Digital Transformation

What Is a Document Management System?

A document management system can help you reduce operational time and errors, and increase customer satisfaction. Learn more about it here.

Blog Post

7 minutes

Feb 06, 2023

A document management system, or DMS, is a digital software solution that captures, stores, and retrieves electronic files and documents.

Think of it as a well-organized digital file cabinet for all your company documents. This file cabinet can help you extract relevant information and quickly find files whenever they are needed. You can store various file types in a DMS, be they PDFs, word processing files, emails, or even images or videos. 

If you’d first like to discover how a company used a document management system to increase sales and customer satisfaction, see Impact’s Document Management System Case Study: Espinoza’s Leather Company. 

Since the files and data in a document management system are all digital, storing them, sharing them, and finding them takes a fraction of the time compared to handling physical paper files.  

Relationships with customers and vendors can be improved by using a DMS since the system indexes information and highlights relevant data. When a customer query appears or a vendor requires more information, this data can easily be extracted by authorized users. 

Advantage of Using a Document Management System

Document management system (DMS) benefits / advantages | What Is a Document Management System? | Impact

Document issues cause more than 21% of daily productivity loss. Companies produce a large number of documents daily. These documents are created, checked, shared, stored, and often needed more than once to conduct business.  

The benefits of using a document management system, however, are not only easy document access and reduction of processing time. Let’s look at each of the advantages of having a document management system in your business: 

Collaboration 

A quality document management system includes an easy-to-use interface that integrates with existing applications.  

SharePoint, for example, is a management system developed by Microsoft that integrates with Office and allows users to interact and collaborate on documents across platforms through the cloud. 

The most likely communication channel used by workers to collaborate and manage documents is email, cited by 92% of respondents. Additionally, workers share six documents daily, on average. A DMS can extract relevant information from emails and add them to an indexed folder.  

It also allows authorized users to access documents from any location, as long as they have a device connected to the Internet. This means that your employees can collaborate whether they work at the office, from a remote location, or are traveling.  

Automation 

A document management system does not have to alter the processes and workflows of an organization. But it can make these much faster by automating business processes 

Workflows can be automated so that stakeholders are notified before approval, upon which the specified file is sent on to its destination. This removes the need for waiting for a manual review or signature, accelerating the approval process. 

This is used extensively by companies that deal with documents such as contracts and invoices on a daily basis and is an important aspect of digital document workflow. It is no wonder then that 82% of employees report welcoming the idea of an automated software solution to help them name and tag documents. 

Related Post: 5 Cost-Saving Initiatives for Office Managers 

Remote access 

As stated above, document management system for a modern business should be accessible from any Internet-connected device. 

This offers more flexibility and efficiency, as stakeholders can conduct tasks regardless of where they are located, whether at the office; on the go; or working from home. 

Additionally, documents can easily be approved with a digital stamp. Any authorized employee that needs the document can benefit from visibility on its status. 

Search functions 

83% of employees recreate existing documents since they can’t find them in their company database. A reliable DMS should have a search function that allows users to find information quickly. 

Files can be found instantaneously as documents (including image-based files) are indexed and labeled with metadata tags so that users can easily look for and access the data they need. Users can input keywords or use the software’s automated mechanisms. 

This means that virtually any document, regardless of file format, can be found instantly. 

Version control 

“Versioning” refers to maintaining a documented history of a file throughout its entire lifecycle. 

When employees collaborate on, review, revise, or approve documents, every version of these files will be retained in case they need to revert or study a previous version of a file. 

Stakeholders can also be notified when changes have been made for easier collaboration. 

Over 1,000 employees found that 83% of workers lose time to versioning issues every day, a survey found. 

Access control 

Access controls are crucial for maintaining or establishing security protocols for stored data and information. 

While with paper-based processes, documents can be accessed by anyone with a key to the filing cabinet, a document management system allows for a far clearer visibility over who has access to what. 

Compliance support 

Access controls and other security protocols like encryption also play a large role in organizations looking to comply with data standards, particularly those concerning personal identifiable information (PII).  

The sectors that are especially affected by data compliance laws and regulations include the finance and healthcare industries. 

Cybersecurity 

Security is a key consideration for document management systems today and any solution should come with the measures necessary to secure a company’s stored data. 

This will include standards like 256-bit Advanced Encryption (AES) security—which encrypts sensitive data—for sending and receiving of information, and SSL (or TLS) certificates—which verify the identity and establish a network connection—for the protection of data transferred between two systems (like a worksite and client). 

How Does a Document Management System Work? 

Users will generally take the next steps to take advantage of a digital document management system:

1. Input 

At the input stage, a stakeholder will capture the document. 

A document management system can retrieve information from a variety of devices. These input sources include things like: 

  • Scanners
  • Email 
  • Manual and bulk uploads 
  • Mobile apps 
  • Web-based software applications 

2. Processing  

Once a document is scanned or otherwise inserted into the system, it needs to be processed and often converted to a different file. 

Document processing involves taking a hand-written or paper-based file and translating it into a digital format for indexing and storing. 

With a DMS solution, processing is much faster than manual processing and filing. RPA bots instantly scan relevant data from each document with fewer errors than human employees. 

Related Blog: 10 Advantages of Process Automation 

3. Indexing 

At this stage, the inputted documents are “tagged” with the appropriate metadata to make it easier to search for them. 

This metadata is determined by the internal organization process, but will typically involve the use of key search terms and phrases. 

In addition, system indexing should also take place here, which means that data relating to information about dates, document type, or other identifiers of the document are taken into account. 

Indexing also takes into account revisions after the fact, so different document versions are made clear for every authorized user. 

4. Retrieval 

A document management system offers a search function that is easy-to-use for stakeholders when retrieving documents. 

A powerful search engine is an aspect of the management system that takes into account all of the attributes that are outlined in the indexing stage—most modern systems will have a search function that is more than adequate. 

Bottom Line 

Document management systems are essential for modern businesses to effectively index, store, and manage their data. 

As volumes of data within SMBs increase to unprecedented levels, the need for organizations to both utilize this data effectively and ensure that it is secured in order to meet today’s compliance standards for sensitive information. 

If your company is still using paper-based processes for documentation and is in need of modernization, consider asking if a document management system can benefit your operations and improve your efficiency, productivity, and customer relationships. 

To see how a company used a document management system to go paperless and provide better customer service, see Impact’s Document Management System Case Study: Espinoza’s Leather Company. 

Tags

Digital TransformationBusiness GrowthManaged Process OptimizationAutomationDocument Management

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Additional Resources

man showing another man files in paper form

Improving Business Outcomes by Rethinking Paper-Based Processes

Learn how Impact helped overhaul business processes by implementing an integrated document management and managed print solution. 

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