Regardless of the industry, sector, or economy, documents make up a vital part of any business. And depending on the size of your business, you may deal with hundreds or even thousands of documents every month. And despite documents and document management being deeply intertwined with daily business operations, businesses often push this aspect of their business towards the periphery of their focus. In a bid to make their operations more efficient and profitable, businesses invest in complicated, and often expensive technologies hoping to take their business to greater heights. But, they fail to adopt smarter ways to do the seemingly basic things that can add significant value to their business, chief among them being managing documents.
Every aspect of business, from the way organizations manufacture products to the way they market them to customers, has been evolving through the use of smarter technology. However, management of documents is a function that is neglected by businesses when it comes to improvement through innovation. Document management software, although not as glamorous as, let’s say, Artificial Intelligence (AI) or Blockchain, is extremely vital to the functioning of businesses, perhaps even more than any other technology. Okay, maybe that’s taking it too far. But, there is little doubt that effectively implementing a powerful document management software can greatly influence the performance of any business.
So, the answer to the question, ‘Is Document Management Software important for a business?’ is a resounding yes. But we know you won’t be satisfied with such a simple answer, and so, following are a few reasons why using a document management software is important for any business:
Why it’s important to have a document management software
A document management software is a multi-purpose application that enables businesses and individuals to create, organize, retrieve, share, and secure documents. These software applications enable users to automate and simplify the management of their document library and automate their document control processes. For businesses that deal with documents and document-centric processes on a daily basis, having a document management software is important for the following reasons:
To make documents easily accessible
The primary reason why any individual or business would need a software for managing documents is simple — to find necessary documents when needed. When an organization frequently deals with documents, relying on traditional file management systems can be a messy affair. Not only can files go missing altogether, but they can also be hard to find due to the traditional file management systems’ inability to classify and differentiate documents. Losing track of key documents that are necessary for critical processes, such as audits, can lead to severe consequences for organizations. Using document management software can ensure that any document can be found and accessed in a couple of steps instead of having to go through an ordeal that wastes both time and effort.
For instance, finding multiple invoices and receipts to verify a series of transactions with a specific vendor can be a real hassle if done using conventional document management practices — be it using paper documents or a computer’s default file management application. Unless the invoices and bills are painstakingly filed manually (consuming time and labor), retrieving and verifying the information from multiple documents can be cumbersome. Using a document management software, users can easily find any number of invoices and receipts for a specific vendor within seconds. And the best part is, they won’t have to manually enter document metadata every time they file a new invoice or receipt. The software can automate the process of filing similar documents with the right metadata.
Thus, using a document management software makes it easier for organizations to file and retrieve documents. Having an electronic system or tool to manage documents is important if businesses want to spend less time finding documents and more time making things happen.
To protect and preserve documents
While making documents easily accessible can be a great thing, making it easily accessible to everyone can be risky. Sensitive documents such as those containing financial records and customer information must only be made accessible to the authorized personnel. This is required not only for competitive and ethical reasons but also to ensure compliance with laws such as the General Data Protection Regulation (GDPR).
Although it is possible to secure documents using specialized applications, they can be expensive and still have limitations that can restrict the right people from using the documents, or at least slow down that process. On the contrary, a document management software can enable multi-layered security for different documents. This means that different members of a business can have different levels of access to different documents. Depending on their role and relevance to a specific document, someone might have the right to edit a document, while someone else can only view it, whereas others may not be able to access it at all.
Thus, using document management software, businesses can have a highly flexible security system that makes it extremely easy for the right people to access documents while making it nearly impossible for irrelevant people to do the same.
Converting paper documents into electronic ones using document management software helps in preserving documents for long periods of time. It eliminates the risk of these paper documents degrading and becoming unusable due to long periods of storage or frequent use. An electronic document stored using a document management software can be retained for as long as is required by the organization, after which it can be safely deleted or revised and updated easily using the software itself.
An electronic document management system also helps businesses to maintain the integrity of the information stored in their documents. This is especially crucial for documents containing accounting data that must be strictly maintained for both internal and external audits. To help maintain the integrity of such documents, many of these applications come with the ability to record all the changes made to documents and all the users who accessed them. This allows businesses to closely monitor their documents and ensure that nobody accesses and modifies them with an unethical intent.
Thus a document management software is necessary to protect documents from unwanted access as well as preserve them for longer periods of time.
To streamline document workflows
A workflow is a standardized, repeatable, sequence of operations — often involving multiple people and documents — to achieve specific outcomes. An example of a workflow can be the process of leave approval for an employee or the process of approving the purchase of components or raw material. These processes, as simple as they may seem, require documentation and verification of the documents by multiple members of an organization for the completion of every iteration. And these are activities that businesses need to undertake several times a month.
Performing these tasks can use up a lot of time since it requires the flow of information (in the form of documents) between different people, requiring approval by them at every stage. Using traditional methods, these processes may take hours or even days to be completed. This is because moving the necessary documents from one member to the next in the established sequence takes time and depends on the physical availability of those members to approve the documents. However now with the help of document management software, most of which also provide workflow design and automation features, workflows can be completed within a fraction of the time taken previously. This saves a lot of man-hours, enabling businesses to invest them in more valuable endeavors.
Since these workflows can be easily monitored and analyzed, businesses can also identify and eliminate inefficiencies in their business processes. Thus, a document management software is important for businesses that want to automate and streamline their workflows.
To aid and facilitate collaboration
A document management software is essentially a centralized repository of all the documents a business generates and receives. This means that every document that any employee needs will be accessible from a single application. This makes it easier for different members of an organization to collaborate on shared documents with ease.
A good document management software allows multiple users to work on (or co-author) a single document. Users can simultaneously make changes to documents, regardless of how physically apart they might be from one another. The ability to co-author enables businesses to review and publish co-authored documents much quicker than was possible using conventional methods of collaboration.
A document management software also retains multiple versions of documents that are being modified, enabling authors to know what changes were made in which iteration. This helps the co-authoring process to run smoothly without the possibility of one user getting in the way of another.
In addition to collaborative authoring, users can also share documents with other users such as team members, partners, and decision-makers with ease and in a secure manner. Documents can be assigned to different users in a document management software, which tells a particular user that their input or action is needed on a particular document. This speeds up the business processes involving the action of multiple different users by giving them the information that they need, when they need it.
Hence, using document management software is important for fostering and facilitating collaboration among the different members of an organization.
To adapt to change faster
While there are many direct and obvious benefits to electronically managing, there are also certain implicit benefits that businesses fail to recognize. And among them is the impact that such a software makes on an organization’s ability to keep up with the constant change that transpires outside the organization. This might be a change in the market determined by the changing needs of the customers, changing demands from regulators, or a change dictated by competition.
Businesses that use document management software to streamline, automate, and integrate their document-related processes are capable of sharing information easily and making decisions, and acting on that information easily. Imagine how effective a manufacturing supply chain would be in meeting the changing market demand if all the documents — from market research reports to purchase requisition documents — are created and shared using document management software. The time between the generation of the market forecast report and the corresponding response from the supply chain to meet the expected demand would be much shorter than without the use of such software.
Additionally, document management software can also integrate with other performance-enhancing applications such as Enterprise Resource Planning (ERP) systems using Application Programming Interface (API). The benefits of using ERPs and Management Information Systems (MIS) can be amplified by integrating them with document management software. Thus, combining other technologies with these software can enable businesses to achieve end-to-end efficiency.
Why choosing the right document management software is just as important