The Paper Explosion

The amount of documents demanded by investors, housing agencies, and HUD has dramatically increased during the past several years.  Developers not only have to collect paper, but they must distribute each document to the unique set of participants that require the information to complete the work.  A few leading edge developers have strive for the “paperless” office, yet they continue to generate more paper than ever because they cannot easily control the flow of documents to people.

The American Records Management Association (ARMA) estimates that organizations double the amount of paper that they file every 10 years.  The average white-collar worker generates an estimated 15,000 sheets of paper per year.

It is an expensive mistake to not realize the cost of inefficiencies that occur as the volume of paper increases. Paper files are difficult and time consuming to locate.  Documents are misfiled, not accessible when taken by another person, or in the worse-case scenario, permanently lost.

Even more unsettling is the amount of money organizations spend to file and maintain paper. According to the ARMA, the average 4-drawer file cabinet can costs almost $10,000 to fill. This amount does not include the $26,000 per year in labor spent to retrieve and maintain paper files. Studies have shown that the average document in an organization is photocopied 19 times, with 25% of the filing time for that document being spent in walking to and from the photocopier.

Starta Development, Inc., an organization based in North Carolina that manages documents for affordable housing developers, has determined that the developers spend more than $17,000[1]  managing the documents for each development.

Affordable housing developers are challenged daily with the generation and management of 300 to 500 documents for each development. This is further complicated by the fact that each development is comprised by an average of seventy-four individuals from thirty-three external organizations. This leads to two major tasks for the developer, the management of people and the management of paper.

The developer typically selects participants for each potential community and begins requesting documents from each third-party contact.  Most documents are mailed to the developer’s office, physically received, duplicated, and locally filed by a member of the developer’s staff.  Copies of each document are mailed to the numerous participants who require information contained within the document. The process is repeated as revisions are made, inevitably causing some parties to refer to outdated versions.

To specifically support the unique demands of the affordable housing industry, Starta Enterprise System, developed by Starta Development, is designed specifically to support the affordable housing industry.  There is no cost for anyone to use the system for any development that does not receive funding.  In theory, a developer could use the service indefinitely and never be charged (of course, this would mean they are not a successful developer).  It is important to note that at the time the development is awarded, the Starta technology is billed as a service to the development.  Starta is not absorbed by the developer as an overhead or fixed cost, but rather by each community that receives its value.  Some developers classified a portion of the servicing fee in eligible basis by demonstrating the savings created by the use of the Proposal Management module.

To effectively manage the flow of information, it is best to enable all third parties and investor to access relevant information and document.  Starta has simplified this challenge by allowing developers to specify exactly how little or how much outside parties may access or modify.  Once a development is added, the developer selects their participants and assigns roles for each person.  A person only has access only to developments where they are participating, and their role at each development limits what information and documentation they may view or modify. 

Developers should also dedicate their time to developing, not technology issues. Starta development documents are maintained in a central repository that is continuously backed-up to two offsite locations.  Internal and third party participants may submit their documents via the web, a toll-free fax line, or email.  As documents are contributed, each participant who has been granted access to the document is notified of its availability.  Outdated versions of each document are maintained for reference, but the most recent version is always presented by default.  Customizable checklists extend the value of the base document management system by providing an immediate status of every application and closing binder.

Tracking progress of each project and analyzing the status across a developer’s portfolio is more than an idea with today’s technology.  The Starta system has easy-to-use checklists that track the receipt of documents.  Reports may be quickly created that analyzes the entire portfolio or across multiple communities.

For the inevitable audit, partners may grant auditors access to one or more developments.  The auditor may be allowed access to all documents or to a specific collection with minimal effort.  In addition, the auditor may perform the audit from anywhere in the world, saving time and travel costs.  What was once a time demanding task may be accomplished in minutes with the proper system.

 

Fast Facts

•  The average company spends between 7-14% of its total costs on document processing in a paper environment

•  An estimated 7.4% of staff time is spent searching for documents

•  Average storage cost per page = $0.014 per year, or about $1,400 per file cabinet

•  Storage requirements for hard copy documents DOUBLE every 3 years

•  The average company spends 280 hours annually per employee looking for lost documents

•  Due to a lack of solid disaster recovery planning, 70% of companies Never fully recover from a disaster

 

Source:

American Records Management Association (ARMA), IDC