What is a document management system (DMS)?

Nowadays, the majority of business documents (invoices, contracts, orders, etc.) are no longer received in paper form, but digitally. Business correspondence is also increasingly being conducted by email and – at the latest since the pandemic – via video conferencing tools such as Microsoft Teams or Zoom.

A document management system plays a key role in this scenario. It offers clear advantages for companies as it increases productivity, reduces costs and streamlines and optimizes work processes. In the context of the digital workplace, it is the foundation on which everything else is built. But what does a document management system actually do?

A DMS is a software solution for creating, organizing, storing, searching and sharing electronic documents within an organization. The main aim of a DMS is to enable the efficient handling of documents and to manage the entire life cycle of a document.

The introduction of a document management system can contribute to this,

• reduce paper consumption,
• increase efficiency,
• improve compliance
• and to promote cooperation within organizations.

Here is an overview of the most important functions, which we will discuss in more detail below:

• Document capture and provision
• Mapping of workflows
• Enabling collaborations
• Audit-proof archiving
• Integration capability and connection to third-party systems

The basic function is to record and evaluate documents and the information and data they contain. If a paper document is available, it is scanned. An electronic document, on the other hand, is captured directly by the DMS software. Upon receipt, the document is now indexed and saved with all metadata (including, for example, information on the type of document, the creation date and the assigned keywords). This process helps the user to find the files later. The documents are then made available to all authorized users for retrieval via a terminal device at any time and from any location.

Coupling a DMS with BPM software is the norm when introducing it in companies. “BPM” stands for Business Process Management and refers to the modeling of digital business processes or workflows.

Let’s assume that your company already has an “analog” process in place: For example, the approval of an invoice by the boss. This process probably takes place millions of times in every company in the world. Overall, digital processing saves a lot of time, as there is no longer any need to go to the supervisor upstairs in person. It is just a virtual process step that is completed with 1-2 clicks.

Such recurring business processes exist en masse in every company and they can be easily mapped digitally and largely automated using integrated BPM software. The same also applies to new, previously unusual business processes that can be modeled with the software. There are no limits to the imagination here. The DMS, which manages the underlying documents for you, still serves as the basis.

One aim of the DMS is to ensure an uninterrupted workflow, especially when several users are collaborating. If different people are working on a project at the same time, they often access the same documents. If every employee makes their own changes to the document, chaos quickly breaks out.

A DMS addresses this problem by versioning documents: this gives users access to the complete document history and allows them to make changes without overwriting previous versions. None of the authorized persons “tampers” with each other’s work if such joint editing of the document is not intended. At the same time, all users involved are informed of any changes made, e.g. if the order list changes for an order.

The audit-proof archiving of documents is another essential component of a DMS. “Audit-proof” means the storage of the write-protected and therefore unchangeable original file in the archive. Legally speaking, documents backed up in this way have the same status as original paper documents in the vast majority of cases. Audit-proof archiving is therefore important for official audits (e.g. tax audits) and also for legal disputes if you want to do without paper – and this is ultimately one of the primary objectives of document management systems.

In any case, professional legal advice should be obtained beforehand as to which business documents should also be kept in paper form. For example, this still applies today to opening balance sheets and annual financial statements, which are not sufficient in digital form.

Modern DMS are designed to be integrated into existing company applications and IT infrastructures. The DMS therefore fits into your existing system architecture and generally does not require any costly restructuring. This enables your DMS to receive data from third-party applications and use it for document indexing, for example. Conversely, third-party applications (e.g. collaboration tools, ERP or your email software) can also access the content of the DMS without barriers and use it for their own tasks.

The introduction of a document management system (DMS) offers many advantages. These can vary depending on a company’s specific requirements and processes – but overall, a DMS helps to increase efficiency, improve document security and facilitate collaboration. Here are the most important document management system advantages.

A DMS enables efficient document management, which saves time. Search functions, clear structuring and fast access enable employees to find and edit documents quickly.

A digital document management system reduces the need for paper. This not only helps to protect the environment, but also saves the space and resources needed to store paper documents.

By making it easy to share, comment on and collaborate on documents, a DMS promotes collaboration between departments and teams.

A DMS enables the management of different versions of a document. This allows changes to be tracked, older versions to be restored and revision security to be increased.

The DMS enables the implementation of access rights and security measures. Only authorized users are granted access to certain documents, which ensures the confidentiality and integrity of information.

For industries that are subject to strict regulations and compliance standards, a DMS offers functions to fulfill these requirements.

Intelligent search functions allow users to find documents quickly and easily. This minimizes the time normally spent searching for information.

Some DMSs offer workflow management functions that make it possible to set up automated processes for the approval, release and distribution of documents. This increases efficiency and reduces manual work processes.

A DMS is generally scalable and can grow with the company. It can therefore meet the increasing demands on document management.

By storing documents in electronic form and implementing backup strategies, a DMS improves disaster recovery capabilities. In the event of data loss or system failure, documents can be easily restored.

Looking for the right document management system provider for your company? By choosing the dataglobal Group, you are choosing one of Europe’s leading system providers for digital document management and business process modeling.

With our powerful DMS software suite, you can manage all your documents such as emails, contracts, invoices, files and workflows within the company. Digital, secure and 100% legally compliant.