Document management systems & benefits: defined and explained

updated 12/22/2023

Document management systems make a lot of sense for businesses, especially as digital documents and remote work become how business gets done.

No matter where you are in your journey to find the right one for you, it’s very common to have questions. In this article, we aim to answer many of those questions:

• What is document management?

• What is a document management system?

• Why do companies choose electronic document management systems?

• What types of document management systems are there?

• What features should you look for?

• How do businesses use document management systems?

• How to choose the right document management system for your business?

• What questions to ask when evaluating platforms.

What is document management?

Document management refers to how you file, store, retrieve, manage, share, and secure your business documents. Often in business technology, the term document management gets used synonymously with document management system. This, however, misses the reality that if you are in business, you already have some form of a document management system.

For example, storing Word docs and Excel spreadsheets on your PC is managing documents. Using file cabinets to store paper documents is another form of document management.

With this understanding, we can see that the definition of document management is how you store all your documents, both digital and paper.

In the past, managing paper documents meant file cabinets, folders, staples, and paperclips. Today, it likely means those plus digital files like Word, Excel, PDF, image, and an assortment of others you use daily.

Of course, the challenge with digital files is organizing, and – once you’ve got a lot of them – making them easy for anyone to retrieve. That’s where a document management system becomes useful.

Why companies choose document management systems

A document management system provides many benefits for businesses.

• Simplifies remote work. Paper can’t move from one home office to another at the speed you need it to. Files stored locally on PCs must be found, emailed, or uploaded to be shared. Working in this way minimizes productivity for everyone. Those sharing the file need to interrupt what they are doing while those needing the file must wait.

Document management systems eliminate this problem. The file resides in a single, secured repository anyone can reach from anywhere, meaning no more waiting and fewer interruptions.

• Increases productivity. Whether your people work in the office, at the home office, or on the road, everyone can access the files they need, when they need them. Productivity isn’t just about getting more work done though. Sales representatives can get the answers they need while in front of a customer, speeding up the sales process. Automated workflows can accelerate processes like AP, increasing the speed by which you get paid.

• Improves workplace safety. Digital documents eliminate the need to move physical paper, creating touchless document sharing. They also make it much easier to implement a hybrid workplace with a mix of remote and on-site employees.

• Reduces paper usage. You will likely still receive paper documents and may need to print some too, but the bulk of office printing will decrease as a single digital document can serve the entire company. When everyone has access, there is much less need to create copies. And new documents can be printed directly into the system, for immediate use and access by everyone who needs to use it.

• Introduces better cost controls and budgeting. Less paper means you’ll use less paper, but the savings go beyond that. Digital documents mean fewer file cabinets and costs associated with filing and storing paper. You’ll have more available office space, which can be very helpful with workplace management of proper distancing today. You may enjoy reduced mailing costs common with sending paper documents. And as an application, usage costs can be better measured, tracked, and controlled.

• Enhances business agility. Electronic documents move at the speed of the internet. They are also not bound by the physical limitations of paper or an office, meaning businesses can address customer needs faster, continue operations should the office be closed for any reason, accelerate completion of document-dependent tasks, and adapt quickly to shifts in the business environment – since everyone has access to the information and data needed.

• Ensures business continuity. Vital documents are available to you and your team no matter where you are. Public cloud or private cloud (in your own cloud) implementations allow you to walk out of your office, set up in another location and keep working.

• Disaster recovery. Digitally stored documents can be quickly restored from backup. If you use a cloud deployment with its redundant systems, recovery time and recovery point restoration can be immediate, depending on your implementation.

• Information governance. Features like version control enable companies to track changes, document age, and document lifecycle. (Version control also supports disaster recovery and business continuity.) Having the documents in a centralized location also prevents multiple versions from existing in different areas, consuming extra server/hard drive space.

Cloud or on-premise document management system?

In the previous section, we mentioned cloud document management systems. While those are popular, they aren’t the only way to implement document management. There are two types of implementations: cloud and on-premise.

Cloud document management systems. These systems live and reside in the cloud, just like a lot of the applications you may use in your business and personal life. They would be considered public cloud applications, which only means they are accessed via the internet, not that your information is publicly accessible. All you and your employees need to access the system is an internet connection.

The benefits of this system include:

• No need for onsite hardware.

• No need for IT support.

• No maintenance or support fees – only a subscription.

• Secured access anywhere there is an internet connection.

• Quick setup and configuration.

• All data backed up in a secured data center.

• Data center system redundancies ensure consistent access.

• Ideal for both offices and remote work environments.

On-premise document management. This type of implementation means you purchase the software and install it within your network, whether that means on a physical server in your office or in your own private cloud environment.

Why do people choose on-premise document management?

• Data security policy requires owning and housing all software within the company’s network

• IT staff and infrastructure are already in place, for the application, the backup, and for the connectivity, such as VPN for remote users

• Business preference