Introduction to Document Management Software
A document management system can transform the way your business operates. Whether you're solving a paper problem or simply improving the way you handle electronic records, the right document management system can provide significant time and cost savings.
As you investigate document management options you may run into some confusion regarding the name. Some companies call their systems "document management systems" others call them "content management systems." Both are software programs used to store, secure, search, and track electronic files like emails, spreadsheets, images, and PDFs.
Also available on the market are systems that simply scan, capture, and index paper documents. These are sometimes called "document imaging" or "document capture" systems. By talking to a qualified document management seller you can get help sorting through your available options and finding the right solution for you.
This BuyerZone Document Management Software Buyer's Guide covers both document imaging for paper conversion and document management for electronic files. Almost all sellers in this arena offer both. When you're ready, we can put you in touch with several qualified sellers in your area - for free!
Before you begin to compare the benefits of the platform, take a quick review of how these benefits can boost the profitability and service of your business overall.
Document Management Applications & Legal Requirements
Document management solutions have the ability to improve your business processes without changing them much. This makes them ideal across a wide range of situations and industries.
Who uses document management solutions?
More and more industries are falling under the influence of legislation that requires specific procedures for records keeping. Financial services companies need to be able to prove that information is unaltered to comply with Sarbanes-Oxley. Medical practices have to prove that their records are safe from prying eyes to comply with HIPAA. The legal industry, too, has specific requirements related to discovery, including full-text searching of massive numbers of documents.
For businesses in these highly regulated industries, document management solutions are by far the best way to ensure compliance with strict security and record-keeping rules. It's important to note, however, that such systems can only help your company become compliant, they don't guarantee it. But, the right procedures and behaviors do. No matter how secure your electronic records are, if an employee prints sensitive information and takes it to lunch, you're not in compliance.
Almost all companies have certain common business units that can benefit from document management. Human resources and accounting departments, for example, are traditional heavy users of paper files and some of the biggest beneficiaries of a document management solution.
Other applications for document management include compliance with the Patriot Act, which requires immediate government access to certain records, and ISO 9000/9001 certification, which benefits from having the ability to prove your data is secure and unaltered. Manufacturing and government are two sectors that pursue document management solutions for these broader regulatory reasons.
In truth, any organization that wants to put procedural processes in place can benefit from document management. Such systems are used to enforce naming conventions, ensure strict approval processes are followed, and generally add consistency to existing procedures.
Whether your business is large or small, paper documents have become a time-consuming impediment - especially for businesses with employees on the road or who work remotely. So before deciding on the specific features you need, it's important to understand exactly how document management software can boost the productivity and compliance of your organization.
Document Management Software Benefits
The benefits of document management are sometimes obvious (they save you from drowning in paper files), but sometimes are more subtle.
If you have employees who spend most of the day filing and retrieving documents, then you are dealing with one of the biggest hidden costs of a paper-intensive businesses. Let's say it takes a $20/hour employee five minutes (a very conservative estimate) to walk to your records room, locate a file, act on it, refile it, and return to his desk.
At just twelve files per week, that's over 52 hours per year spent filing - which adds up to over $1000 in wages. At thirty files per week, those number increase to 130 hours per year and $2600 - for only one employee. A system that makes it possible for employees to find and work with documents without ever leaving their desks can instantly improve efficiency and slash costs.
Document management systems also eliminate so-called "lost document" costs - the time it takes to recreate a document that's been destroyed or misplaced. Based on research done in this area, some sellers estimate the cost of replacing each lost document is $120 or more.
Additional cost savings come in the form of office space that can be freed-up by eliminating paper records. With real estate costing $15 to $40+ per square foot in many major cities, converting records rooms into usable office space can save considerable amounts of money. In other cases, companies are able to eliminate the cost of warehousing years of archived records.
If you're not taking data security seriously, you should be. Threats from outside and inside your company jeopardize the integrity and value of your most important information. Document management systems can provide several layers of security against identity thieves, hackers, disgruntled employees, and the prying eyes of the competition. Standard security measures include:
- Multiple levels of password-protected access for groups and individuals
- Encryption of document contents
- Audit trails showing who has accessed or updated documents
Whether your existing documents are paper or electronic, chances are you don't have adequate disaster recovery plans in place. Document management systems protect your paper records by creating electronic copies that can be backed up in multiple ways. They also can include off-site data backups and other steps to ensure that a fire, flood, or break-in won't cripple your business.
Even as the web makes it increasingly easy for employees to work remotely, paper records remain a serious roadblock for widely distributed organizations. The right document management system allows your employees access to vital records wherever they may be.
Furthermore, by allowing more than one employee to look at one file at the same time, document management systems can improve office efficiency. And as previously mentioned, multi-layered access allows employees to see and change only the documents they're authorized to handle.
In a majority of businesses, the use of smartphones for professional purposes is becoming more commonplace. They're portable, convenient, and allow the workforce to stay on top of vast amounts of corporate information. Quick and convenient access to this information from anywhere - the factory, remote office, taxi, or airport - is essential for today's professionals. With Document Management System mobile software your corporate content is always available.
Mobile software may include the following features:
- Add files
- Search for documents
- Submit reviews and approvals for workflow tasks
- View metadata and version properties for a document
- Download and view a document through your device's supported application
- Initiate a workflow on a document
Document management in action
One document management seller offered this example of how document management solutions can transform a business. A salmon distributor based in Seattle would move their entire operation to Anchorage every summer for fishing season. This included putting their corporate servers and pallets full of paper files on a barge and sailing them up the coast. At the end of the summer, they'd pack everything up and get back on the barge.
Not the most efficient business plan, perhaps, but they couldn't operate without their records. Once their document management system was in place, all they had to do was bring a laptop and small scanner with them to Anchorage, and they could still access all their records as if they were back in Seattle.
Before you connect with a seller, review the features below. Doing so will enable you to ask specific questions about which features may be right for you while saving you from considering platforms that are too skimpy or extravagant.
Document Management Software Features
As you evaluate different document management software packages, keep in mind that your choice should be based on your specific business needs; tools that are useful for one company may only serve as a distraction to another. Comparing several document management solutions can help you figure out what works best for you.
Some sellers recommend to do a feature by feature comparison and consider the foundational technology. You want it to seamlessly integrate with your existing applications. Definitely consider the workflow processes. The ability to automate an electronic workflow is one of the most important features of your Document Management System. Another coveted feature is the ability to review contracts electronically by multiple people.
It's best to make comparisons by getting live product demonstrations. Whether it's face-to-face or online, a live demo will allow the seller to showcase the functionality while giving you the opportunity to ask questions. Seeing the software in action is the only way to truly judge ease of use. You can accomplish this via live product demonstration or by visiting a company who is already using the system (ask for referrals from the sellers you are evaluating.)
How to evaluate document management software
The most important aspect to consider is ease of use. If creating, filing, and retrieving documents isn't easy and intuitive, your employees may resist using the system, decreasing your ROI. Technical support and automatic upgrades are also essential.
Systems that use familiar metaphors such as file cabinets, folders, and paperclips can help even the least computer-savvy employees catch on quickly. The interface should also provide easy access to the screens you use most without being overly-cluttered with buttons. Keep in mind, the more features that get added, more buttons will exist. Integration is improving, as are browser-based uses. See below.
Other general attributes to consider:
- Connection - The documented API is a way to seamlessly connect your Document Management System to other application systems.
- Customizability - Because their function is so central to your everyday operations, the system you choose should be customizable to match your business processes. The seller should be able to integrate the system into your existing applications, making use of the system almost transparent.
- Scalability - The system needs to be able to grow with you - both in terms of how many users it supports and how many documents it can handle.
- Configuration - Does the Document Management System allow you to change the appearance of the interface? This is important to make it more user-friendly if necessary.
- Modularity - In the best-case scenario, you'll be able to buy only the functionality you need at first, and add more as you expand your use of the system.
- Open Source - Some businesses prefer open source software, as it can offer a more adaptable, cost-effective alternative to proprietary systems. However, this may require you to have staff with the knowledge and experience to implement company specific coding.
There are also more specific document management software features you'll need to investigate:
- Security - The more granular the security options, the better: security rules may be applicable to the entire system, per cabinet, per folder, per document, or even to specific sections of documents. Systems that rely on Windows security capabilities alone are not considered very secure.
- Searching - Is it easy and logical? Can you easily call up all related documentss - all W2's, for example, or all documents with a certain customer number?
- Compliance - Auditing features can track activity by user and by machine. In some industries, you'll need to prove that documents are unaltered.
- Access - Some systems require client software on each computer that will access the system; others only require a web browser. Make sure to consider your remote users.
- Workflow - Document management software can automate approval processes, editors, and other document routing. Extensive workflow rules can be a distinguishing factor between small to mid-sized solutions and true enterprise-level systems.
- Compatibility - Microsoft Office integration allows you to check-in and check-out documents while working in Word, Excel, and PowerPoint. E-mail integration allows you to send direct links and share native documents with remote customer. And some systems allow you to generate PDF versions of your documents.
Make sure you take into consideration the needs of remote employees: do they need access from mobile devices? Tablets? Macs or PCs? Check with your provider to see if the system supports these configurations.
There are unique advantages to web-based and in-house platforms. Make sure you have a clear understanding of this aspect of document management software before going any further.
In-house Hosting vs. Hosting in "The Cloud"
An imperative decision to make when choosing a document management system is where the software will be hosted. An in-house solution is usually referred to as a client-server system and offers the most autonomy and control. But you need an IT team to manage the hosted server.
Cloud hosting offers two methods of ownership:
- Application Service Provider (ASP) - such as Microsoft, Amazon, or any cloud hosting service - then you buy, install, and own the software "in the cloud."
- Software as a Service (SaaS) - They provide a complete service - the software and the hosting.
Both options provide distinct advantages: consider which are more important to you.
If you choose a locally hosted program it will run on your computers and store data either on your hard drive or on a network server in your office. This familiar setup gives you the greatest control over every aspect of your document management system.
Document management applications are built on proven software that is highly stable and requires little database maintenance. You will need to have access to either outside consultants or highly specialized IT staff to address any hardware or software issues that arise.
You will also need to make regular backups in case of a system crash. You can schedule backups that copy your data to off-site computers fairly easily. (Interested in remote backup services? Get free price quotes today.)
If you choose the client-server route, you'll purchase or lease your system including software and servers.
In the current era of cloud hosting many companies are choosing ASP solutions. With this setup both the application and data reside on the seller's servers, and your staff gains access via web browser or specialized client software. Hosting in the cloud is becoming more prevalent, especially for smaller companies (five or less employees) who don’t have an IT staff on site.
With ASP solutions your database is maintained by IT professionals at the seller's office. Multiple layers of firewalls and security, uninterruptible power supplies, fail-over (instant switching from one computer to another in case of a crash) and reliable backups are all standard operating procedures for these sellers. Together these features virtually guarantee that your critical documents will always be secure and available.
If you choose to go with an ASP solution be sure to ask prospective sellers if your data will be stored in an SAS 70 audited facility. These highly secured data centers are checked by third party auditors to ensure the strictest standards in security and compliance are followed. You will also want verify that your data will be encrypted when transmitted in both directions over the Internet .
The biggest risk of using an online solution is that they require an active Internet connection. Since no Internet connection works 100% of the time (your internal network may fail, your ISP may experience an outage, or an Internet worm may cause congestion) you may not be able to access your documents at all times. These types of outages are rare, but you should be aware of the possibilities.
With online sellers, payment is more likely to involve a smaller setup fee and then ongoing monthly payments based on usage.
Which is right for you?
Some business executives may feel more comfortable with an in-house solution. Next generation IT staffers, however, often prefer the ASP model, and there has been exponential growth in this sector. Here are some areas to consider:
- IT staff. If you have in-house IT staff, a client-server solution may be your best option - but make sure you involve IT in the purchasing decision. Smaller businesses with little to no computer expertise are probably better off choosing an online solution.
- Customization. ASPs can easily make basic changes in appearance and functionality, in effect giving you more control over the application than you would get from an internal IT team. However, if you need extensive customization and integration, client-server can provide more flexibility. Remember that you will pay a premium for the extra customization work, though.
- Sensitive data. If your documents include sensitive data such as Social Security numbers, banking records, or other information that you are legally required to protect, your first instinct may be to keep it in-house so you can be directly responsible for it. However in many cases, ASPs can provide better security than you could in your own data center with more layers of security and larger IT staffs.
- Usability. Cloud hosting will perform only as well as your Internet connections.
- Cost. Consider the cost over the lifetime of the contract. Fees can increase with cloud hosting depending on the number of documents you are storing.
Since both options provide secure, reliable document management options, a final way to make the choice is to consider which of the potential downsides you fear more: being unable to access your documents while your Internet connection is down, or losing data and time because your server crashes.
You can also start off with a hosted service, then move to an in-house solution: ASPs should offer a seamless migration path that will allow you to easily export your data. If you're unsure of which direction you should go, this can be an easy way to get started without committing fully to either direction.
There are two main hardware components you may need. If you're running a document management system in house, you'll need a server. If you're going to be converting paper documents, you'll also need a document imaging scanner.
Your seller should provide you with appropriate specifications for the server, and in some cases will sell it to you directly. However if you have a preferred computer hardware provider, you will probably be better served buying from them. Just make sure you follow the recommendations from your document management seller and your IT staff for processor speed, RAM, and hard drive space.
You may already have the document imaging scanner you need in-house: your copier. A modern digital copier with an automatic document feed and network connectivity can be exactly what you need to keep up with your day-to-day scanning needs. Almost any network copier can be used with a document management system. (Need help choosing a copier? Read our Digital Copiers Buyer's Guide.)
If you're buying a document imaging scanner, the seller can provide valuable assistance. They'll be able to recommend certain brands or models that will work well with their software. Network scanners allow employees to enter meta data at point of scanning, which helps address the exponentially increasing number of electronic documents.
When choosing document imaging scanners, you'll have to consider the balance between quality and speed. If you want to scan paper documents so that the full text is easily retrievable and searchable, you'll need optical character recognition (OCR), and that requires more expensive, high-quality scanning.
If your system will simply be storing your documents as images, the level of detail isn't quite as important. If you need color or wide-format scanning, you can expect to pay a little more for scanning services.
If you plan to scan millions of pages, you'll want a high-end scanner - one that can chew through files at around 150 pages per minute (ppm) - which could cost you $40,000 or more. A scanner rated at around 20 ppm, on the other hand, might cost around $1,000. The slower machine can easily handle around 1,500 new documents per week, but won't be any help in processing back-files.
To meet higher scanning volumes, consider getting multiple scanners instead of one ultra-high capacity model. Three 40 ppm machines will be considerably less expensive than one 120 ppm device. Plus, they'll allow three people to work on scanning simultaneously, and provide you with the ability to continue working if one of them needs service.
Web-based scanning is a new technological trend that makes it simple to scan documents anywhere you have Internet access, using an application on your smartphone or tablet. With web-based scanning, you can digitize, scan, sync, manage and store documents from a mobile device into a central depository. No local scanning software needs to be installed, but this is an optional feature whose pricing depends on the number of add-ons.
Web-based scanning is especially powerful for companies who need specific documents to go into a workflow to automate review and the approval processes.
Quality document management systems can be customized to almost any situation, but some decisions need to be made up front. Without the right planning, you risk wasting time and money.
What problem are you trying to solve?
It may seem obvious, but that question is one you have to have detailed answers to before you start working with a document management seller. "We have too much paper" isn't a good enough answer. Be specific: "We need more remote access," "We want to cut filing costs," and "We have to enforce better security" are all better answers.
Gather details on what types of paper you're working with. How are they created, labeled, and filed? What are your needs like for retrieval or ongoing usage? If you can easily categorize your documents into types, such as delivery slips or W2s, sellers may be able to offer specific advice. A rough count of how many new documents you'll need to enter per day is also useful.
Don't overlook your existing electronic documents: you'll want to be able to incorporate text files, PDFs, spreadsheets, and other important files into the document management system. Don't get over-aggressive: stick to the types of documents relevant to the problems you're solving.
Also look at your processes. What approval or editing steps should be built into the system? Which documents need to be permanently archived, and which should be editable? What types of documents need to be filed together for easy retrieval?
Then make sure you have management buy-in. Because of the costs and the transformative nature of document management systems, "grass-roots" efforts to implement them rarely succeed. With well thought out ROI analyses, you should be able to get executives on board.
What about your existing paper files?
It's important to understand that you don't have to start a document management solution with a total conversion of all your old paper files. Sometimes a "scan forward" approach works best.
In a scan forward implementation (also known as "day forward" or "forward scanning"), a cut-off date is chosen after which all new documents will be scanned. Existing paper records are only scanned if they're used - in many cases, documents that don't get scanned after a year can be archived or simply thrown away. This approach means you can get started much more quickly since there's no delay while a backlog of paper is scanned. Once the value of the system is proven, you can then decide to start scanning older files.
The scan forward approach isn't for everyone, though - for some businesses, access to paper files is essential. In those cases, you may consider using a back file scanning service. Document management sellers generally don't do back scanning for you, but they will be able to recommend a file scanning service. These niche sellers have expensive high-volume scanners and plenty of staff to operate them. For these firms, scanning millions of documents for a single customer is not uncommon.
Typically your documents will be shipped to or picked up by the scanning service provider, but you can also get on-site service. On-site may cost significantly more, but if your files contain highly sensitive material, it can be reassuring to keep them with you. Once the documents are scanned, the service can provide CDs of the resulting images or put them directly into your document management system. They'll also destroy or return your paper documents, whichever you prefer.
While you may eventually want a comprehensive, company-wide system, document management sellers strongly recommend you start by implementing a solution for one application in one department. It's much easier to get management support for a new effort that only affects a single department at a lower cost. Tackling one problem at a time also makes installation less disruptive.
Once it's been implemented, sellers indicate that it's very common for a company to come back to expand the solution to multiple departments or processes months or years later. The success of the first, smaller solution leads to greater support for a more significant investment later. For example, a successful implementation in HR can serve as the launching point for larger, company-wide projects.
With the software and hardware settled, your next step is choosing a seller – or reseller, as the case may be. Unlike other purchases, you have to evaluate both the reseller and the software platform simultaneously when comparing document management services.
Document Management Resellers
The majority of the document management sellers you'll work with are resellers, not manufacturers. Most manufacturers lack the large in-house tech support and sales teams needed to support a wide customer base. Instead, they support reseller networks who handle much of the front-line interaction with customers. Some manufacturers also sell direct, but they tend to focus on large enterprise level customers.
What to look for in a reseller
The seller you choose should have experience in your industry. Some industries - legal and medical are the two best examples - have very specific needs from their document management systems, and so require a reseller who understands those needs. Don't depend on the seller to know everything about your industry, though: you're responsible for compliance issues, not them.
Longevity is another important consideration: you want someone who will be around to support you.
The supplier should also be able to demonstrate more than flashy features and technology, but how those features will help you. Look for suppliers who ask real questions about your business and describe how their product answers your needs.
Watch how long it takes the seller to respond to you. If they are slow to respond during the sales process, things aren't likely to get better once you've signed a contract.
Size of the company isn't that important - as long as they have the staff to support you, a smaller seller is fine; in fact you may get more attention than you would at a larger seller.
What to look for in software manufacturers
Remember to check out the software publisher each reseller represents, as well. Look for proven dedication to the system - make sure the software publisher is committed to updating and improving the software.
In general, look for publishers that specialize in document management. A recent trend in the industry is for makers of specialized vertical applications to add document management modules to their existing software. While this is an attractive option to companies who already use their software, it's not recommended. There are a couple of dangers with this approach.
First, tying document management to your business applications locks you into both solutions at the same time: you'll have trouble getting your documents out of the system if you decide to switch. Also, because document management is just a small component of their main business, it's hard to tell if they're committed to maintaining and improving the system.
Document management systems are not the type of application where you take the shrink wrap off the box, install the software, and dive right in. You'll need to work with your seller to handle installation and training.
When you first meet with a seller, they'll ask about your plans and your business to get an idea of what capabilities you require. Then they'll submit a detailed proposal that outlines the costs and what they'll deliver.
Once you agree on a contract, the seller will usually come to your office to do the installation and training. This can take as little as a day, but the average is closer to a week. Again it will vary considerably based on the amount of customization and integration you choose. Some sellers may use remote access to do the installation without actually visiting your office in person, and of course if you choose an ASP solution, you won't need any work done on your premises.
In most cases, first line support will be provided by the reseller, not the software manufacturer. You'll see a range of support options: some sellers will offer you blocks of time that you can "bank" against future calls; some will charge a monthly support fee that includes an unlimited number of calls; some will simply charge you per call. Flexibility of contact options is important: find out if your seller offers support via phone, e-mail, instant messenger, and/or online chat.
Because of the complexity of document management systems and the fact that every installation is different, it's generally a good idea to opt for a service contract that includes unlimited support and upgrades - at least for the first year. After that, you'll have a better sense of how much support you'll actually need.
Before you get on the phone, it's important to know how much you can expect to pay. The prices for document management software and its related services vary widely.
Document Management Software Pricing
Document management systems are a major capital expense. You can expect to pay thousands of dollars for even the most basic system. Just remember the economics we discussed in the Benefits section above; when you evaluate the cost of your current paper systems, you will quickly realize the ROI potential of these systems.
Also worth noting is the cost per user drops as the number of users increase. For example, a 5 user system ranges from $3,750-$4,000 on average and a 10 user system ranges from $6,000-$7,500.
Also, keep in mind document management systems are highly customized, so pricing will vary tremendously depending on the features and integration work you require.
Entry-level paper conversion systems, with an in-house server and including scanner and software with all the basic indexing, searching, and security features, costs around $10,000 for the initial setup. At 10 users, you're likely looking at just $11,000 or more. A medium-sized installation, with web access, auditing, and workflow features, and support for 100 users will probably run $20,000-$40,000.
Costs for enterprise-level solutions for hundreds of users can easily reach $100,000-$150,000. This cost depends on the intensity of use. Most are casual users, meaning they merely read the document.
For ASP models, you can expect minimum prices of $100 per month, and easily over $1,000 per month for mid-sized solutions. Support for larger companies can quickly top $2,000 per month. Cost is subject to the volume of documents being stored. As the number of documents increase, the price can hike up quickly.
Some ASP suppliers base their fee structures on the total number of images in the system, rather than the number of users. Since you've already estimated the amount of documents your system will be handling, you should be able to compare costs fairly easily.
Again, these are only rough estimates of your total costs. Sellers will break down the pricing in much more detail: hardware, software, customer service and support, training, installation, and maintenance. Software prices overall have actually decreased the past five years.
If you're having archived records scanned, expect prices of between 2 and 20 cents per page. You'll pay more for on-site scanning, stapled or damaged documents, and indexing services. When you consider a million-file archive, you can see why many companies opt for the scan forward approach.
If your business doesn't have regulatory concerns and you don't need network access to your documents or extensive tracking and security needs, then a smaller turnkey solution for $200 or $300 may be sufficient. But the benefits are limited so you'll want to talk to a document management specialist to find out which solution is right for you.