zs are the new age workforce that is gradually changing the landscape of the corporate world. Leading and engaging Gen Zs in this environment requires a bold approach.

Optimus SBR Named 2022 Most Admired Corporate Cultures™ Winner!
What a thrill it is to be honoured as a 2022 Most Admired Corporate Cultures™ Winner! This award celebrates the Bold Attitude and Entrepreneurial Spirit each of us embodies.

Power BI vs Tableau – Which is Better?
Although Tableau and Power BI are similar business intelligence tools, there are key differences that organizations should be aware of when considering analytical requirements.

7 Drivers of Economic Development
These seven drivers of economic development bring new money into the municipalities, accelerate the velocity of money within the city, increase the engagement of citizens, and propel the generation of new ideas, technologies, talent, success stories, wealth, and global rankings.