What Paperless Means

There are many definitions of 'paperless' but the implied meaning is for a given process or function to be able to function without relying on paper as an input or output. Paper is used to capture data (in the form of forms, applications, surveys, contracts, etc.) in order to transport the data to a person operating the process that relies on the data. Paper is also used to output data, reports and charts to share with people who make decisions in regards to the process.
Being truly paperless is to operate without any paper. A prime example of a paperless office is the many outsourcing companies in India that perform work without printing a single sheet of paper. The operator is simply given a terminal computer to work on. While the result of being paperless in this example eliminates waste, their primary reason for being paperless is to reduce security risks and limit how much information an operator can take out the front door.
It is unrealistic to operate a business without any paper whatsoever, but virtually every document that is used to capture data or is generated as an output from the process should be eliminated. People by their very nature need tactile experiences with information and will therefore continue to use paper to take notes, convey messages and marketing, draft ideas and design solutions, and work with companies who are not paperless and still require paper.

Alternative Definitions of Paperless

The term paperless is often used to refer to scanning and storing existing documents electronically. Imaging, storing and managing documents is an important aspect of going paperless since legacy documents that only exist on paper must still be stored, handled, searched and archived. Eliminating legacy paper stores is an essential part of going paperless, but this aspect alone will not make a company paperless. The only way to become paperless is to eliminate the paper in the first place. Document imaging solutions are necessary to manage the existing paper and the paper given to you by others (i.e. vendors, partners, customers, etc.).

Why The Paperless Office Doesn't Exist Yet

In many ways we are already paperless. Think about the number of software programs and systems commonly used by businesses today that eliminated paper:

• Financial systems replaced general ledgers
• Databases replaced rolodexes and index cards
• Email replaced traditional letters and faxes
• Electronic calendars replaced day planners and desktop calendars
• Internet is replacing encyclopedias, phone books, and much more

With the advent of computers, a perfect world without paper can exist. Businesses could operate without paper if every process was designed to exclude paper and every user became accustomed to viewing and reading online or in a paper-like reading interface (e.g. Amazon Kindle, Sony E-Book). Unfortunately, this concept has been unrealistic for several reasons:

Efficiency Creates Capacity For More Paper Production

If the goal of every business is to be profitable, then at least one of the goals of a company's operation is to become more efficient. While efficiency is essential to lowering costs and improving profits, what it's really doing is increasing capacity to perform more tasks or the same tasks more frequently.
For example, if you manage a chain of two hundred stores and your budget analysis takes two weeks to generate, you would greatly benefit from reducing that process down to just a few minutes. Now if you could perform that budget analysis in 2 minutes what would you do with the remaining time? In addition to tackling other problems, you might also perform the budget analysis daily instead of every two weeks. In this case, a bi-product of producing the analysis is a printout. That means instead of printing the budget twice per month, it may now be printed 20 times per month.
In many cases the reason we're not paperless is because our efficiency has allowed us to create more paper. While email eliminated writing letters and sending them via the US Post, we now write many more messages than before and some people print emails in larger quantity than they ever printed standard letters. The result of email is possibly more paper, not less.

Processes Initially Depend Upon and Require Paper

If you have ever performed a process that was not automated by any machine then you most likely used pen, paper and the tools of your trade. The cheapest and most effective way to design and start using a process is to rely on paper to capture and/or transport data.
For example, opening an account with a financial institution requires someone to fill out a paper form to capture the investor's contact information. This form is then processed by someone who inputs the data into the account system that creates the new account. Finally, a paper statement and/or confirmation is printed to give the investor their account information.
Unless processes are designed to operate without paper from the very beginning most companies will rely on paper when they first start using a process. If and when the process is automated with computer systems and machinery, about 80% of the process will be automated for roughly 20% of the cost of automating 100%. In other words, automating the last 20% of a process will cost four times as much as the first 80% did. Since most of the paper used by a process is in the 20% not automated, the paper is not eliminated.

People Prefer To Read Paper

Although much of the traditional media (newspapers, magazines, trade journals, etc) is going digital and reducing the amount of paper they print, people still prefer to hold and read physical paper. This natural tendency is due to familiarity with paper (only the younger generations have grown up with a computer screen and treat it as normal), technology limitations (viewable page size, screen glare, unnatural lighting, etc) and even a sense of security for some (paper doesn't require electricity or a computer to be seen), and other reasons.
In the workplace, it is often easier for individuals to print documents or work with pre-printed documents than it is to seek a computer-based alternative. Ultimately, users need incentive to be paperless.