What is document management?

What is document management, and how does it differ from document administration? We’ll explain that in this post.

What is a document?

Documents form the basis of our communication. Generally speaking, documents are primarily carriers of information that contain text. According to Duden, a document is something “officially recorded in writing” or an “official, formal letter” that is also characterized by a certain degree of permanence. A document serves as a means of conveying and evidencing a specific idea. In this form,written documents are of considerable legal and practical significance.

Documents surround us every day in countless forms. In addition to original documents in the form of single copies or mass-produced prints, documents often exist as transcripts or copies. It is irrelevant whether something was created by hand or typewritten, or whether documents were produced or stored on analog media such as paper, or as digital media or electronic documents. All of these are documents—from meeting transcripts and business letters to emails, certificates, and scans.

However, the definition of a document can also be broadened, independent of the written form. In this sense, visual and auditory media are also considered documents. Examples include photos, graphics, diagrams, and tables, as well as video and audio recordings.

What is digital document management?

According to the definition in Wikipedia, the term “document management” refers to “the database-supported management of electronic documents. In German, this also refers to the management of digitized documents—originally paper-based—in electronic systems.”

In English, the terms “electronic document management” (EDM) or “document management system” (DMS) are frequently used.

What is document administration? And what is the difference?

In contrast, “document administration” is generally understood to mean the simple, organized filing of previously received or created documents for retrieval purposes. While this forms the basis of organized document management, it covers only a small subset of document management.

Document management differs from simple document administration and storage primarily in that it makes information in documents usable for actively monitoring and influencing business processes and provides support in many areas. In many companies without a system-supported document management system, it is difficult to keep information up to date for all relevant employees and to make it fully and quickly available. This is because the data is often “locked” in a wide variety of media (emails, letters, notes, and much more) and does not always reach all responsible employees.

Documents form the basis of our communication. Generally speaking, documents are primarily carriers of information that contain written text. According to the Duden dictionary, a document is something “officially recorded in writing” or an “official, formal letter” that is also characterized by a certain degree of permanence. A written document serves as a vehicle and evidence for conveying a specific idea. In this form,written documents are of considerable legal and practical significance.

Documents surround us every day in countless forms. In addition to original documents in the form of single copies or mass-produced prints, documents are often available as transcripts or copies. It is irrelevant whether something was created by hand or typewritten, or whether documents were produced or stored on analog media such as paper or as digital media or electronic documents. All of these are documents—from meeting transcripts and business letters to emails, certificates, and scans.

However, the definition of a document can also be broadened beyond the written form. In this sense, visual and auditory media are also considered documents. Examples include photos, graphics, diagrams, and tables, as well as video and audio recordings.

According to the definition in Wikipedia, the term “document management” refers to “the database-supported management of electronic documents. In German, this also refers to the management of digitized documents—originally in paper form—in electronic systems.”

In English, the terms “electronic document management” (EDM) or “document management system” (DMS) are frequently used.

In contrast, “document administration” is generally understood to mean the simple, organized storage of previously received or created documents for the purpose of retrieval. While this does indeed form the basis of structured document management, it covers only a small subset of document management.

Document management differs from simple document administration and storage primarily in that it makes information in documents usable for actively monitoring and influencing business processes and provides support in many areas. In many companies without a system-supported document management system, it is difficult to keep information up to date for all relevant employees and to make it available quickly and in its entirety. This is because the data is often “locked” in a wide variety of media (emails, letters, notes, and much more) and does not always reach all responsible employees.

In many industries, as competition has intensified, a consistent focus on the customer—coupled with process optimization in operations and service—has become the norm. A key factor in this is the optimization of document management and the information they contain. After all, response times and service quality improve only when this information is up-to-date, complete, and readily available to all relevant employees within the company.

However, secure,proactive management of documents and information is not only crucial in customer-facing roles but across all departments—whether, for example, in the form of digital procurement or supplier files, legal documents, or digital personnel files.

These requirements are best met with document management software.

To manage documents effectively, it’s not enough to simply optimize storage. Ideally, this should encompass all document-oriented processes throughout a document’s entire lifecycle. To achieve this, a document management system should, at best, cover the

• capture,
• administration,
• storage and retention, as well as
• distribution

… of documents, forms, certificates, and much more. Digital document management thus provides the ideal foundation for a paperless office.

Paper documents must first be digitized upon receipt before being filed. The DMS should allow this to be done from any function within the system, either centrally (e.g., via a scanning station) or decentrally using any simple scanner at an individual workstation. The document management system indexes the documents during digitization.OCR technology recognizes, classifies, and extracts data such as contact information, employee ID numbers, and other details. Automatic data extraction is also possible from web forms, emails, etc. This data, as well as the entire document, is then assigned to any (SAP) objects or linked based on content to the corresponding posting data, master data, etc.

Another advantage is barcode generation and recognition. Using barcodes, documents can be assigned to different files and registers during the scanning process. If incoming documents contain a barcode, they are also automatically assigned to a transaction in the document management system and stored in the associated electronic file in an audit-proof manner.

Apart from feeding the paper documents into the scanner, the digitization process and the capture of relevant data are carried out almost entirely automatically.

When digitizing paper documents, it is recommended to enlist the help of a specialized scanning service provider who can assist the company in managing its mountain of files. This provider prepares hundreds of thousands of individual pages for seamless integration into the digital workflow. For example, it takes less than four weeks to digitize a four-digit number of filled file folders. During this process, the documents are indexed and classified. To minimize the effort involved in digitization and ensure proper electronic record management from the start, files should be sorted in advance in accordance with legal requirements, and all documents that no longer need to be—or are no longer permitted to be—retained should be destroyed.

According to figures from BITKOM, each employee receives an average of 18 work-related emails per day. Extrapolated over a month, that amounts to approximately 400, and over a year, nearly 5,000 emails per employee related to business operations. However, these often remain in the recipient’s inbox. This widespread problem is not ideal for fast and well-structured business processes, as it effectively withholds important information from other departments and employees. This can be resolved by strategically managing online communication.

An important feature of a document management system is therefore the ability to store, manage, and properly archive emails as well. However, this audit-proof archiving of emails is only effective if the email is archived unchanged—that is, including all formatting, attachments, etc. A good document management system imports emails from MS Outlook directly into the electronic file and archives them there, along with all text formatting and attachments.

Manually creating quotes, contracts, letters, forms, response letters, emails, Excel spreadsheets, and management dashboards takes a lot of time; it’s easy to use the wrong template, and mistakes can occur. To prevent this, a document management system should offer integrated document generation. This feature automatically generates all types of documents and forms—as individual or form letters, as well as for mass production—in a variety of print formats, including MS Office and PDF (PDF/A), while ensuring they are customized to each recipient.

The first step always involves a subject matter expert who creates new templates in the DMS or modifies existing ones. These templates define the structure and layout, the content of each section for the various document types, and their respective validity periods. It can also be specified whether users should be permitted to make individual changes or additions later on.

The creation of documents is simplified in particular by the fact that text passages can be automatically populated with data from ERP systems (e.g., SAP), data from other database systems, or a barcode via inserted variables. The generated documents should then be able to be archived in Word, XML, or PDF format using standard mechanisms in the electronic file system of the cuSmarText DMS, as well as in any other archive, and stored for future use.

In summary: Document generation shortens response times and improves document quality.

Whether dealing with paper documents or documents stored on a network, it is difficult to ensure that they are not stored redundantly, edited simultaneously, or used in different versions. A digital document management system should also provide support in this area, for example, through a check-in/check-out feature. As soon as an employee edits a stored document outside of the file, it is checked out and is no longer available for editing by others until it is checked in. Upon check-in, the edited document is then saved as a new version.

Another important—and otherwise time-consuming—task is comparing document versions. To quickly verify what has been changed in an MS Word or PDF document, different document versions can be compared, and every change can be displayed at a glance. PDF documents can also be compared directly with Word documents, and the comparison document can be stored in the electronic file. This eliminates the cumbersome process of converting Word files to PDF for document comparison.

The version management feature of a DMS solution thus makes it possible to trace the evolution of a document or contract—from the draft stage, through revisions, to the current version—even years later.

The following arguments, among others, support the benefits and cost-effectiveness of using electronic document management systems:

• Easy retrieval of documents (search engine, keyword indexing)
• Simultaneous access by company employees to the most up-to-date information through digital storage
• Long-term readability of documents (through automatic conversion to “timeless” file formats such as TIFF or PDF/A)
• Compliance with statutory retention periods(in some cases up to 30 years)
• Management of processing statuses(versioning, version control)
• Support for document creation(text modules, review, approval, distribution, and archiving workflows)
• Automation of business processes involving documents
• Ensuring an access authorization policy(information security and data protection)
• Logging of all changes to documents
• Avoiding storage and filing costs
• Preventing ambiguity regarding the validity of document versions and conflicts caused by concurrent changes
• Preventing duplicate work and duplicate filing
• Using a legally compliant digital signature via signature software

Most medium-sized and large companies use an enterprise-wide SAP system. Therefore, a document management system should also be fully integrated into the SAP environment. This is the only way to ensure a seamless exchange of information within the SAP ecosystem.

Deep process integration opens the door to numerous scenarios. For example, the DMS connects procedurally with the standard SAP modules for finance, controlling, sales, and purchasing, among others, and can be accessed from any function within the SAP system. In this way, it manages documents not only in isolation but in relation to transaction, contract, cost, and posting contexts, among others, and maps them consistently and transparently.

Furthermore, SAP system integration offers the advantages of global deployability and multi-client capability, ensuring future-proof technology and data management without requiring additional resources. The use of SAP system-integrated solutions thus results in the lowest possible operating costs.

Employees receive information in a variety of ways: in paper form, verbally—after which the information is recorded in writing, for example, as a note—or electronically as an email, e-form, XML, etc. In addition, there are documents created within the company itself, which are typically stored digitally in the file system. Regardless of the form in which this process-related information is received or available, it should be stored centrally and in a structured manner in the DMS to ensure optimal use.

Until they are permanently destroyed at the end of the minimum retention period, the documents are secure in the electronic file. This means they are archived in an audit-proof manner in one (or more) connected archives, such as those from OpenText or SAP.

To this end, all changes made to a document are reliably documented throughout its entire “lifetime.” This makes it possible—even decades later—to trace who made a change and when. Every edit to a document is always logged in an audit-proof manner and can be viewed at any time.

The DMS thus provides protection against unauthorized changes, which would be unthinkable with “unprotected” paper documents and files on a network—either because the changes go unnoticed or because it is nearly impossible to determine who made them.

The electronic file is at the heart of the document management system. It is maintained for each transaction and clearly organizes all documents, contracts, information, and other records. The structure of the digital file should be definable centrally for each file or transaction type. An authorization check—ideally down to the field level—dynamically adapts the file’s display.

To ensure that all necessary documents for a specific process are available, it also makes sense to define a minimum number of documents that must be stored in a specific folder. Depending on the process type, not only can the file structure be defined differently, but also the layout and number of subfolders, as well as dependencies and the respective validity checks. In addition to the defined file structure, it should be possible to create any number of additional subfolders as needed.

With purely paper-based contracts, the search process alone takes a lot of time—especially when documents are scattered across multiple locations and must first be requested. But even digitally stored documents that are difficult to locate offer a company no significant advantage over paper-based filing or storage in the company network’s file system.

Document management enables quick retrieval of stored documents and all available information through various search functions. To ensure successful searches, the software solution automatically and comprehensively indexes documents upon import or creation—regardless of whether they are emails, e-forms, PDFs, or scanned documents.

Automated scheduling and deadline tracking are among the core functions of document management. There are a wide variety of processes related to documents, such as the often time-consuming and labor-intensive approval process, which frequently requires several rounds of review before a document is finally approved. In many cases, ad hoc coordination is also necessary, which cannot be planned in advance. A computer-assisted, integrated workflow provides a solution, making it easy to manage tasks.

A DMS also lightens the load when it comes to tasks and deadlines. As soon as the lead time for a specific deadline is reached, follow-up actions can be executed automatically. For example, an email is sent and/or the to-do list opens for the person responsible for the process, indicating that the process or document needs to be addressed.

For standardized communication, tasks can also be generated automatically based on document and file data. The system generates the content and automatically determines the assignee based on the given data.

Compliance plays an important role when it comes to documents. A DMS makes it easy to ensure that a company’s internal requirements are met, such as defining roles, responsibilities, and access rights, as well as adhering to the dual-control principle when creating documents. Of course, it is also particularly important to meet external compliance requirements. In this context, both audit-proof archiving and adherence to minimum or maximum retention periods play a crucial role. This is because the same retention periods apply to digitized documents and emails as they do to paper documents. In addition, the company must comply with legal requirements regarding audit-proof archiving and data protection, such as the General Data Protection Regulation (GDPR).

The General Data Protection Regulation (GDPR), which took effect in May 2018, is primarily aimed at providing better, cross-border protection of personal data. In addition to strengthening the rights of data subjects, the GDPR aims to increase transparency regarding data processing. Documents typically contain a wide range of data protected by the GDPR. Data subjects have the right to access information about the processing of their data. At the same time, they can request rectification, erasure, and restriction of processing.

A document management system plays a central role here. The primary benefit of using software to implement the GDPR lies in process optimization and increased productivity. Well-designed, documented procedures ensure security and quality; automated processes ensure speed and efficiency and relieve employees of routine tasks. In such cases, the document management system can generate reports in response to requests for the erasure or rectification of data. At the same time, thanks to procedure documentation within the DMS software, various departments within a company can access the history of a data subject’s request at any time.

The software also records the lawfulness of data processing. Consents authorizing the use of data, as well as contracts, agreements, and other documents that necessitate the use of personal information, are securely stored in the digital file. In this way, the company ensures that it complies with the documentation requirements of the GDPR and uses only those data for which it is authorized under the regulation.

There is a wide range of document management software available, and their feature sets vary greatly. When selecting the right solution for your company, the following questions may be helpful:

• What types of files and documents need to be managed, and what is their volume?
• Which departments will be using the system, and what are their specific requirements or technical expertise?
• What factors are particularly important to you when it comes to document management? What is the goal of the DMS? Digitization, faster retrieval, data security, ease of use, task and deadline management, etc.?
• Which other systems should be integrated into the digital document management system—for example, if your company already uses SAP?
• Are there any special requirements, such as multilingual support or accessible software operation?