How Does Your Company Manage Its Documents?
It’s an important question to ask as we move deeper into an increasingly digitized world. Despite digital document management systems being available, many businesses still rely on paper-based models. According to research and advisory firm Verdantix, 27% of companies still use paper-based systems in their supply chains. A 2020 article published in Forbes notes that traditionally paper-based industries, such as mortgages and insurance, are still “awash in paper.”
That’s a problem.
Paper-based systems create enormous costs for businesses. U.S. companies spend $8 billion annually on managing paper. A good document management system alleviates many of those costs. Here, we examine the key benefits of these systems.
What Is Document Management?
Document management refers to any system a company has in place to capture, store, track, and manage its documents. In a paper-based system, companies manage documents by indexing them and placing them in filing cabinets. This is an inefficient model that forces employees to search through reams of paper whenever they need to access a document.
Modern document management systems use digital technology to make storage and tracking easier. In addition to providing storage and searching tools, the right service allows companies to scan digital images of their paper-based files. Legacy documents become available on a centralized system that’s capable of categorizing documents and searching through them to locate key information.
The Benefits of Document Management
You may ask yourself why you should implement an electronic document management system. That’s especially the case for smaller businesses, which may see the upfront costs of such systems as prohibitive. However, several crucial benefits come with digitizing your document management processes.
Benefit No. 1 – Reduced Costs
The cost of paper is on the rise. A combination of issues related to the pandemic, global supply chain, and paper manufacturing resulted in the cost of wood pulp increasing by 25% in 2021 alone.
Paper companies can’t absorb these costs. As a result, they’ve raised the price of their paper. Several major paper companies increased paper costs by between 6% and 15% in 2021. And those costs look set to continue increasing in the future.
The point is that it costs more to buy paper than it ever has before. Add on the costs of physical storage solutions, such as filing cabinets and archiving rooms. Then, add the costs related to the time your people need to sift through paper to find the documents they need. It’s clear that the paper-based model is becoming extremely expensive.
Electronic document management solves many of these cost problems by taking paper out of the equation. The systems reduce waste, make it easier to find documents, and help tackle the issue of lost documents, creating savings of between 30% and 40%.
Benefit No. 2 –Reduced Storage Space
Renting commercial property is an expense that all office-based businesses must endure. That expense is amplified when you need to reserve space for paper documents. You require room for boxes, storage bins, and filing cabinets, all of which take up space you could use for other purposes. In some cases, businesses rent commercial property solely to store their documents.
Digital document management systems reduce your need for storage space by hosting all of your files online. Companies save money because they no longer need to rent as much space. Alternatively, they make that space available for other, potentially revenue-generating, operations.
Benefit No. 3 –Improved Workflow
In its survey “Definitive Guide to America’s Most Broken Processes,” workflow automation firm Nintex made some interesting discoveries. It found that 49% of employees struggle to find the documents they require. Furthermore, 33% noted that document versioning created issues, leading to inefficiencies that often affect clients.
These statistics demonstrate that streamlining workflows is a critical concern in modern business. By implementing a document management system, your company centralizes key documents digitally. Employees benefit from more logical filing and storage structures, in addition to often having the ability to search for specific documents based on their titles or contents. Document management systems also allow your people to collaborate on a single version of a document, reducing versioning inefficiencies. The result is a more streamlined workflow that creates productivity gains, ultimately benefitting your company’s bottom line.
Benefit No. 4 –Increased Security
According to office technology manufacturer Konica Minolta, the average organization loses or misfiles up to 5% of its documents daily. In addition to creating an average cost of $120 per misfiled document, losing paper documents generates a security risk. If a malicious party gains access to these lost documents, it potentially receives sensitive data that it could use against your customers or hold your business for ransom.
By digitizing your documents, you enhance their security. The issues of lost and misfiled documents disappear as all documents get stored in an appropriate system. Your business benefits from access controls, meaning you can determine who can read and edit your documents. Plus, the implementation of firewalls and similar security measures, such as regularly updating software, make it difficult for hackers to gain access to your systems.
Benefit No. 5 – Disaster Recovery
If your business is in an area that’s prone to natural disasters, such as earthquakes or flooding, your paper documents are at risk. Unless you keep off-site copies of paper documents, which would double your storage costs, a single disaster could lead to the loss of enormous volumes of data.
With electronic document management, you can easily create backups of your digital files. Costs are kept to a minimum as you only need to pay for off-site storage, with many cloud-based firms offering cost-effective disaster recovery services for this purpose.
Manage Documents Effectively to Improve Productivity and Lower Costs
The traditional paper-based model becomes more inefficient with each passing year. As your company accumulates physical documents, it faces increasing storage costs and exposes itself to more risk. By converting to a digital document management system, you minimize both costs and risks to create a more secure and productive business.
At KDI Office Technology, we offer document management services to companies in New Jersey, Delaware, Philadelphia, and eastern Pennsylvania. To find out more, speak to a member of our team today.