Insurers Decrease in Profitability and Productivity Due to Slow Adoption of Digitisation
- Written by: iPMI Global
Dajon, is predicting a sharp decrease in profitability as businesses fail to manage sustained workplace productivity.
Using data which compiles the cost of document storage across core business sectors and the propensity for strategic management, Dajon is today highlighting the potential costs that will be incurred if corporates fail to become fully digital.
If for instance you calculate the cost of storing 2,000 document boxes over a 10-year period, physical storage comes to a total of £165,783.80, with contract exit costs totalling £186,352.11. Compare this to the cost of digital storage, at a cost of £568.73, there is a difference of £185,783.38 between what a business is currently spending on physical storage against digitalisation*.
The biggest culprits are businesses that are not investing in digitalising historical data, such as insurers and those in the legal sector. Averaging £87 to recall one document from storage, the costs can quickly add up, denting productivity and profit.
Other blockers come from CFOs and shareholders who are not prepared to reinvest for a longer-term gain.
Commenting on the issue Dajon Managing Director, Damien Andrews said: “We are concerned that the perceived cost of investment is going to add up to more in lost productivity, longer term. For instance, we know that insurance data must be kept for 60 years, so the cost of keeping any records that are not digital could run into the tens of millions. And that’s not counting the cost of lost productivity in locating filed paperwork – let alone travelling to some far-flung storage centre to retrieve it.
“Businesses must weigh up the ease of locating digital documents and the efficiency of working with digital data. This is also not forgetting that as AI becomes the norm, to harness the power of AI, paper records must be digital.
“The message here is simple. Whilst in the main digitalisation is happening in most business processes, data storage is a hidden issue that is going to leave UK businesses in the dark ages.”
The Association for Intelligent Information Management (AIIM) backs these findings up. In 2023 its report titled ‘Why Has Digital Transformation Stalled?’ found that one third of organisations had not achieved significant successes with digital transformation**. The report’s authors, Dave Jones and Theresa Resek found that ‘only 10% of respondents said digital transformation was an organisational information management goal.’ This is deeply concerning when, in 2024, AI policies are being incorporated but blockers such as operational issues, the perceived cost of migrations and skills gaps are prevalent.
Digital transformation is clearly defined by Dajon as process integration, change management and the improvement of legacy systems. It offers an award-winning digital transformation management and consulting service that will transform a variety of business from a range of sectors.
*Calculated using Dajon’s storage calculator
** https://info.aiim.org/aiim-blog/why-has-digital-transformation-stalled
