What Is an EDMS?
Document management is an integral part of every company’s operations—its circulatory system. No decision can be implemented effectively unless it is properly documented. Establishing document workflows is not bureaucracy but an essential step toward smooth and uninterrupted business operations.
Today, a large proportion of business documents exist electronically. Like paper documents, they must be completed, registered, organized, stored, updated, and sent to the appropriate recipients. Almost everyone has either performed this work personally or waited for someone else to do it—for example, employees of a government institution. Therefore, we all know how exhausting and time-consuming routine document processing can be.
Electronic Document Management Systems (EDMS) are designed to accelerate and simplify document-related work. These systems consist of several applications, each responsible for a particular document operation. Their functionality may include corporate document templates, registration of incoming correspondence, document review and approval mechanisms, automated reports, and more.
There are four main types of EDMS:
- Records management. A system for managing correspondence and the movement of documents between employees and counterparties.
- Workflow. A system for configuring document-related business processes.
- Archives. A system for storing documents with different access levels and providing fast search capabilities.
- ECM. A comprehensive enterprise content management system covering documents, spreadsheets, PDF files, and other types of content. It includes the functionality of all the systems listed above.
Implementing an EDMS can reduce routine document processing, completion, and exchange activities several times over. In addition to saving time, an EDMS reduces the risk of data loss, accelerates business processes, and improves interaction both within the company and with counterparties.
How to Determine Whether Your Company Needs an EDMS
If you are considering implementing an EDMS, you should answer several questions:
- How are documents exchanged between departments, processed, and stored? Can employees quickly find the required document when necessary?
- Does the company have document retention rules covering document organization, review periods, copy retention, and final deletion? Is there a designated archive? Are regular archive backups configured?
- What path does a document follow from the moment it is created until it is transferred to the archive? Can this process be monitored at every stage? How long does each stage take?
- Has the company configured different access levels for different documents? Have employee groups, such as departments, been assigned specific access levels? Are access levels consistent across departments, and what happens to access permissions when documents are exchanged?
If the company’s manager or another responsible person can confidently answer all these questions, the company may be able to operate without implementing a new EDMS—most likely because it already uses one. In all other cases, the implementation of an EDMS should be planned for the near future.
What Benefits Does an EDMS Provide to Businesses?
A business that implements an electronic document management system gains the following benefits:
- Automation of routine tasks and savings in employees’ working time.
- Reduced impact of human error on data accuracy and document loss.
- Faster delivery of information to all employees or selected groups of employees.
- Improved protection of important information through configurable access levels.
- Transparent document workflows, including the ability to quickly find a document, trace its path through the system, and review its editing history.
- Compliance with the ISO 9000 international information security standards.
How to Choose the Optimal EDMS: Five Key Criteria
There are countless criteria for selecting an EDMS because every industry has its own requirements. Let us consider five criteria that can be regarded as universal across all sectors.
The user interface is the primary tool through which employees interact with the system. Its usability determines how long employee training will take, how many errors may occur in the future, and how much time will be required to correct them.
Company documents usually have different confidentiality levels—from publicly available materials to highly sensitive documents containing financial and other critical information. An EDMS should allow roles and access levels to be configured for individual employees and groups, such as departments.
The larger the company, the less likely it is that only one person will work on a document. Collaboration capabilities simplify and accelerate the preparation of important documents and their subsequent approval by management.
The average retention period for an important company document is three years, while the most critical documents may need to be stored indefinitely. To support this requirement, an EDMS should allow the company to create an archive, configure personalized access, and automatically generate backups at specified intervals.
Configuring external access is a separate and relatively complex task for system administrators. However, without it, employees cannot work remotely, which significantly reduces the benefits of implementing an EDMS.
Off-the-Shelf or Customized EDMS?
An off-the-shelf EDMS is a ready-made software solution, whereas a customized system is developed specifically for the customer’s requirements. The choice always depends on the customer’s needs. We recommend considering the following factors:
Market availability. There are many ready-made EDMS solutions for companies of different sizes and industries. Each solution has its own characteristics, but it can be implemented immediately after purchase. A customized system must be developed from scratch, which takes time.
Implementation cost. For packaged solutions, the implementation cost is usually determined at the beginning of the project and includes a defined set of services. The total implementation cost of a customized system is more difficult to calculate in advance.
Support cost. Configuring and optimizing a packaged solution is generally treated as a separate project with its own budget unless these services are agreed upon at the outset. Support for a customized solution may be included in its cost, but it can involve additional challenges, such as the availability of resources within the development company.
Integration with other systems and products. Popular off-the-shelf solutions either include integrations with widely used products in their standard packages or offer them as additional options. Integration companies also already have experience implementing new software and configuring interoperability between different systems.
Preliminary Audit Before EDMS Implementation
Before implementing an electronic document management system, the company must conduct an audit. The audit should cover both the company’s current document processes and its technical infrastructure. This helps select the appropriate system and determine the required functionality.
During the audit, the current state of document management is described and documented. These data can later be used to evaluate the return on investment of the implemented EDMS.
The audit is conducted by specialists from the vendor or integration company supplying the software. Based on its results, an EDMS implementation plan and a list of required integrations are prepared. In some cases, additional investment in infrastructure upgrades may be necessary.
How to Evaluate the Effectiveness of EDMS Implementation
It is important to understand that a system of this scale may take several years to pay for itself fully. Depending on the selected solution and implementation package, the average payback period is three to five years. To calculate the system’s return on investment accurately, the company must audit its processes before implementation and record relevant indicators, such as the time required for a document to complete its workflow and the amount of working time spent processing documents.
The system can be considered cost-effective if employee productivity increases because less time is spent working with documents. On average, an EDMS can save up to 60% of document-processing time. Indirect benefits, whose value may not always be immediately apparent, should also be considered. These include fewer cases of information loss and fewer disruptions to business processes caused by missing data.
Conclusion
Based on LITIKO’s experience, an electronic document management system is not merely a competitive advantage over companies that still rely on paper-based records management. Following the global pandemic, many companies adopted remote working arrangements, and their document workflows became almost entirely electronic.
Under these conditions, managing electronic documents manually is an inefficient use of employees’ time, particularly when highly qualified specialists are involved. For most businesses, transitioning to an EDMS is now a necessity, and deciding when to implement the system is only a matter of time.
