What’s it Cost to Manage Policies and Procedures?
A manual system of document control — paper documents, logs, change records, manila folders, hanging folders, labeling “systems”, filing cabinets, a manual check-out system (with policies and protocols) — is a lot of work, no question about it. Have you ever thought about what it costs to manage such a system of policies and procedures? To answer this question, let’s look at the three main costs of managing policies and procedures.
What is Does it Cost to Manage Policies and Procedures?
The cost to manage policies and procedures can be categorized in to three types:
- Hard costs (money for materials and equipment);
- Soft costs (typically employee time); and
- Opportunity costs (lost revenue).
Each cost does not represent a real savings unless we’re able to recover that cost, but that doesn’t mean it isn’t a cost to be considered. Let’s look at each one in some detail, to see its impact. That way, we can compare the costs of managing policies and procedures manually with OnPolicy software.
Hard Costs of Managing Policies and Procedures
Hard costs of managing policies and procedures consist of printers and document materials. Printing costs vary with volume, as well as the type of printer and paper you use. In general, paper is inexpensive, maybe US $0.006 (6/10 of a cent) per sheet — if you’re printing on both sides of paper, that’s $0.003 per page.
High-speed copiers (100 pages/minute or thereabout) can cost as little as $0.005 per page, for a total of $0.008 per page. We’ll round that up to a penny a page for high-speed copiers. If you have a slower printer — let’s say a typical small-office printer that prints 15-20 ppm — your print costs could easily rise to $0.03 per page, with paper.
For argument’s sake, we’ll say the average cost to print is about 2 cents. Add in the cost of equipment depreciation, collating, binding, and equipment disposal, your total cost to print a policy and procedure manual rises to 15 cents a page — or more! — depending on what equipment you use. And we haven’t talked about lease-versus-buy, or SLAs. Do you see how expensive this can get?
But Wait! There’s More…
You have to protect your documents from disaster, too. Usually, that means some sort of offsite backup and storage. Internet backup costs run in the $50-80 per year range for about 50GB of space. Depending on how many documents you manage, you may be looking at another penny per page per year for backup and recovery services. Your hard costs of managing policies and procedures is now up to $0.16 — 16 cents — per page.
Soft Costs of Managing Policies and Procedures
Soft costs consist mainly of your employees’ time — the worker-hours you spend within the organization preparing, printing, collating, fixing, distributing, training, searching, maintaining, and answering questions about your policies, procedures, forms, and other documents. This is probably the most expensive piece of your policies and procedures system (not counting the cost to write policies and procedures); hence, it’s where automating policies and procedures management will likely make the biggest difference in your cost.
- Writing new policies, procedures, and forms for new and existing processes;
- Annual reviews of all policies, procedures, and forms;
- Preparing revisions for review, approval, and release;
- Printing, copying, faxing, collating, and binding documents for distribution;
- Distributing printed documents (and retrieving old, outdated copies);
- Backing up documents and restoring previous versions;
- Training new hires, answering questions, and updating current employees on changes to your policies, procedures, and forms;
- Preparing policies, procedures; and forms for upcoming desk audits;
- Taking corrective action on document control audit findings; and
- Time employees spend searching for policies, procedures, forms, guidance documents, etc.
It’s not uncommon to spend 60 minutes — or more — revising a document and circulating it for review and approval before it’s released for use. Once the document is released, employees can spend 2-10% of their time looking for the right policy, procedure, and/or form to do their job (and, of course, they sometimes don’t find anything), which brings us to training.
Authors (and editors) need training to improve performance on formatting policies and procedures, storing and retaining policies and procedures, and of course reviewing and approving policies and procedures. Not to mention every employee needs training on how to find, use, and improve your policies and procedures. Training is one of the most overlooked areas of policies and procedures deployment so it’s no wonder that companies spend thousands on policies and procedures training alone.
If you pay an average office worker $50,000 (including expenses and benefits), a small system of 100 documents could be costing you $30,000 a year in lost productivity. People’s time is getting more expensive every year– inflation, labor costs, and competing priorities all contribute to this problem. So, anything you can do to reduce the amount of time you spend on maintaining policies and procedures will have a significant impact on your performance.
Opportunity costs are associated with lost revenue or indirect expenses. We already mentioned one: time your employees spend maintaining documents and file systems.
How many sales are you losing because customer service operators can’t find policies or procedures for returns, complaint handling, or release of information? What about employee turnover? Frustrated employees who cannot find the information they need to do their jobs won’t stick around for long. What about the confusion caused by not knowing which policy or procedure document is the most current? That’s why document control is really important.
Why let the simple things hold you back? There’s no reason to allow errors — caused by outdated policies and procedures documents — to drive away your best customers and employees. Hard to quantify or not, it makes sound business sense that automating document management will save you a lot of money.
Policy and Procedure Costs
We’ve talked about how using policies and procedures software saves you money. But, how much?! In hard costs, a small organization can save thousands of dollars. In soft costs, tens of thousands. In opportunity costs, it means a percentage of your business — maybe a sizeable percentage — when you lose customers and skilled employees.
The conclusion: Your procedures drive your total cost of compliance. The more policies and procedures you write, the more it costs you to maintain each and every one of them.
There are a lot of document management solutions on the market that are being used to manage document files, but when it comes to policy and procedure management, people need more than just a fancy filing system with some added features. Users want something that helps them to do their work better and more easily.
Automate Your Policies, Procedures, And Forms
Automation is important in business organization to improve performance, cut costs, and improve quality. Automated policies, procedures and forms management needs to be seamless, unobtrusive, and not get in the way of employees doing their job.
Policy and Procedure Users Want:
- An easy way to locate the information they need
- A fast convenient way to access and use the information
- An intuitive interface that does not require any learning
- Confirmation that they are accessing the correct information
- Reminders of outstanding tasks
- A system that really helps them get their job done
Publishing policies and procedures online is far simpler and more effective than any paper based policy and procedure management system. Paper systems do not provide automated tracking of approvals, notifications, reminders, backup, access control, or remote access. Paper is slow, cumbersome, and expensive to maintain. Have you ever thought about what it costs to maintain policies and procedures?
The Cost to Manage Policies and Procedures
If you are still using a paper system for your documents instead of an intranet policies and procedures or forms, why not switch to the latest SaaS software-as-a-service technology that provides the lowest cost, the quickest controlled access to your important documents, and the easiest way to manage your policies, procedures and forms, online.