Small and Medium Sized Business: Why It’s Time For a Formal Document Management System

As businesses grow from very small to small and medium size (and for the sake of our discussion, we assign corporations with annual revenues less than $500 million in the small and medium businesses (SMB) category,) there are many new and necessary requirements, including many IT systems and management tools. 


The cost, not to mention the time required to implement, for any of these systems is often substantial. Most companies don’t have the appetite to embark on multiple projects simultaneously, and given the overall risk to the corporation’s success, it’s understandable that “slow is better” is currently the norm.

In addition, many organizations are simply constrained by the funds they have allocated for IT improvements and tools. As such, IT departments budget for acquisition and implementation based on greatest need and return on investment within the limitations of what can be accomplished in a reasonable period of time. 

Operations systems versus departmental systems

The majority of new or improved IT systems address operating issues and productivity enhancements for a specific department or related departments. Production systems for the manufacturing floor are frequently beneficial for the manufacturing floor and perhaps for QA or engineering as well. These departments or groups see the benefits and are therefore apt to support the cost and time to acquire and implement the systems. The return on investment objective typically is included in a particular department’s budget or annual goals.

There are systems, however, that cross multiple departments and can be beneficial to a large number of users. But because they don’t specifically focus on one department (and as such, there is no internal champion), the IT department is left to try and justify the system with little backing. For most IT departments, especially in SMBs, which can be as small as one person up to less than 50, these systems are just not on the radar for adoption, especially when there are so many other possible applications and tools users are asking for.

Applications like security, file management, network management and infrastructure optimization qualify as such systems. Other IT operating systems are also included, but when IT wants to fight for cross-department or company-wide software, often these systems come first. Given that IT sees these systems as the lifeblood of their mission it’s understandable why.

What is a document management system and why is it needed?

As companies expand, their information base (both paper and digital) also increases. Adding to the digital file challenge is the inclusion of unstructured data like emails, texts, photos, videos and audio. SMBs may not yet have to deal with some of the newer data formats, but they find out quickly how the number, variety and location of their digital files can get out of hand. 

Though users often associate a document management system (DMS) or content management system (CMS) with the scanning of paper into files that can be searched, the function of a formal document management system is much more than that. The major features in a typical DMS include:

  • Store and manage any digital file
  • Secure and manage access to corporate data files
  • Search and find needed data and documents
  • Retain and archive files
  • More feature-rich document management systems include features such as:
  • Extensive version control
  • Mobile device access
  • Real-time markup and collaboration
  • Check-out/check-in control
  • Robust security, encryption and user authentication
  • Batch and remote printing
  • Multi-site synchronization
  • Controlled email file distribution 
  • Integration with existing legacy systems

At the highest level, it’s fairly obvious why a formal DMS is needed, especially when digital file volumes start to get out of hand. When individuals are hoarding their own files, important files are getting overwritten or deleted, and an organization feels the loss of productivity from searching for needed files or having to rework files. Employees become frustrated, especially in today’s environment of instant downloads and real-time communication.

This should be sufficient rationale for implementing a formal document management solution. But the stronger reason, not often appreciated, is the growing case for file security and the need to protect these files as greater and greater access is provided, often in very unprotected locations. Because the security issue does not create revenue or reduce cost, many growing organizations have a hard time seeing this as the key driver for a document management system. As a “soft cost” it isn’t viewed as significant until an event occurs and individuals are called to account for the vulnerability.

Detailed rationale

A robust document management system provides many benefits to the organization across departmental lines. It’s this enterprise-wide use that makes implementation not only important and helpful towards improving productivity but easier to rationalize as compared to other systems. The ancillary, but significant, benefit is better security.

More specifically, the return on investment, both quantitatively and qualitatively, is even higher for smaller organizations where the improvements are more impactive and substantial for existing operations given the smaller employee base and the higher proportionate cost when something “falls through the cracks.”

Additionally, although not often included on the quantitative side of the ledger, the deferred costs associated with security-related events should be identified and estimated. Certainly, we hear about publicized hacking and ransomware events at large corporations, but a significantly greater amount of security-related losses happen at the employee level (such as when employees keep files after leaving the company), whether purposeful or not.

The flip side of securing digital files in the organization is the growing need to provide access to users wherever they are, at any time, using any device type. This means getting important data and information out of existing legacy systems that either don’t provide for mobile access or have not been optimized for smaller screen sizes. The cost for upgrading many of these systems to gain mobile device access — if access is even available — can be large and time-consuming. A simpler and less expensive approach is moving or copying the data out of the larger systems and allowing them to be accessed using your DMS.

Why it’s as important, or more important, than many department systems

There are few characteristics that are common across an entire organization. It’s hard to put finance and production side-by-side and see a lot of similarities. One key commonality, however, is the organizational reliance on digital information to complete their workflows. Unfortunately, this commonality is also seen in many of the developing issues concerning digital files.

The number and variety of digital files is expanding at a very rapid pace, to the point that IT is having trouble storing, distributing and archiving information sensibly. Given the tumbling cost of disk storage, it’s typically easier for companies just to keep everything electronically. But if “big data” is all the rage, “obese data” is clogging up the pipes. Managing all these files in an efficient and practical way is now a requirement across all functions of the organization.

For small and medium-sized businesses, this affects operations in subtle, but often impactive ways. Most notably, as files are edited and improved, the different versions get confused, deleted or are just unfindable. The cost in terms of rework, time, inefficiency and frustration can be more significant for smaller companies (not to mention the impact on people’s employment tenure). Robust DMSs manage this requirement with the added benefit of providing audit trails and data for improvement analyses.

Ironically, an advantage small and medium-sized companies may have over their bigger brethren may be that they have fewer large legacy systems. Getting access to these systems and the data within, especially using mobile devices, is usually difficult if even available at all. Getting the data to users when they need it and wherever they are speeds up workflows and improves productivity. More and more DMS solutions provide for mobile access which enhances collaboration, as users in different offices, locations or divisions can get real-time, simultaneous access. In today’s must-have-it-now environment, these collaboration events are happening more frequently and increasing employee satisfaction.

But more importantly, smaller operations need the added security that these types of systems provide. The three most vital elements of a document management or workflow system are security, security and security. As smaller companies are not known for their extensive intrusion detection and prevention systems, this is where hackers and phishers focus. Add on the loss of important files, downtime while backing up and general frustration when security events occur, and SMBs need more security, not less. Getting a NIST compliance audit can help, but one of the key requirements under NIST SP 800-171 is the need for appropriate securitization of both physical systems and software systems. The best practice is to anticipate these needs and introduce the needed security now. DMSs are only one part of the picture, but a good and affordable start to securing the company data.

Small and medium-sized businesses are being dragged into the digital transformation era, sometimes against their wishes. There are various systems to support this organizational transition, from front-end scanning to digital file management, to email capture, and analysis systems including BI, Big Data and AI/machine learning applications. The first steps into the digital transformation don’t have to be traumatic, costly or diversionary. Formal document management systems are affordable, easy to implement and are an essential leg in the journey toward total digital nirvana. 

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Scott Brandt
is president and CEO of eQuorum, a leader in cloud document management technology.
Scott Brandt

Scott Brandt

is president and CEO of eQuorum, a leader in cloud document management technology.