What is the point of electronic document management?
When we ask the companies with which we are about to collaborate whether they use electronic document management (EDM), quite often we find out that they don’t.
When people hear about EDM, they think it would probably be useful as it would be more convenient and faster to work with documents. So, although people concede that EDM would be a good thing, they also raise the following objections:
Introducing EDM requires investing money
Introducing EDM requires time
It is difficult to train staff and reorganize work
For these reasons, the introduction of EDM is often postponed until it becomes absolutely necessary.
We have described in this article what EDM gives in addition to allowing to exchange documents electronically and have also considered how complicated it is to introduce, how much it costs and whether it is difficult to restructure processes after its introduction.
How does EDM work?
In brief, for an electronic document to have the same legal force as a printed and signed document, it is necessary to:
- Have an electronic digital signature (digital signature or electronic signature) which confirms the document authenticity; and
- Be connected to a specialized EDM operator which ensures the security of information and transfer it through legally established communication channels.
There are 3 types of electronic digital signatures (EDS):
- Ordinary EDS. This EDS allows identifying document senders. Typically, it may be used only internally because if it is used for external exchange of documents, there is no way of checking whether the documents have been exchanged or not;
- Enhanced non-certified EDS. This EDS is generated by a specialized software and protects against corrections. This signature has legal force only when specified by law, or alternatively, by agreement between counterparties;
- Enhanced certified EDS. This signature is the same as the previous one although its reliability is confirmed by a certification center accredited by the Ministry of Communications. Documents with an enhanced certified EDS have the same legal force as signed documents on paper with no additional conditions.
All the basic principles of paper document flow are retained in EDM. Electronic documents may be edited while orders and additional tasks may be generated. The document initiator may read the document, view the deadlines and anyone else working on the document, while managers may monitor the status of each document in real time.
Finished documents are approved as per a predetermined course depending on the configuration of user rights. For example:
- A department specialist has finished working on a document and informs that it is completed by pressing the relevant button;
- The specialist’s immediate supervisor is informed that the document is ready, so he/she reviews and approves it;
- The head of the organization also signs the document by pressing special buttons.
Advantages of EDM
Compliance with the law
The law does not currently require using electronic document management although many state agencies are already able to exchange documents electronically. Doing so is quicker, simpler and cheaper than exchanging paper documents. Exchanging electronic documents with various state agencies will become more and more common.
The obligation to use EDM could have already been introduced in 2020 as Russia was going to introduce mandatory traceability for certain listed goods in January. This means that EDM should have been used by manufacturers and importers of these listed goods (e.g. refrigeration equipment, forklifts, washing machines, projectors, strollers, metal office furniture, etc.) The launch of the traceability system has been postponed to mid-2021.
Getting rid of paper
Managing paper documents is expensive. If it is possible not to print and send paper documents at least within a group of companies, this will already save money and speed up work.
For example, if a paper document needs to be approved, the secretary could spend more than an hour to achieve this, needing a lot of correspondence. With EDM, each document gets to the right person in a few clicks.
After switching to EDM, much less money is spent on document printing and delivery. When paper documents are necessary, allowances should be made for printing, courier, postal and storage costs.
Control and effective management of document flow
It is important for the person responsible for documents or for managers to know who works on documents at any given time. EDM allows viewing when and who opened and edited a document, what it looks like now and who is holding it back. This allows improving control over business processes and discipline.
Increase in productivity and unification of procedures for generating and processing documents
There is a certain procedure simplifying work for all employees because the processes and movement of documents are devised in advance and configured in the system. Assignments are not duplicated, documents are approved faster, and decisions are also made faster.
All document revisions are usually saved in the system, so it is possible to return to a particular version if necessary.
It takes less time to search, prepare and send documents through EDM.
EDM search function allows looking for documents according to various parameters. To find an electronic document, no need to know its details as a few key words are sufficient to retrieve electronic documents.
Folders with documents may be organized as required by employees. For example, they can be arranged in sequence as they should be handed over.
Any document is available to everyone with the appropriate rights, from any device and at any time. People can work on documents even if they are, for example, away on business trip.
Any important information is available in the system at any time even in the event of employee dismissal.
Quicker contract execution
Given that documents are sent to counterparties instantly, it is possible to receive payment from counterparties quicker. This is especially useful when it is important to receive payment on the day of contract conclusion.
Interacting with major partners
Large companies are increasingly using EDM and require their partners to do the same.
Difficulties in introducing EDM
We have mentioned above 3 reasons why most companies postpone introducing EDM:
- Introducing EDM requires investing money;
- Introducing EDM requires a lot time;
- It is very difficult to reorganize processes.
These are important points for any changes. We have described the introduction of EDM in view of each of these points:
- How much does EDM cost?
- How difficult is it to introduce EDM?
- How difficult is it to train employees?
How much does EDM cost?
The cost of EDM consists of 2 parts:
- Acquisition of electronic signature;
- Fee to EDM operator for access to EDM infrastructure.
Each certification center set its own fee for issuing an electronic signature. On average, the minimum fee for a legal entity is RUB 2,500-RUB 3,000 (specialized software installation and electronic signature (security certificate) on USB stick).
An electronic signature is usually valid for 12 months after which it needs to be purchased again
The fees for EDM operators are dependent on the number of outgoing documents: the more documents are included in the fee, the less it costs to send a document. Incoming document flow is usually free of charge. On average, it costs RUB 6-7 for one outgoing document.
If we compare with a paper letter:
- Sending a letter in Russia costs RUB 25 and for a registered letter from RUB 50 so that sending a document via EDM saves RUB 18 per document;
- Given that an electronic signature costs approximately RUB 3,000 per year, it makes sense financially to use EDM if you send more than 166 documents per year (3000/18).
How difficult is it to introduce EDM?
Several steps are necessary to introduce EDM:
- Determine whether it is possible to install the EDM integration unit in the accounting software currently used (it is possible with standard 1С; it is necessary to find out for non-standard 1С or another accounting software) or whether document exchange should be configured in other ways;
- Choose a tariff plan for EDM;
- Issue a digital signature and security certificate;
- Set up document approval courses in EDM. To this end, roles must be created for system users, routes must be specified based on the company’s business processes, users must be trained and results analyzed;
- Appropriate changes should be made to the accounting policy.
Overall, it is not easy to reorganize document management as this requires conducting a full analysis of the process, determining optimization methods as well as developing and introducing new regulations, etc.
However, switching to EDM allows saving a lot of time and money as well as optimizing management processes.
How difficult is it to train employees?
Switching to EDM can be very stressful for those who are accustomed to paper documents. But, in the end, EDM significantly simplifies work, so it is important to schedule staff training. EDM systems are quite simple. Their interface is not much different from usual office programs or email services, and employees can find this out easily during their training.
The difficulties that are usually mentioned when talking about EDM cannot be denied, but if we look closely, they are only temporary and do not affect the operations of an organization that much that they would warrant postponing the introduction of EDM until it is absolutely necessary (e.g. to receive an order from a major counterparty or due to amendments to the law). The earlier an organization switches to EDM, the simpler it will be to work with existing document archives.
Switching to electronic document management significantly simplifies work and allows saving time and money. Switching to EDM also allows optimizing management processes in general.
We offer a range of services (including consultations, project evaluation, liaising with EDM providers, EDM implementation) that help simplifying as much as possible the introduction of EDM in companies.
We look forward to advising you on how to introduce EDM and assessing how much your company needs to do so based on its business processes. We also look forward to implementing EDM in your company if you decide to do so.
If you have any questions, please feel free to contact us.