Despite digitization in our everyday lives, businesses still drown in paper. This is hard to understand since sources estimate that the average paper-based business would shut their doors within three weeks—for good!—after a catastrophic event that destroyed that paper. Paper documents aren't just risk-laden cost-burdens, they're productivity saps that seep into every layer of your workforce. Fortunately, you don't have to deal with paper documents anymore; businesses evolve.
According to Gartner, Document Management Systems reduce document-based costs by 40%. And IDC suggests that Document Management Systems result in a 404% ROI, and a complete return on their investment within 6 months. In other words, Document Management Systems provide considerable (and immediate) value to organizations caught in the paper tsunami. But what are Document Management Systems? And how can they help you cut costs and improve operations?
Let's take a look at the biggest benefits of a Document Management Solution.
What is a Document Management System?
A Document Management System (DMS) is software that manages your end-to-end document lifecycle. A DMS helps you capture, track, trace, and store documents. In 2021, businesses are scrambling to cut costs, retain talent, improve operations, and strengthen their role in the global supply chain in the wake of global uncertainty and financial frictions. Sure! There are mid-horizon technologies like IoT, next-wave machine learning, 5G, and blockchain that are ever-so-tantalizing with massive promises and "differentiator" potential. But a DMS isn't one of those mid-horizon solutions. A DMS is valuable today! It has a proven track record and it's more of an industry-standard than an industry differentiator.
But, the truth is: many organizations still haven't invested in a DMS or digitization. If your business is in this category, you may be wondering what types of benefits you can expect when you onboard a DMS.
To be clear, there are plenty of advantages, but we want to focus on the big one: employee happiness. To help illustrate the value of a DMS, let's go beyond the ROI. Let's look at the intangible.
Employee Happiness and Document Management Systems
When it comes to intangible benefits; it doesn't get much bigger than employee happiness. At a surface level, you can calculate the value of employee happiness to a degree. Companies with happy employees are 20% more productive, happy salespeople make 37% more sales, and happy workers take 10x fewer sick days. Those are all tied directly to costs. But, beyond the veil of productivity, sales, and sick days, employee happiness weaves between every layer of your business.
Happy employees make better workplace decisions. They help you create stronger and more vibrant workplace cultures, and produce better ideas and solutions — which feeds right back into Business Intelligence (BI) and Research & Development (R&D. In other words, the reason that employee happiness is intangible isn't that it's hard to figure out how happiness contributes to the bottom line. Instead, it's the opposite. It's hard to figure out how to calculate all the different ways that employee happiness impacts the bottom line. There are simply too many.
Here's the problem: 85% of workers are unhappy. Believe it or not, document management is one of the first areas you should look towards when trying to reduce this plague of frowns. The average employee spends 2.5 hours every single day searching for files and documents filled with the information they need. Here's the scary part: they'll only find those documents 56% of the time. According to PricewaterhouseCoopers, 7.5% of documents get lost, and 3% are misfiled. According to the IDC, this never-ending maze of document searching, loss, and filing costs the average business a 20% total loss in yearly productivity.
There's a valuable insight from all of these statistics. 90% of workers spend the majority of their day doing boring, repetitive, mundane tasks. Is it really surprising most of them are unhappy? Most of us want to challenge ourselves, think on our feet, and navigate interesting tasks — not spend hours upon hours looking for documents, filing documents, and handing documents off to other employees.
Document Management Systems reverse the trend. Not only do DMS solutions manage the creation, storage, and use of documents, but they help your workers shed hours of boring and mundane activity each day. That's certainly a win for your business; but it's also a win for your talent. It's a win-win.
2 Tangible Benefits of a DMS
As a cherry-on-top, let's discuss two (of the many) tangible benefits of a DMS. These are the two benefits that our clients rave about most:
Cybersecurity is the attention hog of the information security ecosystem. We all know that cybersecurity is at the top of nearly every business challenge list, and for good reason! Hackers attack a business every 39 seconds. But, there's an interesting problem at play in the world of infosec. The global cybersecurity market will reach $170.4 billion by 2022. Yet, almost half of data breaches aren't caused by threat actors and crazy viruses; they're caused by employee mistakes when dealing with documents. 47% of business leaders say that the reason for their latest breach was due to the accidental loss of a paper document. Worse yet, 61% of data breaches at small and mid-market companies are caused by paper document mishaps.
In other words, a DMS is an infosec tool. It helps dispose of risky filing cabinets and awkward document storage processes. In fact, PwC suggests that a quarter of employees fail to shred sensitive information, and 66% of business leaders believe that paper documents present a "significant" security challenge to their business.
Document Management Systems don't get the level of press that cybersecurity solutions get. But, at their core, DMS systems prevent security threats from sinking your business. DMS converges digitization with information management to create hyper-secure information ecosystems.
Conversations surrounding cost-containment are difficult. A DMS is an overarching solution that essentially rains value down on your business. But trying to discuss the complexities of cost reduction when dealing with a groundbreaking solution like a DMS can get confusing, complicated, and nuanced — fast. So, for a moment, let's ignore 90% of the benefits of DMS systems. We'll ignore the increase in productivity, compliance, security, safety, visibility, and traceability. In fact, we'll ignore every single benefit except for one: paper storage. That's simple enough, right?
The average employee consumes 10,000 sheets of paper per year (i.e., a tree-a-year). A case of paper (which costs around $45) is 5,000 sheets. So, the average employee uses 2 cases of paper a year. Let's say you're a mid-market company with 200 employees. You consume ~400 cases of paper each year. At $45 a case, that's around $18,000. That's not too bad (tree killing aside). Unfortunately, that's the tippy-top of the cost pyramid. Next, you have to store the paper.
Five-drawer filing cabinets cost roughly $400. You're going to need 50 of them to store those 400 cases of paper. That's another $20,000. But what about the space they take up? For a moment, let's say that you pay $15 per year per square foot in rent. That's at the lower end of average. A five-drawer filing cabinet takes up roughly 7 square feet (0.65 m²) of floor space. So, you'll be paying an additional $5,250 annually simply to store those filing cabinets.
But, we're not done yet. Someone has to manage all of those files. The median income for a file manager is $58,263 annually. Let's pretend you only need one (which is likely untrue). In this scenario, simply storing your paper — just storage — is costing you $101,513 annually.
That should illustrate the value of a DMS. Looking at one simple component of DMS cost-reduction, we see a crystal-clear picture; DMS solutions save you significant capital. Depending on the size of your business, Document Management Systems can save you hundreds of thousands, if not millions, per year in straightforward, calculable costs. When you include the intangibles; the benefits spiral upward.
How DRS Imaging Can Help You Discover the Value of a DMS
Document Management Systems aren't simply cost-saving solutions; they provide unparalleled benefits to your entire organization, including your workforce. We are long past the era of paper. Digitization is the future of your business. Are you looking to embrace the raw value of a DMS? We can help! Our world-class DMS solution keeps you organized, compliant, happy, and revenue-generating. Contact us to learn more.