What Is a Document Management Solution?

Document management challenges can significantly impact your business, leading to a 21.3% loss in productivity. While email remains the preferred order channel for 45% of B2B buyers, manual processing introduces substantial inefficiencies. This approach typically adds an extra 9 hours to fulfillment time, potentially causing delays of up to 2 days. Moreover, manually processed orders are 33% more likely to be late and generate 200% more errors compared to their digital counterparts.

The financial implications of these inefficiencies are severe. A single order error costs an average of $5,000 directly. However, when factoring in rectification expenses and potential customer loss, the total cost can skyrocket to $17,800 or more.

Unsurprisingly, poor order handling ranks among the top reasons customers become frustrated and take their business elsewhere. In fact, companies lose a substantial 10% of their business to competitors due to subpar customer experiences.

Given these challenges, implementing a digitized Document Management System (DMS) has become essential for organizations aiming to maintain a competitive edge. A well-implemented DMS can transform your operations, maximizing efficiency, enhancing collaboration, and ultimately improving your bottom line while reducing customer churn.

Continue reading to discover how a Document Management Solution can revolutionize your business processes, leading to improved productivity, accuracy, and customer satisfaction.

What Is a Document Management Solution? 

A Document Management Solution (DMS) is a comprehensive digital system designed to streamline the creation, organization, storage, and management of essential business documents. This advanced technology optimizes workflows by providing easy access to critical content, such as invoices, purchase orders, and forms, for your entire workforce, regardless of their location.

By implementing a DMS, businesses can significantly reduce the time and effort spent on manual document handling. Instead of wasting valuable hours retrieving and searching through physical files, employees can quickly locate and access the information they need. This efficiency allows your team to focus on core business tasks that drive growth and innovation.

Why Is an Automated Document Management Solution Important?

Traditional document management that relies on manual processes leads to wasted time and missed opportunities. Let’s examine how implementing an automated document management solution addresses these challenges:

Problems with Traditional Document Management

• Time-consuming manual processes.

  Inefficient filing systems force employees to spend significant time searching for documents, recreating existing content, and fixing errors. Research shows that the average employee spends over 1.8 hours daily gathering and retrieving information due to outdated practices. For a team of 25, that amounts to a staggering 45 hours of lost productivity daily.

• Lack of version control

Without proper document version management, your business will struggle to maintain accurate records. Multiple iterations circulating together can make it hard to identify the latest information. Collaboration on documents becomes challenging when changes are not tracked or synchronized.

• Limited accessibility and collaboration

Physical documents or files stored locally on individual workstations can only be handled by one person at a time, limiting employees’ ability to collaborate from different locations. Sharing documents via email introduces security risks and delays the approval process. 

• Inadequate security and compliance

Sensitive customer and operational data require strong protection. Traditional methods often lack sufficient control over who can access and edit critical information, leaving your business vulnerable to data breaches and non-compliance with privacy regulations. 

• Difficulty in scaling and integrating systems

As your operations expand, relying on disorganized files and manual workflows leads to increasingly inefficient processes. Integrating document processes with applications like CRM platforms becomes complicated without centralized management. 

What are the Benefits of a Document Management Solution?

An AI-driven document management system enhances efficiency, provides easy access to critical information, safeguards sensitive data, ensures regulatory compliance, and reduces long-term costs. These advantages help your business thrive. Let’s explore the specific benefits of implementing an automated DMS:

• Ensuring Maximum Efficiency: Manual orders lead to 28% more late deliveries and 49% more order errors than digital orders. A digital DMS streamlines workflows by eliminating manual tasks such as inputting, sorting, storing, mailing, and searching for paper documents like invoices and orders. These improvements reduce processing time and enhance overall efficiency.
• Enabling Easy Accessibility: Storing documents digitally in a centralized repository means your employees can access important files from any internet-connected device. Thirty-two percent of companies plan to increase order automation to enhance efficiency and remote collaboration.
  Storing and Securing Documents: Data breaches can cost an average of $4.5 million. Implementing a DMS provides enhanced security measures like encryption, access controls, and audit trails, safeguarding sensitive information.
• Meeting Compliance Standards: A digital DMS helps your business fulfill legal and industry regulations by enforcing retention policies and providing full auditability. Proper document handling procedures and simplified reviews reduce compliance risks. 
• Lowering Costs: Reducing physical storage and mailroom costs leads to long-term savings. Efficiencies gained from automated workflows also minimize document processing costs over time. Companies using EDI reported on-time rates above 90%, compared to only 31% for manual orders, demonstrating clear cost benefits and operational efficiencies.

How Do Document Management Solutions Work?

Document management solutions enhance the entire lifecycle of document handling, from capture to secure access. Here are the key processes that allow this system to improve your distribution or manufacturing operations:

• Capturing Documents: The DMS captures relevant files through scanning paper records, EDI export, email extraction, or direct uploads. This crucial initial step ensures all pertinent materials are swiftly converted to digital format for further handling within the system.
• Storing the Documents: The DMS stores all documents in a centralized, cloud-based repository accessible to your team from any location. 
• Organizing Documents: The DMS helps you organize captured content using folders, tags, and metadata fields related to the subject matter, department, project, or client. 
• Enforcing Access Control: The solution applies tight permission settings to specify which users can view, edit, print, or delete each document category. 
• Supporting Search and Retrieval: Users can search the repository using keywords, phrases, dates, and other criteria to retrieve the necessary records quickly.
• Maintaining Audit Trails and Compliance: The system automatically logs all document access, modifications, and related activities to help with audits and confirm adherence to regulations.

Learn more about how the power of document automation is transforming customer service.

How Do You Choose the Right Document Management Solution?

Conducting a comprehensive evaluation of your unique requirements is essential for selecting the most suitable Document Management System (DMS) for your distribution or manufacturing business. An effective DMS will securely store your critical operational and customer files and enhance your workflow efficiency. Here are the key factors to consider during your evaluation process:

1. Assess Your Needs and Requirements

Take inventory of the types of documents your organization currently handles, the volumes involved, and the specific capabilities necessary for your use cases. Identify any special needs or compliance requirements to ensure the DMS can meet them.

2. Consider Usability and User Experience

Ease of use among your employees will impact adoption levels, so ensure the selected solution is intuitive to navigate and easy to learn. A user-friendly interface can significantly reduce training time and increase overall productivity.

3. Evaluate Security Features

Robust access controls and compliance features are essential to protect sensitive documentation from unauthorized access.

4. Assess Integration Capabilities

Consider how well the DMS will connect to your existing software ecosystem, such as CRM or ERP platforms already core to your operations.

5. Check for Scalability and Flexibility

The chosen solution should adapt as your needs evolve and support your business's growth projections. 

6. Consider Total Cost of Ownership and ROI

Weigh the investment against potential cost reductions through improved efficiency and streamlined workflows to ensure a good long-term value.

7. Review Vendor Reputation and Support

Investigate customer service ratings and industry standing to have confidence in a dependable technology partner.

The challenges posed by traditional document handling methods can significantly hinder your organization's growth, productivity, and customer satisfaction. Even a single error can cost you dearly.

With half of customers defecting to competitors after just one bad customer experience, and that number jumping to 80% for two or more negative encounters, the stakes couldn't be higher.

By implementing a Document Management Solution, you're not just solving current problems; you're also positioning your business to meet and exceed future customer expectations.