What Does A Document Management System Do: Your Ultimate Guide

  Taylor Pettis    August 4th, 2020 

In the eternal search for ways to cut down on document-related costs, Document Management System (DMS) came to the market with an estimated 40% in cost reduction in document management.

If you’re unfamiliar with what a document management system entails, you’re not alone. It might seem like a wide-sprawling system at first sight. However, it actually does exactly what it sounds like.

It’s a system of managing documents in a centralized manner, cutting down on lost time and inefficiency. If you’re wondering what does a document management system do exactly, you’re in the right place.

Keep on reading for our deep dive into the definitions and the mechanisms of the document management system.

Document Management Systems: The Definition

Before we start delving into our breakdown of how a DMS works, let’s start with the basics of the system’s definition.

In the simplest of terms, a document management system (DMS) is an electronic organizational system that stores and tracks documents through a single hub or centralized platform.

When the system was first launched to the market, it was intended for converting paper documents to digital documents. That’s why this system was previously known as the electronic filing cabinet.

However, as storing technology evolved (welcome to cloud computing) and the needs of the market changed, the system did the same.

DMS on the market is now equipped with automation capabilities. These capabilities work on automating all the manual procedures that involve capturing, storing, or even retrieving documents.

What Does a Document Management System Do?

Now that we’re on solid ground in terms of definitions, it’s time to breakdown what a DMS actually does.

In essence, a good DMS does three main things. It captures documents, stores and then distributes them.

Let’s explore how that works.

The Document Capture Process

Traditionally, before storing any sort of document, you’ll have to ‘capture’ it first. A good DMS will have solid data capture processes that are applicable to any document from any source.

In addition, the whole premise of document capture is saving documents so that you can find them and sort them out at a later date. Thus, this process calls for document indexing.

In short, indexing is a way of classifying documents that make them easier to find. You can think about it as similar to a hashtag on social media platforms.

Indexing allows the users to add specific terms to the documents’ metadata, like customer numbers, locations, categories, and even order numbers.

However, there are different methods of capturing documents. They all depend on the source of the document. An example of that would be email documents.


As with any modern business, there’s a hail of email messages (with attachments) that you’re receiving on a daily basis. These emails can contain sensitive documents and other important attachments like invoices.

A DMS will be able to instantaneously, and in some cases automatically, capture these documents and messages.


Similar to emails, most businesses will be dealing with huge amounts of system generated reports that contain essential information.

A well-rounded DMS will capture these reports, which can be anything from sales reports to inventory levels, and make them accessible to you and your team.

By eliminating the friction between the report generation stage and the point where the intended party gets to access them, your business is already cutting down on huge swaths of wasted time.

The Centralized Document Storage Process

After capturing business documents, the next step for a DMS would be properly storing them.

In order to keep the whole process as streamlined as possible, a DMS will have a centralized document storage system.

This way all paths lead to Rome. Stray documents from all across your business will congregate to a single location. Thus, you’ll have an easier time managing and retaining your documents.

There’s a multitude of benefits that come with this centralized approach.


For a business to keep up with the necessary speed and efficiency that’s expected by its customers and the market, employees need fast access to business documents.

After all, if employees are expected to make sound decisions, they must have the ability to access the reports need, regardless of location and time.

For instance, when it comes to fast-paced and critical areas like digital customer communication, your employees will need access to concrete data at the tips of their fingers or risk passing along incorrect information to your customers.

Furthermore, this central document storage will contain both static and dynamic content. An example of dynamic content would be webpages, forms, and emails. As for static content, that would be your regular correspondences, reports, and invoices.

Retrieval and Distribution of Documents

The final stage of document management is the process of document retrieval and distribution.

As it were, the whole document management ecosystem—so to speak—would fall apart if a business fails at retrieving its documents as well as distributing it to the relevant parties.

When it comes to document retrieval, a DMS needs to provide a seamless and lightning-fast process. As we’ve previously discussed when it comes to document access, a customer service representative must grab an invoice in seconds, not minutes.

The only difference, in this case, would not only be the added ability to retrieve documents by indexing, but also sending the document to the customer or other relevant employees.

Discover the benefits of using an Electronic Document Distribution System

Demystifying Document Management Solutions

To the initiated, document management systems can be a bit complex at first glance.

The fact that the software itself has been around for a long time with differing multiple iterations doesn’t make the process simpler to follow along.

However, now you can confidently say that you know the answer to, “what does a document management system do?”.

Yet, how good is a DMS without effective customer communication management to bolster a business’ client communications?

Keep on learning by heading to our blog for communication gems on building customer trust and how to put a solid customer engagement strategy in times of crisis.


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