What is a document management system (DMS)?
A document management system (DMS) is software that facilitates the capture, management, storage, organization, search, and retrieval of digital documents. It is used in companies to streamline and improve the handling of digital documents and files.
The main objectives of a document management system are:
Document storage: A DMS enables centralized storage of various types of documents, including text files, spreadsheets, presentations, PDF files, images, and other digital data. This way, documents are not scattered across different servers or directories.
Organization of documents: In a DMS, documents are arranged in a structured manner, usually using folders, categories or keywords. This makes it easier to find and access the information you need.
Versioning and revision: A DMS stores the different versions of a document so that users can track changes and revert to previous versions. This is especially important when working collaboratively on documents to ensure that everyone is using the latest version.
Access management: A DMS enables management and control of document access. To maintain security and data privacy, companies can define who can view, modify, or only access certain documents.
Search Function: An effective search function is a feature of a strong DMS that allows users to quickly and easily search for specific documents, materials or keywords.
Workflow integration: Some DMS solutions offer the option of routing documents through predefined procedures using workflow functions. For example, processes for releasing documents or approval procedures can be integrated.
Backup and restore: DMS systems often provide automatic backup and restore capabilities to ensure that documents are protected even in the event of technical problems or data loss.
A well-integrated document management system increases the effectiveness of document management, boosts employee performance, promotes teamwork, and provides better protection and control over corporate records. It is used by a wide range of companies of all sizes and industries to manage the growing amount of digital information.
What is an Enterprise Resource Planning System (ERP)?
An ERP (Enterprise Resource Planning) system is a comprehensive software solution specifically designed to integrate, automate and manage all business-related operations and resources of a company. It serves as a central database, enables real-time communication between different departments and facilitates efficient business processes.
The main objectives of an ERP system are:
Business process integration: ERP unifies all essential operations, including financial accounting, purchasing, sales, inventory management, manufacturing and human resources. This reduces duplicate data entry and enables smooth data and information exchange between different departments.
Efficient resource management: An ERP system helps manage a company's resources, including raw materials, inventory, equipment, finance and personnel. It enables companies to use their resources more effectively and reduce costs.
Real-time reporting and analytics: ERP systems provide powerful reporting and analytics capabilities that give companies instant access to information about the performance of their operations. This enables them to make smart decisions and respond immediately to market changes.
Business process automation: ERP streamlines manual workflows and procedures, increases productivity and reduces human error. Employees can now focus on more strategic tasks.
Governance and compliance: An ERP system supports companies in complying with legal and regulatory obligations. Consistent data capture and archiving increases transparency and traceability of business activities.
Customer relationship management (CRM): To support sales and customer service processes, manage customer information and increase customer loyalty, many modern ERP systems also have CRM functions.
Security and access control: ERP systems have extensive security features to restrict access to private company data and ensure system integrity.
A well-implemented ERP system enables companies to work more efficiently, reduce costs, foster collaboration and improve decision-making. It is used in companies of various sizes and industries and can be customized to meet a company's specific needs and business processes. A successful ERP system can help increase a company's competitiveness and promote its growth.
Automation and cost savings through ERP systems and DMS
Business workflows are defined processes that run within a company to achieve specific tasks or goals. They serve to increase the efficiency and quality of business processes and minimize sources of error.
The medium of business workflows used to be clearly defined with the circular folder. However, as part of the digital transformation, companies need to make a decision about the digital place where business workflows will be mapped in the future. This analysis takes a closer look at the two most common alternatives, ERP and DM systems.
ERP (Enterprise Resource Planning) systems are software solutions that serve to connect and automate the various business areas and processes of a company. They provide a central platform on which all business areas are networked with each other, thus enabling smooth communication and collaboration. Well-known manufacturers are, for example, SAP, Microsoft, Infor or Oracle.
DMSs, on the other hand, are designed to facilitate the management and sharing of documents and content within an organization. They offer centralized storage solutions and tools for editing, publishing and distributing content. Well-known manufacturers are, for example, d.velop, Shareflex, Docuware or ELO.
ERP and DM systems thus both offer the possibility of defining and automating business processes. By integrating business processes into the software, they are accelerated and simplified. The ability to map and automate business processes enables companies to work faster and more efficiently and thus achieve competitive advantages. To elaborate on this, two processes that occur in almost every organization are analyzed below, highlighting the differences and presenting the derivations.
Realize the advantage from standard processes in multiple system types and increase flexibility
First example process: Incoming invoice processing (ERV)
The advantage of smart incoming invoice processing (ERV) is that it works exclusively with digital data and documents after the media break has been performed in the first process step. Scenarios that use a DMS that is visually and technically strongly embedded in the ERP system are also characterized by an almost universal user experience within ERV.
This standard scenario for ERV shows how the two systems work hand in hand by using core functions to compensate for the weaknesses of the other system. Starting with invoice posting: Where the ERP system unintelligently relies on manual assignment to a transaction, the DMS can automatically assign the document to an ERP transaction by technically reading the invoice (Optical Character Recognition - OCR), thus creating a 1:1 link between transaction and document that ensures access from both systems to the respective counterpart. For the release workflow, it is often worthwhile to use the DMS, since the authorization matrix can be stored and adapted more flexibly there. The posting in financial accounting is clearly located in the ERP, but if necessary, the corresponding document can be accessed with just a few clicks. Once the posting is complete, the data-related transaction is archived in the ERP and the document is stored in the DMS in an audit-proof manner. For future searches, it is possible to search in the ERP transaction by vendor, booking number or similar, or in the DMS by document content, sender, etc., as required.
Second example process: contract management
Digital contract management enables the direct assignment of the contract to master data, bookings, etc. and thus no decoupling of the contract document and the systemic processing of the contract contents. In addition, paper is saved and approvals such as signatures can be carried out digitally.
The best practice for the standard process in contract management also relies on a division of labor between ERP and DMS with a focus on the core functions. The use of contract templates from the DMS, including contract creation via standardized fields, make it possible to ensure the use of up-to-date templates and the formally correct filling of contracts. Every contract arises from an operational necessity and is usually associated with payment obligations, both debit-side and credit-side. This requires direct assignment of the contract document to the posting transactions in the ERP system. The digital and, above all, legally secure signature is a significant added value of contract management solutions. The direct integration into many DM systems does not cause any media breaks and, in the case of Software as a Service (SaaS) solutions, is always technically and legally up to date.
Neutral requirements analysis instead of biased system selection
The two process examples illustrate one thing above all: the answer to the question of whether an ERP system or a DMS is better suited to mapping business processes cannot be given as a blanket statement, but must be answered individually for each organization. Often it will be a mixture of both technologies, so it is elementary that the company's business processes are carefully planned and technologically designed to achieve the desired results. A thorough analysis of existing processes and consideration of user needs and the roles behind them are critical to successful business process automation. In plain language, this means: First analyze the requirements in a technology-open manner and select the system on this basis, instead of first deciding on a system and then mapping the processes in what may only be the second-best solution.
In summary, ERP and DM systems offer the possibility to (re)define and automate business processes in order to increase the efficiency and quality of business processes. However, thorough analysis and planning is important to achieve the desired results.
