A document management system can generate a significant return on investment for small to medium sized businesses. The changes in technology pricing over the years has made it possible for small to mid-sized businesses to enjoy the same efficiencies provided by information technology systems that large enterprises have enjoyed for decades.
In todays business world as competition increases, it is imperative that a companys capital expenditures generate a positive return on investment. Increasing business efficiency is frequently the key consideration when investing money in any project. Technology has had a significant impact on most every aspect of business. It was predicted as early as 1975 that the paperless office had arrived. Obviously progress have been made toward this goal, but the amount of paperwork necessary to run a business (particularly a regulated one such as financial services and medical clinics) has increased a great deal since 1975. Just to maintain the status quota requires businesses to move to the next level in office productivity and implement a complete document management solution.
Every business in todays workplace uses some type of document management system (including paper-based systems) to maintain the papers used in daily operations. A comprehensive electronic document management system (EDMS) can provide a method for storing all relevant documents allowing office staff immediate, controlled access to documents. If the EDMS can be integrated into the current software application employed by the company, productivity and efficiency is considerably enhanced. For instance:
- The accounting department could access documents (orders, invoices, contracts¡) online from their accounting application.
- Sales could access documents from their CRM (customer relationship management) software.
Preferably the EDMS application should integrate the operations various software packages together in an approach that all aspects of the business gain efficiencies.
A document management solution is a system that can replace not only the paper files and documents in an office, but enable the user to send an electronic document through the same steps a paper document or file would follow. Case in point, a securities firm has a new account form that is filled out for each client account and it must proceed from the agent to the trader and then to accounting, the document management system must provide the same path. A true management system not only provides storage, but must provide workflow capabilities, protect documents so that only approved personnel can access the document, minimizing the learning curve for the entire workforce.
In summary the attributes of a document management solution should:
- Maintain a repository of electronic documents.
- Provide a mechanism for securing the documents.
Integrate with other software applications currently in use.
Provide a method for putting the documents into a defined workflow.
Supply audit data providing the four Ws (Who, What, Where, When).
Capture form data in a database for usage in monitoring and managing the business.
Comply with industry regulatory requirements.
There are problems that arise from using a paper based system. The list below is an outline of benefits of a document management system:
- Documents are stored in an electronic format which is easily backed up and can be copied offsite relatively easily. Multiple copies of the documents can be made easily and cheaply. In contrast, a paper based system would require copies of each piece of paper as they are generated. At a $.05 a page this can become prohibitively expensive.
- Misfiled documents can be easily found using the search capabilities built into the document management system. Misfiled documents in a paper-based system can be impossible to find depending on how and when they were misfiled.
- Filing documents is relatively easy particularly if the document management system is integrated with other software packages. Filing paper documents requires a trip to the filing cabinet.
- Moving documents from one point in the workflow to another is simple. Determining who has a document or folder in workflow is available at all times. Finding a paper folder somewhere in a workflow can be difficult at best, particularly if its buried on someones desk.
- Move any paper forms to an electronic version. Data can be captured and can populate a database then paper is no longer necessary. Filling out paper forms can be tedious and prone to human error. Using electronic forms allows data to be pre-filled eliminating these types of errors.
It is relatively easy to take the noted benefits and determine if an office will get a cost justified Return on Investment. Some of the factors typically included when calculating the ROI for a contemplated EDMS.
- How many filing cabinets do you have a standard four drawer filing cabinet requires at least 12 sq ft of office space.
- How many cabinets do you have?
- Do you rent an offsite storage facility.
- What is the monthly cost?
- Number of copies made of incoming documents. For instance if an order comes in, how many copies of it are made and where do they go? More than likely all of these copies are placed in filing cabinets in separate departments
- How much do you spend on filing supplies per month?
- How long does it take to retrieve a paper document?
- How many people handle each document?
- How much time does it require to file a paper document?
- Lost documents become a thing of the past. Search tools built into an EDMS make it virtually impossible to lose a document. 7.5% of all documents will be lost, requiring the document to be recreated at a cost of??? If the paper based system being used is very efficient and this loss is reduced to 4%, how much time and effort is saved just by not losing documents.
- A misfiled document also becomes a non-issue. Again the search tools built into an EDMS allow misfiled documents to be easily found and re-filed in the correct place. At an average misfile rate of 3.5%, misfiled documents are a huge problem and can turn an office upside down.
- Answering a customers query while on the phone with them is also a source of significant savings. If employees can access document on their screen and answer client/customer/patient questions right then, without having to physically pull the file and call the customer back, a time savings is realized. Additionally customer service is improved.
- Workflow is improved when using an EDMS to distribute and route documents vs. the time required to physically move paper through an organization.
Take a look around your office and then contact Krumm & Associates, we will be happy to provide you with an estimated ROI if your office became paperless.