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Find a Solution Small Business Solutions

Document Management Systems: A Buyer's Guide

Document Management Systems: A Buyer's Guide Credit: Kabakou/Shutterstock

Looking for a document management system? This article contains everything you need to know about how to choose one. If you're in a hurry, just scroll down to see our best picks and staff reviews. You can also see a full list of document management vendors and a breakdown of how we chose our best picks here.

Ready to choose a document management system? Here's a breakdown of our complete coverage:

With an eye on becoming more organized and efficient, many small businesses are adopting a paperless office environment.

Assisting in this challenge are document management systems, which allow you to easily sort, edit and distribute documents to others. These systems help businesses increase productivity, save time, operate in multiple locations, support remote workers, meet compliance requirements, reclaim office space and solve a wide range of business problems.

Using document management solutions is a great way to organize all of your paper and digital files in a central location, where everyone in the office has access, said Jeff Pickard, CEO of Lucion Technologies.

"It's a challenge for companies to keep up with all the paperwork and electronic files that come into a home office or business every day," Pickard told Business News Daily. "It generally starts slowly — an email here, a receipt there, incoming invoices and customer correspondence. And before you know it, you've got a mountain of paper and no way to find the documents you need."

Document management systems give you a framework for organizing all of those papers. These systems work in tandem with scanners, which convert your paper documents into digital versions.

When looking into document management, you will encounter several types of tools: document management systems, document management software and document management solutions. In reality, however, they all accomplish the same tasks. Mary Williams, marketing communications director for DocuWare, said the differences are a matter of semantics, and many industry terms are interchangeable.

However, a document management system is different from online storage, which simply provides a place for you to store a variety of documents. Document management systems do much more. They're essentially electronic libraries that can be easily searched, shared and managed. Some of the specific functions you can use document management systems for include:

  • Storing various document types, including word-processing files, emails, PDFs and spreadsheets
  • Creating new files directly within the system that can be edited and shared with others
  • Searching an entire library of files by individual keyword
  • Sharing documents with co-workers, departments and clients
  • Restricting access to certain documents
  • Monitoring who is viewing documents and when
  • Tracking edits being made to documents
  • Retrieving previous versions of edited documents
  • Controlling and regulating when out-of-date documents can be deleted
  • Accessing, editing and sharing documents via mobile devices

When using document management systems, you have the option of installing and running them on your own computer or network or accessing them via the cloud. Many providers of both options offer various versions of their software, which vary by storage space and features.

Costs for document management systems vary greatly. On-premise systems typically require higher upfront costs, including a one-time fee for the software based on the number of computers it's being installed on. Cloud-based versions typically charge monthly fees based on the number of users. These can typically range anywhere from $10 to $100 per user, per month.

Additionally, many on-premise and cloud-based options charge initial setup fees. This can cost hundreds to thousands of dollars depending on the number of users.

Since keeping things organized is critical for success, there are few businesses — regardless of size — that couldn't benefit from a document management system. Any business that handles forms, correspondence, emails, files, printouts, personnel or client files, charts, data, or any other type of paper or electronic document can use this type of solution to become more efficient, Pickard said.

Compared to those that still rely on paper files and folders, small businesses with an overarching system in place to handle all their information operate at a vastly superior level of productivity, said Greg Milliken, vice president of marketing for document management software provider M-Files Corp.

Editor’s Note: Looking for a document management system for your business? If you're looking for information to help you choose the one that's right for you, use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free:

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Even small companies that have most of their documents in digital form, but in a traditional folder structure, suffer many of the same drags on productivity as do businesses with paper-filing systems. That's because these companies constantly waste time looking in several locations for misplaced documents, Milliken said. This problem is often compounded by the creation of multiple versions of the same file, which results in errors and repeated work.

"Without a document management framework, small businesses find it very difficult to enforce reliable file organization and optimize their internal processes," Milliken said.

"An investment in a good small business document-management strategy has a meaningful impact on the ability of a small business to prosper," added Jeff Segarra, senior director of imaging product management for Nuance.

With so many document management solutions available, it can be tough to know exactly which one is right for your business. Jim True, vice president of product management at document management provider Cabinet, recommended searching for the following functions and features in a small business solution:

  • Filing structure: A document management solution that mimics a physical filing structure — including cabinets, folders and tabs — makes transitioning to paperless operations much easier and more intuitive. It also improves filing consistency and gives businesses the ability to easily apply access rights to certain documents.
  • Collaboration: The system you choose should facilitate teamwork through the easy sharing of documents. Users should be able access and share documents from the office or while on the road.
  • Cloud based: For companies with remote employees or offices in several locations, a cloud-based product unifies workers across one platform, allowing everyone to act as effectively as if the company were operating in just one location.
  • Compliance: Regulated industries must remain compliant. Enforcement of document-retention policy, audit tracking, and reporting and user-access controls are the primary tools a document management system needs to help businesses achieve compliance with regulations and internal policies.
  • Disaster recovery: The system needs to back up data at a remote facility to ensure it's protected from a disaster. Without this feature, fully recovering from catastrophic events, such as floods or fires, is nearly impossible. 
  • Custom user configurations: The document management system should accommodate your preferences, not the other way around. Creating a comfortable user experience that delivers the information in a custom view will drastically improve how efficiently the document management system performs.

There are a few other things businesses should search for in a document management system, Pickard said. One of the most important features is the system's scanning capability, which should be easy to use before and after the scan.

"Now, scanning takes just seconds, and if you get the right technology package, you can automatically create editable, keyword-searchable files in a universal format like PDF while you scan," he said. "A good scanning solution even makes bulk scanning easy, recognizing where separate documents begin and end in a stack and sending them to the right folder like a virtual file clerk."

The system should also be easy to search. Pickard said some document management systems look so complex that you need a database expert to help you locate the files you need.

"If you find a solution with integrated search features, you can simply conduct a keyword search to pull up documents in seconds [and receive] a preview to make sure you've got the right file before opening it," Pickard said.

Finally, look for a system that enables editing.

"It's handy to be able to make changes to electronic documents on the fly and transform printed pages into editable electronic files," Pickard said. "The right document management system makes these tasks quick and easy."

Thomas Schneck, president of DocuWare Group, advised those interested in document management systems to ask several critical questions before buying a solution, including:

  • How many users does the system have? A large installed base generally indicates that the document management system is mature technology that's well established. This shows that the vendor has a strong interest in maintaining the solution's stability and quality, and has maintenance agreements and other arrangements in place to finance ongoing development to ensure it won't become obsolete in the near future.
  • Does it have future-proof architecture? To get a long useful life from your document management solution, it needs to have future-proof architecture, such as mobile apps and a modern Web browser.
  • Does it integratewith your other software? Being able to integrate with all of your solutions, ­such as email and CRM systems, that bring in or generate documents is critical.
  • Is it scalable? You might only have five employees when you start using a document management solution, but what happens when your company grows? You don't want to have to change your system every time your business expands, so make sure the one you choose can easily scale to fit your business needs.

Besides keeping your business organized, there is a wide range of benefits to using document management systems. From always having access to your files regardless of where you are, to being able to search through thousands of different documents in an instant, the small businesses we spoke with reported a number of advantages to using these systems. Here are some of the largest plusses they pointed to:

  • Always accessible: As someone who often works outside the office, Sara Sutton Fell, CEO and founder of FlexJobs, said storing all of her files digitally provides a key benefit: She can get her important documents from anywhere. Whether going to an out-of-state conference for several days or a local coffee shop to work for an afternoon, using a document management system ensures she still has access to all of her files.
  • Easy access: One of the biggest plusses of a document management solution is that it gives employees quick access to their files. John Bustrum, CEO and founder of My403bCoach.com, said having such software in place means he's no longer forced to stockpile loads of files on his desk. Instead, when clients call, he can instantly find the documents he needs on his computer.
  • Easy to search: Being able to easily search through her company's documents is a huge benefit, said Karen Walker, founder of ONETEAM Consulting. She said her consulting projects generate a large amount of information over the course of several years, and the ability to quickly search for and retrieve presentations and notes is invaluable.
  • Better collaboration: Getting rid of hard copies of documents makes it easy for employees to work with each other, said Gary Tuch, founder of the Professor Egghead Science Academy. When multiple employees are working off of one document and editing is constantly happening, document management systems ensure workers always have the most up-to-date copy. Employees waste no time on printing revisions or double-checking to make sure they have the current version.
  • Added security: Increased security is a huge advantage of using document management solutions, said Andrew Southard, general manager of the Indiana-based Data Management Shredding, Inc. The technology has given his company the option to track who is viewing and editing each document, and designate which employees have access to which files. Being able to provide proof to customers or auditors of a file's chain of custody, from cradle to grave, is essential in today's business environment, Southard said.
  • Saves space: Exchanging paper documents for digital versions can save a tremendous amount of physical space in your office, said Randy Jourgensen, owner of Digital Office Solutions. Since transforming the company's office to a paperless environment more than 15 years ago, he has been able to convert space that was formerly only used for file storage into space that can now generate revenue.
  • Disaster recovery: Small businesses that have all customer records stored in half a dozen filing cabinets face the risk that these files might be destroyed, or that the business may lose access to the documents, should a disaster occur, said Alan Baker, president and chief consultant at Spitfire Innovations. If a water pipe bursts or there is a fire, business owners can rest assured that they can still operate with little impact, since their critical documents are stored online and spared from any destruction.

For a summary of our best document management system picks and to review our methodology for choosing them, visit our best picks page here.

Editor’s Note: Looking for a document management system for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free:

buyerzone widget

Additional reporting by Business News Daily writers Sara Angeles and Dave Mielach.

Chad  Brooks
Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.