I hope I'm not sounding like I'm preaching, but I am getting frustrated and nervous as more and more companies are using free cloud-based box services to store, distribute, and manage their documents. (I know I have said this before, so I guess it is preaching). And why are we doing this? Because it is free! At least it's initially free, in the sense the company does not have to outlay any cash. We'll investigate the real costs here in a second.

Case study (an actual example I recently witnessed): Company has many large files that are key to their operation. They consider the files confidential and important in both supporting their sales efforts as well as helping operations with existing production. It is a relatively small company (let's say less than $50 million in revenue) and IT has decided that buying storage and managing it is something they don't particularly like doing (don't know about you but this sounds like the fun part of the job, just sayin'). So they have decided to use a very cost efficient tool, considering it is free; a cloud-based box provider.

Stay with me, not the most interesting story yet. So here we go, they tell the keepers of the large files (us) to start storing them on the cloud, and a business account is setup on the free cloud-based box provider. Let the mayhem begin.

At first it's cool. Now lots of different people can get to files they couldn't get to before or even knew existed. The Cinco de Mayo party has nothing on us. Distribution lists are constructed and passwords created and file structures initialized. Fast forward six months ------->

There is now over 5 terabytes of data on the provider
There are 3 times as many user accounts as there are employees in the company
There are now multiple folders with the same name, some of them sound very scary like Corporate Strategy (this is made up as I can't reveal the real name)
Everyone has synched their desktop to the cloud and then reorganized their folders, often not synching back to the cloud (so now we are using local storage as well)
There are multiple versions of the same file, with the same name, some the same size, and some with the same date but different sizes
Links to files have been provided to many vendors and customers, which no longer work as files have been deleted, moved, or renamed
The CEO is screaming that non-current versions are being used in production, people are recreating existing files, and although there is now greater visibility to the files, it is now even harder to find what he needs.
BUT IT IS FREE!! (Not really as they are now paying for additional storage, but that doesn't count as we would have had to pay for it anyway.)

I know you're waiting for it, so I'll give you that gratification: IT IS NOT REALLY FREE. I would argue not only is this approach not free it is more costly than keeping the documents in-house, BY A FAR MARGIN. The problem, like a lot of business problems, is we can't quantify the real costs, but we do know what we write checks for. A couple of bucks for these cloud services sounds a whole lot better than thousands for additional drives or servers. The non-quantifiable costs (I knew you were asking), include:

The huge cost of working from non-current versions of files (rework, additional materials, late production, customer ill-will, reduced morale, etc.)
The huge amount of time lost in trying to find files and ensure they are the most current (think of this, in a small 250 person firm, if 50% of the people take an extra 5 minutes per day to find and verify a file, it's equivalent to almost 1 1/2 people's work for an entire year - without assuming any productivity factors)
Loss of files due to people moving files or just being plain stupid
MOST IMPORTANTLY - a substantial decrease in security for significant files, in this case Confidential files. (I'm okay if they are pictures of the company outing or even this year's budget, as we know this document is really a figment of someone's imagination).
BUT IT IS FREE!!!

Okay, I give on this one. Certainly we are all conditioned to try and find less expensive ways of doing our job. And the ability to distribute and collaborate is a big improvement. But the costs are significant and the loss of security is like my insurance agent tells me - "you never know." (Still not sure what he is implying, pretty sure I know I am going to die, maybe he is subtly telling me I don't know how much its going to cost me for the additional insurance, you know.)

Technology is not free, of course, but it is a heck of a lot less expensive these days than in the past, and it's getting cheaper. I think its wonderful to put pictures of your dog up on Pinterest or Instagram and your videos of the birthday party on YouTube, but we need to draw the line on putting corporate documents on non-commercial grade applications.

The cost of a full fledged document management system is so insignificant compared to the costs (non-quantifiable as they are) that its really a no-brainer for the corporation. Don't cop out and take the easy road, for as they say, "you get what you pay for," and "caveat emptor," and "no pain, no gain," and "you never know," and "I can't believe they gave it to me for free!"

Scott Brandt

President/CEO eQuorum