The Facts about Electronic Document Management

The Facts about Electronic Document Management


What is Electronic Document Management?.

What does an Electronic Document Management system do?.

What are the benefits of EDM?.

10 Reasons to adopt EDM.

Document Management statistics

Document Management checklist

What is Electronic Document Management?

Electronic Document Management is a method of providing a single point of access for all of your business critical information from its creation to its archival or destruction.

It is also:

A systematic method for storing, locating, and keeping track of information that is valuable to a business. The key characteristics of an EDM system are the ability to manage information, to collaborate when creating information, to distribute the information, and to allow secure and immediate access to the greatest number of people.

And according to the British Standards Institute:

Effective EDM is key to business efficiency and competitiveness. The value of an organisation’s information assets is critical in many business sectors.

This document is intended to provide a useful introduction to EDM - it outlines the benefits of implementing an EDM system, what an EDM system will do for you, some statistics around EDM management, a checklist of key things to consider when looking for an EDM system and how you can get the best help and advice as you consider implementing an EDM solution.

What does an Electronic Document Management system do?

An EDM system provides a single source of access to business critical information, giving users immediate access to this information.

EDM systems consist of both software and hardware, the software allows you to manage documents, including both scanned and documents and electronic documents (such as Microsoft Word, Outlook and Excel).

These documents are stored in a central repository that permits only authorised users to search and retrieve documents and carry out numerous other activities such as e-mailing and printing of the document.

The hardware usually consists of a scanner which will capture an electronic image of a hard copy document. Scanners can very hugely in terms of their throughput and functionality from a basis Multi-Function Device (MFD) to high volume scanners for production level volumes.Typical systems involve the scanning of original paper documents, and then the storage of the scanned image in the EDM system. The image is then manually “indexed” against appropriate criteria in order to make finding the image easier.

For instance, a user scanning a purchase invoice might want to index the document against the Invoice Number, Date and Supplier Name to aid future retrieval.

Indexing can be carried out automatically by performing Optical Character Recognition (OCR) on the image, storing the text along with the image without the need for manual indexing.

OCR along with ICR (Intelligent Character Recognition) and IMR (Intelligent Mark Recognition) allow a large amount of data to be captured automatically therefore saving a significant amount of time otherwise spent manually indexing and warrant separate investigation.

EDM systems include the ability to restrict access to certain documents or groups of documents to ensure only authorised users can access them. Along with security controls, these enable users to be granted different levels of access.

Optional elements within an EDM system include Workflow where documents are moved through a business process to various individuals in order for them to make a business decision on that document.

This is particularly useful for things like invoice authorisation processes where individuals need to approve or reject invoices for payment. By automating the approval process a significant amount of time can be saved.

Other optional elements include integration of the EDM system with your current line of business applications e.g. your financial system where the user is able to access related documents from the EDM system without the need to leave the line of business system.

What are the benefits of EDM?

EDM is now becoming one of the fastest growing back office technologies as many companies are beginning to understand that information in electronic format is not only more immediately accessible but it is also more secure and manageable. The next few pages are intended to outline some of the more obvious benefits and also to provide some quantifiable metrics that will help you calculate a return on investment from the implementation of an EDM solution. A set of statistics on EDM has also been included to aid the justification process.

  • Reduce document access and retrieval times - this will help you process transactions quicker, increase your productivity and improve your customer services
  • Provide secure back-up and disaster recovery compliance – much of your data is held on vulnerable media that would not survive a disaster, once it’s all stored electronically it can be easily backed up
  • Make better use of office space – no more need for multiple filing cabinets and document storage cupboards thus reducing office costs
  • Help with legal compliance issues – for example the Sarbannes-Oxley Act requires an efficient document retention policy which EDM will help provide
  • Improve document security – much of our paper-based information is very sensitive and yet it is not held securely
  • Reduce work and document duplication – no more need to make numerous photocopies for distribution
  • Reduce paper and printing costs as well as postage
  • The list below shows the amount of time wasted by each member of staff on document related tasks. This can be fairly easily quantified through number of staff and cost of the staff.

    10 Reasons to adopt EDM

    1. Documents are hard to find (1 hour wasted per week).

    2. Content is hard to manipulate and repurpose (1.5 hours).

    3. Documents are hard to update (1 hour).

    4. Documents are hard to share (1 hour).

    5. Content is hard to publish consistently (30 minutes).

    6. Document creation is an ad hoc process (30 minutes).

    7. Document review is an ad hoc process (30 minutes).

    8. The importance of a document's content is not obvious (30 minutes).

    9. Paper-based distribution and storage is costly in terms of storage, copying and printing (1 hour).

    10. Paper-based archiving is expensive to maintain and inefficient for retrieval (30 minutes).

    Source: Coopers & Lybrand

    Following an assessment of the costs of the current manual method of operations, enterprise scan begin to calculate return on investment and benefits. Expected and real benefits cited by organisations such as your own that adopt EDM systems include:

  • Lowered document production costs
  • Avoidance of data duplication
  • Promotion of data reuse, leading to lower costs and time for document production, repurposing and distribution
  • Wider and easier access to documents to facilitate knowledge worker productivity
  • An increase in data integrity
  • Better-quality documents
  • Slower growth in head count due to higher productivity
  • Reduction in head count
  • Document management systems are becoming an essential part of the modern company's disaster plan. Fire, flood or electronic failure can happen at any moment.

    Many business now utilise advanced techniques to ensure their electronic data is properly backed up, but few ensure paper documentation is held securely. Something in the region of 76% of business that have a disaster affecting paper storage will go out of business. EDM can help retain the vast amounts of information currently held within paper documents and protect it from future disaster.

    Source: Coopers & Lybrand

    Document Management statistics

    Workers now waste 20 percent to 30 percent of their working hours managing document-based information outside automated systems and this is expected to grow.

    Enterprises can save at least half of the time and money now spent on non-automated DM.

    Implementing an enterprise-wide DM system can thus provide an ample ROI, paying for itself in two to three years.

    One question enterprises often ask about EDM systems is how can they be cost justified? Put another way, the question is “what will our ROI be if we implement EDM either on a departmental or enterprise-wide basis?” Enterprises have a gut feeling that EDM is a good idea, but need hard numbers to justify costs.

    Gartner research from 1997 forecast that the amount of time wasted would continue to rise.

    They wrote that workers were spending about eight hours a week on DM tasks, or 20 percent of their time. They forecast that this would rise to 30 percent.

    The average document is copied, either physically or electronically, nine to 11 times at a cost of about £10

    There are many hidden and not-so-hidden costs associated with unmanaged documents, including costs for on-site and off-site storage, electronic media, physical plant (e.g., filing cabinets and floor space), postal and other distribution costs.

    Today the average company stores about 90 percent of its corporate information on paper and it is costing them money and resources.

  • Documents cost about £12 to file.
  • To fill a four-drawer filing cabinet, about £15,000 of company time and money is spent.
  • An additional £1250 is required to maintain that filing cabinet for one year.
  • One in 20 documents is lost.
  • Three percent of the remaining 19 documents are misfiled.
  • On average, companies spend £70 searching for every misfiled document.
  • Source: Coopers & Lybrand

    Document Management checklist

    Before investing in an EDM system, some internal analysis needs to be carried out to ensure that the solution has the greatest impact and that your organisation achieves the maximum return on its investment.

    Here is a useful checklist of questions that need to be answered before you implement an EDM system:

  • What is the current volume of documentation?
  • What is the rate of increase?
  • How are the documents created?
  • How are the documents delivered?
  • How many people must access, edit or view the document and at what intervals?
  • How often and by whom are the documents updated?
  • What is the role of the documentation in any compliance or quality assurance processes?
  • What is the business value of the document?

  • What are the document's workflow requirements?
  • How is it used across business processes or how could it be used?
  • Investigating these questions will ensure your organisation is concentrating on the highest value document processes. They can also be used as pre-project benchmarks for measuring system performance and cost savings.
  • Where can you get the best advice?
  • The best advice is to use a proven methodology - that is talk to other people who have already implemented an EDM solution. They can tell you what productivity gains they have achieved, what effect it has had on their processes, how it has helped with their customer service and, ultimately, what the savings have been.

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