What is a document management system (DMS)?
DMS for companies
The efficient management of digital documents is a necessity in the modern working world. A digital document management system (“DMS” or “DMS software” for short) is therefore becoming a must-have for companies – and not just for corporations, but also for SMEs. In this article, you will find out what a digital document management system actually is, what functions it fulfills and what advantages it can offer your company.
Contents
What is a document management system?
A DMS is software for creating, organizing, storing, searching and sharing electronic documents in companies. 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.
Increased efficiency
Paperless working
Reduced search times
Improve compliance
Document management software: the foundation for the digital workplace
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 DMS 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?
Further information on the Digital Workplace can be found in the free e-book “The Digital Workplace – A dataglobal Group Guide”.
The most important functions of document management software
Document capture and provision
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. The documents are then made available to all authorized users for retrieval via a terminal device at any time and from any location.
Enabling collaborations
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.
Audit-proof archiving
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.
Integration capability and connection to third-party systems
Digital business process management makes it easier for companies to quickly adapt their business processes to changing market conditions. Thanks to the flexibility of digital technologies, processes can be easily scaled or modified to meet changing requirements.
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 extensive 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.
Document management system advantages
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.
Increased efficiency
Paperless working
Improved collaboration
Versioning and revision security
Access control and security
Compliance and audit trail
Reduced search times
Workflow automation
Scalability
Increased efficiency
A document management system enables documents to be managed efficiently, which saves time. Search functions, clear structuring and fast access enable employees to find and edit documents quickly.
Paperless working
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.
Improved collaboration
By making it easy to share, comment on and collaborate on documents, a DMS promotes collaboration between departments and teams.
Versioning and revision security
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.
Access control and security
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.
Compliance and audit trail
For industries that are subject to strict regulations and compliance standards, a DMS offers functions to fulfill these requirements.
Reduced search times
Intelligent search functions allow users to find documents quickly and easily. This minimizes the time normally spent searching for information.
Workflow automation - digitize & automate work processes
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.
Scalability
A document management system is generally scalable and can grow with the company. It can therefore meet the increasing demands on document management.
Quick document search with a DMS – how does it work?
The core function of a document management system is to store all company-relevant documents (contracts, invoices, emails, delivery bills, etc.) centrally and make them available quickly and easily. In other words, if you need specific information or a document, you can access it in seconds without having to search for a long time. Whether you’re in the office, working from home or on the train. But how can something like this even work?
Indexing and indexing of documents
Each individual document is indexed when it is entered into the document management system. The indexes refer to relevant information such as the client or supplier, the machine identification number or a categorization such as “invoice” or “delivery bill”. Paper documents are scanned and then also indexed. Simply select the information with which you can best find the document via the DMS interface. In a modern DMS, a document can also be automatically indexed, provided that the necessary additional software solutions are used – this eliminates the need for manual input by the user.
Find the information you are looking for in seconds
An example: You are looking for a specific invoice. So you type a keyword into the DMS search function on your tablet that relates to the invoice, e.g. the invoice number or the customer name. You will immediately receive access to the corresponding document or to a list of documents to which your keyword is linked. It’s just a matter of seconds before the desired information appears on your device.
Search functions for document research
The integrated search function of a DMS makes it much easier to search for documents and offers various options. This usually includes search options such as searching via document types, searching via the document indexes, a quick search with user-defined search criteria and a full-text search. This includes not only the content of the documents themselves, but also any comments attached to them. Everything is designed so that users can find the documents and information they need as quickly as possible using the search function.
Optimal options for mobile working
With a document management system, you can create and optimize options for remote working and working from home. Employees are no longer tied to the office – they can work from anywhere and at any time using the device of their choice.
Collaboration and shared access to documents and information are not a problem remotely – on the contrary, they actually improve collaboration. This increases both the flexibility of your employees and the qualitative possibilities for collaboration.
Thanks to various integrated solutions, e.g. for contract management, e-mail archiving or digital invoice processing, you have all documents, tools and digital processes at your fingertips at all times. Access is possible at any time and from any location, provided an Internet connection and a suitable end device are available.
Document management system provider: How to make the right choice
The right document management system provider will respond optimally to your individual requirements and find the right solution for your company. You should consider a few factors in advance to help you separate the wheat from the chaff and find the right document management system more quickly:
The right document management system provider will respond optimally to your individual requirements and find the right solution for your company. You should consider a few factors in advance to help you separate the wheat from the chaff and find the right document management system more quickly:
Transparency
Are there transparent prices for the software and the associated services (support, development, etc.)?
Technical suitability
Is the DMS capable of mapping the processes in your company?
Up-to-dateness and scalability
Is the technology up to date and is it being developed further? Is it expandable in terms of functionality so that it is also equipped for new requirements in your company at a later date?
User friendliness
How is the usability? Is the software intuitive and user-friendly to operate? Or is there a high need for employee training because the product requires a lot of explanation? Remember: Low usability can cause rejection and resistance among the workforce! A high level of usability, on the other hand, has a motivating effect on employees and encourages acceptance of the change.
Clear requirements
Is it clearly stated which requirements and steps are necessary for the implementation of the DMS at your company (e.g. additional hardware, conversion to the cloud, employee training, etc.)?
Legal conformity
Does the provider comply with all legal requirements (e.g. GDPR)?
Quality of support
Is there sufficient service/support?
Communication
After making contact: Does communication with the provider work? For example, can they explain clearly what their DMS will do for you and what the specific application scenarios will look like for your employees?
If you can answer “yes” to all the questions on this checklist, this is a very good sign. Nevertheless, don’t be afraid to ask the provider if you don’t understand something or if details remain unspoken. A document management system is not an assembly line product, but a complex software solution that should take into account the individual requirements of your company and the people who work with it. The same applies to service/support for the product. The choice of your DMS should therefore be well thought out and accompanied by a good feeling, which usually emerges from your initial discussions with the consultants or other contacts on the provider side. Effective, transparent communication is the be-all and end-all before you make a decision.