Benefits of Electronic Document Management System: EDMS Advantages

Without a doubt, one of the most important assets of a company is data. A well-organized data storage allows not only to make faster business decisions but drastically improve processes as a whole.

Electronic document management systems are designed to do just that. With their help, any document is within a few mouse clicks. But EDMS is not just a fancy way of storing information.

What exactly are the advantages of an electronic document management system? What are the drawbacks?

It takes a step forward and organizes data using tags and keywords. It enables real-time collaboration between employees. It also provides data security, which makes it an ultimate tool for businesses of any size in any industry.

Are you in need of an EDMS but still not sure what it has to offer? In this article, we touch upon several significant benefits of EDMS that will make your life easier.

Top 7 Benefits of Electronic Document Management System

1. Enhanced Data Storage

This advantage is a no-brainer for anyone who knows a bit about document management systems. They do, in fact, optimize the way data is stored in a company. Turning an office into a storage facility is a trap that many companies resisting digitalization have fallen into.

Storing documents can actually cost a lot of money! Think about:

• paying rent (since you need a physical location)
• buying filing cabinets
• maintaining the space

These are the costs that easily can be saved by using an EDMS.

2. Improved Productivity

According to Nitro, employees spend 50% of their time creating and managing documents. Considering that many of them deal with paper documents or communicate via email, keeping a productive flow might be an issue. 82% of workers admitted that having an automatic tool for managing data would improve their productivity.

The time that you save for your employees is the time they can spend working for your business. Although implementing an electronic management system requires time and money, in the long run, you will certainly feel the benefits.

3. Better Time-Management

One of the advantages of using an electronic document system is time efficiency. When it comes to searching and keeping track of all the data in the company, there is no better solution than EDMS. On average, workers spent 18 minutes looking for a paper document. It’s 2 minutes when using an EDMS. That is almost a ten-fold difference!

What allows them to save all that time?

• Templates
• Drag-and-drop function
• Metadata
• Optical character recognition

That’s one routine task to delete from the list.

4. Reduced Costs

A good DMS requires an initial investment. However, further benefits to your budget are incomparable! Among other advantages of using EDMS, this one is easier to track.

There are several ways how such systems can help you reduce costs.

• by eliminating the need for filing cabinets and storage space. Depending on your office location rent may vary. However, DMS generally helps to save a lot since your data is stored in a cloud.

• by eliminating other related costs. Filing and storing a document may cost up to $20. Searching and replacing a lost document – $120. Multiply it by the ever-growing number of paper documents. Result? You will end up with a tight sum of money that could’ve been directed elsewhere. Not even mentioning the amounts of actual paper, ink, and equipment it would require.

• by eliminating security and disaster-related costs. One of the DMS benefits includes a guarantee of data security in cases of flood or fire. Moreover, a well-made backup function can protect documents in case of emergency power shutdown.

• by eliminating non-compliance costs. In the USA federal regulations cost businesses up to $2 million annually, and EDMS can actually warn employees when a certain document isn’t complying with these regulations.

5. Expanded Accessibility

To begin with, one of the main functions of the EDMS is to provide remote access for employees. Since the bulk of the information is stored in the cloud, it can be accessed from anywhere, including the comfort of your own home.

This function was especially important during the pandemic when we learned what it is to work from home full-time. Thanks to EDMS, they had access to all the necessary information, so it was possible to effectively organize a workplace outside the office.

In addition, you can also work with the system from a smartphone or tablet – today’s mobile and web developers for hire are trying to create not only a desktop version but also applications for iOS and Android so that employees can use it on the go.

6. Facilitated Editing and Versioning

In large companies, when several employees can work on the same document at the same time, functions like editing and versioning are a must. One of the benefits of an electronic document management system is the ability to track changes to a specific employee. It can also store several versions of a document in case you need to access the original.

According to Perforce Software, 83% of the workforce wastes time due to versioning issues. So, EDMS doesn’t just help avoid serious problems in business operations. It also helps save time and redirect the productivity of the employees.

Audit trail is a function that notifies listed people if changes have been made to the document. It’s an indispensable assistant for project managers who must keep a close eye on the project.

7. Security and Levels of Protection

Information theft can seriously damage businesses. And technology has taken a step forward to prevent these things from happening.

Implementing EDMS means tightening security with two-factor authentication and file encryption. It also offers roles within the system so that some people have limited access to certain documents. That way data is being protected not only from the “outside” parties but also from employees with different positions.

Find out more in our DMS Guide!

Disadvantages of an Electronic Document Management System for Your Business

These systems come with challenges that may affect your decision-making process. Here are the primary disadvantages of EDMS for your business, explained in detail.

1. High Initial Costs

Implementing an EDMS requires a significant upfront investment. This can deter small and medium-sized businesses with limited budgets. Costs typically include:

• software licenses
• hardware such as servers
• cloud storage subscriptions
• implementation fees for setup and configuration

Additionally, businesses may need to hire consultants or external vendors for system installation and training.

These expenses don’t always end with the initial purchase. Businesses often incur hidden costs during the implementation phase. Adapting the system to meet specific operational requirements can cost extra.

For companies managing large amounts of data, scaling infrastructure can add even more costs. And we remember that the upfront payment can be large too.

So you have to weigh the pros and cons and choose a provider wisely. The initial investment is only worthwhile if the system can deliver a return on investment (ROI) long-term.

2. Complexity of Implementation

Migrating to an EDMS is not as simple as flipping a switch. It requires:

• a detailed analysis of current workflows
• identifying inefficiencies
• determining how the new system will integrate with existing ones

This phase often involves data migration, where physical or digital files must be converted into formats compatible with the EDMS. For companies with complex or outdated document systems, this process can be time-consuming and error-prone.

Furthermore, employees must be trained to use the system. This training period can be disruptive to daily work. This is especially true if your employees struggle to adapt to new technologies.

Businesses need to find additional time and resources for a smooth transition.

3. Data Security Risks

One of the most popular concerns with any digital system is data security. EDMS platforms, particularly those hosted in the cloud, are susceptible to:

• cyberattacks
• unauthorized access
• data breaches

If sensitive business information or customer data is compromised, the consequences can include:

• financial losses
• legal penalties
• damage to the company’s reputation

Look for providers that offer encryption, multi-factor authentication, and role-based access controls. Also, make sure they update all of those measures continuously.

Businesses must also invest in additional security tools, such as firewalls and intrusion detection systems. For industries like healthcare and finance, where compliance with strict regulations like HIPAA or GDPR is mandatory, the stakes are even higher.

4. Advantages and Disadvantages of Electronic Document Management System: Dependence on Technology

An EDMS is heavily reliant on technology. This makes businesses vulnerable to potential disruptions. Internet connectivity is critical for cloud-based systems. And any outages can prevent users from accessing important documents when needed.

Similarly, hardware failures, software bugs, or system crashes can lead to downtime. This may reduce productivity and delay projects.

Another challenge is the rapid pace of technological advancement. Businesses using an EDMS must keep their systems updated to remain compatible with new tools and platforms. This dependence on regular upgrades can strain resources. This is particularly true for small businesses without dedicated IT teams. In the event of system malfunctions, companies must rely on technical support from vendors. And it may not always be readily available.

This is not the case of ProCoders, of course. We’re ready to help anytime!

5. Ongoing Maintenance Costs

While the initial investment in an EDMS is significant, the ongoing maintenance costs can also be substantial. Maintenance includes regular software updates to fix bugs, improve security, and add new features. Additionally, businesses need to allocate resources for:

• server upkeep
• database optimization
• troubleshooting

For companies using cloud-based EDMS solutions, subscription fees often include maintenance. But the cumulative cost over several years can exceed the initial investment. On-premise systems, on the other hand, may require hiring dedicated IT staff or contracting external support teams to handle maintenance tasks. Businesses need to account for these recurring expenses when evaluating the affordability of an EDMS.

6. Employee Resistance

Introducing a new system often meets resistance from employees. Those who are accustomed to traditional document management methods are the roughest competition.

Employees may perceive an EDMS as overly complicated or unnecessary. This may lead to reluctance in adopting the new workflow. This resistance can slow down the implementation process and reduce the system’s overall effectiveness.

To address this challenge, businesses must invest in comprehensive training programs. You have to demonstrate the benefits of the EDMS and provide hands-on learning opportunities.

Clear communication about how the system will improve individual and team performance can also help ease the transition. However, the time and effort required to overcome employee resistance add another layer of complexity to the implementation process.

7. Compatibility Issues

An EDMS may not always integrate seamlessly with a company’s existing software or tools. This lack of compatibility can lead to inefficiencies. Employees may need to manually transfer data between systems or work with multiple platforms simultaneously.

For example, a business is using specialized industry software for project management or customer relationship management (CRM). It may struggle to align them with the EDMS. In such cases, companies may need to invest in custom integrations or additional software solutions. These can drive up costs and complicate workflows. Compatibility issues can also result in data inconsistencies, undermining the reliability of the EDMS.

While the disadvantages of an EDMS are real, they can often be mitigated through:

• proper planning
• robust training
• ongoing support

Understanding these potential challenges allows businesses to make better decisions. You can develop strategies to maximize the benefits of your document management system!

ProCoders can help you with the development of a unique EDMS that is:

• secure
• compatible with other systems
• easy to learn

ProCoders Advice about the Advantages and Disadvantages of EDMS for Your Business

At ProCoders, we know how useful EDMS are. We’ve worked in the software development industry for no less than 10 years. And our teams constantly come across such systems, both in development and implementation. We can say with confidence that going digital is the best option you could choose for your data.

Yes, changing from paper to DMS might not be the easiest task. But looking at all the benefits of DMS, it’s worth it.

The cons can always be resolved through security practices and proper employee learning, among other strategies.

If you worry about the transition or have no experience, we can offer our services as a staff augmentation company. That way you can be sure an experienced developer is setting up an EDMS. We can help you develop your own system or integrate an existing one into your workflow. Contact us and let’s find out how we can help!

Our company employs the most talented developers. The team works with over 50 languages and frameworks. So, we know what technologies can be useful in developing your very own electronic document management system!

To be sure the solution fits your needs, we can offer to do a discovery phase. During the phase, we analyze all business operations and tailor the EDMS directly for you. That way, you can rest assured that your employees will use all features and functions extensively. As a result, you’re not going to pay for useless features. You’ll be able to redirect this money to something more productive, such as hiring new specialists.

Conclusion

The transition from paper documents to EDMS is not just a tribute to the fashionable trend of digitalization. It’s a powerful tool to increase the efficiency of your business.

Today’s market is increasingly competitive. Do you need a push to dominate the industry and rise to the top? Maybe helping your employees search for and prepare documents is that push? Responding quickly to customer requests with the right materials sounds very good!

The benefits of EDMS are endless, starting with time and cost-efficiency and ending with enhanced productivity. We’ve just covered seven of them so as not to overcrowd the topic. The more info there is, the more confusing the topic could get.

Hopefully, in this article, we succeeded in showing you that the use of an electronic document management system is a good choice.

Do you have questions about the implementation and use of the EDMS in your company? Want to discuss your specific features? Let’s schedule a consultation with our specialists. They will be happy to help answer all your questions!