What is a Document Management System (DMS) in Business?

A document management system (DMS) is a highly significant part of a business operation. It is where all the important documents of a business are stored, organized, and retrieved. With the constant advancement of the business sector, there have been continuous advances in the document management system. 

If implemented the right way, a good document management system can be an asset to a business empire. But what’s the right way to implement the document management system?

Here’s what you need to know.

What Are the Key Features and Functionalities of a Document Management System?

The main features and functionalities of a document management system include:

Document Capture

To create a strong document management system, all previous and present documents need to be digitized. It can be done by scanning the physical documents or importing them from existing electronic documents. They can be formatted in JPG, CAD, PDF, etc. For capturing the documents effectively, optical character reference (OCR) can also be used to convert the scanned digital documents into detectable texts.

Document Storage and Organization

After proper capture and transfer of documents into digital form, the document needs to be stored, preferably in a cloud-based data storage option. There, the documents should be organized and categorized to ensure easy management and retrieval. The documents can be tagged with metadata like keywords, titles, indexes, and attributes so that everyone accessing them can understand them.

Document Retrieval

One of the biggest advantages of a modern document management system is that it makes retrieving a document much easier and quicker, increasing productivity and efficiency. In the traditional method, even after proper filing and categorizing, finding a specific document in the sea of hundreds of documents used to be time-consuming. In DMS, even the oldest documents can be retrieved within seconds by searching keywords or full texts on the search bar.

Document Security

Most of the documents in a business are generally confidential. They include sensitive data like transaction records, customer information, and intellectual property. DMS software provides the utmost security to ensure these data are safe and secure by encryption, access controls, and audit trails. Additionally, backup and disaster recovery options ensure the retrieval of documents damaged by any mishap.

Workflow Automation

DMS software has the option to automate a business’s everyday workflow. This helps establish a consistent and efficient workflow and good customer service through instant actions on common daily operations. This includes contract approval, form submissions, invoicing, and so on.

Collaboration and Sharing

The DMS accelerates team collaboration by providing simultaneous sharing options for the team, staff members, customers, or business partners. It saves the time and resources required to create and copy a document or pass it down to the team members successively to share documents. 

Integration with Other Systems

In modern times, most document management systems have integration options with other necessary business software, like customer relationship management (CRM) systems and enterprise resource planning or ERP. In this way, DMS facilitates smoother and effortless business operations. 

How to Implement a Document Management System in Your Business: Step-by-step Guide Through the Process

Aren’t you here to basically know how you can implement an effective document management system in your business? So, let’s talk business. You just need to follow the steps below:

Step 1: Assess Your Current Document Management

To implement an electronic document management system, you first need to review your current system. Jot down the problems, inconveniences, and lackings of the present system. Based on this assessment of your current document management, you will have a clear idea of what you are looking for in your new document management solution. 

To perform the assessment effectively, determine how both the paper and electronic files are currently received, stored, managed, processed, reviewed, and updated in your company. Don’t transfer all the documents at a time. Start a pilot in one or two departments and see how it works for them.

You need to remember that every department might have a different document processing and reception. Therefore, decide wisely based on your assessment whether to go for a standardized process for the new DMS or department-wise customized processes.

Understand the pattern of work within each department. Besides, trace the pitfalls in your employee communications that need change. Help yourself and note down the answers to the following questions:

• How many employees are there in your company, and each department?
• What are your company’s main communication channels?
• How many documents do your company turn in each day?
• Which methods are most effective for identifying documents?
• How quickly do the files stack up?

Step 2: Define Your Needs And Requirements

After reviewing your present document management, note all the things you want in your new one. List down what types of documents you’ll store there, what pain points you wish to cover from the current document management in the new one, and which features will be useful for you.

Analyze and understand if you should let your internal teams handle the implementation strategies of the new DMS or if you should take help from a document management service. Determine what you should do to make the document management strategy better than before. Plan adding or eliminating steps of the process to improve the system’s efficiency.

Make sure that whatever you decide, the DMS ensures the safety, retention, retrieval, and deposition of your files. These points are a must consider when creating a new document management system. 

Define and list the primary functions followed by the secondary to add later. Other than that, analyze your potential weakness or threat concerning the new document management system. To better detect your needs, find the answers to the following questions:

• What kinds of documents are currently handled by your organization, and how are they managed?
• Who should have access to these documents, and at what level?
• How does your company’s document workflow look?
• What conditions must be fulfilled for compliance?
• What kind of integration will the document management system have with your current business systems?
• Does your business require features like sophisticated search functions, automated workflows, or version control?

Step 3: Choose a DMS Software

Once you outline everything you want in your DMS solution, select software that aligns with your purpose and requirements. There are different types of cloud-based DMS software with different features, such as file servers, database-supported systems, and content management systems,. Consider the software’s storage, access control, version control, compliance, and user experience, among other things, while evaluating.

Alongside these, scalability is a very important factor to consider. Even if your company has a moderate number of documents that the DMS easily stores if you’re planning to grow, you need to think about the future. Make sure to choose software that can handle a large number of document entries and storage without compromising the performance.

Another important thing to consider is user-friendliness. The document management system software should have a friendly and easily navigable user interface. So that any employee can easily grasp its operations, which saves both learning time and energy.

Jot down the answers to the following questions:

• How are the documents managed and stored in the software? Does it support metadata or keyword search for easy retrieval?
• Does the DMS system offer the option of tracking multiple versions and changes in the document?
• Is there an option to manage the access to the system and customize it whenever needed?
• Can the selected DMS software integrate with other important business tools like CRM, ERP, email, or other office productivity software?
• Is the DMS compliant with the regulations of the industry, like GDPR, PCI-DSS, or HIPAA?

Step 4: Develop a Document Taxonomy

Now, it’s time for you to organize your documents to transfer to your new document management system. Discuss with your teammates and decide on the hierarchy of the documents. Determine which document type should be at the top and how to categorize them within folders. This is called taxonomy.

There are different types of taxonomy, like subject-based taxonomy, process-based taxonomy, legal/compliance taxonomy, content type taxonomy, and metadata-based taxonomy, each serving a specific purpose in organizing and classifying documents within an organization. Select the best option for you or make a combination of a number of taxonomies.

Strategize based on the type, function, purpose, and background of the document. No matter what, maintain a simple and traceable sequence. Because the sole reason for classifying the documents is to make them easily findable. 

For that, a tree-structured taxonomy system of documents is a very effective option. Here, the files can be kept in folders and subfolders like branches and branchlets of a tree. However, in this case, you need to make sure the folders are named in a relevant and proper way.

The best thing you can do is make a file plan and set the documents within the system accordingly. You can include reference sheets in the folders so the users can easily locate materials.

Step 5: Establish Access Controls

It is quite crucial to practice role-based access control to ensure proper security and confidentiality. The administration of a company should only have access to documents that are relevant to their operations. Highly confidential or sensitive documents should only be accessible to the higher authority.

You can divide and limit the access or document permission for certain users as per requirement by the option to view, read, modify, or create. This creates an extra level of reliability and security. 

Step 6: Scan and Digitize Paper Documents

As said before, you will have to digitalize the existing paper files to store them in the cloud-based DMS. For that, you can scan the physical documents and use optical character reference (OCR) to convert these files into detectable texts or collect them from existing digital files.

Step 7: Implement Document Workflows

For that, you can scan the physical documents and use optical character recognition (OCR) to convert the scanned digital documents into detectable texts or collect them from existing electronic files.

Next, you need to plan and design your DMS according to the business process. Such as keeping documents regularly needed upfront, drafting automated calculations and emails, and recording form responses. 

You can draft an instruction on how the documents should be saved and the overall way of using the system. When you make a document workflow, you can keep someone in charge and share their contact details to help anyone struggling to navigate the system. 

The workflow should be logical and orderly. Make sure to test the flow to check if it matches the flow of the company and its daily routine. 

Step 8: Train Employees

Before moving forward with the DMS, you need to train the employees extensively about the software. Teach them how and when to use it. Show them how the documents are categorized and where the regular documents are situated.

No matter how good of a software you use, it will be worthless without a well trained manpower to use it. For effective training for the employees, you can arrange training sessions and user guides. After the training, ask for feedback and take questions. Know that communication is key. Make sure to clear out all the confusion from your employee’s side.

You can use DMS training software for this purpose, such as cloud-based DMS, on-premise DMS, HR-specific DMS, and specialized industry-focused DMS.

Step 9: Monitor and Maintain the System

Last but not least, keep an eye on the software. Frequently monitor how it is performing and if it meets your expectations and requirements for document management. Also, maintain the software by updating its features and data. 

Keep an eye on how your team is using the DMS, whether they’re utilizing key features like searching and version control. Observe whether they are struggling while using it. Constantly try to optimize the process, such as replan the folder structure, redesign the outline, and introduce new tagging options.

What are the Best Practices for Document Management Systems in a Business?

Any document management system can be utilized for optimum service. You just need to know how to do it. Try the following practices for maintaining a well-functional document management system:

Creating Standard Operating Protocols

Decide and prepare clear guidelines on how your document management system should be used and how to maintain consistency and compliance throughout your business. Always remember that consistent team activity is the key to better returns. Ensure proper detailed protocols for every small or big operation, such as a customer service representative’s protocol for handling customer complaints, an HR onboarding process for new employees, or a marketing campaign execution plan.

Capture Every Document as They Enters the Business

Digitize and capture every document to enter your business as early as possible. You might not have the option to make every small and little paper digitized, but try to archive them inside DMS as soon as they enter your business. For example, some urgent mail coming to the company should be immediately scanned and documented in the DMS to ensure it doesn’t get lost by accident. The more you choose to delay the entry, the higher the risk.

Utilize the DMS Options for Workflow

Do not make outlines that are just the digital version of your paper flow. Redesign and create a more effective outline than before. For that, you can utilize the several different options provided by DMS software, such as templates, structures, and samples.

Regularly Audit History and Update 

Make sure to constantly update the workflow, features, and permissions of the DMS. Check if everything is off and requires a change. When there is a requirement for change, don’t delay it. For example, you can always change the design and pattern to increase the convenience of the user experience.

Conclusion

A document management system is a revolution in the business sector. It has made all the time-consuming routine tasks and document processing in running a company very easily accessible and operable. 

It increases your and your employees’ productivity a few degrees more, making way for more profit and returns. Therefore, as long as you know how to utilize and maintain it properly, document management will no longer remain your concern. 

After all, it’s the 21st century. Let the technology handle it!