What is a File Management System? Why is it Important?

One of the most underrated evils businesses face today is document and file management. 

The reality of today’s time is that an inefficient system of document management can decrease your organization’s overall productivity by 21%. In monetary terms, this loss may vary from business to business. However, a study suggested that it costs $20000 per worker annually. 

While having an efficient system of files and documents is one challenge, retrieving such stored information instantly is another, agreed by 86% of workers. This becomes the very reason why 83% of these employees choose to recreate these documents instead of putting effort into finding them. 

That was just a gist of what happens at the backend of every office; we all know that the damage it does is primarily irreversible without a proper system.

Businesses that understood the implications of the same within time opted for File Management Systems for a do-over. 

But what is a file management system? And does it help repair the damage? Let’s see!

What is a File Management System?

A file management system is a software that helps organizations manage documents and files in a computer system. An FMS, also known as a File Manager, is many a time an in-built functionality that comes as a default feature in computer systems. Like the “finder” tool in Mac systems. 

Despite being efficient, these might not be the most suitable for every business. These in-built default solutions usually come with very basic features, which is not something enterprises willing to streamline their workflows are looking for. 

Nonetheless, a File Management System is there to make the whole process of arranging files, rearranging files, and working with them easier. It will do the needful and make sure that these files aren’t just stored and stacked in different places but are organized in a way that makes retrieval seamless.

A typical File Management System can help you: 

1. Define roles, responsibilities, and permissions for stored files. 
2. Track data reports to witness if files are being used and if they are successful. 
3. Secure corporate assets from internal and external influences. 
4. Carry on operations on stored information like editing, modifying, and more.

Why is File Management System Important?

The number of essential documents is only going to increase with time. You might as well set up a system that makes browsing through them more accessible and saves you time and effort. 

And since better organization can bring nothing but proficiency, these are the reasons why having a system in place makes sense: 

A hub of information

Whether you are an individual or a company, having all your information in a single place, be it a repository or a file-storage system, is crucial. Take the following situation: 

Imagine you are running a law firm and have all your files scanned and saved on your computer and some cloud-based drives. Every time a client approaches you, you can just go to the folder where you saved the file and access whatever information you need. 

But what happens when these files multiply? You will keep creating folders and folders of information on different systems and drives, losing track of the location and contents of every single saved document since you depend upon your memory here. 

Now had you invested in a software earlier, you wouldn’t be worried about losing track of anything since you can always retrieve the same with the help of a few keywords. And it’s all placed in one single repository instead of scattered in different folders and drives. 

Thus, a File Management System helps you create a hub of all the content you need to save for quick retrieval later. 

Improved productivity and efficiency

50% of the skilled workforce spends time preparing and recreating documents; on average, 18 minutes are consumed looking for a single paper.

When you switch to a more efficient management system like an FMS, all that time is spared; thus, your skilled workforce has more time to focus on essential tasks that require their expertise. This leads to an apparent increase in productivity and efficiency of your organization. This is also enabled since such systems help you set up automated workflows of the regular business process.

Information security 

There are many ways in which a secured file management system could benefit your organization in respect of security. The following are a few ways an FMS can secure your documents from uncalled-for security risks: 

• A digitized version of documents means you wouldn’t have to worry about them getting damaged, like catching fire, getting stolen, or worse, falling into the hands of a competitor. 
• A secured file management system ensures your information is encrypted and away from the possibility of any cyber-attacks. 
• A file management system also prevents your documents from getting into too many unauthorized hands during project collaborations.

Reduced overheads 

When you ditch paper-based documents and go digital with your approach, you are more likely to cut regular overhead costs associated with your business. Expenses related to printing and reprinting lost papers, storage, and more are reduced; thus, profit margins are also increased.

Tips for Choosing the Right File Management Software

It’s not about blindly going for a file management system; you need to ensure that the one you choose suits your requirements to get the expected ROI. Here’s what you need to keep in mind. 

1. Switching from a filing cabinet system to a complicated software will further drop your employee’s productivity. They will need to attend multiple workshops, and even then, they might not be able to get it. What you need to do is find one which has a user-friendly interface. So this new change will come easy to your employees. 
2. You need a system that promotes integration to quickly and seamlessly keep working on your organization’s applications already in use. 
3. The file management system you prefer should prioritize safety and must also have the required encryption technology. 
4. The FMS must also be progressive. Meaning it should have the capability to bring in more necessary features with time for ease of operations.

Difference Between File Management Systems and Document Management Systems: 

1. A file management system is about storing information digitally, whereas a document management system also focuses on storing and managing the same.

A document management system is a more comprehensive solution. It helps with all problems related to document handling and management, like document indexing, workflow automation and management, ease of collaboration, and more.

A file management system is indeed a helpful strategy that businesses can deploy to mitigate the risks associated with paper-based documentation. However, this is highly subjective to the needs of the company. 

While newly established businesses can leverage file management systems with limited functionalities, an established business needs a more all-inclusive solution to deal with every challenge with paper-based documents. 

As your organization grows, you might feel the need to switch to a DMS. We say you skip the hassle and use a document management system from the get-go instead. It comes with more benefits, helps with many more activities involved in regular business processes, and makes more sense. dox2U is one such; go and check if you are eligible for a lifetime free plan or not.