Document Management 101 - Part 2

In part 1 of this series, I introduced the basics of a document management system, sketched out the architecture, and showed some examples of application integration in a professional services environment. But while document management systems are important - and in many cases essential - to law firms and other services organizations, they also have a place in the enterprise. They can serve important functions in many areas but one of the biggest impacts of a DMS is in an organization’s accounting functions.

Accounting departments have always been document intensive - invoices, purchase orders, statements, expense reimbursement, payments, etc. And much of this is concentrated in accounts payable. In this environment, a document management system shines as a corporate record keeping tool. The architecture doesn’t vary substantially from what was illustrated in part 1 of this post, but application integration with office productivity applications such as Microsoft Word and Microsoft Excel is probably not used. In fact, in many cases, the types of documents stored are limited to document images - either in the form of TIFF or PDF files.

On the surface, the accounts payable process, shown in figure 1, looks straightforward. All the incoming paper documents (invoices and their supporting documents) are converted to TIFF files in a scanning process. As part of that scanning process, the A/P clerk views the document, enters the index values for the document and stores the image into the document management system. In an A/P environment, these index values include such data as the invoice number, total amount, invoice date, vendor, etc. These indexes typically match, or relate to, the data used in the ERP system to track transactions.

Figure 1 - A DMS in an accounts payable environment

Once the invoice image is scanned, indexed and stored, the invoice can be processed for payment. And we’ve only scratched the surface of what is possible. Once the base system is in place, it can be extended with additional tools enabling higher levels of automation. But leaving automation aside for now, there are still huge benefits to the indexes used the store the documents.

With the index data, the accounting department can search for any A/P invoice. Taxonomies can be developed using the available index fields, by matching a document to vendor, vendor invoice number, date and so on. This can have a substantial benefit to audits, and to legal actions requiring document production. Instead of searching through paper records, or requesting boxes from offsite document storage facilities, these records can be retrieved from the DMS.

This ability to search for documents and produce them on demand is an incredible enabler for an enterprise in other areas too.

In human resources, a document management system provides the ability to store, index and retrieve personnel data including certificates, licenses, employee intake documentation such as W-4, and I-9, employee reviews, and so forth. Rather than a paper file, all this information can be collected in a DMS. To make this even more interesting, the DMS can be tied to a number of workflow engines, asuring that activities for employee intake, promotion, termination, etc. comply with both organizational policies and applicable employment law. Once again, legal actions show the benefit of DMS usage. All employee records can be produced quickly in that event, for delivery to corporate counsel.

As a last example, consider an environmental engineering department. I’ve done some consulting for an organization which operates gas stations, and is affected by environmental law. Every gas station must have a license or permit from the state in which it operates - in fact several permits. In Texas for example, there are air quality permits, storage tank permits, waste water permits, etc. If any systems are repaired or installed, all work orders, service invoices, etc. must be kept as part of the environmental records. The DMS enables the organization to store, index and retrieve these records, demonstrating compliance with regulations.

So there you have it. In two short posts, basic information on document management systems, how they work, and what they can do. And I’ve only scratched the surface. In future posts, I’ll be expanding on one some additional aspects of document management that make implementing a DMS even more compelling.

A DMS is probably in your organization’s future, if not already there.