Establishing an electronically-managed document management system (DMS) may not be high on your list of priorities, but once you understand the value it delivers, you may have second thoughts.
Document management, in a traditional sense, involves the filing and organization of paper documents of all kinds: correspondence, invoices, contracts, intellectual property, employee and client information, and so on. In most offices, files take up a significant amount of real estate, sometimes occupying an entire room, with extra storage space often needed for expired or seldom-used documents.
Electronic document management proves its ROI quickly
Hundreds of payroll hours every year are devoted to managing paper documents. If you think about the amount of time and money that goes into file management, it really adds up!
Case in point: medical clinics are notorious for housing masses of paper files. Medical office staff routinely pulls files and then re-files them at the end of the day after they have been updated with the latest patient information.
Studies have found that even in the most efficient medical office environments, it takes an average of six minutes to pull and re-file a patient chart. If a clinic has four doctors and each doctor sees 30 patients a day, that adds up to a combined 12 hours of time per day spent just filing the charts. Filing errors also account for a lot of lost time. Some medical offices have a missing chart rate of 40 to 50 percent—a concerning metric when you consider that these are people’s lives that hang in the balance.
According to a study conducted by Coopers & Lybrand, companies spend an average of:
- $20 to file one document
- $120 to find a misfiled document
- $220 to reproduce a lost document
Additionally, employees spend a little more than a tenth of their on-the-clock hours viewing documents and about half of their day either trying to locate or file those same documents. Though this study was conducted in 1998, the findings are still significant today as the core activity of filing and managing paper documents has not changed.
What has changed is that now we have a viable alternative. The digital age has brought with it some significant solutions in document management. And once it’s deployed, a DMS can start saving you money immediately.
What a document management system can do for you
A digital document management system combines document imaging with complete document lifecycle management, giving you a solution that allows you to file, retrieve, revise, collaborate on, and even track all the disparate data contained within different versions of the documents. You can even use keyword searches to locate associated files, making a digital DMS a must-have tool in the never-ending effort towards greater efficiency, productivity, and—perhaps most importantly—profitability.
Improving security with a document management system
In many offices (particularly in the highly-regulated medical and legal professions), confidentiality is paramount. With a paper filing system, you would need to resort to a locked file room or just locking the file cabinet itself, which aren’t the safest options: given the right motivation and opportunity, anybody could access those files at any time, putting your company at risk.
A DMS provides significant improvements to document security. For instance, access permissions can be set per department or job description, ensuring that nobody but the appropriate people can open or alter any file. Documents can be encrypted and protected in various ways—such as username-and-password combinations or multi-factor authentication—and additional protections can be leveraged in the cloud.
Document management strategies by the numbers
In the past, not all enterprise document management systems were seen as viable solutions for small businesses. The equipment needed to physically scan documents into such systems was expensive, with some document feeder systems costing upwards of $30K or more. Today, the costs are significantly lower. Document feeder systems can process more images in a shorter amount of time, and they cost much less—often under $1000 for a good business-grade unit.
Let’s look at a possible situation in a hypothetical company that still uses a paper filing system:
- 100 paper documents are filed each day
- 100 documents x 6 minutes = 600 minutes filing per day = 10 payroll hours per day
- 10 payroll hours per day x $20 per hour = $200 per day
- $200/day x 250 days worked per year = $50K per year
For a smaller company that only filed 20 documents a day, the amount would still be a hefty $10K!
Keep in mind that these numbers represent costs related to filing only—they don’t account for time spent searching for lost files, expenditures on storage space needed to keep old records, or the cabinets required to house them.
The business end of managing paper
Paper filing systems carry a number of hidden costs. Offsite storage starts at about 30 cents per box, per month. The cost of retrieving those boxes is about $10 per box.
As for the real estate of file storage, consider that a typical four-drawer filing cabinet will have a footprint of about eight square feet, including the space you need to allocate for opening the drawers. If office space costs $13 per square foot per month, then a single file cabinet carries a cost of $1248 per year. Multiply that by the number of file cabinets as you have and you’ll probably be aghast.
In comparison, if those documents were stored as data, your company would be able to store the equivalent of 100 four-drawer file cabinets’ worth of documents on a hard drive that’s smaller than the size of a desk phone. Cloud storage amplifies this further, as there is no need for local storage (although it’s always a good idea to keep your data backed up to a physical device). The cloud also offers convenience in that your securely-stored files are accessible from anywhere.
In conclusion, businesses can benefit greatly by moving to a digital document management system. The money you can save on storage and labor alone is significant enough to justify the costs. The convenience and the agility you will gain in the process may just facilitate the next phase of your growth.
If you are a company doing business in Arkansas and would like to learn more about a document management system for your business, call Business World today. We’d love to show you how we can help.