Modern Digital Business | DocuWare Blog

Is Digital Document Management Cost-Effective For Your Business?

Written by Thomas Schneck | Aug 12, 2015
If your company is like most typical mid-sized businesses, a digital document management solution would allow you to reduce or eliminate many of your current expenses related to creating, using and storing a variety of business documents.


To determine the cost-effectiveness of the solution, you need to compare the cost of your current system to those of implementing a new enterprise content management (ECM) solution.

Current costs to consider typically include:

  • Document storage: Expenses for a file room, warehouse space, filing cabinets, binders, shelves and other related hardware.

  • Document creation: Expenses for paper and toner supplies, postage, shipping supplies and printing costs.

  • Document handling: The efficiency costs of manually routing paper documents within the organization, such as postage or courier service; additional expenses include maintaining files and destroying outdated information.

  • Employee time: The productivity burden of having to constantly store and retrieve documents in a time-consuming fashion, especially if stored off-site.

On the other side of the cost-benefit equation, you have the costs of a new document management system. These might include:

  • Implementation: Upfront expenses for licensing document management software and purchasing additional hardware, such as scanners. Additional costs for changing business processes, integrating the document management solution with existing infrastructure and potential business disruptions during implementation.

  • Usage: Training and education of users and system administrators, plus the temporary loss of employee efficiency as they learn the new software.

  • Maintenance: Data backups and hardware maintenance.

It’s important to weigh these current and potential costs when you’re trying to decide if going digital is cost-effective for your business. But they’re hardly the only factors.

Too often, companies think only in terms of these hard costs, and come to the conclusion that it’s not worth going digital. Moving to digital document management could end up saving you $400 to $500 per month on these items. But unless you have extremely heavy paper-based business processes and operations, these savings alone do not deliver a convincing ROI.

Understanding The Value Of ‘Soft ROI’

Most of the value of document management comes in the form of soft ROI from improved efficiency and productivity. That’s why it’s essential for owners of mid-sized businesses and other decision makers to look beyond the basic costs when considering a document management solution and assess the long-term investment value.

For example, let’s say that adopting a document management system helps you to quickly provide accurate information to your customers, improving customer satisfaction. While making customers happy is a good thing, the investment goal would be to get these happy customers to spend more with your company.

Now, the question is, how do you quantify the value of better customer service? What does improving your customer retention mean for your company’s bottom line? If providing better customer service would improve your revenue by 10 percent, for instance, the value of document management would be thousands of dollars per month, rather than a few hundred dollars in hard cost savings.

In the end, to accurately assess the cost-effectiveness of document management for your company, you need to assign a ROI value to improving the efficiency of your business processes and the accessibility of your information. Quantifying the value of saved time, informed decision-making and other benefits helps you make sound technology investments that help your company grow.

Discover the true value of increasing efficiency and productivity through document management. Download our free e-book, Cost-Effective Document Management: A Guide For Mid-Sized Businesses.