Document management systems provide several different types of benefits: some obvious, some more subtle.

Cost savings
One of the biggest hidden costs that paper-intensive businesses face is the time it takes to work with paper files. Say it takes a $20/hour employee five minutes to walk to a records room, locate a file, act on it, refile it, and return to his desk. At just four files per day, that's over 86 hours per year spent filing - around $1700 in wages. At ten files per day, that shoots up to 216 hours per year - over five weeks' time, or $4300 - and that's only for one employee. A system that lets employees find and work with those documents without ever leaving their desks can instantly slash those costs.

Document management systems also eliminate the "lost document" cost - the time it takes to recreate a document that's been destroyed or misplaced. Some suppliers estimate the cost of replacing each lost document at $250.

Additional cost savings come from the office space that can be freed by eliminating most paper records. With real estate costs at $15 to $40 per square foot in many major cities, converting records rooms into usable office space can save considerable amounts of money. In other cases, you may be able to eliminate warehousing costs for years of old records.

Security
If you're not taking data security seriously, you should be. Threats from outside (competition, identity thieves) and inside (disgruntled employees, employee theft) threaten the integrity and value of your most important information. Document management systems can provide several layers of security:

- Multiple levels of password-protected access for groups and individuals
- Encryption of document contents
- Audit trails showing who has accessed or updated documents

Disaster recovery
Whether your existing documents are paper or electronic, chances are you don't have adequate disaster recovery plans in place. Document management systems protect your paper records by creating electronic copies that can be backed up in multiple ways. They also can include off-site data backups and other steps to ensure that a fire, flood, or break-in won't cripple your business.

Access
Even as the Web makes it easier and easier for employees to work remotely, paper records remain a serious roadblock to distributed organizations. The right document management system allows your employees to access vital records from wherever they are. Simply allowing more than one employee to look at a file at the same time is a significant improvement over paper files. In addition, multi-layered access allows employees to see and change only the documents they're authorized to handle.

Process consistency
Many companies' document handling processes are just fine without a computerized system - or so they think. One benefit that matters more to larger companies is that a document management system will enforce consistency to the degree you want it. Different departments may have different approval processes - but once those are defined, the system will make sure they're followed. No longer will consistency in filing, naming conventions, and workflow suffer as you add new employees or cover for vacationing staff.

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Working towards the paperless office: You can drastically reduce the amount of paper documents your business depends on by choosing a document management system.