Measuring the ROI of Document Management Systems

An invaluable exercise for companies is to measure the return on investment (ROI) of implementing and maintaining a document management system (DMS) as it can assess its efficacy and efficiency and offer a comparison to alternative solutions. By accurately calculating the costs and benefits, companies can increase their awareness and enhance operations. Making informed decisions regarding the DMS and its impact on business performance is possible through this analysis.

Organizations can expect to incur several costs including setting up the system initially which might include licensing fees, having the necessary hardware components while also providing employee training plus continuous maintenance and customer support. Furthermore, the merits can entail superior document categorization, efficient workflows, heightened partnership, intensified information safety as well as lower use of paper-based systems.

Let’s look at the myriad of benefits for companies that invest time and effort in calculating the ROI.


Informed Decision Making

ROI measurements provide valuable data that can inform decision-making processes. This helps ensure that decisions align with organizational goals and maximize the value derived from the system.

Justification for Investments

Going through this process provides organizations with evidence that backs up the investment in a DMS. The information can be crucial for securing further investments for maintenance on the system as well as upgrades.

Cost Savings

When implemented correctly, document management systems can deliver enormous cost savings. They can eliminate manual processes and reduce paper usage and storage costs. Without these measurements, companies might overlook opportunities for cost savings, such as reducing operational expenses.

Optimize Resources

These measurements allow organizations to maximize the allocation of human and financial resources. Without facts, decisions on resource allocation are arbitrary and based on incomplete data.

Continuous Improvement

It also provides the basis for ongoing improvement of the document management system. This allows companies to leverage ROI data to prioritize improvements, streamline processes, and adapt to changing business needs. This ensures the system remains effective for the long-term. By not knowing how the DMS is impacting the company, it hinders the ability to evolve and meet changing business needs.

Stakeholder Communication

Measuring ROI allows organizations to accurately demonstrate the value and impact of the document management system to stakeholders. This builds support, trust, and confidence among stakeholders, facilitating ongoing commitment to the system. Without quantifiable data on the system’s benefits, it becomes challenging to communicate its value proposition effectively.

Benchmarking and Comparison

While ROI calculations may vary based on specific organizational goals and context, it enables organizations to benchmark and compare the performance of their document management system against industry standards or competitors.

Steps for Measuring ROI

  1. Establish goals. Clearly define the objectives you aim to achieve by implementing a document management system
  2. Define key performance indicators (KPIs). Identify measurable KPIs that align with the organization’s objectives.
  3. Collect data. Before implementing a document management system, gather data on relevant metrics to establish a baseline. For example, measure the time it takes to retrieve documents, find misfiled or lost documents, and include the cost of physical storage
  4. Calculate implementation costs. Determine all expenses associated with implementing the document management system that include upfront costs and recurring expenses.
  5. Measure productivity. After implementing the DMS, track improvements in productivity and efficiency.
  6. Quantify savings. Document management systems can lead to cost savings in various areas, including improved compliance and reduced legal risks.
  7. Assess all benefits. Consider both tangible and intangible benefits that the DMS brings to the organization. Intangible benefits, although harder to measure, can include improved customer satisfaction, better decision-making, and enhanced data security.
  8. Evaluate results. Analyze the calculated ROI (using the formula below) to determine the success of the DMS implementation. It’s important to communicate the results to stakeholders and decision-makers to demonstrate the value of the system.

The ROI Formula

Measuring ROI is an ongoing process, and it’s important to regularly review and assess the system’s performance to ensure continuous improvement and maximize the benefits.

The ROI formula looks at comparing the total benefits to the total costs incurred.

ROI = (Total Benefits – Total Costs) / Total Costs * 100

  • Total Benefits attributed to the DMS. These can include cost savings from reduced paper usage, decreased storage costs, improved productivity, time spent on manual tasks, and other measurable improvements.
  • Total Costs are associated with implementing and maintaining the DMS, such as software licenses, hardware infrastructure, implementation services, training, ongoing support, and any other costs incurred throughout the lifecycle of the system.
  • Subtracting the total costs from the total benefits provides the net gain or return generated by the document management system. The net gain or return is divided by the total costs to calculate the ROI ratio. The result is expressed as a percentage, so it’s easier to interpret and compare against other investments or benchmarks.

Documented proof regarding the gains from installing a document management system is indispensable for businesses and measuring its ROI helps in achieving that. They can assess whether or not a solution works effectively by evaluating its efficacy in conjunction with alternatives before making an informed decision on improvements. This analysis ultimately contributes towards enhancing the benefits and value attained from employing DMS.

Unlock Value for Success

The implementation of KRIS Document Management System (DMS) in your organization could offer considerable advantages as KRIS is the ultimate transformative tool for any organization looking for ways to increase productivity, reduce costs, improve collaboration, and streamline processes.

Companies utilize ROI measurements to assess performance and optimize resources while driving improvements that demonstrate value to stakeholders. Unlock the value to success by maximizing the efficiency and effectiveness of your document management practices by taking the next step!






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