If you’re curious about the advantages of digital document management, you want to make sure that it’s a good investment for the company. You need to know that the new technology is going to reduce your current document expenses enough to recoup your initial investment, and then provide an ongoing return that benefits the company.
While digital document management does reduce a variety of hard costs, these alone don’t give you useful insights into the true costs of your business operations. It’s essential to look beyond a cost perspective to a value perspective when estimating your ROI with document management.
Paper-Based Systems Hamper Employee Productivity
When a global stainless steel producer implemented a digital document management system to manage financial documents and link accounting information with product test reports, the company was able to achieve ROI within the first year.
Penn Stainless Products, Inc. (PSP), is a mid-sized player in the stainless steel industry, with over $140 million a year in revenue. The company had been using paper-based systems for accounting information and managing the credit files for its customer accounts. This information had to be accessible for accounting, sales and management, and with so many individuals working with these financial documents, each employee lost an average of an hour a day just filing and searching for paper files.
Information was shared between 60 employees and searching for information was tedious because documents were subject to slow refiling and misfiling. In addition, the company needed to reference each invoice with the heat or test report for the product specified.
PSP needed to implement an electronic document management system that would work well with its large volume of documents and allow documents to be indexed by multiple criteria. The company wanted to secure the access to these files and ensure documents would not be lost due to human error or natural disaster. Additionally, PSP wanted to reduce document storage space and expand its office space without adding on to the building.
Electronic Document Management Improves Productivity
An Authorized DocuWare Partner implemented DocuWare as PSP’s electronic document management system for the company’s credit and accounting departments. Today, accounting information such as invoices, bills of lading and work orders are scanned, organized and stored in the system. By indexing documents with multiple index criteria, cross-referencing invoices with vital heat reports is easily accomplished, and the company no longer loses documents, such as customer invoices.
In terms of reducing hard costs, this solution has helped PSP to better manage production costs by allowing management to immediately see if a product was cut, priced and billed correctly. Eliminating paper-based document storage has helped the company avoid spending thousands of dollars on building additional office space.
Moving to a digital system has also improved customer service and reduced legal risk exposure, while also saving PSP tens of thousands of dollars on audit preparation.
Even with these cost savings, improved productivity and efficiency is PSP’s greatest benefit from document management, according to the company’s controller, Dave Harris.
“Our return on investment was more about improving the way our employees work,” Harris says. “Our sales team is at their desks much more, spending more time making sales calls rather than searching and filing paper. That documents are never lost and no one has to do any refiling is huge around here. Within one year, the system has more than paid for itself.”
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