Paperless World

By Erika Schnitzer, Managing Editor

We’ve all received—and likely sent—emails asking recipients to think before they print. This is just one strategy in the move toward a paperless office. While the concept of such a workspace has been around for several decades, it’s only recently that companies have truly begun to implement it across the board.

Although it would appear to be a fairly seamless move from the more traditional office to a paperless environment, the average office worker in the U.S. still consumes 10,000 sheets of paper each year and generates approximately two pounds of paper and paperboard products every day, according to the Environmental Protection Agency (EPA).

In addition to the ecological benefits of a paperless office, the potential financial benefits are also tremendous. The average business document, for example, is copied nine to 11 times, at a cost of $23, according to 1997 Gartner data. And, while filing a document costs $25, finding a document that was filed in the wrong place costs an average of $153. These figures have only increased in the last decade.

Despite the noted savings, those in the traditionally paper-centric multifamily industry have lagged behind when it comes to implementing paperless offices. “A lot of us thought technology would get us there a lot sooner than it has,” acknowledges Lori Reeves, vice president-chief information officer, Forest City Residential Group Inc., who also points out that prospects are not renting site-unseen—as many previously thought would be a trend—which contributes significantly to a lack of implementation. “That was a big driver for a lot of these documents being digitized—our industry was headed toward online leasing,” she notes.

However, Jake Harrington, chief revenue office of On-Site, believes the biggest challenge to executing a paperless office is in the transition, which includes training to ensure successful changeover to a paperless world.

Going paperless—and its challenges

“People talk about paperless offices usually in terms of guest cards, applications and leases,” explains Harrington of On-Site, whose screening and document management tools provide online leasing solutions, and which was a finalist in MHN’s First Annual Green Initiative Award in 2008.

“A real paperless solution is going to have to account for every shred of paper that you have,” adds Harrington. And since there is a huge amount of liability resting on proper documentation, this seems to be the industry’s top concern.

Some companies have developed ways to make the entire leasing process paperless—from searching for an apartment to guest card management, applications, payments, application fees and the resident screening process.

But while Forest City, for example, has come a long way toward making files available electronically, Reeves points out that a number of challenges of implementing a truly paperless office deal with the legal aspects of a lease.

In the company’s front office, for example, Reeves explains, “we’ve had pretty strict policies and procedures in place about how to treat paper, just because of the nature of the paper having private data and sensitive information.”

And the biggest challenge Forest City struggles with, notes Reeves, is the legally binding aspect of leases and the fact that the company requires residents to acknowledge physical receipt of all such documents. “We are printing it off and giving them a copy and keeping a copy. We can then scan that and attach it and make an electronic folder of that document, but we haven’t eliminated” the paper, notes Reeves.

Despite Forest City’s lack of implementation, Reeves does note that certain products would address the issue of electronic signatures, which became legally binding under the Electronic Records and Signatures in Commerce Act of 2000. Instead of physically signing the documents, residents could choose an “I accept” option for the terms.

That’s not to say that others aren’t implementing an electronic verification in their lease agreements. For example, Harrington notes that, within his client list, companies representing 370,000 units are using e-signatures—and, he adds, a majority of On-Site’s clients utilize paperless online applications and payment processing.

Forest City has yet to implement the e-signature option, though. The company requires that residents come to the site to provide proof of identification. “There’s still that human interaction that has to happen,” says Reeves. “We found that people are searching for apartments online, and after they come in for a visit they might fill out the application electronically and get pre-screened electronically, but they will still come” to view the apartment before moving in.

Kevin Wallace, president and CEO of Las Vegas-based RMI Management LLC, agrees with Reeves. “We haven’t seen a whole big need for electronic leases,” he asserts, pointing out that management typically meets with residents at least once before the move-in. “They are coming in to get keys, to give us deposits, so most [everything] is taken care of at the same time. If you do electronic signatures, you still have to collect the money.”

A matter of convenience

Of course, every company has to weigh its own costs against the benefits of implementing a paperless office. But, as Harrington points out, operational consistency, which can result in reduced training time and improved security, can certainly impact NOI in a positive way.

However, paperless systems are not, by definition, efficient, Harrington asserts. Instead, the key is to work with a system that can be integrated with the company’s established business rules. Customers tell him, for example, that they are reducing administrative paperwork, giving them more time for
customer-focused activities, which, Harrington points out, “can never be a bad thing.”

With that in mind, Forest City Residential has converted much of its paper into electronic formats, implementing document management into all forms for its conventional and affordable portfolio. And RMI Management has archived and digitally stored 98 percent of its paperwork. But that hasn’t resolved the issue from a green standpoint, since most documents begin as
hard copies.

As Reeves also points out, a large volume of paper in the industry stems from invoice processing, purchase orders and contracts. “On that side, currently invoices are scanned and put through a document enterprise management system. So if you look at cash flow and see unusual expenses, you can drill down electronically to your cash flow to that invoice.”

Again, however, that doesn’t address the issue from a sustainability standpoint—nor does it help with management companies dealing with smaller vendors, points out Wallace. “Once you have smaller vendors—the rug cleaners, the painters—that have adopted electronic practices, it will get pervasive and will be in every segment,” he predicts.

A better solution

State laws have helped the industry get rid of some paper, however, since this information is safer in electronic form.

“In terms of security and sensitive information, having the information on a secure website is a thousand times more secure, reliable, protective of the applicant than being printed
on a piece of paper locked in a file cabinet,” notes Harrington.

In addition to the added security, electronic documents are easier to locate if filed incorrectly. “The key is to sit down and look at how you file your paper and look at the system you choose and how that paper is going to get stored in the system,” says Wallace. “How easy is it to retrieve the document?”

Though Forest City has yet to implement a truly paperless office—at least from a sustainable point of view—it has found ways to remove some of the paper from its site. For example, if it is sending a former resident to collection, the company can use a document management system, which, Reeves explains, “bundles up all the paperwork and sends it securely encrypted to the collections vendor. It’s just a much better process to have that data encrypted and stored. We can restrict who can see the data, where, if it was in a file cabinet, it’s hard to say who walks in the office.”

While the industry may have fallen behind in entering the new paperless world, there is technology available for it to catch up. “The more you can create the document digitally and store the document digitally, that’s better for the environment,” asserts RMI Management’s Wallace. “You’ll never get all of it on there—I don’t think—but at some point I think we can do a lot more than what we are doing today.”

To comment on this story, e-mail Erika Schnitzer at [email protected]