Technological advances over the last two decades have impacted not only our personal lives but the business world too. While they have created opportunities for businesses, they have also raised challenges. The single-largest challenge faced by organizations across the globe lies within - the challenge of managing information effectively. Whether you are a large enterprise, an independent professional or a small business, managing information effectively is one of the keys to successful operations and survival in tough times.
Most of the information businesses manage is in the form of documents - be it paper-based or electronic. Organizations that adopt electronic document management systems (EDMS) definitely have a better grip over business processes. In fact, not having a sound EDMS can present several risks, something that no business can afford.
1. Loss of data in the event of a disaster.
The worst nightmare a company can face is answering customer calls and having to tell them that all their data is gone because the archive room just caught fire! Well, it may not be that dramatic, but let's face it - you must be ready to deliver your best and be prepared for the worst, like a natural or man-made disaster. The best way to protect your business documents is to implement a document management system that not only helps you manage your paper-based documents but also your digital files. This way, the documents will outlive wear and tear caused by physical handling and adverse weather conditions. Moreover, while the only physical way to back your paper documents is to make copies of them and add to your paper mountain, digital files are easy to back up - and retrieve within minutes.
2. Time and cost overruns.
Paper archives are too time-consuming to be your source of information in the long run. Not only is it difficult to fetch information from a physical document library (especially an offsite one), it also causes a whole range of tasks connected to a business process to queue up; this leads to projects getting delayed and possible cost escalations. You may not feel the pinch during good times, but in an economic downturn, having invested in an EDMS can mean lower costs when it matters most. Also, you no longer need tons of consumables, acres (well, maybe just a few hundred square feet!) of rented space to house your documents; and dedicated (salaried) staff to manage all of this. And other things being constant, lower costs usually translate into a neater bottom-line.
3. Communication gaps.
Most business processes involve stages of conception, iteration, research, decision and execution, and then a follow-up review. Multiple departments are involved in the entire exercise. When the source documents are not at the fingertips of every stakeholder in this business process, it can hamper the smooth communication of ideas and relevant data. This, in turn, leads to another serious risk…
4. Poor or wrong decisions.
Communication gaps imply that your employees may not be armed with complete data for them to carry out their tasks as expected. This is especially true when some members of the team have the requisite documents in their possession, while others do not. Decision-makers are faced with time-bound goals that they must achieve. If a business decision is made in a hurry and with incomplete data or without the required inputs from the entire team, it could lead to a loss in terms of revenue, market share, or other such performance indicators.
5. Missing the opportunity to delight customers.
When your customer-facing staff has all the documents they need on a single application, they will be more confident handling customer issues. But if the source documents have to be retrieved from a box file in another corner of the office building, don't expect the customer to stay on hold or wait patiently for long - you have just lost an opportunity to create a "Wow!" customer experience. Electronic document management can come to your rescue. Having all of the information the customer needs means a 'first contact resolution' and no repeat calls for the same issue - something every business wants to achieve 100 percent of the time.
6. Losing the competitive edge.
Businesses that have an EDMS in place are far better placed to succeed in today's digital age. Better communication, lower costs, quick turnaround times, and improved productivity and quality levels - all these make an organization highly competitive and give their rivals a run for their money. Not having a sound EDMS means you could lose out on these performance indicators and, consequently, your competitive edge over a period of time.
7. Loss of reputation.
A few small lapses in levels of customer service may not be too detrimental. But when a company's document management policy (or lack of it) leads to a serious strategic or tactical error, it could result in the company's reputation being seriously damaged. This can jeopardize the organization's position in the market in the long term and have a cascading effect on other areas of operation.
8. Failing to comply with legal requirements.
Laws like the Sarbanes-Oxley Act (SOX) and the HIPAA require the maintenance of records in an organized way so as to be secure and accessible. Managing paper archives without scanning the documents is undoubtedly tougher than managing documents in electronic formats - electronic documents are easily created, stored, modified, shared, and transmitted than paper documents. In the absence of an EDMS, an organization can have a hard time organizing its information repository so that it complies with applicable laws.
The costs of going paperless are minuscule compared to the potential consequences of not switching to electronic document management. These eight risks are just some of the situations that could happen to businesses who don’t adopt EDMS, and delaying implementation can have a ripple effect in each of these areas. As with everything else, the hardest step is the first step toward change. The organizations that have taken this step have seen their operations transformed and have enjoyed a return on investment in their document management solution.