Strategy guide to convert paper files to Electronic Document Management (EDM) systems.

This guide is designed to assist you in how best to determine if converting “older” paper files to Electronic Documents is right for you. While consulting with various companies for twenty years; literally hundreds of on-site visits across the country and addressing whether to convert paper records to an electronic format, there are some general items you will need to consider before bringing in a professional document conversion company.

We recognize that every situation is unique to some degree. The question one should ask is; ‘WHY”? Why convert your files to an electronic format in the first place.  How far back should we consider converting our files?  When do we call in a professional service bureau? Should we consider doing the back file conversion in-house? What are the costs? Is it worth considering a back file conversion in the first place?  Should we simply move forward with current records?

The Why Question:

You may think that storing records off-site is the way to go. I have articles about two recent fires at Iron Mountain which in the industry, is regarded as a secure facility. One fire was in London England and the other in Ottawa Canada. Both fires happened in June of 2006.  This same article describes an Iron Mountain facility in Metairie La, which was flooded because of Hurricane Katrina. The article mentions a storage facility in Pennsylvania owned by Diversified Records Services Inc. that experienced fire damage in May 1997.  Article Ref via the internet “Iron Mountain fires prompt users to hasten hunt for backup options”  

Let’s say you are the records manager. Your boss or the Board of Trustees comes to you and asks you to describe the paper records disaster recovery program? What assurances can you provide? Should ever a disaster occur, is a back up process in place, such that the corporate records will be available?

If the facility had water damage, fire, smoke, or theft, what assurance will you give?  What is the recovery program? Is the off site storage facility adequate? It is only fair, when consulting with customers for them to describe the back-up and recovery program for their paper records? When asked, you should see the looks I get.

In New England, we have experienced a tremendous amount of rain. I cannot tell you many how times, this year, I have seen water damage in legal offices, medical record departments, human resource files, accounting source documents, bank file rooms, and architectural firm’s drawings.

Surprisingly, many of these customers’ files were not located just in basements. In many cases the files were located above ground. For the facilities down south, they experience hurricanes and tornados.  The point we are making is things happen that are out of our control. When they do happen, it’s generally too late to recover. I was at one company several years ago, that experienced water damage. The damaged paper files were hung on clothes pins. We have pictures of their files on our web site. 1st-in-filing.com.

Today customers are facing federal and state regulations that require assurances that their paper records are secure. Beyond that, managers and owners are evaluating the true long term cost to manage and maintain the paper filing process. If you consider the cost for office space, file cabinets, labor, supplies, purging, retrieval, replacing mis-placed or lost files, copying, faxing, and long term offsite storage, etc.; that cost over time, say seven years, would be a far greater expense than what it would cost to file electronically. We have developed a cost illustration that will further assist you in your evaluation process.   Please call or email for a copy of this analysis titled: What’s it Worth to You?

There are lots of practical reasons companies today take advantage of electronic filing. Besides the direct cost benefit, regulations, and security/disaster recovery issues, believe it or not, it’s retrieval. Once a customer installs the software and begins to retrieve their files from their desk top, a whole new world begins to open up. The day employees retrieve “their” documents electronically over your network; reality sets in and smiles are on faces. For these employees, they understand that they no longer need to get up from a desk, go to the file room usually located at some distance, retrieve a document, and then when done with the file, reverse the process. The primary reason customers begin to review the ‘Paper Filing Process’ in the first place, is space issues. Whatever the initial reason in considering electronic filing, the important point is to examine the totality of the issue. What I call a Macro prospective.

The Why about Microfilm and Microfiche:

Basically, like paper, microfilm and microfiche will degrade over time. The readers will scratch the film, making it difficult to view an image. Anybody that has used either microfilm or microfiche will tell you that the consumable parts for the readers are obsolete and harder to find. That should be a warning sign indicating this is an obsolete technology.  

It has been well documented that this technology has been long since replaced with W.O.R.M. Even the ‘Old’ microfilm/microfiche service bureau companies are finding parts hard to replace. Like companies manufacturing buggy whips, I am sure there are still some great companies out there converting paper to microfilm and microfiche. There are also companies that provide the service to convert microfilm or microfiche to an image format. That should be another warning sign!

Let us move on to what the industry calls ‘back file conversion’.

To highlight our point, let me use an illustration. You are the records manager and your boss has decided that the company will require a back up process be instituted immediately for all paper records. You have twenty years of paper files that will require copying. To perform this task you can guess it will be rather extensive and expensive. The bottom line; as a general rule, the cost to copy will run you in the range of $0.08 to $0.12 plus labor. Lets say, it has taken twenty years to create these records, its’ going to take a while to copy all of them. This illustration will help bring you into focus on, what a professional service bureau will be tasked to convert paper records to an image file format. If you think about it, a professional service bureau will be providing similar tasks, just accelerated and with a better end product for you!

Professional service bureaus, at least the ones that perform high end document capture, generally will use scanners that are capable of running at speeds in excess of 100 to 120 pages per minute or greater. Generally, they will run these machines on a network, such that, the scanning and indexing operations are done almost concurrently. In fact, there may be several scanning and indexing stations. The software used in these operations is designed for high speed document capture. There are a lot of tricks in the trade that streamline the entire process. I will cover some of these a little later.  Keep in mind, professional service bureaus will have hundreds of thousands of dollars invested in this technology. In any event, the bottom line is they are in a much stronger position and have the experience, staff expertise, equipment and software technology to convert your back files at a much more efficient rate and at less cost than attempting to convert ‘Older’ files yourself.

Strategies for back file conversion.

I believe, the best strategy is what I call the ‘1/3 rule’. If you think about it, approximately, a third of the ‘Active’ files are nearing the end of their retention life. Most likely, they are not worth scanning into an electronic format. If you are willing to accept the risk of off-site storage for the short term, it may be best to move these boxes to just such a facility and “Forget about it” On the other end of the spectrum, given a good system, most customers
can easily perform what I call ‘Day-One’ filing going forward, in-house. The difference between the two spectrums is best left to a professional service bureau.

As a practical consideration to this strategy, it is best to start small. Let the technology and the company you partner with prove themselves.

As a suggestion, most paper filing systems have already established an indexing methodology. If you are currently filing, by Last, First, Middle and some number system and it works, then stay with it! Don’t worry about finding an electronic file, the magic occurs in the database.

Finally, we recommend that you consider assigning a project manager. Large back file projects will go more smoothly if there are good lines of communication.

A little about professional service bureau operations that may save you money:

Keep in mind, like anything you purchase, if you want more, expect to pay more. If you want full text search capability on your documents, generally, the scanned image will be done at a higher DPI (Dots per Inch), this means that the scanner operation will run slower and a service bureau will run your documents thru an OCR processing engine. Both take extra time; expect to pay a little more.

I have seen where customers place documents in an open box with no indexing. The only thing that separates one document from another is a staple(s). They want the service bureau to index each document separately. Service bureaus are generally happy to assist and will perform these additional tasks but this added task to separate and index each document will most likely cost more for the additional indexing.     

Today, most professional service bureaus charge an hourly rate for what is called document prep and indexing. Clearly, the “cleaner” the paper files; less prep, will mean less cost. I.e. staples, clasps, post-it notes, etc. and other obstructions are not prevalent. Here is a technique that will help keep your cost down. Today you pay someone to index a file folder. For this illustration lets’ keep it simple. Say your indexes on your paper files have a last, first name and unique number. If you can provide the service bureau a ‘flat”

file or e-mail your data base of the index values, say, in this example, last, first name and unique number that will save you money. Most service bureaus can perform what the industry terms a Match and Merge function. This way, you are only paying for the service bureau to ‘key’ the unique number. They will use your data base and automatically index the fields based on the unique number.  Kind of Cool!

Do I get more for my money?

You bet ya!

Here is a short list that a Professional Service Bureau brings to the table. Besides years of experience, expertise, technology and equipment, is the fact that the day your boxes are picked up, you no longer are required to retrieve those documents or warehouse (office space) these records. In the short term, the Service Bureau is acting as your filing clerks and providing office space, only off site. That’s instant savings and efficiency to you. Generally, the Professional Service Bureau can assign a team of trained employees that can begin processing your paper records to an electronic format at a much more rapid rate. As part of their service, generally charged as a separate fee, is what the industry calls a fax back service. What is a fax back service? Say you need information contained in a paper file; you call the service bureau, they will ‘pull the file’ and either fax or e-mail to you that document. This way, you are never without your records.

Another task the service bureau should perform is what is referred to as either “Post Processing or Image Clean up” What is Post Processing or Image Clean up? That is the ability from the software to “clean up images; de-skew, noise removal, line correction, black corner removal, halftone filter, dilation and erosion. You may also hear terms like VRS (Virtual Rescan) or ultrasonic document double feed detection technology and auto page sizing etc. Using these tools will result in two important aspects. 1. A cleaner image; 2, more images stored on a given size of memory.

Should I consider doing a back file conversion myself?

This topic comes up in most meetings. Generally, you can purchase a scanner and software and do it yourself. The however is, if you have a large amount of ‘back files’ you most likely will need a robust scanner and ‘professional grade’ software. The Achilles heel is in experience and expertise in setting up and actually doing a large back file conversation while maintaining your current process. Yes, you can hire temps, but temps will last about three days and yes, you need dedicated office space and employees. A long term commitment must be made and stuck to.

I am using a particular software application that has an imaging viewer; can a service bureau convert my back files to my software system?

Without going into a great deal of detail, the answer is that most service bureaus have or should have a “conversion utility” in their software application. If they do not, it is a limitation in their software operation.  You should consider talking to another company.

Electronic ‘Day One’ filing:

‘Day One’ electronic filing and going forward can be easily accomplished one of two ways. You can do it yourself or outsource. Both ways are fine and are used with great frequency.
 
What you need to know about selecting an Electronic Document Solution provider.
It is important when considering purchasing any document software to ensure that whomever you choose, that the software is what we call ‘open architecture’ Please call or email for a copy of; A guide to identify the right Electronic Content Management (ECM) Document System.
 
Select a company that provides flexibility in solutions and knowledge base with the technology. What do I mean? Quality companies will be comfortable openly discussing the pros and cons of the various options that are available to you. Stated another way, if companies come in with an agenda that’s never a good thing! Knowledge base is determined on how well they understand the software, process, and technology. How that expertise and experience relates to your needs is extremely important.

I hope the above guide is of some help in your evaluation process.

If I can be of any further assistance, please do not hesitate to call me at 1. 800.886.6233

Lindsey S. Smith
President
DOCUMENT MANAGEMENT SOLUTIONS, INC.