Document management digitalization in Ukraine
Vladimir Mikhailov is the technical director of IT-Enterprise, which has been engaged in business process automation for large businesses and state-owned enterprises for more than 30 years. In his interview, he talks about modern electronic document management systems, electronic business management in Ukrainian business and the public sector as well as trends and solutions in this area.
To begin with, a simple question: what is electronic document management, and what is it for?
– Electronic document management is a digitalization of all processes for working with documents of an enterprise or institution. It is about files and digital tables Instead of A4 papers, electronic digital signature and other verification tools instead of signatures and ink stamps. Every legal entity, regardless of the form of ownership, size, and scope of activity, works with documents. Some of these documents should be periodically reviewed and corrected, some should be transferred to other people: government services, partners, contractors, etc. To do this, you must print the document, agree with certain people, possibly make corrections, then send it to the responsible person to sign, stamp and carry out the same procedure with the other party. Electronic document management allows transferring this entire business process to a digital dimension, discarding paper and saving a huge amount of time and resources.
Electronic document management is a natural stage of development, part of the digital transformation of the world as a whole. Once all documents were written by hand by calligraphy masters, it was not very fast and convenient. Then typewriters appeared and it became much faster and more convenient to write. Computers made it possible to change documents and create an unlimited number of copies without much effort. But in any case, it all came down to working with papers: from printing and signing to sending. Now, in the era of digitalization, the Internet, digital signatures, electronic databases, and software solutions completely replace paper media and form the system processes of e-document management.
That is, programs for electronic document management are some kind of digital document exchange system between enterprises and other legal entities?
– Yes and no. All electronic document management programs can be divided according to their intended purpose into two types: external and internal ones. Internal document management is all that is associated with the posting of documents within the enterprise, external one is work with documents with other companies, institutions, etc.
E-document management programs can be compared with a smartphone. Each smartphone has an operating system: it knows where the files are, how they interact, your smartphone works with it, and you can perform any actions with it. This is the document management. Such systems make it possible to effectively use documents within the company, maintain an electronic database of documents, redirect them from one person or department to another within the company.
The external document management system is like a browser with which you access your smartphone on the Internet. It allows your documents to "go out into the world", get to other enterprises or institutions, while being officially signed and having legal force.
This division is rather conditional, because there are complex enterprise management systems in which there are modules for both external and internal use. But if we talk about document management, it has the right to life.
Why is this relevant for Ukrainian enterprises? What are the reasons for the transition to electronic document management in business and the public sector?
– Simply put, this is a requirement of time. Today, every market is global. Enterprises have to compete not only with their compatriots, and the larger the enterprise, the stronger the competition. In such conditions, any optimization means an increase in efficiency and a competitive advantage.
For developed countries, this is no longer a novelty. The culture of electronic document management is ingrained, and no one uses folders, paper and stamps in offices. Ukrainian business is only maturing for such a transition, and large enterprises are the first to take this path. If, let us say, the plant employs 10,000 people, it produces complex technical products, conducts many procurements, and concludes new contracts, this implies a huge amount of documents. Electronic document management is a clear system with which you can manage the processes of exchange and accounting of documents. All documents can be found in a few clicks, from any device, from anywhere in the world where there is the Internet.
We had a real case, the key request of which was the following thesis: "The ability to assign tasks to subordinates and send documents while being in the production workshop or at an industrial exhibition". We did it and the client was happy, because all that was needed to manage the company was a telephone. It is very convenient and saves a lot of time, and time is money.
Small and medium-sized enterprises are not fully prepared to use such systems. They often do not see them as necessary ones. If a company of 10 people spends a couple of hours of one of the employees a month to process all the documents, they do not need an internal document management system. External e-document management is used by such companies mainly as a response step to the use of e-documents by partners, for the convenience of doing business.
As for the public sector, here things are different. In 2018, the Cabinet of Ministers of Ukraine issued Resolution No. 55 "Some issues in the documentation of management activities", according to which the electronic form of work of the executive authorities became the main one. The precedent was the CMU’s refusal to accept internal documents in a non-electronic format. Since January 2019, ministries have done the same. This may not please everyone, although in reality this is a positive step.
Why? Wouldn't it be better to give the public sector time just like business?
– Because without the ultimatum on the transition to the electronic document management, one would have to wait for years. The public sector is fairly conservative, with rare exceptions to teams of innovators in the field.
Business is taking this step, having a specific goal and order of the managers. It can be assumed that everything is the same in the public sector, only the managing director is the CMU. With the current legal framework, even with the allocation of funds, but without a clear order, the process stops, there are formal useless actions. As a result, there is no efficiency. When there is a directive and pressure from above, then a real implementation begins, and electronic document management can be made systematically in the public sector.
The fact that electronic document management will improve the work of government agencies is not questioned. In addition to the obvious bonuses in the form of speed and economy of resources, this will help them become more transparent. Current legislation provides for the publication of orders, regulations and other regulatory acts in open access. Some government agencies fulfill this requirement, some do it only partially, but, in any case, the process of publishing data requires resources. Electronic document management means that all documents will initially be created in digital format and can be automatically published to the public (on the websites of state services, etc.).
What solutions for electronic document management does your company have?
– First of all, our flagship product, the IT-Enterprise ERP system, contains the electronic document management module since the early 1990s. As part of an integrated enterprise management system, it was indispensable, but it has remained just a module for a long time. 5-7 years ago we noticed an interest in e-document management solutions and isolated it into a separate product – SmartManager. This IT-Enterprise solution is intended for large players: big enterprises, factories, and holdings, which require both internal and external turnover.
The MASTER product line is a project created with the support of our team, focused primarily on small and medium-sized businesses as well as on the public sector as a packaged solution. MASTER started with a basic accounting solution in 2017. Now we have a number of industry configurations: MASTER:Budget institutions, MASTER:Salary and Personnel, MASTER:Housing and Public Utilities, MASTER:HoReCa, MASTER:Agro, MASTER:Retail. The next stage of development is two solutions aimed precisely at the digitalization of workflow: MASTER:Document management Exchange and accounting and MASTER:Document management Comprehensive solution.
MASTER:Document management Exchange and accounting is an external document management system that simply provides companies with the opportunity to exchange documents electronically. This solution is simple, it can be deployed in less than a week, including the registration of all users. Its target audience is enterprises that do not need an internal document management system yet, but which have to deal with an external one. These are the same state institutions that are under pressure from above, but which are not ready for complex changes yet.
MASTER:Document management Comprehensive solution satisfies the organization’s basic need for exchange and accounting, but, in addition, provides for the classification, storage of documents, coordination and review, preparation of documents, reporting, and analytics. This is a full-fledged document management system that can be installed on computers of a fairly large enterprise or state institution.
Also at the end of 2018, we finished work on the SmartSign service. This is a cloud service for external document management allowing to exchange electronic documents and sign them. It can be embedded in any EDMS or used as a cloud solution through a browser. This is the simplest product that can be used by everyone, for example, small businesses that need to exchange documents with the client in electronic form.
Everything is clear with SmartManager, this is an ERP system module, a complete solution for very large customers. And what advantages does MASTER:Document management have?
– First, MASTER:Document management is a full-featured packaged solution. The document management procedures are fairly standard, so, unlike other systems, this product can be simply installed, and it is suitable for almost any enterprise.
Secondly, MASTER:Document management does not require any implementation and developer services on our part. Any person from the customer’s side can independently start working in the system, and, in case of questions, ask for help from the built-in guide.
Thirdly, it is a support service. This is one of the main advantages of MASTER. In general, we understood that when working with a new product, users would have questions, so they invested a lot of effort in creating and ensuring the coordinated work of the support service. The user of any of the MASTER products can contact the call center at any time and receive the necessary assistance immediately.
The fact that MASTER is developed on the IT-Enterprise platform makes it possible to seamlessly integrate it with our other products. If, let us say, a company acquires MASTER:Document management Exchange and accounting, and after some time it turns out that it also needs an internal document management system, they simply pay for the difference in the value of the product MASTER:Document management Comprehensive solution. Programs will work together without any effort or additional configuration.
In addition, MASTER products have a modern adaptive web-interface, a web-client that supports ordinary PC files, analytics visualization tools, a mobile client and many other useful services. This is a modern product that meets the requirements of the market today.
Do your electronic document management products have successful implementation cases?
– Of course, the basis of our successful cases is the introduction of document management as part of the ERP system. One of the latest examples is the successful implementation of SmartManager for the Center for the provision of administrative services in the Vinnitsa region, and this is a very good example of cooperation between the customer and the system supplier. We really appreciate when a customer keeps up with modern trends and openly forms system requirements.
We were tasked with increasing transparency and speeding up the work of the Center. After the introduction of electronic document management, the efficiency of the Center really increased. On average, the administrator received 1 hour of saving of working time, which was previously spent on searching and processing documents. All information, documentation and some services became available to citizens online. The number of visits to Center decreased by 1.5 times, and the number of services provided increased by 15%. These are very good indicators and a significant bonus to the work of the Center, which is visible to the naked eye to all participants in the process.
Are these indicators typical? What is the probability that the result of the implementation of the document management will be the same for other institutions or companies?
– It won’t, everything works a little differently. This is a geometric progression: the more documents there are in a company, the larger it is, the greater the effect of the introduction of electronic document management will be. Our solution can reduce the time required to work with documents, on average up to 30-60 minutes a day. You can take the time spent on average on this process in a company and correlate it with the salaries of employees. Someone will win dozens UAH, someone hundreds of thousands UAH, someone millions UAH.
The main advantage for the customer, and this is often the top manager or owner, is his/her off-loading. When TOPs are not forced to distract and devote all their time to routine tasks, they can be engaged in strategic management. It is almost impossible to predict what economic effect this will have for an individual enterprise, but the difference will be significant.
What now stops the market from transition to electronic document management?
– Basically, it is the lack of initiative. In the case of business, there are a number of enterprises that are simply not ready for such solutions. So here: before you install an electronic document management system, it is necessary to computerize the enterprise. You'd be surprised, but in 2019 this is still an unsolved task for a surprisingly large number of enterprises. Others simply do not see the point, and this means that they do not need a system yet.
As for the public sector, there is also internal resistance. Often there are quite mature people who are not enthusiastic about innovation. Imagine a person who has worked for 35-40 years at a state-owned enterprise, and tomorrow a manager comes to him/her and says: "From now on, there is no paper documentation, send the documents through the electronic document management system to me to get the digital signature." Some find it difficult to relearn, some fear dismissals due to system implementation and sabotage its implementation. Practice shows that learning is not such a difficult process, and there were no dismissals in those companies where one has already introduced electronic document management.
In general, this is a natural and gradual process that should happen sooner or later. Therefore, do not be afraid, you need to be prepared for the fact that the world is changing.
Do you have information on how electronic document management in the public sector is implemented in other countries?
– Before MASTER:Document management was released to the market, we looked for examples and communicated with many companies. We were impressed by the experience of Lithuaniaю The company Nevda has been on the market for more than 20 years. It implements and maintains individual information systems for public sector organizations and commercial companies, including with electronic document management systems. They have implemented a single server of central government: when a company installs a system, it connects to this server. Further, the central body simply connects its subsidiaries. They also provide for the placement of data for state organizations in the cloud, which we only have to dream about so far.
It is convenient for the state: a single server ensures unification of solutions and guarantees implementation in all structures. The distributor of the solution assumes all the service and support, and the customer does not need to worry about the support and updating of the system. This is very convenient.
Let me remind you that Lithuania is a country that 28 years ago was part of the USSR with us. Nevertheless, their electronic document management in the public sector has been functioning much more successfully for quite some time. In other developed countries, as far as I know, everything is similar.
You mentioned that our structures could only dream about cloud technologies, although the transition to the cloud was a global trend. Why is it this way, and what other trends can be traced in the field of electronic document management?
– Yes, the cloud is definitely a global trend, but in our case, there is a legislative framework. The problem is that cloud solutions function as a service, that is, one charges for a subscription, rather than a one-time purchase of the solution. The public sector cannot do this: financing is allocated for a one-time purchase. The second point is the security requirements. Each state structure should have a built-in security system, but in practice it is very expensive and difficult, so we don’t have adequate protection systems. But, nevertheless, it is believed that the cloud, whose data servers are protected by all possible means, is a less secure place to store data than their servers and systems.
As for trends in general, we are waiting for total digitization. Management systems, electronic documents, accounting – all this becomes more accessible, and soon it will be available for almost any company. Clearly, packaged solutions will be the trend, because they do not require long adjustments, they are ready for use immediately after purchase.
An important trend will be the ability to scale solutions, integration with additional tools and functionality. If the company decides that besides electronic document management systems, they also need automated accounting, they will want these solutions to be integrated, and they would not have to spend a huge amount of resources to combine them.
Another trend is low-code platforms. No one wants to depend on developers and enter each configuration through a long, costly process.
Modern solutions should be simple and accessible for configuration for people who do not understand anything in programming.
And finally: an increasing automation, the transfer of an increasing number of tasks to machines and algorithms. The technology of artificial intelligence and machine learning, which are still carefully implemented by leading companies, will become as commonplace as a regular laptop. This will change the world: the speed of data processing and decision-making will increase significantly. We do not know yet what this will lead to, but the future is unambiguously behind these technologies.