If your business depends on a variety of important documents and records, you may find it overwhelming to keep them organized. That’s where a document management system comes in.
At its core, a document management system is a type of software that captures, stores, retrieves, and distributes digital documents. At the highest level, it allows you to quickly and easily provide employees, customers, and vendors with the information they need, reducing inefficiencies to meet your business goals.
But what are the specific benefits of a document management system, and what does that look like for an organization?
What are the Advantages of Document Management?
There are many benefits to utilizing a tool that helps manage your company’s documentation—and knowing what those are is the first step to picking the right document management system. Several of the most noteworthy advantages include:
1. Less Storage Space
The costs to store paper documents can add up quickly. After all, you have to purchase and make room for file cabinets, boxes, and storage bins. One report found that physical document storage ate up roughly 15 percent of total office space. And on average, office space in the U.S. runs $285 per square foot. At that price, that’s a lot of budget to allocate on just document storage.
Since a document management system is a software-based solution, you’ll be able to free up space and store any necessary hard copies off site in more affordable places like a warehouse.
2. Offers Document Backup/Recovery
Not only is storing physical documents pricey, it’s risky, too. A fire, flood, earthquake, or another disaster may destroy years’ worth of valuable information and take a serious toll on your business. Believe it or not, 40 to 60 percent of all small businesses never reopen their doors after a disaster. Unfortunately, though it may be, it’s not too surprising—when disaster strikes, it’s practically impossible to recover crucial files.
By electronically storing your documents in a document management system, especially one that’s cloud-based and off-site, you’ll be able to avoid this issue and easily back up and protect your information.
3. Improves Workflows
In a recent Nintex survey of 1,000 respondents, 49 percent said they struggled to find documents, 43 percent faced roadblocks with sharing documents, and 33 had issues with document versioning. That’s a lot of inefficiency.
Streamline workflows and save your team hours by housing files in a document management system. Since the system acts as an easy-to-use, centralized repository, employees can find what they need quickly, easily share files, and determine at a glance how recent the document is. That simplification helps them spend their time on more important tasks.
4. Promotes Better Version Control and Organization
Even if you’ve gone digital, it can be tough to determine if the document you’re looking at is the most up-to-date version. Remember, per the Nintex survey, 33 percent of workers struggle with version control. Clearly, this can lead to confusion and disorganization.
A good document management system prevents these headaches by tracking edits and providing a document history. That way, you can see all of the changes and always have access to the latest version.
5. Enables Easy Regulatory Compliance
Every industry has different compliance requirements, and it’s not always easy to adhere to them. For instance, one recent survey found that as many as 56 percent of healthcare providers may not be compliant with HIPAA right of access. Not only does that sort of non-compliance set you up for legal issues and potential hefty fines, it can also damage your reputation and ultimately take a toll on your bottom line.
A document management system can make compliance with HIPAA, tax laws, Occupational Safety and Health Administration (OSHA), and other federal or state regulations much easier. You’ll be able to automatically organize and secure files per regulations and store them without the hassle.
6. Grants Wider Access to Documents
One of the biggest issues with physical documents is that they can only be in one place at any given time—and making copies isn’t always efficient or secure. If you invest in a system to manage these files, everyone who needs to access a document can, without having to wait on someone else to finish with it.
Plus, team members can click into these forms from multiple devices such as desktops, laptops, or even mobile devices. A document management system ensures that everyone who needs access to documents has it.
7. Provides Better Security
That said, wide access isn’t always a good thing. Forty-one percent of companies have over 1,000 files with sensitive information (think: credit card numbers, health records, etc.) left unprotected and open to any employee. This is a huge problem, as security issues can lead to serious consequences and potentially put you out of business.
A document management system is invaluable for shoring up these issues. You can restrict access as necessary and often find out who has viewed or modified a document at any time.
8. Saves Time and Money
Managing paper files is time-consuming and expensive. A document management system can save time and money as employees may use it to search by word, phrase, or full text and quickly find what they need. Since all documents are stored on the cloud, your employees can meet their goals in a fraction of the cost and time.
9. Integrates with Vital Legacy Systems
In this day and age, there are more apps and software systems than you can count. In fact, on average, companies use roughly 130 different apps or tools to get work done. And many of them, particularly those that are critical to a business, would be costly and difficult to replace.
But a good document management system can easily integrate with legacy systems, avoiding disruption. Accounts payable, logistics, marketing, and any other department will be able to access and send documents with ease and automate many of their tasks.
10. Makes Document Retrieval Easy
In a 2012 McKinsey survey, knowledge workers spent 19 percent of their time looking for information, whether that information was in a digital format or not.
A document management system simplifies retrieval, as it allows employees to access what they need from just about anywhere via a simple search. And depending on the system you choose, you may be able to add meta data and tags to each document to make the retrieval process that much easier.
11. Increases Collaboration
According to a 2015 survey, 75 percent of all cross-functional teams are dysfunctional. Collaboration challenges may be to blame.
With a document management system, employees from various departments can share and work on documents in concert with minimal effort. For example, someone in marketing can easily email an invoice to a colleague in accounting. The accounting employee may pay the invoice and then mark the document’ as “paid” so that everyone knows its status.
Choosing the Right Document Management System
Managing paper documents, or even just poorly organized digital documents, can lead to inefficiencies that cost your organization time, money, and headaches. Investing in a quality document management system that meets your unique needs is the best way to nip these issues in the bud. However, finding that solution is another issue.
With the help of best-in-class optical character recognition (OCR) technology, MHC Software offers solutions that give you the opportunity to replace paper documents, like accounts payable invoices, with intuitive and integrated digital formats. It’ll help your business save time and money by reducing data entry errors, creating more efficient workflows, and so much more. Talk to one of our experts and learn more today!