What Is Document Management Software?

Document management (DM) software encompasses a wide range of features and functionalities, many of which are critical to effectively running a business. Many small to midsize businesses (SMBs), such as legal firms, creative firms, or media and publishing organizations, aim to go paperless and are looking for the right tool to do so. Businesses generate a lot of data regardless, so choosing a reliable and scalable DM system is key to streamlining and automating workflows.

For SMBs, an efficient DM system can make for better overall performance for several reasons. The most basic reason is having a place to store and organize documents. Version control, workflows, access permissions, backup, and data protection can also be handled by a DM solution. It is the starting point for storing, securing, and sharing various business documents. The ability to classify data is another DM capability that can completely change the way your organization maps its workflows. With all that power, it's no surprise that worldwide revenue projects for DM and enterprise content management (ECM) systems are steadily tracking up, as shown in the chart below from market research firm, Statista.

ECM Worldwide Revenue, 2017-2027 (Billions USD)

In addition to new efficiency, DM systems can also act as collaboration tools, ones that combine new ways of communicating with equal attention paid to legitimate regulatory needs. For starters, traditional file storage makes security difficult to manage and maintain. While there are certain capabilities available to set permissions on a file or folder, these permissions can be rapidly degraded or defeated entirely simply by moving files from one folder to another. Tracking changes to a document stored in a shared folder on a corporate server is nearly impossible for users, as is maintaining and evaluating an audit trail. Even in terms of collaboration, there are significant improvements to be had simply by transitioning away from the traditional corporate file share.

And let's be clear: When we talk about DM in this review roundup, we're focusing on DM systems that can offer enterprise-level file management, including routing, retention, and sometimes even support for paper file handling, including offsite storage and insurance. If you're simply looking for online storage in the vein of Dropbox Business or Google Drive for Work, then you can read our reviews of those products in our best cloud storage and file sharing providers roundup.

Storage and Collaboration

Even at its most basic, a DM system should be able to store documents in a wide variety of file types, though you should check your organization's requirements carefully in this regard and match those up against any potential system prior to purchasing. Even today, there are some proprietary file types, especially in custom-built line of business (LOB) applications, that not every DM system can support.

Aside from that, the DM system should also provide tools to organize these files and find those that meet certain user-defined criteria, with a minimal amount of effort or system resources. Most often, this will come in the form of a "smart search" feature; this is another key feature you should test during your evaluation phase. Capabilities such as tags and customizable key fields are important for finding files after their storage location has fallen from corporate memory. Some solutions, such as Microsoft SharePoint Online, provide features that will automatically classify or tag documents based on rules you configure. This not only improves reliability in the data behind your documents but also improves the odds that users can track down the documents they need.

Many of the DM systems we reviewed include some amount of online cloud storage, such as Adobe Document Cloud Standard, Ascensio System OnlyOffice, and Microsoft SharePoint Online. However, you shouldn't look at this as a key buying criteria because storage is the easy part. For most organizations, this won't be the most important factor when evaluating a DM system. Collaboration efforts, such as sharing documents, viewing changes (like in an organized revision history), or simultaneously working on a document with another user (available in both Ascensio System OnlyOffice and Microsoft SharePoint Online), are the kind of capabilities that will improve your teams' efficiency.

Another common scenario is integrating your DM system with other business apps. Because they handle documents, which are often central to many business processes, DM systems can act as the lynchpin to other business processes by feeding their data and functionality into other apps. Web content can be created, edited, and processed in some of these systems, and then monitored or even published through a marketing automation system. If this might be important to you, then your evaluation phase will need to focus on any prebuilt integrations a prospective vendor offers as well as the utility of its application programming interface (API)—or whether it has one at all. As always, if you can try before you buy, then that's the best way to go. Most of these vendors offer at least a 14-day free trial, while many offer a full 30 days. Some vendors even offer a free tier, though this is usually delivered with a low user count and limited features, which can defeat the purpose of evaluating the system.

Sharing, Approvals, and Signatures

There are scenarios in which a business will create a document just to have it. But, in most cases, documents are meant to be shared and usually shared often. Thus, a focus area for any DM system should be the tools it provides for handling such files. At a minimum, these capabilities exist to streamline this communication and improve returns, either from an efficiency or customer perspective. In some cases, these communication tools also support tracking communications and reporting on them over time; this is a feature that can be particularly critical for documents that have compliance or legal repercussions.

From a workflow perspective, being able to route specific types of documents to personnel who need to complete or approve them is a basic level of functionality. Rendering the document in an editable format that becomes final in a non-editable file type, such as PDF, is another good feature. Finally, e-signatures have become a more common requirement in many business scenarios, not just to finalize engagements with partners or customers but also to verify workflow between in-house staff. Some DM systems, such as Adobe Document Cloud Standard, have e-signature functionality built-in while others need to integrate that functionality from an outside source. Whatever the method, evaluating a DM system will often require you to nail down both implementation and functionality, so be sure to ask a sales representative about it during your product demo.

Collaboration features are important, too. Having a check-in and check-out option that locks access when a user has downloaded a file prevents editing overlap and could prove to be a sanity saver. Version history is a great way to track who has edited files and when, and be able to revert to an earlier version if the file becomes corrupted or if errors are introduced. Some programs require integration with Microsoft Office 365 or Google Drive for Work to edit documents online, while others provide their own word processing and document publishing tool kits for the same purpose.

Security and Compliance

Security is a cause for concern for any business and is often top of mind when seeking and evaluating new business solutions. SMBs and startups might not see an immediate need for compliance or legal concerns, but it pays to think ahead. Systems that can grow with a company's needs featuring basic permissions as well as version control functions, will have the advantage. Consider a solution that can accommodate compliance requirements down the line. Investing in advanced and redundant security and backup features can only help future proof your business.

Companies with compliance or legal concerns, including financial firms, government entities, medical practices, and schools, will really want to focus on security as a primary criteria. More advanced security features, such as audit trails, advanced permission capabilities, or enterprise authentication tools such as multi-factor authentication (MFA) or integration with a device management system, are less of a "nice-to-have" feature and should even be considered mandatory in some cases.

File retention is another security-related area that most of the DM systems we've reviewed support, though the tools and features related to file retention vary between the different platforms. Many companies must legally maintain records for a predetermined period of time. Your DM system should provide tools for preventing permanent file deletion. Ideally, it would offer you an archive solution to facilitate proper identification of obsolete files without compromising you legally.

Compliance considerations should be part of evaluating every aspect of your DM system. In cases where documents containing patient or other customer information are being handled or other compliance factors are in play, collaboration features should be managed very carefully. Many DM systems can prevent users from sharing files with external users (Ascensio System OnlyOffice and Microsoft SharePoint Online) or from saving them to a mobile device. Microsoft SharePoint Online takes this one step beyond the competition by offering rule sets that are tailored toward compliance, with specific laws and regulations based on geography.

Microsoft also has the advantage of being able to offer operating system (OS)-level data protection features such as access controls set at individual and group levels and especially data encryption. But, while Microsoft is able to offer these features largely because of its Windows OS, that's not the only way the company can deliver these benefits; it's not the only way its competition can deliver them, either.

Meanwhile, solutions like Adobe Document Cloud Standard offer compliance with regulations like the Health Insurance Portability and Accountability Act (HIPAA) and the Family Educational Rights and Privacy Act (FERPA), which protects student-education records.

Be sure to ask how a prospective DM system can deliver advanced security features and you'll find that some will deliver them through whatever OSes they support, while others will integrate with other back-end business platforms for the same capabilities. Once you've nailed down the how, be sure to evaluate how well these measures will work in your particular business environment.

Efficiency and Integration

Nobody really likes a tool if its sole purpose is just to maintain compliance and provide oversight for management. Therefore, ideally, your DM system will also make DM-related tasks easier and more efficient. Automation tools are one area in which a DM system can make your life easier. In some cases, these tools are related to a workflow, though each system implements workflow differently.

Integrating with other business systems, whether a financial system, database, or a cloud storage provider, can increase efficiency and accuracy in a number of ways. One DM system we reviewed can even take scanned documents, automatically divide them into separate records, perform optical character recognition (OCR) on the documents, and then produce output files based on the document content. These can then be imported into other systems to eliminate double entry.

Most of these services also have mobile apps that offer limited or nearly full functionality. Ideally, there should be apps for both Android and iOS so that your employees can have mobile access regardless of their device. Look for features in the app such as document editing and creation and file sharing. Ascensio System OnlyOffice and Microsoft SharePoint Online offer not just iOS apps but also Android and Windows Mobile versions, too. Microsoft SharePoint Online also has a mobile user interface (UI) that worked well in our tests and even includes an option to switch between desktop and mobile views. There, you can open documents, upload files, and add folders. Adobe Document Cloud Standard has mobile apps for Android, iOS, and Windows tablets and phones. You can view and sign documents, and even snap photos of forms and then fill them out on your device. Within Document Cloud Standard, Adobe has now added the ability to edit PDFs from iOS and Android tablets. Touch-enabled features make this functionality simple. Within a PDF, users can change text, format and edit as well as rotate and resize images.

Administrative controls are also important in a DM system. While most file-sharing services let you set permissions on particular files or folders, admins may also want to set global permissions for users. For instance, an admin may want to restrict some users from ever being able to delete files. Other admin controls include the ability to remove a user's access to some or all files (such as when an employee leaves the company or moves departments) and the ability to change ownership of a file for the same reason.

Customer Service and Support, and Compatibility

Customer service and support is a very important element even if the DM system is easy to use. The best systems offer live help in the form of phone calls or web chat; email is also a good resource for non-urgent issues or questions. You may even be able to schedule a phone call with support so you don't have to wait on hold. For small issues or for when you're still learning how to use features, access to thorough online documentation is necessary and video demos are even better. Other important features include advanced search and organized FAQs.

If you're investing in a DM system to manage large parts of your business, then it only makes sense to protect that investment by evaluating the support options for that system. In most cases, DM systems that are primarily cloud-based come with some level of support automatically. Systems that are designed to be implemented within your corporate datacenter will typically require a support agreement, usually with an additional annual cost. In any case, you should consider support costs when evaluating your options.

Finally, compatibility is also important. We're dealing with web apps here so, unless you're pairing them with desktop software, there's not as much to worry about compared with when you use other types of software. However, browser compatibility, API support, and file formats are still important considerations, even today. Check to see that the software functions well on your preferred web browser, especially if your business relies on multiple web apps to function. Also, supporting only one browser can help keep your IT people sane. Additionally, do a document audit to find out which file formats your employees are using day to day and pay special attention to files being produced by any custom software your organization might be using.

Once you have a list, see if you can drop any esoteric formats and instead consolidate to more standard file formats, such as Microsoft Office's DOCX and Adobe's PDF. These formats are de facto standards and you can save yourself some headaches by relying on them. If you're stuck using a proprietary format, then don't give it short shrift. Make absolutely sure any prospective system can handle these files, not just in terms of storage or routing but also as part of advanced features such as e-signatures and especially security.