Benefits of electronic document management systems

Discover five ways an electronic document management system can benefit your organization, as well as some potential drawbacks.

June 9, 2021

Article highlights

Organizations that have relied on paper documents and files over the years have found that they're keeping tens of thousands of documents of varying importance, and using valuable office space to do it. An electronic document management system can help reduce the amount of paper you use and save thousands of dollars per year.

Why a document management system is important

Organizations create many documents and use a lot of paper — as much as 10,000 sheets (20 reams) per employee per year. Add the costs of toner or ink ($27,000 per gallon), and that works out to $800 per employee annually. An organization of 100 employees may be spending upwards of $80,000 just on paper and printing.

Storing all that paper in a four-drawer filing cabinet takes up roughly 9 square feet, which can cost $1,500 per cabinet per year as well.  And you undoubtedly have several filing cabinets that you have accumulated over the years, all filled with past documents that you may or may not even need.

Employees can spend as much as 30% of their time looking for information, which takes away from their productivity and effectiveness. You only have to look at your payroll to estimate what 30% of a person's unproductive time will cost.

Memos, reports, meeting minutes, agendas, forms, releases, notes: All of it gets filed away because you "might" need it later. And the things you actually do need later (has anyone ever actually needed an agenda from a committee meeting seven years ago?) can often get lost or misfiled, which means spending a lot of time looking for it before finally recreating it from past notes and information.

When you realize what it costs just to put information on paper and have it available, you understand why going paperless with an electronic document management system makes more sense in terms of savings and efficiency.

Five benefits of electronic document management systems

An online document management system provides centralized storage. All files are kept in one location, not scattered throughout departments or even buildings. Everything is available to all authorized personnel regardless of location. That means you can grant access – whether editorial or read-only – to anyone in any part of the world. Nonprofits and enterprise-level corporations who have associates in different parts of the country or the world can give access to all necessary documents.

This online access can also lead to further file sharing and collaboration. Stakeholders across departments can work together on projects and documents, passing updates back and forth until a final version is released. Then, rather than printing out enough copies for everyone and distributing them through interoffice mail, you can just share the document via email, measure read reports, and track acknowledgment signatures.

It's also much easier to standardize file and folder naming conventions. In a large organization, the file/folder naming conventions will evolve, even unintentionally, as different departments and individuals use what they think is the right way to name all their documents as well as where to file them. But in an online setting, errors are easy to spot, correct, and retrain.

It's also possible to track documents in their creation, editing, and evolution. If you've ever used Track Changes in a Word document, you know how convenient it is to be able to see changes and updates to a document and then compare them to the previous versions. Document management solutions like Google Drive even let several collaborators all make changes to a document without creating separate versions for every single collaborator.

Searching for documents is easy as you can search for file names, keywords, or even creation dates. Even if a document is misfiled or misnamed, a single search can take seconds instead of several minutes or even a few hours. Once found, a document can be sent as an email attachment or shared with the appropriate people.

Best of all, an electronic document management system reduces costs. Relying on a paper management system can cost well over $10,000 for a 10-person organization and even $100,000 for a 100-person organization per year. And that number will grow as the organization grows because it will be necessary to store more and more old documents.

A cloud-based document management system costs a tiny fraction of that amount. No paper, no toner, no physical storage – you can store thousands of documents for a few dollars per year, and they're all easy to find.

Drawbacks of an electronic document management system

Of course, not all electronic document management systems are built equally. For example, if you need an online policy and procedure manual, and you want to tie your accreditation requirements to it, that's not always possible. You can create and publish a basic policy and procedure manual, of course, and you can think of your cloud server as an online binder. But you won't have some of the advanced features that a policy and procedure manual solution carries.

For example, you won't be able to map your policy manual to your accreditation and training requirements. A good policy and procedure manual solution lets you create a living connection between those three areas, simplifying your accreditation process. PowerDMS enables you to make that connection, so as accreditation policies are updated, the changes will be reflected in your policy manual and training requirements. As employees complete their training, it will be reflected in your accreditation completion status, and so on.

Some cloud-based document management systems cannot create custom sharing groups or let you easily set user access roles and levels. For example, in Google Drive, you can only set Edit and Read-Only levels. There are no Contributor or Admin roles.

Finally, if you have specific state or federal requirements you need to follow in your accreditation, you can't easily integrate those updates into your general document management system. With PowerDMS, we work with content partners and have tools to subscribe to relevant policy content written by subject matter experts.

Go beyond document management

Anyone who's ever searched through folder after folder, filing cabinet after filing cabinet, understands the need for an electronic document management system. Anyone who has ever looked at all their paper and printing costs has dreamed of a way to slash that budget. Anyone who has ever wanted to tie their policies and accreditation together to cut down on accreditation time has looked for an electronic policy management solution.

If you have a small organization that only needs to keep track of a collection of documents, then a cloud-based document storage system like Google Drive, Box, or Microsoft OneDrive might be perfect for you.

But if you've ever needed to manage and interconnect vital documents, policies, and accreditation requirements, then you need something more sophisticated. PowerDMS can help you figure out what you need.

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