Benefits of EDMS: Electronic Document Management System Advantages
14 min.

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.

By digitizing documents, EDMS transforms physical documents into digital ones, enhancing operational efficiency and streamlining content management. EDMS stores documents in a digital format, which improves organization, saves space, and enhances productivity by facilitating easy access, sharing, and collaboration.

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.

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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.

Definition and Importance of EDMS

Electronic Document Management Systems (EDMS) are software platforms designed to capture, store, manage, and track electronic records. These systems play a crucial role in modern business operations by providing a structured, easily navigable database of business-critical data. With an EDMS, companies can streamline their document management processes, ensuring that all documents are organized, secure, and easily accessible.

Key functions and features of an EDMS

EDMS systems ensure the secure storage and organization of documents in a centralized repository, making them accessible to authorized users anytime, anywhere. Key functions and features of an EDMS include:

  • Data Capture: This involves scanning and importing physical documents into the system, transforming them into searchable digital formats. This process not only digitizes paper documents but also makes them easier to manage and retrieve.
  • Document Indexing: Assigning specific keywords to documents for quick and accurate retrieval. This feature allows users to find the documents they need swiftly, using tags and metadata.
  • Access Control: Ensuring that sensitive data is only accessible to authorized users. This robust security feature helps protect confidential information from unauthorized access.
  • Version Control: Tracking changes made to documents and reverting to previous versions if necessary. This is particularly useful in collaborative environments where multiple users may edit the same document.
  • Collaborative Document Editing: Allowing multiple users to work on files simultaneously, enhancing productivity and ensuring that everyone is on the same page.
  • Backup and Recovery: Safeguarding against data loss by storing copies of documents in secure off-site locations. This ensures that critical documents are protected in case of system failures or disasters.

Importance of EDMS in modern business operations

Implementing an EDMS can bring numerous benefits to an organization, including:

  • Improved Document Accessibility and Reduced Physical Clutter: With documents stored digitally, employees can access them from anywhere, reducing the need for physical storage space.
  • Enhanced Collaboration and Communication: Team members can easily share and work on documents together, improving overall communication and efficiency.
  • Increased Productivity and Reduced Time Spent on Searching for Documents: With powerful search capabilities, employees spend less time looking for documents and more time on productive tasks.
  • Better Data Security and Protection Against Unauthorized Access: EDMS systems offer robust security features, ensuring that sensitive data is protected from breaches.
  • Compliance with Regulatory Requirements and Reduced Risk of Data Breaches: EDMS helps organizations comply with industry regulations, reducing the risk of costly fines and data breaches.
  • Cost Savings Through Reduced Storage Space and Associated Expenses: By eliminating the need for physical storage, companies can save on rent, maintenance, and other related costs.

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 by utilizing a digital format. Turning an office into a storage facility is a trap that many companies resisting digitalization have fallen into.

when paperwork attacks

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 can easily 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.

performance improvement

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.

time saving is one of the best advantages of electronic document management system

4. Reduced Costs

A good DMS requires an initial investment. However, further benefits to your budget are incomparable! Among other advantages of using electronic document management software, 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, document management software 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.
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  • by eliminating security and disaster-related costs. One of the document management software 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 an 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.

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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 made by 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.

advantages and disadvantages of edms

Audit trails are a function that notifies listed people if changes have been made to the document. They enable organizations to track document revisions, monitor user activity, and demonstrate compliance during audits, thereby minimizing legal risks associated with document management. 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.

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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!

Scalability and Flexibility of EDMS

EDMS systems are designed to adapt to the growing needs of an organization, providing a scalable and flexible solution for document management. As businesses expand, their document management requirements evolve, and an EDMS can grow alongside them.

Ability to scale with growing business needs

EDMS systems can handle increased volumes of documents without compromising efficiency or security. They can also be easily integrated with other systems used by the organization, such as workflow automation tools and digital signature software. Additionally, EDMS systems can be configured to meet specific business requirements, including customized workflows, user roles, and access controls.

By implementing an EDMS, organizations can ensure that their document management system grows with their business, providing a secure, efficient, and scalable solution for managing critical documents. This scalability ensures that as your business operations expand, your document management system remains robust and effective, supporting your growth seamlessly.

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. Digitizing documents is a crucial part of this process, as it not only minimizes physical clutter but also improves accessibility and collaboration. 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!

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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.

FAQ
What are some of the advantages of using an electronic document management system?

Notable benefits of EDMS include reduced costs, improved security, and overall efficiency of the business. Implementing this system means saving a lot of time on mundane day-to-day procedures like printing or filing documents, as well as searching for a paper document – tags, keywords, and metadata allow DMS users to find a document within 1-2 minutes. Generally speaking, document management systems are designed to enhance data storage and improve the overall experience.

What benefits of DMS can directly influence my business?

A short answer would be all of them but in their own specific way. Among all benefits of EDMS, the most prominent and easy-to-spot one would be definitely cost reduction, since you would be able to see the results almost immediately. And these results are quite tangible – literal money that you can redirect and use to hire new specialists or buy new equipment for your core activities.

However, we would also like to highlight increased productivity that would allow you to develop faster and reach your target goals.

What Challenges may I Come Across When Implementing a DMS?

The process of transition from paper documents to DMS, or even migrating from one DMS to another may seem like a challenge. The most obvious pitfall is retraining your staff and giving them time to adjust to the system, its functions, and interface.

For non-technical CEOs and companies that aren’t involved in the IT sector, it may be hard to keep up with 24/7 support and constant updates all document management systems require. However, if you buy an out-of-the-box solution the service provider will take care of that, and if you have a custom DMS you can always hire (or outstaff) a tech support specialist!

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 the 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!

2 Comments:
  • This was a blog with high-quality content. This blog assisted me in learning about document management systems and understanding the specific benefits of incorporating DMS into my business.

  • Really nice article, I like all points were showcased with memes. It helps the reader to stay connected and not get bore reading.

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