How and Why You Should Digitize Your Documents: A Business Guide

1. What is document digitization?

Document digitization refers to converting physical documents—such as paper files, records, and forms—into digital formats using specialized scanning technologies. These digitized files are stored electronically and can be accessed, retrieved, and managed through a document management system (DMS).  

Digitization goes beyond simply scanning documents; it involves processes like indexing, optical character recognition, and integration with digital workflows to ensure that the files are easily searchable and usable within a business's operations. 

2. Digitize vs. digitalize: what’s the difference? 

“Digitize” and “Digitalize” are often used interchangeably, but they refer to different processes. Digitization is the conversion of information into a digital format (e.g., scanning paper documents), whereas digitalization is the broader process of leveraging digital technologies to transform business operations and improve efficiency. Document digitization is a fundamental step in the larger journey of digital transformation, which includes automating workflows, integrating with enterprise systems, and utilizing advanced analytics. 

3. The importance of document digitization 

It’s no secret that today’s business landscape is fast-paced and data-driven, and this makes the need for quick access to information critical. Businesses that rely on physical documents fall behind in terms of retrieval speed, security, and storage costs. Document digitization addresses these issues and offers a pathway to improved organizational efficiency and data protection.

• Operational efficiency: Physical document management is time-consuming, involving manual retrieval, filing, and storage. Digitized documents can be accessed instantly with a few clicks, significantly improving productivity. 
  
• Data security: Paper documents are vulnerable to loss, theft, or damage. By digitizing documents, businesses can leverage encryption, password protection, and access controls to enhance security. 
  
• Cost savings: Managing paper-based documents can incur substantial costs related to storage, printing, and mailing. Digitization eliminates the need for physical storage space and reduces costs associated with handling and processing paper. 
  
• Disaster recovery: Natural disasters or accidents can lead to the irretrievable loss of paper documents. Digital files backed up across multiple locations ensure that business-critical information is always accessible, even in emergencies. 
  
• Compliance and legal considerations: Many industries face strict regulatory requirements regarding document retention and accessibility. A well-managed digitization strategy ensures compliance by providing secure storage, version control, e-signatures and audit trails for document access.

4. Benefits of document digitization 

• Improved searchability: With advanced search functions in a document management system, businesses can find documents by keywords, metadata, or full text search. This dramatically reduces the time spent searching through filing cabinets or storage rooms. 
  
• Enhanced accessibility: Digital documents can be accessed from anywhere, making them perfect for remote teams or businesses with multiple office locations. This promotes collaboration and flexibility. 
  
• Enhanced document security: Digitized documents can be protected with encryption, password protection, and multi-factor authentication, reducing the risk of unauthorized access. Digital storage also supports version control, ensuring document integrity. 
  
• Cybersecurity: Look for protection against ransomware and other malware. For example, with a foundation such as Microsoft Azure as its foundation, 99 percent of all viruses are already known, which is why a contaminated document is immediately recognized and can't even be archived. Even a completely new virus cannot spread to the organization's other documents, because the malware has no access to the corresponding data store.
  
• Compliance automation: Digital systems automate document retention schedules, ensuring that businesses remain compliant with regulations without manual oversight. Version tracking and audit trails help maintain document accuracy and integrity for audits. 
  
• Sustainability: Moving away from paper-based processes reduces a business's environmental footprint. Digital files eliminate the need for printing and reduce waste, aligning with corporate sustainability goals. 
  

5. Simple steps for document digitization 

While the benefits are clear, the process of digitizing documents needs to be well-planned to ensure a smooth transition. Here's a step-by-step breakdown: 

• Scanning: High-quality scanners or multifunction devices are used to convert physical documents into digital files. These scanners capture clear, accurate images of each page, ensuring that details are preserved. Any type of document can be scanned, including invoices, contracts, blueprints, CAD drawings, medical records and legal documents. 
  • For documents in active use: Day-forward scanning involves digitizing, indexing and storing paper documents as soon as they are created or received. You’ll need to create a process to scan and digitize these documents quickly so there isn’t a backlog of hard copies. Other documents that are used in daily business should also be scanned before the system goes live.  
  • Backfile scanning: Backfile scanning is used for scanning paper documents that are still required for daily use and records that are no longer in active use.  These records require long-term storage for compliance or other business reasons. It can be started in parallel with scanning documents that are still in daily use. When a large number of records need to be digitized, companies often work with a vendor that specializes in backfile scanning. 
• Optical character recognition (OCR): OCR technology is applied to scanned documents to convert printed text into machine-readable data. This allows users to search and edit digitized documents. 
• Indexing: To facilitate easy retrieval, digitized files are tagged with metadata, such as document type, date, and relevant keywords. Indexing organizes documents in a way that enables efficient searches. 
• Quality control: A designated manager or IT department member conducts regular audits. This process includes verifying that scans are clear and complete, and that OCR has captured all text correctly. 
• Storage and management: Once digitized, documents are stored in an on-premises or cloud-based DMS, providing secure storage with version control, access permissions, and redundancy through backups. 
• Retrieval and access: Digitized documents are accessible via a user-friendly interface. Advanced search capabilities and indexed metadata make retrieval quick and efficient. 
• Workflow integration: A DMS can integrate with existing business workflows, enabling seamless document routing, approvals, and process automation. This reduces the need for manual intervention, improving overall efficiency. 

6. Do I need to keep paper copies? 

One common question business face during the digitization process is whether physical copies of documents must still be retained. In most cases, once documents are digitized, paper copies are not required, provided the digital versions meet regulatory standards for accuracy and integrity. However, it’s essential to review industry-specific regulations to ensure compliance. 

There are some documents that should be kept in a paper format. They include wills, trusts, notarized contracts with raised seals, titles to property, checks and promissory notes.

Often, companies scan these documents and store them digitally as well to create an electronic back-up. 

7. Integrating digitized documents into a document management system

Transitioning to a document management system is key to maximizing the benefits of document digitization. A DMS provides a centralized platform for managing digitized files, enabling businesses to store, organize, and retrieve documents efficiently. Beyond storage, here are some of the benefits: 

1. Efficiency and productivity: With digitized documents employees can quickly locate and retrieve information, reducing time spent searching for information and improving overall productivity.  
2. Automated workflows: Documents can be routed automatically to relevant team members for review or approval, reducing manual handoffs. 
3. Enhanced Collaboration: Teams can collaborate on documents in real time, improving communication and reducing duplication of work. 
4. Compliance Support: A DMS can enforce retention policies, ensuring that businesses remain compliant with regulations concerning document storage and access. 
5. More informed decision-making: Access to accurate and timely information is crucial for informed decision-making. Digitized documents housed in a document management system ensure that decision-makers have reliable data at their fingertips. 
6. Business continuity: Backup solutions for digital documents provide a robust disaster recovery plan. In the event of hardware failure or a disaster, businesses can quickly recover lost files from backup systems. 

8. Digitize to stay ahead of the curve

Digitizing documents is more than just a convenience; it’s a strategic decision that can future-proof your business. As technology continues to evolve, businesses that embrace document digitization will be better positioned to integrate advanced tools like AI, machine learning, and predictive analytics into their operations. 

By taking steps now to digitize your documents, you not only gain immediate benefits in terms of productivity and cost reduction but also set the foundation for long-term success in a digital world.

ABOUT DOCUWARE