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 site notes, and it points out that half of businesses’ waste 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, the dream of the paperless office has not materialized, but there is still an urgent need to use less paper, for reasons beyond 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 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 pose challenges to developing better approaches; they are the stimuli for inventing smarter ways to do business.

Nitro’s Tools

I’ve been impressed by the tactics of the document management company Nitro (sometimes a client of mine) for dealing with the problem. This week, it introduced products aimed at improving the efficiency of paper-based business processes, rather than simply digitizing paper.

Efficient processes can reduce the need for paper in the first place, enabling businesses to continue while 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 it, and return it. Other vendors can handle the job as well. 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 put it in the hands of everyone 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 a 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 is a real-world example of “the Innovator’s Dilemma” from the challenger’s perspective. Incumbents have historically had a hard time dealing with a grassroots 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 adjustments, license concessions, or 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 can largely be traced to the big need to build infrastructure. Now that infrastructure building has accelerated, we’re seeing faster turnover, and I see Nitro in a similar situation. Document management plateaued with the digitization of paper, and the next move is the digitization of the process.