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How Document Management Can Control Your Files

August 31, 2022 Information Management
Tom Regan
By Tom Regan LinkedIn

Remember filing cabinets? Big, heavy and mainly constructed of steel, they would sit in the corner of the office and hold all your most important documents. Large companies would often have rooms filled with nothing but filing cabinets. How quickly you found a document in that filing cabinet depended on your paper filing system's accuracy and if you remembered to file the documents. Document management was not easy.

Things started to change in the 1980s with the advent of personal computers. As personal computers became more prevalent, businesses could store important files on them. However, the situation was far from perfect. Files were only held on one computer and computers were not linked together. So when one employee needed a file that wasn't on their computer, they needed to find the worker who had the file on their computer.

Those early, imperfect document management systems (DMS) were the precursors of our current, more robust DMS systems.

What Is Document Management?

Businesses define document management as how they manage and track electronic documents. Today, document management captures, tracks and stores digital documents such as word processing files, PDFs, digital images and scanned copies of paper documents. Unlike the practices of the '80s, these digital files are now available to everyone who has permission locally or globally.

Modern document management systems reduce costs, minimize human error, eliminate physical damage to a file, solve retrieval issues and provide as much storage space as is needed. Thanks to the use of metadata (information included with each file that provides details), companies can create document management systems that allow for quick search and retrieval.

Related Article: The State of Document Management in the Workplace

Document Management Features

Businesses of any size can use document management systems that are small enough to be standalone applications or large enough to be enterprise-wide configurations. However, regardless of the size of the business, a DMS offers many similar features:

Document Storage

The primary function of any DMS is document storage. It allows companies to store their documents safely and retrieve them easily.

Simple File Structure

While few businesses still use physical filing cabinets, a good DMS will duplicate its filing structure: a drawer with alphabetized files.

Keyword Search

A good DMS has a broad keyword search function. Using metadata based on specific keywords recalling the document or group of documents is much easier.

Document Permissions

Not every document should be available to every employee. A document management system allows you to set tiered permissions so only specific employees can see certain documents. Without permission, no other employee can view or edit forbidden documents.

Monitoring

Companies often want to know who's been looking at what documents. It's a central security feature for businesses of any size to keep their confidential documents private.

Edit History and Restoration

A good DMS will have a history showing who edited a particular document. It will also allow you to search previous versions to see what changes have been made by previous users and when they made those changes. It will also have versioning tools that will prevent two people from working on the same document simultaneously.

Deletion of Outdated Documents

A document management system can provide regulatory controls that allow you to set dates for the automatic deletion of certain documents. You can also set it to save documents automatically.

Compliance Considerations

Financial, legal and healthcare firms often face stringent regulations about documents. Many organizations need to provide files as evidence of compliance considerations. A DMS will allow you to manage these files carefully. You can store them in a secure location so no one can tamper with them without having a footprint.

Integration

A DMS should integrate with other essential software in your organization, such as your email client and customer relationship management (CRM) system.

Scanning

Your organization will still receive or produce some documents as paper copies. A DMS will allow you to scan and store these documents in digital form.

Mobile Access

Accessing essential documents and files from any location is a critical feature of a DMS. Many of today's business tasks don't happen in an office setting. Employees should be able to view, edit and share documents from any location.

Related Article: Why Document Management Systems Are Still Key Enterprise Technologies

Two Types of Document Management Systems

When selecting a document management system for your business, you can choose from two different versions: onsite and cloud-based software. The kind of system you will select often depends upon the size of your business and how much you want to spend on your DMS.

Onsite DMS

An on-site DMS requires you to use your in-house servers and storage systems. You will need to perform your maintenance, so you will probably need a dedicated IT team. You are also responsible for the security of all your documents. You'll need to plan for disasters or system failures, so you'll need a plan that includes a way to back up all your files. Most companies that use on-site DMS receive technical support and software updates from the software vendor. So there will be a need to renew a contract with the vendor continuously.

Pros: An onsite document management system works best if you must control your system constantly. You don't like to rely on anyone else to keep working. You also won't need to depend on the internet or be hacked. If the internet goes down, it's also not a problem.

Cons: The biggest drawback is the upfront and yearly update costs. Companies will also need to have a backup system in place. There may also be a proprietary software issue, as some DMS only work on Windows and some only on Macs. Large corporations often choose this variety of DMS because they can absorb the cost.

Cloud-based DMS

Companies can purchase cloud-based document management software from many providers. It will be accessible to everyone in the organization online. It will include all maintenance and software updates. Most cloud-based CMS operates on a monthly or annual fee. It's a good choice for a small or midsized business as pricing can sometimes be no more than a few dollars or maybe $100 per user per month.

Pros: Companies can save costs by not needing an in-house IT team to provide maintenance for the software, and there are few upfront costs. Companies can access their DMS from any location if the user has an internet connection. You have fewer fears about physical damage, as the online DMS automatically saves your documents to the cloud.

Cons: If you sign a bad contract with a poor provider, you're at its mercy. You'll need to rely on the vendor to keep your system in operation. If there's a problem at their data center, you can be offline for a long time and unable to access important documents. Or, if your in-house internet connections fail, you have the same problem. Most cloud-based solutions also have storage limits; if you need more room, you'll pay for it.

The Benefits of Document Management Software

There are several benefits of using a DMS, including:

Time Saved

Before the 1980s, businesses could spend many hours alphabetizing and filing documents or retrieving those documents. When a company uses a document management system, any time previously spent organizing and managing paper documents can now be spent dealing with more critical tasks.

Enhanced Security

While using a computerized network to deal with documents is far from the '80s, it also opens up new threats: hacking and ransomware. Cybersecurity has become crucial. You back up documents in the encrypted cloud or secure them in an on-site server. It allows you to protect essential and sensitive protocols and information more easily. Administrators have greater control over which authorized employees can only access certain documents.

Growth and Scaling

Every company wants to grow. As your company grows, you can increase your document management storage and use new features. The top benefit of using a DMS is that it can scale up or down according to your company’s situation.

No-hassle Document Management

A DMS should help you save time and effort. When you use a DMS, you want to be able to find important information quickly and with minimum effort. As mentioned above, searching the drawers and drawers of a physical filing cabinet is a time-consuming and tedious task. A DMS removes that barrier and allows you efficient access to your documents.

Better Collaboration

Document management enhances the ability of your employees to work together. They can be in the same office or scattered across the country or the world. When one team finishes working on a document in North America, another group in Asia can easily access the document and continue to work on the project.

Access Documents From Anywhere

Anyone with an internet-enabled device anywhere in the world can access important documents if they have permission. Most cloud-based DMS also provide automatic backup for content. If your business suffers a disruption or disaster, restoring your systems to normal will be much easier and faster.

Workflow Tools

These tools available in most DMS build on the collaboration feature mentioned above. It allows businesses to easily assign tasks and keep these tasks and projects on track. Managers can alert team members when they must devote their energies to specific assignments. Workplace tools can also ensure that documents never get forgotten in an employee’s inbox. An excellent example of a workplace tool is versioning. Users can view and collaborate on documents or track who and when they last worked on a document.

DMS Costs

The DMS you select depends upon your vendor and the type of service you require. As noted above, an on-site DMS system can be considerably more expensive, especially considering upfront costs. Usually, the vendor charges a one-time setup fee and a yearly subscription fee to cover upgrades and maintenance. Some DMS can average $1,000 per user with annual subscription fees based on about 20% of the initial setup fee. The high upfront cost and yearly subscription fees can limit an on-site DMS to a large corporation that can absorb these expenses.

Cloud-based systems use a familiar subscription fees model. The subscription fee depends on how many features you select when deciding on a service. Prices can be as low as a few dollars per user up to several hundred.

Related Article: AI Is Changing How We Handle Documents

Tips for Document Management Systems

Whether you select an on-site DMS or a cloud-based system, here are some tips to help you get the most out of your document management.

Designate a Point Person to Watch Over Files

If you run your business, you will probably be the person who keeps an eye on the files. If you run a midsize or large enterprise, it makes sense to designate a manager to be that point person. You can also request each manager to keep a written record that outlines how their team processes the documents handled.

Set Document Management Rules

Before using your DMS, determine how you will convert essential paper documents to digital files. Set rules for acquiring, storing and securing files. Create a metadata system that will help you more easily store and retrieve documents and decide who will be able to access which documents.

Be Careful About How You Delete Files

You should also set up rules for deleting files based on duration or importance. (Remember, the IRS likes companies and individuals to keep all records that affect tax situations for seven years.) You can include this requirement in any deletion protocol. Think about what documents any team can safely remove if you’re nearing your storage limits.

Create File Naming Protocols

You’ll want your documents to be neatly organized and easily retrievable. Set file naming conventions that reflect your organizational needs. Depending on the size of your business, you can have one general filing designation and then specific ones for each department. The files can reflect the author, date stored and document description.

Final Thoughts

A DMS is a good investment for a company if you’re looking for a better way to manage documents. Document management will help cut down, but not wholly eliminate, paper files. It will encourage efficient document collaboration and better organize business-related content.

However, remember to do your homework before purchasing any document management system. You’ll want to kick the tires to ensure any DMS is what your business needs. Interview a variety of vendors and try out as many demos as possible. There are choices, so it's important to find the DMS that fits your business and wallet.

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