What is document management (DMS)?

Organizations — regardless of industry — process vast amounts of documents in both digital and paper form. In fact, the average US office worker alone uses 10,000 sheets of paper, annually. Apply this statistic to an organization of 100 or even 500 employees, and you quickly begin to appreciate the volume of documents moving through organizations.

These organizations usually perform best when they can use automated processes to handle documents with speed and efficiency and without the hassle of cumbersome manual workflows or difficult-to-locate information.

The chances are your organization's no different. You probably recognize the inefficiencies of managing all this paper, and that tedious manual processes are impacting productivity. You likely also acknowledge that there must be a better way. If you haven't considered document management for your business yet — or you're looking to get more out of document management solutions for your company — start by learning more about this technology today.

Document management software (DMS) is a digital solution that helps organizations process, capture, store, manage and track documents. By tightly managing your critical business information, you can develop processes that start, execute and complete in a stable, predictable, measurable way. It is almost impossible to design and implement reliable business processes and digital workflow without fully-featured document management software.

Some components of document management software include:

• The document repository. This is where the documents and associated data are stored. Depending on how you choose to set up your document management system, the repository may reside in the cloud or on-premises. Cloud options are typically more scalable and less expensive, though the regulatory compliance requirements of some industries may mandate that documents are stored on in-house servers.
• A document viewer. This is one of the main components of the user interface. It's where people can view documents and images on their computers or mobile devices. The best document management software can display PDF, JPG, TIF, CAD drawings and other image versions as well as show electronic documents in their native formats.
• Workflow tools. Workflow tools route documents to staff members or teams within your company or to customers or business partners outside of it. The best document management solutions offer options for optimizing and automating workflows to save time and money.
• Indexing for powerful search. Index data classifies documents and identifies document types. Indexing enables you to move documents through appropriate workflows and find them later. For example, you might need to find an invoice sent to Mr. Smith in July 2020. If documents are indexed by type, account number and date, you can search for all invoice documents from July 1 through July 31 of that year that contain Mr. Smith's account number.
• OCR capabilities. OCR stands for Optical Character Recognition. This is a technology that converts text from images into data that can be used by business software. For example, an OCR tool might pull all the pertinent information from a resume and load it into an applicant tracking system.
• Search tools. Search tools let your staff narrow results to find the document they need. Depending on your criteria and how your software is set up, you may be able to search by document type, index values, keywords and full-text.
• Integration options. Integration options let you use your document management system in combination with your accounting software, ERP or other solutions. For example, DocuWare has integrated with more than 500 applications, including QuickBooks, SAGE, Outlook and SAP.

Many companies are transitioning from older on-premises systems to cloud-based software-as-a-service (SaaS). This transformation will only continue. The “lightness” of the cloud is driving this trend. In comparison to on-premises systems which require implementation, upgrades and regular maintenance, cloud software deploys quickly and requires minimal internal IT support.

This “lightness” provides many other benefits including the ability to scale up easily as your business grows and better operational flexibility. The results? Improved efficiency, productivity, and agility — all of which help you set a new pace for business.

The cost of cloud is less than on-premises

Cloud software is typically available as a monthly or annual subscription. But it has no upfront license costs and support and maintenance are built in.

On-premises software requires a large upfront investment in software licenses, plus the cost of the application, IT support and hardware.

Accounting for the annual support and maintenance fee and a typical three-year cycle for new hardware, the overall cost of cloud is less than an equivalent on-premises deployment. Subscriptions to services are operational, not capital expenditures, and are only acquired as the company needs them enabling predictable budget planning.

Before you start shopping for a document management solution, learn about some other common terms you might come across.

• Document capture. Capture refers to the process of getting documents into your document management system. This is accomplished in a number of ways, including scanning, importing, emailing, capturing faxes directly and entering data into electronic forms.
• Document imaging. Document imaging is the process of converting paper files to digital files. Often, this is done through scanning processes, which convert those paper documents to PDF, JPG, TIF or other image types.
• Document type. Document types are an overarching type that you've set up, such as "invoices," "customer emails," or even "sales" or "customer service."
• Indexing. Organizes documents in a document management system by allowing you to apply any identifying data, like vendor or customer name, date, amount and category, or assign broader terms, such as "invoices," "letters," "sales" or "customer service." Index terms define what the document is about. Companies should set up rules for indexing so all employees use the same processes; you can also automate indexing with Intelligent Indexing software which uses machine learning to instantly identify the most valuable information on a document and convert it into highly structured, usable data
• Version control. Version control is the process of recording changes to documents. If someone makes a change to documents in your system, version control enables you to access previous versions of documents and see when changes were made and by whom.
• Electronic signature. An electronic signature is captured digitally and appended to a document. In some cases, it's a digital version of a handwritten signature that is signed on a touchscreen with a stylus or a finger. In other cases, there’s an encrypted key that only the designated signatory has access to that ensures that the signature is authentic.

Good document management offers many benefits, including bottom-line savings, better customer satisfaction, increased employee morale and easier compliance with federal, state and industry regulations. Check out seven major benefits of document management systems below, or browse DocuWare case studies for specifics about how various organizations have used document management to make a positive impact.

HR has some crucial decisions to make such as whom to hire, how to improve the onboarding process and how to best manage employees.

Document management software assists HR managers with these critical areas by automating the OCR and electronic capture of employee records, HR files and business documents into a central repository. From there, HR managers can create simple workflows to manage these critical areas. Consider these examples:

• Finding the right talent is made easier because applications, forms and email are stored in one central place for easy retrieval by decision-makers, and information flows effortlessly between team members.
• The employee onboarding process is improved as managers can create digital workflows for all new hires. For example, you can send welcome and orientation information automatically.

Achieve efficiency in finance and accounting areas such as accounts payable, accounts receivable and financial audits.

Realize a new pace in accounts payable by:

• Quickly and easily capturing paper and electronic invoices
• Assigning documents to predefined file structures for easy retrieval
• Automatically matching invoices to purchase orders
• Providing efficient workflows for the approval process
• Avoiding human error, reducing invoice handling, and eliminating manual data entry

Speed up collections by linking related documents to the order process so that you can create and process invoices faster, and track and manage payments. You can, for example, combine approving payments with release workflows.

You can store a full and secure record of all business transactions which helps during an audit process. These include emails, contracts, and other confidential information. Access this historical information when you need it, without delays.

According to a CSO Insights survey, “88% of sales professionals are unable to find or bring up critical sales material on their smartphone,” leading to longer sales cycles and lost deals.

A DMS solves this problem by:

• Capturing leads with web forms that can then be routed to the right sales team
• Storing critical sales and marketing material in a digital repository for retrieval
• Sharing relevant documents and information with team members securely

Ultimately, your employees become empowered, productivity improves and sales and marketing functions better.

Simply buying a document management system and using it in your business doesn't get you all these benefits automatically, though. Make sure you work with your vendor to plan a strong implementation that includes training and communication for your staff. The more buy-in you get from your employees, the more likely they are to use the software and help drive some of these benefits.

Here are three more best practices to consider:

1. Create standard operating procedures for using your document      management system

Plan ahead, deciding how you want your document management system used. Create standard operating procedures and training materials employees at all levels can turn to when they have a question. The more consistent your teams are in using the software, the greater the benefits.

2. Capture documents as soon as possible

Not every organization can go 100% paperless, but the best results are achieved when you convert as many documents to digital as possible and capture them as close to the "entry point" as you can.

For example, certain types of mail should be opened and immediately scanned and routed to the proper people as digital documents. Workflows should allow staff to forward attachments directly into the document management system, rather than require that they print document emails.

3. Don't simply emulate your old paper processes

A document management solution provides opportunities to do much more than you could ever do with paper processes. Don't seek to create workflows that mimic what you did with paper. Instead, gather subject matter experts in your organization and design better processes that take full advantage of digital capabilities.

Below are the three major steps for starting with document management software. For a successful implementation, follow the 7 essential document management best practices.

Identify the right workflows

Digital document management is best suited for document-centric workflows like those in business areas already identified: finance, sales and marketing, and HR. These are workflows that typically enable employees to transition from time-consuming manual workflows to productive automated ones.

To help you identify these areas, start with the common ones that typically yield substantial productivity gains, for example, invoice processing, employee onboarding and contract management.

Pinpoint integration points

Integration is a core value proposition of any DMS. Once you’ve defined your workflows, find the integration points. Below are examples of integration points within those three common workflows:

Invoice approval

Integration with an accounting or ERP system ensures that information is consistent in both systems and eliminates duplicate data entry. This might be an integration with QuickBooks for a smaller business or with Microsoft Dynamics for a larger organization.

Employee onboarding

Human resources teams often use a human capital management (HCM) system like Workday or SAP Success Factors to manage employee information and use office automation to ensure that supporting documents are captured, routed, signed, completed, approved and stored with appropriate privacy settings.

Contract management

Document management integrates with the tools that legal and procurement teams live by: Microsoft Office and Microsoft Outlook. The success of contract management teams depends significantly on a structured workflow which supports strong security and version control.

What does document management software do?

Document management software captures, manages, retrieves and stores documents in electronic format. It is defined as the digital representation and secure storage of documents so that businesses can achieve new levels of speed, accuracy and transparency while creating a predictable, reliable, repeatable information infrastructure.

These solutions should be able to integrate with other systems, including email, ERP, accounting or customer relationship management systems. These integrations help you develop and automate workflows that involve documents and allow employees to access documents as needed to perform their work.

What’s the difference between document management and enterprise content management?

If document management software specializes in capturing, storing and automating document flow within business processes, enterprise content management (ECM) describes software that extends beyond that: including web content management, social content management and other enterprise capabilities fall in this bucket.

Typically, ECM is deployed within large enterprises, as licenses and configuration are complicated, costly and time-consuming to deploy. Thus, ECM is not a good fit for small and mid-size businesses that need basic document management.

Why do I need document management software?

Document management software is a must-have solution for most businesses. Paper, though not completely obsolete, is expensive and difficult to maintain. It can require costly file storage space. Moreover, an employee has to file the paper, and another staff member has to spend time retrieving it when they need the information. Paper is also tied to manual processes that contribute to higher costs, decreased efficiency and more errors. Document management software, on the other hand, provides you with options for digital storage and retrieval, automated workflow, data security and compliance measures.

What is a document management plan?

A document management plan is a written record of how you manage your documents — both paper and electronic. It might include:

• Where and how documents are stored
• Under what circumstances documents can be archived
• Under what circumstances documents can be altered and how you manage version control when that happens
• Under what circumstances documents can be deleted and what record of their existence remains
• Who has access to various documents
• Which people have access to various documents
• How document workflows function
• How documents are captured and enter your system

What kinds of businesses can benefit from document management software?

Almost any business can benefit from some type of document management system. When it comes to document management software, there are options to support businesses across all types of industries. DocuWare has solutions for finance and accounting businesses, sales and marketing teams, healthcare organizations, manufacturing and many others.

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Ready to see how the benefits of a document management solution might play out in your organization? Contact DocuWare today for more information or a free demo.