Those gunmetal gray cabinets lining the hallways of your business aren't just an eyesore; they're a liability. Just ask St. Vincent's Psychiatric Hospital, a health care provider. The facility converted more than 100,000 paper files to digital format--junking the metal cabinets and saving US$2.3 million over three years.

Joe Paternoster, director of information, attributes the savings to huge productivity gains from a new content management system designed by Creative Socio-Medics.

Now, there's no more weeding through dog-eared patient files. In all, Paternoster estimates that physicians saved 9,500 hours last year. The hospital spends about $300,000 a year to run the system--about one-third more than the old-fashioned one--but the time savings more than make up the difference.

Unfortunately, most businesses still struggle with paper: managing documents, creating and collaborating on them, routing the finished results to global partners and clients, and archiving it all for fast, secure access. But there is a better way. New software and services, many of which run over the Internet, make it as easy as clicking on a desktop icon to pore over an ad campaign or a set of blueprints. Electronic document management is catching on: Some 70 percent of office documents last year existed solely in digital format compared with a mere 10 percent a decade ago, according to Dataquest.

So is paper finally dead? Not yet. In fact, digital processes that boost productivity often result in even more paper output. A company uses 8.8 million more sheets of paper for every $100 million its sales increase, according to PricewaterhouseCoopers. And printer maker Lexmark predicts that by 2010, worldwide paper consumption will total 8 trillion pages compared with 3 trillion last year.

"We're very physical animals," explains Rich Gold, manager of Xerox's Research of Experimental Documents Lab at Palo Alto Research Center. "The more people use computers, the more they print out." Also, people retain information better when they read it on paper. Gold says the paperless office is still 20 years away. "It'll feel more like a paper-full office, but using electronic paper," he predicts.

In the meantime, there's plenty your company can do to integrate digital and paper documents more effectively—and garner big savings.

Cut the Paper Here's how to reap the savings that come from moving to a digital office. Collaborate on the Web Start by using a collaboration service like WebEx to create and review documents online. Set up a Content Management System A content management system such as Documentum 4i eBusiness Platform improves workflow and saves time and money on delivery. Hook in an Extranet Open up the resource to your partners and suppliers by setting up an extranet with software like Hummingbird's CyberDocs. Tap into Your Partners' Assets A system like NextPage NXT 3 makes data stored in different locations look like it's in a central locale. Deliver It over the Net Use the Web to distribute invoices, sales literature, and more via email or fax with Esker Pulse. Or let clients retrieve documents on the Web with Collabria PrintCommerce E-Catalogue. Dump Paper Files Get instant access to all your information. Xerox's Imaging and Repository Service digitises everything for you so it's on your company server, not in the dusty file room. Then use a system like Imagetag's KwikTag to organise files and make them searchable.

All together now

What's your company's biggest challenge? Finding the information you needââ,¬"even though you already have it. That's where content management systems can save the day. They let you search and index your existing documents, and keep track of all their iterations. More importantly, they offer a single system for organising and managing workflow.

BOC Gases, an industrial gas seller, used to process endless reams of paper when working on construction plans for new plants. Now it uses Documentum 4i eBusiness Platform to manage the 30,000-plus drawings the company processes in a year. Documentum's system makes it easy to revise plans, arranging them in treelike groups, with earlier versions linked directly to the latest one.

"We can see if a drawing has been modified in future plans," says John Koerwer, BOC's design automation manager. And anyone at one of BOC's Documentum-equipped plants in 20 countries can review drawings instantly. By hand, it used to take about a week to assemble and reproduce a bid package consisting of hundreds of individual drawings. Now it takes just a few hours to deliver the same material electronically. The system cost BOC about $500,000 to set up; Documentum's basic systems start at around $65,000.

If you manage specialised documents like oversize maps or blueprints, Digital Paper DocQuest can help. DocQuest lets you zoom in on an area of a drawing and annotate it, just as if you had the paper copy in front of you. Grove Worldwide, a crane and aerial work platform manufacturer, uses DocQuest to shepherd some 15,000 prints per week.

As it is, it's often a headache to route and share documents within a single organisation. Bringing clients into the process makes things trickier. That's the challenge advertising giant Saatchi & Saatchi faced. It needed a better way to connect international employees and clients who collaborate on its ad campaigns. That meant integrating a document management system with the agency's Brain, an intranet and extranet that links 152 offices in 92 countries.

Saatchi chose Hummingbird CyberDocs for the job. "Creative teams in the United States now work with a European office for a client in Asia," says Laura Limbach, executive vice president and CIO. "Everyone views the product in real time." Previously they used fax, email, or FedEx. With the Web-based system, days and weeks shrink to minutes.

CyberDocs costs about $500,000 to set up for 500 users, plus annual upkeep costs. But you don't have to invest huge amounts of money to make the most of an extranet. Sometimes all you need is to outsource an extranet for a single department or division.

Take the legal department, for example. Retailing giant Sears, Roebuck and Company uses CaseShare csPortal in its legal department to review 10,000 advertisements a year. One person used to spend many hours manually culling through the ads. Now Sears routes ads between departments, in-house counsel, and outside law firmsââ,¬"quickly reviewing ads and annotating them. Result: CaseShare saved the company $450,000 last year, according to its associate general counsel John J. James. CaseShare charges $1,500 a month for a hosted site.

Another affordable way to work more efficientlyââ,¬"and eliminate paperââ,¬"is a Web-based collaboration service like WebEx, which lets you share documents, transfer files, and conduct real-time meetings. The service costs $6,000 to set up, plus $100 per user per month.

The Associated General Contractors of America, a 33,000-member society, uses WebEx to host document-review meetings. Before, the process forced members to travel to meetings or participate in teleconferences. "If you have four or five people working on a contract, it's cumbersome to email or fax to make changes," says Mark Pursell, the association's executive director of business development. "There'd be five or more revisions and arguing points. With WebEx we can go through changes line by line in short order."

Pursell estimates that WebEx has saved the association more than $100,000 in travel expenses since last August, and it cost only $17,000 plus a $3,000 setup fee.

A collaboration service works when you don't need access to other company information that would reside on an intranet or extranet. But what if you have the opposite problem: the need to share information that resides on individual systems or different servers? You need a distributed content management system like NextPage NXT 3. This software essentially connects all of your information repositories in real time so it appears to everyone in the company that the data is in one place.

Law firm Baker & McKenzie uses NextPage to connect seamlessly with its clients for cross-border mergers and acquisition deals. "Clients want to be closer to a deal," says Brian Gillam, director of practice management systems.

Before, legal files sat on someone's desk, unstructured and unorganised. Now the firm can easily track who works on what files, Gillam says. And searching for information is faster and easier. Since rolling out the system last year, Gillam says, "We had a content explosion. It's more efficient to reuse [our] expertise."

The firm invested more than $85,000 in the system. The payback? Gillam says the company is now able to do more accurate billing because by gauging workflow the firm can better estimate the time its services will take.

Get it there fast

Courier and regular mail take days to reach their destination. And sending lengthy faxes can take hours. A better way? Digital delivery. Before turning to electronic delivery, C&S Wholesale grocers regularly stuffed and stamped payment envelopes to its 4,000 suppliers. But that was before installing Esker's Pulse software. Now C&S sends invoices out as faxes or e-mail attachments. "We get information to customers sooner," says Rick Ketcham, systems technical analyst. Of course the company still must determine whether customers prefer email or faxââ,¬"but it's better than paper cuts. The system, which starts at $17,500, also supports delivery to wireless devices.

C&S sends a lot of faxes, but not nearly the same volume as Hewitt Associates, a global management firm. It typically sends 50,000 faxes a month to its vendors and business contactsââ,¬"a job that even three full-time assistants couldn't complete. Three years ago, Hewitt invested $125,000 in Esker's Faxgate server software and hardware. Douglas Hanna, Hewitt's electronic output technologist, figures Faxgate paid for itself within two years. For example, Faxgate shaved four hours off the time spent sending about 1,000 faxes in a single evening.

For companies that create and distribute a lot of presentationsââ,¬"and who doesn't have a sales staff armed with Power Point handouts?ââ,¬"there's Mimeo.com's ExactPrint service. Not only does it save your traveling sales reps from lugging paper materials on the road, it outsources the dirty work of printing, binding, and mailing them to someone else.

To use the service, download the free software. It converts and sends your presentations to a Mimeo plant in Tennessee where they're printed, bound, and shipped to you. The cost for printing and delivering a 14-page full-color presentation is around $26.

Solbright, an advertising services company, uses Mimeo's ExactPrint for producing manuals. "We can make documents as perfect as we like," says Tamara Westen, Solbright's director of information. "And it's as easy as sending a job to your network printer."

Digital delivery is certainly convenient and cost effective, but it gives you less control over your content. What's to stop someone from printing a copy of your materials and passing them off as their own? Or making changes without your permission?

To safeguard digital delivery, a product like ContentGuard is a good place to start. It lets you distribute digital documents, then tracks who opens and modifies them, and prevents unauthorised access. IndyPublish, an e-publishing firm, uses ContentGuard to distribute and sell digital publications. "We make sure we'll get paid for every copy we sell," says Loc Vo, Indy Publish CEO. Average cost for a medium-size company: $50,000 to $75,000.

Another way to secure documents is with digital watermarking, which stamps a document as the genuine article or an authorized copy. The watermark is normally invisible to people working with the document, but special software detects that it's there and confirms the document's authenticity. For example, Digimarc's SecureDocuments lets you embed a watermark in almost any type of file. It's especially useful for documents containing proprietary images.

For companies that work with signed documents, there are other issues at stake. How can you ensure that signatures are valid? Silanis ApproveItDesktop is one e-signature system that solves this problem.

Signature Pharmaceuticals, which makes liquid medicines, uses Silanis ApproveItDesktop to sign documents for the FDA. "We need 80 to 100 signatures a day," says Dr. Ravi Chandran, president of Signature. Previously, many drug companies used a runner to fetch signatures, he explains. Now, with Silanis, Signature cuts its overhead costs by 15 percent and doubles its productivity. "Before this, we had 15 filing cabinets to store documents to the FDA," Chandran says. "Now there are none." The software costs Signature just $100 per user.

Control your information

Just because your documents are in digital format doesn't mean they're easy to track. But it's an improvement over old-fashioned paper: It's 10 to 15 percent easier to access a digital archive than a paper one, according to Kemal Carr, senior analyst at industry consulting firm Doculabs. With data storage growing 80 percent annually, according to IDC, you need more than just terabytes of disk space.

Some $2.8 billion in archiving solutions will be bought this year, according to Xerox; by 2003, that number will soar to $6.5 billion. The company's Imaging and Repository Service is typical of many of them. It archives all of your paper and digital files to a secure Web site. The cost: 1 cent to 10 cents per image.

You can also archive existing paper documents such as invoices, contracts, and correspondenceââ,¬"and send those rows of filing cabinets to the Salvation Army. Simply box up the documents and send them to Xerox's Imaging and Repository Service facility in Arkansas, where they'll be digitised at a cost of 5 to 8 cents per copy.

Once you have an archive, you need a way to easily search and retrieve your data. For that, you'll want a tool like Imagetag's KwikTag. It stores, retrieves, and indexes documents using a sticky-note formatââ,¬"it was developed with 3Mââ,¬"and bar codes. Imagetag estimates that US employees waste more than two hours a week finding, sharing, and storing documents, and that its software slashes these unproductive efforts by 75 percent.

Tucson Medical Centre uses KwikTag to help with the lengthy process of verifying the background and education of health providers. Before KwikTag, the process involved culling through 262 linear feet of filing space for documents. "We were making copies of copies of copies," recalls Donald M. O'Malley, a hospital director. "I wanted to move closer to a paperless system."

After transferring files to KwikTag, the hospital reduced the amount of physical file storage space to less than 40 linear feet. It took eight months to scan the hospital's 800,000 imagesââ,¬"all done at Xerox's scanning unit-and assign each one a bar code for retrieval.

Once you've established an archive, you need to protect it from loss. Don't think it couldn't happen to you. Businesses will spend some $5.7 billion on backup software by 2004, according to Gartner. To safeguard your critical information, turn to an industrial-strength backup program like BakBone.

Office of the Future

It's hard to imagine doing away with paperââ,¬"sticky notes, receipts, newspaper articles, faxes, and so on. Still, that's exactly what Rich Gold, manager of Xerox's Research of Experimental Documents Lab at Palo Alto Research Centre, predicts will happenââ,¬"in about 20 years.

So what does a paperless office look like? It will collaborate digitally. Parts of the office will talk to each other, such as a desk to electronic paper. That desk will have 20 to 30 built-in computer screensââ,¬"digital scratchpadsââ,¬"eliminating the need for paper. A digital camera mounted in the desk will capture the space where any real paper might rest. So while you read that article or review that fax, your PC will automatically digitize it and file it away.

One futuristic office itemââ,¬"electronic paper invented at Xerox PARCââ,¬"is almost here. It's a thin sheet of plastic embedded with millions of tiny black-and-white beads that have opposing electrical charges. When the beads are charged in a printer, they rotate and transform into printed words.

Gold says this enhanced paper will eventually replace regular paper for displaying information you now retrieve from a computer. You would print documentsââ,¬"just as you do todayââ,¬"but when you're done you could put the paper right back into the printer for the next job.

While widespread use of electronic paper is at least five years off, some businesses are already reaping its benefits. Gyricon Media, a Xerox spinoff, sells the MaestroSign System, which uses electronic paper. This setup enables employees at stores like Macy's to quickly change what's displayed on signsââ,¬"prices, daily specialsââ,¬"from their computers. The system makes for more reliable, accurate pricing, and it allows the stores to respond faster to consumer whims.

Coming Soon

• Digital Scratchpads
  Screens embedded in your workspace let you work without paper.

• Automatic Archiving
  A digital camera mounted above your desk scans and annotates all paper files.

• Electronic Paper
  Reuse this ultrathin charged sheet (made of plastic) again and again.

• Printer and Paper In One
  A more futuristic version of e-paperââ,¬"with no printer required.