To calculate Return On Investment (ROI) of using a Document Management Software (DMS), start by asking these 10 key questions. You may record this data in an excel for the ease of doing calculations.
- How many people in your organisation handle paper documents?
- How many times does each person retrieve a paper document daily?
- How long does it take to retrieve a paper document? (minutes)
- How long does it take to file a paper document? (minutes)
- How many new documents are generated every day?
- How many paper copies are generated every day?
- What is the average hourly salary of the employees who handle these documents?
- How many filing cabinets do you have? – a standard four drawer filing cabinet requires at least 12 sq. ft. of office space.
- What is the average rental rate of your office premises?
- How much do you spend on filing supplies per month?
Once you have answers to the above questions, you will be able to easily calculate the time spent on searching for a particular document by your organisation each day. This time can be multiplied by the average hourly salary to get the amount of money that gets wasted on searching a particular document daily and yearly.
Wait, we haven’t taken into consideration the loss of business or loss of customer trust which happens because of lost documents. The total damage is much more than what we are able to calculate.
Investing in a cloud based or on-premises document management system might seem costly, but not as filing and retrieval of physical documents.
Apart from just secure storage & quick retrieval resulting in saving time and money, a document management solution has many other benefits.
- Documents are stored in an electronic format which is easily backed up and can be copied offsite relatively easily. You may create as many copies as you want easily with no cost. In contrast, a paper based system the cost of paper is high and not environment friendly.
- Even if a document is misfiled, it can be easily found using the search capabilities built into the document management system. Misfiled documents in a paper-based system can be impossible to find depending on how and when they were misfiled.
- Filing documents is relatively easy particularly if the document management system is integrated with other software packages. Filing paper documents requires a trip to the filing cabinet.
- Moving documents from one point in the workflow to another is simple. Determining who has a document or folder in workflow is available at all times. Finding a paper folder somewhere in a workflow can be difficult at best, particularly if it’s buried on someone’s desk.
- Filling out paper forms can be tedious and prone to human error. Using electronic forms allows data to be pre-filled eliminating these types of errors.
- Documents when stored in electronic form gets encrypted making them secure from unauthorised access. On the other hand, documents in physical form are prone to get stolen or misused.
- Papers or physical files are unsafe and can get destroyed during fire, pest attack, earthquakes or any other natural calamity. This isn’t the case with documents in digital form.
Spend a few minutes to do this calculation for your organisation and see how much you can save by investing in a digital solution.