The 2024 Complete Guide to Digital Document Management

Why Waiting to Go Digital Is Costing You Money, Time, and Even Security

You’ve heard the arguments for digital transformaticuson before. Lately though—amid the necessity of work-from-home teams, greater emphasis on customer experience, and the need to maintain business continuity in a world turned on its head—the buzz about going digital has been turned up—way up.

Choosing the right tools for your digital transformation, and understanding the benefits, can be confusing. To help you get clear—and get started—let’s dive into how digital document management works, and how it lays the foundational platform for digitalization.

What Is a Document Management System?

A document management system should be part of a holistic information management strategy, and it’s essential to a successful digital transformation. It delivers measurable cost savings, efficiency gains, and service delivery improvements for government agencies and private businesses. The software includes features critical to helping organizations survive and thrive in a post-COVID-19 reality. The goal is to reduce and eventually eliminate, paper and paper-based processes that slow operations and service.

Benefits of Digital Document Management

Unlike consumer-grade document management tools like Dropbox and Google Drive, enterprise-level document management systems offer much more than digital storage. Version control, permission-based access, backup, data protection, and workflow features make storing, securing, and sharing documents more cost- and time-efficient for enterprise organizations—good news for service too.

Here are the benefits:

• Quick Retrieval:  Retrieving a paper document from typically large amounts of content can be difficult—sometimes impossible. With a document management system, you get quick, easy retrieval.
• Better Workflows: Business processes involve movement of documents from internal to external parties, from department to department, and from person to person in a department. Often, people with different roles (such as creation, review, approval, and dispatch) will have to reference the document throughout a workflow. A document management system handles efficient movement of documents, speeding up the process and reducing errors.
• Easier Compliance: The benefit here is avoiding problems, which can be serious enough to shut down operations. Government regulations require maintenance for different types of data and documents, and the requirements are often complex. A good document management system helps ensure compliance with features like checklists, and standard forms, and access records.
• Tighter Security: A document management system ensures only authorized people can access documents. Once digitized in a document management system, content is also secure in the event of natural disaster, deterioration, or loss.
• Cost Savings: Managing the sizable volume of documents generated in the course of business is expensive. With a paper-based system, paper, ink, file folders, filing cabinets, filing staff, and other requirements eat up budgets. There are also big savings in efficiency improvements.

How Digital Document Management Works

A document management system not only converts paper documents to digital, it automates paper-based processes. Here’s how:

1. Document Capture

Sophisticated document management systems capture and save documents from any source— paper, email, CRM applications, reports—so the document can be indexed for easy searching later. Indexing classifies documents by adding terms to its metadata, such as tags, order numbers, or customer information.

2. Document Storage

A core function of a content management system is storing digital documents securely and enabling retention and deletion. Storing your digital content in one central location allows employees quick and easy access, typically with permission settings for security.

3. Workflow and Process Optimization

A document management system also enables automated workflows and processes. For example, invoices can be automatically routed to an accounts payable system. If the system detects a problem, it can send a notification. Otherwise, the invoice is paid instantly.

Integrating your document management system with your enterprise resource planning (ERP) system is another efficient way to automate workflows. When an order originates in your ERP, it can trigger a workflow in your document management system. This workflow will take the order through an approval process and to fulfillment automatically.

4. Cloud or On-premises

Document management systems are either hosted on-premises or cloud-based. On-premises software requires you to install licenses on employee computers and your network. You’re also entirely responsible for maintaining current versions, and some software providers may charge additional fees for updates. Besides buying the software, you’ll need hardware for storage and processing, and you will pay to power the hardware. You’re also responsible for added security if needed for compliance.

Cloud systems, on the other hand, are installed and maintained by the system’s vendor. You won’t incur hardware or maintenance costs. There are also built-in security safeguards for compliance. You pay a monthly fee for service and can easily scale up or down as needed.

4 No-fail Steps to Implementing Digital Document Management

Digital document management lays the foundation for a complete digital transformation and implementing a digital document management system will have lasting and far-reaching effects on how your organization operates. But getting it right takes the right implementation approach.

We’ve worked with hundreds of government agencies and companies to implement digital document management. To be effective, an implementation plan must align with an enterprise’s specific objectives, resources, and internal and external stakeholder needs, but we’ve found these four implementation best practices universally establish a foundation for success.

1. Establish Clear Goals

For your digital document management system to achieve your goals, you must first clearly define your goals. It’s important to approach digital document management within a complete digital strategy, including not just how you will transform paper to electronic files, but how digitizing content will affect all current paper-based processes.

While there are clear benefits for any organization to digitize, understanding your specific needs—based on factors such as how your documents are used and your particular resource restraints (e.g., staffing, space, infrastructure, budget)—is critical to delivering results that truly improve how people work.

Get specific and be thoughtful. Think about what you’re trying to accomplish and build a strategy around those goals. Do you want a simpler process for sharing information internally? Quicker turnaround for external requests? Tighter information security?

Establishing clear goals is also when you should carefully consider how your documents are used. Set goals first and build out your implementation strategy from there.

2. Determine What You Will Digitize—and When

Taking Inventory

The next step in your implementation plan should be determining what you will digitize. Begin with an inventory of your paper content. Then, consider the needs of the people you serve and how digitization can improve service. For example, ask:

• What documents are requested most often?
• Which ones require the highest levels of security?
• Which paper-based processes and workflows are the most time-consuming?
• Is access to some documents limited because of storage location?

In addition to service delivery, analyze and select documents to be digitized based on how conversion will free up resources. For example, will it save staff time or eliminate the need for physical storage?

We know digitizing all content is rarely cost-effective or worthwhile. So, once you determine the content to be digitized, identify the content that doesn’t require digitization. This includes documents that should be destroyed, are close to their end-of-retention lifecycle, or aren’t used frequently.

Documents you’re digitizing should also be categorized. This will make the next stages of the process easier. Assess the volume of ongoing paper-based content you will need to manage and consider for digitization in the future. Also, determine how ongoing digitization will be handled.

Prioritization

Review the types of documents you classified and prioritize them. This is the time to consider the need for backfile conversion, day-forward scanning or scan-on-demand. Here’s how each works:

Backfile conversion digitizes legacy documents associated with previous years’ activities.  It can be done in bulk to all existing files or for selected years.

If you have a backlog of paper records that are costly to store and manage, bulk scanning may make sense. Backfile conversion reduces or eliminates on-site physical records storage and makes records easier to search for, access, and distribute.

Day-forward scanning means documents that are currently active are converted as they enter the workflow. Day-forward scanning gives the flexibility to access paper files and transition between paper-based and digitized systems. Establish a conversion process that integrates smoothly with your existing processes.

Scan-on-demand digitizes as the need for certain files or content types arises.

In many cases, all three types of digitization are used. Day-forward conversion is always utilized because it increases efficiency. The initial effort to inventory your documents will help you determine which conversion option—or likely combination of options—is optimal. Those questions you answered about document use also will be valuable at this stage.

Planning and Change Management

It’s important to remember that new initiatives that change established systems and processes create disruption. You are likely to face resistance to new processes even when they provide benefits, simply because they change accepted ways of operating.

A thoughtful and inclusive approach to presenting the benefits of your digital transformation to all internal stakeholders will go far in assuaging resistance. Take time to address not only how digitization will solve problems but also review the change management plan. Ask for input.

A well-developed plan will be the most important document you create. The plan should address how going digital will affect:

• Existing processes and technology
• All departments and organizations
• The people you serve
• Employees

3. Choose the Right Technology to Support Your Implementation

During implementation planning, you will need to make important technology decisions that affect how your document management system operates and grows with you. These decisions include:

On-premises or Cloud

Deciding where and how your digital content will be managed and stored is one of the first and most important considerations. The choice is an on-premises server or in the cloud.

A dedicated and secure cloud-based Software-as-a-Service (SaaS)-based document management solution is a smart way to store, organize, and share digital files. In the cloud, information is protected with multiple levels of infrastructure and application security.

Budget is also a key consideration. The total ongoing cost of managing and maintaining on-premises data storage is exponentially higher than a cloud environment. On-premises network storage for digitized data setup requires in-house server hardware, software licenses, and integration capabilities. You’ll also need internal IT resources for initial implementation, then on an ongoing basis to support and manage potential issues, maintenance, and upgrades. Cloud storage solutions deliver economies of scale and expertise for a faster return on your content investment.

Imaging or Digitizing

Before you start implementation, you will have to determine if you’re going to be imaging or digitizing your documents. Imaging and digitizing are often used interchangeably. However, there is an important difference related to how files can be used: An imaged document can’t be manipulated.

Even without the ability to manipulate and index, imaged documents mean cost savings, improved security, and better service delivery. Digitizing, though, extends those benefits further.

Once digitized, content can be manipulated, edited, organized, and searched, further reducing the time it takes to access and use it. As a result, the value of going digital increases. Here are some examples of what you can do with digitized documents:

Document Redaction Systems. Digitized documents can be electronically redacted to better protect sensitive information. Electronic redaction systems are more secure because ink-based redaction methods used for paper documents are relatively easy to remove.

Automated Retention Tracking. A retention program identifies records that need to be retained for legal and compliance reasons. It provides guidelines for how long records should be kept and when they should be destroyed.

Software Integration

How your digital document management solution integrates with other tools affects the value it delivers. Consider how digital document management will be part of your daily workflows and, during implementation planning, map out the necessary integrations with all other systems (e.g., accounting, reporting).

When choosing your digital document management vendor, ensure it offers easy integrations (some may be custom through application programming interfaces (APIs)).

4. Find the Right Partner

A key decision in your implementation is whether to manage it internally or bring on an expert. Base your decision on factors such as internal resources, budget, timeline, goals, and size of the project.

Most organizations lack the equipment, software, and expertise to execute a major implementation alone. Expert vendors provide digitizing services, technical advice, and sometimes even long-term maintenance and support. They can also work with you to create new digitized workflows.

The advantages and disadvantages of an exclusively in-house digital transformation and one managed fully or partially in-house should be carefully reviewed. Attempting to do it in-house will mean:

• Large initial and ongoing investments in resources, equipment, and training
• Significant ramp-up time
• Variable/unknown costs
• Opportunity costs related to reallocated resources

Bringing on an experienced and trusted partner ensures:

• Cost containment and limited risk
• Ability to contractually define timeline to meet objectives
• Limited disruption to your operations
• Broad range of service options
• Compliance with state and federal regulations governing information protection

You’ll also have to decide if the work will be performed on- or off-site. Off-site processing may be less disruptive, but it will involve document transportation and security risk. You’ll have to weigh the costs, challenges, and advantages.

If you engage an expert partner to perform digitization, ensure the work is done in a secure on-site area or off-site facility, with chain of custody practices that enable document tracking through the entire process. They should follow strict security protocols and use ANSI/AIIM standards.

Beyond a Document Management System: Content Services

Digitizing your paper-based documents and processes is transformative, but the power multiples with content services.

It’s helpful to understand how document management systems compare to and work with content management software. Since the two solutions are sometimes used interchangeably, it can get confusing.

While document management system functionality includes capturing, storing, and managing digital documents, content management software manages information through its entire cycle. Standard features of content management software include digital asset management, business process management, email management, and downloading web content.

Combined, these systems mean exponential cost savings, as well as efficiency improvements that benefit service delivery. When the Florida Department of Health, which processes licenses for 600,000 healthcare professionals, could no longer scale to meet demand and was in danger of compliance violations, it digitized its content management and business processes. Among other benefits, the digital transformation reduced license processing time from six weeks to three days.  

The Added Value of the Cloud

While on-premises and cloud document management systems both deliver positive results, the cloud provides significant added value.

Security

Digital document management in the cloud means far greater security than all but the largest organizations could afford on their own. In the cloud, information is protected with multiple levels of infrastructure and application security. When cloud-based software providers leverage the massive infrastructure and expert security teams assembled by public cloud platforms such as Amazon Web Services, you get best-practice controls, policies, and technologies for data security.

Cost

With cloud-based data storage solutions, you avoid the capital expenses of hardware and physical storage. The total ongoing costs associated with managing and maintaining on-premises data storage are exponentially higher than with the cloud.

On-premises network storage for digitized data setup requires in-house server hardware, software licenses, and integration capabilities. You’ll also need internal IT resources for initial implementation, then on an ongoing basis to support and to manage potential issues, maintenance, and upgrades. Cloud storage solutions deliver economies of scale and expertise for a faster overall return on your investment.

Ready to Go Digital?

A document management system is an essential tool for digital transformation. Understanding how digital document management works is a good start to going digital, but it’s just one step in a holistic approach. The best strategy includes optimizing workflows and automating manual processes.

We’d love to talk about how we can apply our experience to your digital transformation. Download our Guide to Going Digital for insights on planning, prioritizing, and choosing a partner. It includes a practical checklist and actionable steps to a successful digital transformation.

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