How to demonstrate ROI for records management programs – Part 1
Records managers usually have two things on their minds at this time of year: finishing up existing projects in time for the holidays and looking ahead to their programs for the coming year.
As you plan your 2016 initiatives, you’ll inevitably come up against the question of ROI. What will your programs contribute to the bottom line?
Answering these questions isn’t always easy. In a two-part blog post, we’ll dive into the various ways that records management programs can deliver positive ROI.
Start with the big one: money saved.
Cost savings are arguably the ideal way to create and demonstrate ROI in records management. A savings of $1000 is worth more to the organization than an increase of $1000 in revenue because the money saved goes straight to the bottom line.
Of all the costs to trim, real estate costs are a great place to start. They can account for a huge portion of total RM costs. After a huge fall in 2008 during the global economic downturn, commercial real estate costs have risen every year since 2010. Commercial property prices have gone up 10 percent in 2015 alone.
As long as this trend continues, real estate savings will continue to be a big driver of ROI for RM programs.
How do you find real estate savings?
Nearly every records management initiative offers at least some opportunity to save on space. However, it is up to us to make that happen by applying RM best practices along the way.
Whether you are planning a document imaging project, a file conversion, a mobile shelving installation, or the implementation of records management software, the following best practices will help you save space and contribute to a positive ROI:
Purging non-record material: This is a great starting point. Many organizations find that anywhere between 30 and 70 percent of their onsite file storage consists of duplicate copies, superseded drafts/versions, and outdated reference documents. Such non-record or “transitory” material can usually be disposed of with minimal authorization once its immediate usefulness has passed. This can significantly reduce your requirements for storage space.
Records scheduling & disposition: Most organizations have a records retention schedule that assigns standard retention periods to categories of records. However, we regularly find organizations with outdated retention policies that result in records being kept long past the required dates. If it has been a while since you have reviewed and updated your retention policies, it could be time to do so. It is also worth checking that document disposition is being conducted on a consistent basis and in keeping with your RM policies.
Inactive and near-site storage: If your organization uses offsite or near-site storage facilities for records, these arrangements should be reviewed. Be sure that the offsite arrangement is saving money from a holistic standpoint, which includes the cost of file retrieval and couriers. Sometimes these costs negate the savings of moving records offsite in the first place.
In-office filing design: Your choice of filing and storage practices can make a huge impact on your space requirements. By combining such innovations as end-tab file folders, color-coded labeling, lateral filing, and mobile shelving, a professionally designed filing solution could improve space utilization by more than 300 percent. It means you could potentially cut your space requirements by over 66 percent!
Once you have calculated the actual space saved by your RM initiatives, it is relatively easy to calculate a monthly or yearly savings figure.
Other than real estate savings, RM programs can also deliver positive ROI by saving on costs such as staffing, filing supplies and storage media.
In next week’s blog post we will dive into more of the ways that RM can deliver ROI, including improved operational efficiency and risk avoidance.
Next Steps
