Digitization of Paper-Based Processes

Decades after computers were supposed to end paper-based business, we’re still at it, using documents to send and receive information and act as proxies in business processes. It’s hard to say if paper consumption slowed thanks to digitization, because good historical use statistics are hard to find. However, it doesn’t really matter, because business is drowning in paper — and, more importantly, the expenses associated with it.

U.S. offices use 12.1 trillion sheets of paper per year, according to The World Counts, an insightful site. Other types of paper use — such as in packaging, publications and newspapers — add to that number.

At the same time, there’s an environmental aspect that’s becoming increasingly important. It takes 75,000 trees worth of paper just to print the Sunday edition of The New York Times, the same site notes, and it points out that half of the waste of businesses is composed of paper.

Smarter Approaches

It’s not just that we use a lot of paper — it’s also that the use is very temporary compared to the time it takes to grow a tree. So suffice it to say that the dream of the paperless office has not materialized, but that there is still an urgent need to use less paper, and for more reasons than ecology or conservation alone.

Printed paper is a surrogate for cost and inefficiency. It requires printers and ink as well as human labor to use it, move it, record it and eventually to discard it. Too often, we view such facts as threats to the status quo.

I can almost hear people saying, “What are we supposed to do, close the office?” No, definitely not. Situations like this are challenges to invent better approaches; they are the stimuli to invent smarter ways to do business.

Nitro’s Tools

I’ve been impressed by the tactics of document management company Nitro (sometimes a client of mine) to deal with the problem. This week it introduced products aimed at improving the efficiency of paper-based business processes, which is different from simply digitizing paper.

Efficient processes can drive down the need for paper in the first place, thus enabling businesses to carry on while still saving paper, printers, ink and labor.

After so many years, you might think that document management would be further along. Frankly, other vendors offer many of the same functions as Nitro but typically at higher prices, which has the perverse impact of limiting the use of good technologies.

For example, signature capture can be done electronically, eliminating the need to print a form, sign and return it, and other vendors do the job too. However, Nitro has taken on the challenge of being the low-cost producer in a market that’s stabilized around higher-priced products. So Nitro’s effort is the classic one of democratizing a technology to get it into the hands of all of the people who can use it and thus reap the benefits for their organizations.

Like other document management vendors, Nitro has a suite of document manipulation tools to support basic processes. Also, in this AI age, when it’s so important to dig into use data, Nitro applies analytics to identify areas where more finely tuned implementation can eliminate paper use. That’s why paper is such an important surrogate, and why tracking how it is used can shed light on processes that can seem rather murky.

As a challenger in the document management market, Nitro has understood the importance of services and change management. After decades, the document management market is well covered, and it’s impossible to expect to succeed at carving out a niche if it means ripping and replacing what’s already there.

My Two Bits

Nitro represents a real world example of “the Innovator’s Dilemma” from the side of the challenger. Incumbents historically have had a hard time dealing with a grass roots challenger with a better idea simply because their cash cow still makes money. When the revenue stream for the cash cow begins to falter, it’s often too late — but not always.

We’ve seen numerous examples of legacy providers that maintain their positions in the market despite effective challenges. Nevertheless, markets adjust either through price or license concessions, or through outright commoditization.

Cloud computing, which has been percolating in IT for nearly two decades, is a prime example of commoditization that has gained significant traction, even though the larger IT market maintained its dominant position.

However, the slow conversion from on-premises to cloud largely can be traced to the big need to build infrastructure. Now that infrastructure building has accelerated, we’re seeing more rapid turnover, and I see Nitro in an analogous situation. Document management plateaued with the digitization of paper, and the next move is digitization of process.