What is EDMS? Electronic document management systems explained

McKinsey states that employees spend 1.8 hours every day — 9.3 hours per week, on average—searching and gathering information. Put another way, a business may hire five employees, but only four “show up” to work; the fifth is relegated to searching for answers that may or may not be found.

Enter electronic document management systems (EDMS).

What is an EDMS?

An EDMS is a centralized digital platform that manages and organizes documents; it makes it easier for employees to find and access necessary information, arranging documentation in a single digital repository. An EDMS’s primary function is to simplify the creation, management, organization, retrieval, tracking and archiving of documents in various forms.

It serves as a central database where files are saved digitally (across formats such as documents, audio, video, images, etc.) and minimizes the use of random file storage options, such as file shares or sync-and-share options — all while decreasing the risks of lost or misplaced documents.

What are the features of an EDMS?

An EDMS holds several features that can collectively enable organizations to improve their document management processes, including:

1. Document capturing and importing

An EDMS streamlines the way information enters your organization, keeps your data to greater standards of accuracy and allows you to access digitized documents with ease — all of which are done through capabilities like:

• Document scanning and processing: Physical documents (invoices, forms, etc.) are scanned into digital formats through document scanners.
• Document indexing: It organizes and catalogs data extracted from documents, allowing for quick and precise searches, significantly reducing the time it takes to locate specific documents.
• Importing electronic files: If existing digital documents are in nonstandard or incompatible formats, users can easily convert them to formats supported by the EDMS and maintain similar organizational hierarchies or naming structures.

2. Electronic document management

EDMS platforms can efficiently scale to accommodate growing volumes of documents without a significant overhaul of the infrastructure. This is particularly valuable for organizations experiencing expansion or those with varying document storage needs.

An EDMS can be configured on-premises or in the cloud, allowing organizations to choose the most suitable storage environment based on their specific needs, budget and scalability requirements. On-premises EDMS deploys servers on-site with control but limited flexibility — while cloud EDMS platforms emerge stronger when it comes to disaster recovery, cost efficiency and painless, automatic software updates.

3. Document version control

The document version control capability eliminates the issue of having conflicting edits to a document, multiple document versions in distribution, messy workflows or further errors. Consider a scenario where a company relies on a document that outlines several standard operating procedures (SOPs) to initiate a repair protocol.

Without version control, technicians may refer to outdated procedures, which would potentially lead to costly or hazardous inefficiencies. An EDMS preserves historical document versions, providing clarity on the timing and nature of changes, while ensuring that users always have access to the most current and accurate documents.

4. Analytics and reporting

Insight is important, and having reporting features in your EDMS measures the security and activity of your organization’s most crucial information. Here’s what you should be able to track with a modern, capable EDMS:

• Usage data such as which documents are accessed, how frequently, by whom, within what workflows and so on
• Document version history (edits, comments, etc.)
• The number of documents awaiting approval at any given time
• When documents are scheduled to expire
• Security incidents such as unauthorized access attempts

An advanced EDMS also offers real-time monitoring capabilities in the form of easily understandable charts, graphs and tables to facilitate informed decision-making.

5. Collaborative tools

An EDMS allows for multiple users to work on the same document and allows edits, markups or annotations to be visible to all authors with access to see them.

Some EDMS platforms seamlessly integrate with popular tools and applications (such as Microsoft 365, Google Docs, etc.). This integration facilitates simultaneous, real-time editing by multiple users, ensuring that everyone is working on the most up-to-date version of a document.

6. Records management and retention

If your organization largely relies on paper documentation, manually tracking retention schedules can become an error-prone process that could leave you wide open to legal risks if sensitive files get misplaced or damaged along the way.

Besides enabling administrators to view full audit trails of user activity, modern EDMS can align with various compliance standards, such as GDPR, HIPAA or SEC regulations, by offering predefined retention templates or allowing customization to meet specific compliance requirements.

The system should also include automated retention scheduling, which allows for the setup of retention and disposal schedules for documents based on their type and content.

7. Backup and archiving processes

Backup processes in an EDMS involve making copies of data and documents to safeguard against data loss due to hardware failures, data corruption or other unforeseen incidents.

You can even set automated backup schedules to run daily, weekly or at other intervals depending on your organization's requirements.

Diverse storage options in an EDMS offer obvious benefits to cost efficiency. For instance, organizations can store documents accessed less frequently or historical records in budget-friendly, long-term storage solutions like off-site tape backups or specialized archival repositories.

8. Security tools and audit trails

Here are common features and ways an EDMS can fortify document management:

• Encryption: Most cloud-based EDMS providers prioritize security over data in transit and at rest. This ensures that only authorized users with a decryption key can access and read information. Basic or free EDMS platforms may still be limited to essential document management features without advanced security measures.
• Access controls: Role-based access control ensures that users have access only to the documents and functions necessary for their roles, reducing the risk of inadvertent data exposure.
• Integrations with corporate single sign-ons (SSOs): Integration with user authentication systems enhances security by requiring users to log in with their credentials, reducing the risk of unauthorized access.
• Audit logs: Comprehensive audit trails track document access, modifications and deletions to monitor suspicious activity and aid in smoother audits.

Benefits of an electronic document management system

If your organization is looking to take the first step towards going digital and establishing a solid foundation for document management, an EDMS is a good launching pad. Let's explore some of the key advantages, complete with real-world examples.

1. It promotes secure collaboration

Collaboration is the cornerstone of any EDMS. 

Here’s an idea of what a secure, minimal-touchpoint workflow might look like in a HR department when documents are digitized and stored in a single location:

How different industries can leverage EDMS

Many industries can benefit from implementing EDMS to improve document management, collaboration, compliance and overall operational efficiency. These industries include:

• Government: Government organizations can utilize EDMS to simplify document management procedures, promote departmental collaboration, increase transparency and guarantee adherence to records management laws.
  
  
• Healthcare: Healthcare providers can benefit from using EDMS to help with patient record organization and accessibility, allowing secure information sharing between healthcare professionals and compliance with privacy laws.
  
  
• Financial services: An EDMS keeps a detailed audit trail of all document activities, ensuring financial firms entrusted with sensitive customer data stays is in compliance with regulations and internal policies. 
  
  
• Manufacturing: Manufacturing organizations can use an EDMS to enhance document management among different teams. From product development to production to invoicing, an EDMS can bolster and enforce SOPs for operating and repairing manufacturing facilities — reducing downtime and enhancing reliability.
  
  
• Education: EDMS can be used to manage administrative documents, student and employee records, applications, lesson plans and research papers, allowing for efficiency in administrative procedures.
  
  
• Retail: The management of vendor contracts, invoices, inventory data and employee documentation can all be centralized for retail organizations, facilitating effective document retrieval.
  
  
• Charities: Transparency is key for charities and nonprofits, and it can be enhanced by an EDMS’ capability to organize and store donor records, grant applications, financial documents and compliance-related information in one place.
  
  
• Construction: Construction organizations can manage project documents, such as designs, permits, contracts and safety records — allowing important papers to be readily accessible on-site.
  
  
• Human resources (HR): An EDMS simplifies employee onboarding and other HR-related processes by electronically storing and managing documents such as resumes, contracts and certifications. It also enhances compliance by securely retaining personnel records and ensuring a painless audit process.
  
  
• Legal services: Legal departments can utilize an EDMS with advanced search capabilities and integrated eDiscovery tools to efficiently locate, review and produce relevant electronic documents during legal proceedings.
  
  
• Logistics: Keep important documents (bills of lading, invoices, shipping records, etc.) in one easy-to-access electronic hub and automate manual paperwork to lower the risks of shipping delays.
  
  
• Research: Research companies can use EDMS to house research papers, findings and academic publications, making the publishing, sharing and citing of valuable research a painless process.

What is the difference between an EDMS and ECM?

Electronic document management and Enterprise Content Management (ECM) platforms serve different, yet overlapping, functions when it comes to managing data.

Here’s the elemental difference between both, as described by CMSWire and Gartner:

Document Management Systems (DMS):

“Document management systems capture, store and retain documents and include functions such as document intake, drafting, generation templates, versioning, collaboration, security, metadata, access rights, approvals, distribution, search, repository organization, archiving and retention policy management, along with reporting and auditing on these functions.”

Enterprise Content Management (ECM):

“Enterprise Content Management (ECM) is used to create, store, distribute, discover, archive and manage unstructured content (such as scanned documents, email, reports, medical images and office documents) and ultimately analyze usage to enable organizations to deliver relevant content to users where and when they need it.”

Modernizing content management for digital transformation

As organizations grow, their content management needs expand.

While an EDMS primarily focuses on digitizing documents and files, your organization will inevitably evolve to encounter a broader range of content types (images, emails, multimedia files, structured data, etc.) and greater needs for extensive collaboration requirements.

ECM systems are designed to scale effectively. They accommodate larger volumes of content and support a wider range of document types without compromising performance.

For leading organizations, a modern ECM is the next step in digital transformation. The right one will seamlessly manage diverse content and foster cross-departmental communication — ensuring your organization operates with precision amidst complexity.

Browse more related articles: 

• What is a document management system?
• Benefits of a paperless workplace
• What is enterprise content management (ECM)? 
  
  

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