Document Management System: How it works

The essentials in brief

Document Management Systems (DMS) & cloud based document management are increasingly used for various private or business solutions
Their main functions consist of capturing, structuring, distributing/editing and archiving documents
Many benefits arise from using a document management software - such as reduced time to find a document or costs for storage

Contents

Basic questions around the topic of document management
What does a document management system do?

1. Document Capture
2. Structured and unstructured information immediately available

3. Automatic Distribution and Workflow Management
4. Audit-proof Archiving

Free Document Management with bitfarm-Archiv

Trivia about Document Management Systems
Further reading: Sources and interesting links

Basic questions around the topic of document management

What is a DMS?

A Document Management System (DMS), sometimes mistakenly called a "dms system," is, in essence, the database-driven management of your documents, whether they're paper-based or electronic. Think of it as a highly organized digital filing cabinet that also borrows some key functions from Enterprise Content Management (ECM) systems.

The core purpose? To archive your records in a way that makes them readily available to any authorized user within your organization. A DMS streamlines the entire document lifecycle – creation, revision, control, and distribution – all coordinated through dedicated software.

These systems are often integrated with client-server networks, linked to other software, and aligned with critical business processes. The ultimate goal? To boost efficiency by slashing processing times and making crucial information instantly accessible. You'll spend less time searching and more time doing.

DMS in practice

Our guide explains DMS in detail, and then, to really solidify your understanding, we encourage you to experience a free DMS firsthand. bitfarm-Archiv is a prime example. It seamlessly blends all the vital features of enterprise document management – archiving, structuring, distribution, and processing – into a single, powerful solution. It's license-cost-free, compliant with current laws, and, with its vast capabilities, a true contender against costly document management software.

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How does it work?

An electronic document management system provides a digital, centralized archive for all your documents. It's not just about revision-proof archiving; it manages documents from the moment they're created. A robust DMS, with automated workflows and precise rights management, supports efficient, streamlined company processes. Think of it as guiding a document through its entire life: from initial capture and distribution to processing, and finally, archiving or deletion.

Why do you need one?

Let's face it, even small businesses deal with a deluge of documents daily – both digital and paper. Over time, keeping track of everything becomes, well, a nightmare. For paper documents, physical storage costs skyrocket. Finding specific information or tiny details on a document becomes incredibly time-consuming, and sometimes, utterly impossible.

That's where a DMS steps in to save the day. Leveraging advanced OCR (Optical Character Recognition) and high-speed servers, you can pinpoint details within millions of documents in mere seconds. And here's the kicker: you often won't even need to store the physical originals. Many DMS solutions are audit-proof, meaning there's always an uneditable original file preserved.

The benefits don't stop there. A DMS empowers you to manage contracts with laser-like precision, ensuring you never miss another deadline. The system proactively alerts you to contract termination opportunities. Plus, you gain unparalleled transparency across your workspace.

You can track every change made by users. The risk of losing documents plummets, and you eliminate the need for endless copies when distributing documents to colleagues. Other key advantages include:

Enhanced control and increased transparency
Elimination of distribution copies
Significant error reduction
Improved document security, minimizing lost documents

Which are the best?

The DMS market is vast, with many different systems available. Because every company's needs and requirements are unique, there's no single "best" system for everyone. It's about finding the right fit.

However, certain features are nearly universally valuable. When selecting a system, prioritize optical character recognition (OCR). This is absolutely *crucial* because it enables powerful full-text searches later on. Modern systems utilize cutting-edge OCR with incredibly high recognition rates, like Omnipage or Tesseract.

Usability is another critical factor. Your employees will be interacting with the system daily, so a user-friendly interface (and generally speaking, an efficient document management UI) is paramount. We strongly recommend a preview window where you can view files without needing to open them in external applications. This should work seamlessly with virtually all file types, from .xlsx to .docx. Choosing the optimal DMS involves considering many other criteria, which is why thorough consultation and planning are essential.

Why Isn't SharePoint Considered a True Document Management System?

Microsoft SharePoint is a popular web-based collaboration system, integrated with other Microsoft Office tools. It utilizes workflow tools, list databases, web parts, and security features to facilitate teamwork.

The question frequently arises: Can SharePoint effectively handle large-scale document management? In short, no. And here's why.

While SharePoint offers a broad approach, it lacks the dedicated focus of a standalone DMS. Beyond missing key features, the costs associated with support and customization are substantial.

Our experience shows that the ability to easily adapt your DMS to your company's evolving needs is vital. Microsoft even explicitly discourages custom changes, which are commonplace in the real business world.

Other significant drawbacks to consider include:

An expensive licensing system
The absence of a mobile app for remote work from a desktop
Complexity for inexperienced users
Limited filtering and sorting capabilities

What is a record management system & ERDMS?

An ERDMS (Electronic Records and Document Management System) is frequently used interchangeably with "document management system." The same goes for "record management system." Both terms encompass the management of documents and records, from their initial creation to their eventual deletion.

However, "records management system" often implies documents of a more formal nature. These documents hold greater significance, serving as evidence or proof. Typically, such documents are not expected to undergo future changes. Therefore, it's often critical that these documents can be stored in an audit-proof manner on the computer system for extended periods.

It's important to note that modern systems can readily offer this functionality, so users don't have to choose between the two. Archiving is often made audit-proof, guaranteeing that the original document remains retrievable even if modifications are made.

What is a DMS Server?

A client-server installation is usually brought into the context of document management systems . On the server component, all documents are to be archived and stored in encrypted form. Other components on the server include a database that stores document metadata and a text recognition system (OCR). These modules can also be mounted separately from one another in larger networks.

The server component's hardware specifications differ depending on the network's configuration and the amount of documents that are processed. However, there are a few specific requirements for a DMS server's minimum hardware. The speed at which the DMS responds to a document request is determined, in part, by the speed of the server hard disks - SSD hard disks provide substantially better performance than traditional hard disks in this regard.

Furthermore, the quicker the server's processor (CPU) is, the more users access the DMS at the same time. This is because the data that a system displays on files is gathered in the background through computationally intensive database queries. The server should, in general, have at least 8 gigabytes of RAM and a CPU with at least four processor cores.

The above specifications are basically the minimum criteria that most business software includes out of the box. Client computers should, of course, satisfy the high requirements in a modern office and, if possible, run the most recent operating system update. A complete list of the minimum system requirements for bitfarm-Archiv can be found here.

What does a document management system do?

Capture – Efficiently handle both electronic and paper records.
Structure – Organize electronically archived information and metadata.
Distribute and Edit – Streamline workflows with individual customization and comprehensive control.
Archive – Ensure unchangeable, audit-proof, and legally compliant storage.

1. Document Capture

While much information is digital today, paper still exists. bitfarm-Archiv automatically captures electronic documents, while incoming paper documents, like invoices, enter the archive through efficient document scanning.

A DMS centralizes all incoming documents for easy retrieval. Think of it as a powerful information retrieval system. The metadata (creation date, document type, keywords, and text content) is stored in a database. This data can be stored on-premises on a server or within a cloud solution. For a deeper dive into document capture, check out our YouTube video (enable English subtitles!).

A crucial question when implementing a system is determining which information must be captured, which is "nice-to-have," and which is superfluous, creating unnecessary maintenance. Careful planning, weighing requirements, considering different perspectives, and understanding the pros and cons of each document type are essential. Remember, optimization is an ongoing process, even after the software is implemented!

2. Structured and unstructured information immediately available

Using metadata, the software retrieves archived files instantly, granting users rapid access. Unlike file management within Windows Explorer, finding what you need with a DMS takes mere seconds. To achieve this, an EDMS relies on robust text recognition and an integrated full-text search powered by a sophisticated search engine.

A DMS enables efficient search and retrieval whenever needed. This forms the foundation of almost every business process. The faster relevant information is available, the quicker crucial decisions can be made.

Full-text search is the simplest way to search within the DMS, functioning much like a Google search. The more search terms you enter, and the more relevant and precise they are, the more accurate your results. Quotation marks pinpoint exact phrases, a minus sign excludes specific words, and there's even semantic full-text search that considers similarities.

what does a document management system do

3. Automated Distribution and Workflow Management

A modern DMS enables completely electronic document transport and processing across departments. Workflows automatically route documents based on predefined parameters (category, project, customer number, etc.) to the responsible individuals or groups, both inside and outside the company. Further workflow steps are triggered based on how and when these individuals complete their tasks.

Workflows aren't rigid; semi-automatic or ad-hoc workflows are also possible. They significantly reduce document turnaround time and enhance transparency, as each step is meticulously logged by the system.

Documents remain visible to all authorized employees during processing, even if they aren't directly involved in the workflow. Importantly, the document itself is never sent around; only a link to its location within the DMS is shared. This ensures everyone works from a common database without creating endless distribution copies.

For enhanced control, a DMS provides valuable evaluations of all recorded metadata – even *before* they're available in department-specific applications like accounting. Dive deeper into workflow management with our YouTube video (remember to enable English subtitles!).

Here's a neat, related function: If a user assigns a document to another user who wouldn't normally have access rights (based on the archive settings), that user *temporarily* inherits the task author's rights to that single document, only until the task is completed. This allows for restrictive rights assignment without hindering editing capabilities. For instance, work can be delegated without granting permanent access permissions. This exemplifies well-designed access control, ensuring document security by preventing unauthorized viewing, editing, or deletion.

It's not just users sending documents; the system can do it too! Of course, this requires predefined rules, known as "workflow rules." These rules can be created by the administrator or an authorized individual, like a department supervisor. Workflow rules define the event that triggers the workflow. For example, all material invoices could be routed to Clerk A, service invoices to Clerk B, and so on. The controller role is also specified within the workflow rule and can be applied to various business documents.

All user edits are visible in real-time. If an edit needs to be undone, bitfarm-Archiv offers version control. This means a copy is created for *every* change, ensuring the original file is always retrievable.

4. Audit-proof Archiving

A modern DMS must include revision-safe archiving for storage and retrieval. Files are stored on write-protected repositories, rendering them unchangeable. To financial authorities, they hold the same status as paper documents, eliminating the need for physical storage for audit trails. However, original records, like signed contracts, should be kept securely as they could serve as evidence in legal disputes.

Documents from an ERP system necessitate audit-compliant archiving and, therefore, cannot be processed in their native file format after capture.

Free Document Management with bitfarm-Archiv

bitfarm-Archiv is a cutting-edge, professional on-premise open-source DMS. Its intuitive interface and exceptional flexibility make it suitable for various industries, requiring minimal training. Numerous existing APIs (Application Programming Interfaces) facilitate seamless data import and export with other systems. Our software also addresses the increasing demands of compliance requirements and government regulations (DSGVO, GDPdU).

We offer two versions of our product. The free GPL edition serves as a freely accessible developer base for individual users and smaller teams. The Enterprise Edition, with expanded functionality, caters to the demanding needs of corporate use.

The combination of precise text recognition and a high-performance full-text search provides all team members with convenient and, crucially, *rapid* access to the information they require. Furthermore, extensive workflow processes, Office integration, a web interface, versioning (document control software), automatic file creation, reporting, numerous interface documentation, and documented revision safety guarantee an efficient and GoBD-compliant workflow.

Explore our videos and screenshots to get a feel for the comprehensive capabilities of bitfarm-Archiv.

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Trivia About Document Management Systems

The earliest digital archive systems emerged in the early 1990s. However, the costs for licenses, servers, scanners, jukeboxes, and other components were prohibitively high at the time, restricting digital archiving almost exclusively to large corporate environments. Furthermore, working with these early digital archives was incredibly laborious; all documents required meticulous manual indexing to enable later retrieval via index masks.

The rapid advancements in information technology have brought us high-performance servers and massive storage capacities at affordable prices. Additionally, text recognition (OCR) technology has advanced significantly over the years, enabling digital document recognition with remarkable accuracy. This has facilitated a paradigm shift, allowing documents to be captured *without* user intervention and reliably retrieved later.

bitfarm-Archiv DMS, a prime example of this new generation, leverages these technologies. Today, thanks to ongoing developments, particularly in the open-source realm, digital archiving and electronic document management can be implemented comfortably and economically in *any* business setting.