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Document Management Systems
A Buyer's Guide

A Business News Daily Buyer's Guide

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Do you remember the days when filing cabinets lined every wall of the office? Or is it still the case that paper records are taking up valuable square footage and making it difficult to stay organized? Luckily, in today's digital world, we have document management software to improve both the organization and accessibility of any company documents.

But where to start when choosing a document management system? After all, it's a crowded field with a lot of different vendors. This guide will help you understand the basics of document management systems and provide you with a roadmap for the procurement process. Also, if you want a reliable shortlist to choose from, you can always check out our best picks for document management software.

Document management systems are essentially electronic filing cabinets your organization can use as a foundation for organizing all digital and paper documents. Any hard copies of documents can simply be uploaded directly into the document management system with a scanner. Oftentimes, document management systems allow users to enter metadata and tags that can be used to organize all stored files.

Most document management software has a built-in search engine, which allows users to quickly navigate even the most expansive document libraries to access the appropriate file. Storing sensitive documents as well? Not to worry – most document management systems have permission settings, ensuring only the appropriate personnel can access privileged information.

These are some of the most important document management features:

  • Storage of various document types, including word processing files, emails, PDFs and spreadsheets
  • Keyword search
  • Permissioned access to certain documents
  • Monitoring tools to see which users are accessing which documents
  • Versioning tools that track edits to documents and recover old versions
  • Controls regulating when outdated documents can be deleted
  • Mobile device support for accessing, editing and sharing documents

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:

Choosing the right document management system starts with accurately assessing your organizational needs. One of the largest choices you'll have to make right off the bat is whether you want an on-premises or cloud-based solution. Each type of system offers the same functionality, but there are several key differences in the way maintenance is performed and data is stored.

An on-premises solution requires you to use your own servers and storage, which means you need to perform your own maintenance. You'll also be responsible for the security of all your data, so it's important to back it up. This option typically makes sense for larger companies with dedicated IT resources because of its higher technical demands, but it also places you in direct control of your own system. Technical support and software updates from the vendor are usually contingent on whether you continuously renew an annual subscription package.

Pros: The biggest benefit of a self-hosted document management system is that you are always in control of your system and not relying on anyone else to keep it up and running. You're not dependent on the internet either. If your online connection goes down, you still have access to all your documents.

Cons: The downside comes in the large upfront costs, as well as the extra yearly expense of software updates. In addition, it's up to you to make sure you have a proper backup system in place, since your files aren't automatically saved in the cloud. Another possible negative is that not all self-hosted systems work with both Windows and Mac computers; many are compatible with only one or the other.

Cloud-based software is hosted by your provider and made accessible to your organization online. Typically, cloud-based solutions charge a monthly or annual fee, which includes all maintenance and software updates. Depending on the system you choose and the features you require, pricing for cloud-based systems can range from a few dollars per user per month to more than $100.

Pros: The biggest benefits are that you don't need an IT team to install the software and keep it running properly, and that there aren't any large upfront costs. You also can tap into these systems from anywhere that has online access, and you don't need to back up your files, since they automatically save in the cloud.

Cons: You are at the mercy of your provider to keep the system up and running. If your provider has a problem with its data center, it could prevent you from accessing your files until the situation is resolved. In addition, if your internet connection fails, you won't be able to get to your files. Cloud solutions also typically have storage limits.

Document management systems can be sprawling and complex. If you're still not sure where to start, consider this list of frequently asked questions.

Q: Are document management systems valuable only to large organizations, or can small businesses benefit from them too?

A: Although they may not have the extensive number of files that larger organizations do, small businesses can still benefit from document management systems.

Q: I often see references to document management systems, document management software and document management solutions. What are the differences?

A: Despite the different names, they all accomplish the same tasks. The terms can be used interchangeably to describe the same platforms.

Q: What's the difference between cloud storage and cloud-based document management systems?

A: While cloud storage serves simply as a place to house documents in the cloud, cloud-based document management systems are much more robust solutions to help businesses manage their important documents.

Q: How do you get documents stored in the system?

A: There are several ways to add files, such as uploading them from your computer and scanning paper documents directly into the system.

Q: How do you find documents in the system after they're filed away?

A: These systems offer many ways to quickly locate documents, including by searching the file's title, the name of the author and when it was added into the system. In addition, many of these solutions allow you to search for content within each file or by file type.

Q: Do document management systems work with other programs I am already using?

A: Most systems feature integrations for Microsoft Office, Salesforce, DocuSign, QuickBooks and several other popular programs. Some also include an application programming interface (API) that allows customized integrations.

Q: Besides keeping you more organized, can document management systems help you get work done in other ways?

A: Yes, and one way is with workflow tools, which help businesses keep assignments and projects on track. These tools, which are included in some systems, notify employees when it's their time to work on certain assignments and help ensure that tasks never get lost in an employee's inbox.

Q: With document management systems, do all users have access to every file?

A: Most document management systems have security restrictions that can control which employees have access to which files. This ensures that employees see only the documents they should. For example, personnel contracts can be set to be available only to HR staff rather than every member of the organization.

Q: What happens if a disaster strikes my business? Are the files and documents stored in the system lost for good?

A: A big benefit of the cloud-based solutions is that your data is safely stored offsite. On-premises solutions often rely on your own servers and storage, however, so it's important to back up all your data.

When choosing a document management system, there are a few key features to keep an eye out for. Discuss your needs at length with any sales reps you contact, and be sure to get technical specifications and pricing in writing. We recommend ensuring that any document management system you consider includes the following:

  • File structure: The system should offer an easy-to-use file structure that makes sense to users, such as a cabinet-drawer-folder approach.
  • Searching: You want a wide variety of options for quickly finding files. You should be able to search not only by the file's name, but also by the content inside the file, date it was last modified, file type and more.
  • Ease of use: The system should be simple for employees to use. If it is too difficult, you won't get complete buy-in from the staff, which will disrupt your day-to-day operations and lead to confusion.
  • Mobile access: You want a document management system that is always accessible via smartphones and tablets.
  • Integration: The system should easily integrate with the programs you already use, such as your email client and customer relationship management software. Ask about open APIs when discussing any solution with a sales rep.
  • Scanning: The solution should be compatible with a wide variety of scanners.
  • Security: The system should allow you to restrict who can see specific folders and files. You should be able to set access permissions by employee.

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

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:

Chad Brooks and Andreas Rivera also contributed to this article.

Adam C. Uzialko

Adam C. Uzialko, a New Jersey native, graduated from Rutgers University in 2014 with a degree in Political Science and Journalism & Media Studies. In addition to his full-time position at Business News Daily and Business.com, Adam freelances for a variety of outlets. An indispensable ally of the feline race, Adam is owned by four lovely cats.