To maximize your return on investment when implementing document management software, it’s important to develop a sound business strategy with specific and measurable goals based on key metrics. We recommend you start in a single department, identify key metrics, implement the document management solution and then compare the results against the key metrics to determine your return on investment.
Human Resources Is A Good Place to Start
When “enterprise content management” (ECM) started catching on in the late 90s, the concept of rolling out document management on an enterprise-wide basis emerged. As with many large Enterprise Resource Planning (ERP) systems these implementations were complex, prone to scope creep and often ended in failure.
Today, a more effective and less risky strategy for implementing document management software starts with selecting a department where the cost and time needed to process paperwork is high, such as in human resources.
Evaluating Your Human Resource Processing Costs
Here are a few key metrics that will help you identify how much time and cost is involved in paper-heavy HR processes:
- The number of hours staff spends capturing, processing, tracking, and handling vacation request forms, T&E forms, benefits enrollment forms, employee review forms and supporting documentation
- The personnel cost needed to manually enter data into your HRM system
- The error rate affiliated with manual data entry and the cost of potential liabilities due to erroneous data
- The amount of time and staff needed to locate retired employee payroll records for estimating pension and benefit calculations, taking into account the time needed to retrieve those documents from off-site storage facilities
- The cost of penalties incurred for compliance violations
- Costs affiliated with records storage and retrieval for I-9s and other documents you must retain for 7 or more years
- The cost per square foot in your office taken up by filing cabinets and storage boxes with employee records and other related documentation
Setting Your Goals
Once you know your costs related to managing your HR documents, you can set goals to reduce them and simultaneously improve efficiency throughout the department. Some examples are:
- Cut the time and number of staff needed to process new employee paperwork, T&E reports, vacation requests or any other HR related documents by x%
- Eliminate compliance fines by ensuring secure and reliable access to digital archives of employee records that must be kept for years, such as I-9s
- Reduce real estate and retrieval costs by x% by eliminating document storage in your office and at off-site storage facilities
Analyzing Your Success
Once your document management software is implemented, you’ll want to measure these metrics over time and compare them with your baseline numbers to evaluate the degree of improvement and related costs savings. Once known, you can estimate your return on investment. You can also analyze other non-cost-based benefits such as happier employees and staff being able to focus on value added services vs clerical work.
ROI & Expansion into Other Departments
By starting with a single paper-heavy department and analyzing the impact of document management software on key processes with the use of metrics, you will know the solution’s ROI and will have created best-practices for document management in your department. Doing so will make it far easier to roll out the system to other business units and/or departments, such as order fulfillment, customer service and invoice processing. Just imagine what streamlining all of these processes could have on your business.