One of the biggest assets in any industry, business, or enterprise is information. The information can be structured or unstructured forms in paper documents. The documents often carry sensitive corporate ownership, policies, transactional, employee, decisions, and evaluation information. And since information is a huge business asset, document management becomes a critical yet essential business tool.
With many businesses also transforming into the digital world, creating and implementing the necessary document and data management platforms is imperative. In addition, the COVID-19 pandemic has accelerated the digital transformation efforts since more services are happening online. Similarly, it has exposed the loopholes and challenges in most document management systems available. So, how does blockchain technology help in all these? This article answers that in more detail.
What is Blockchain?
In plain English, Blockchain can be defined as a system of information recording that makes it impossible to alter, hack, or manipulate a system. Technically, it’s a duplicated and distributed digital ledger of transactions in a decentralized network of computer systems on the blockchain. Each block has several transactions, and every new transaction is recorded and added to each participant’s ledger. You can use it to create an effective online documentation system.
Obstacles in Document and Records Management
Even with the available document management systems, information management still faces some obstacles. They include:
Today, the issue of cyberattacks on data is not a matter of if it happens but when it happens. 2020 alone reported 69% higher cases than those recorded in 2019. Not even managed services providers are safe from these attacks. Storage and information sharing need to be in a completely private and confidential environment and have access control. But, having a single point of failure makes centralized databases vulnerable to cyberattacks and data loss.
• Data Regulations Compliance
In the recent past, there has been a rise in tighter cross-industry regulations. Organizations need to prove to courts or auditors that there has been no intentional data manipulation, logs, or workflows for use by the government, enforcement by a regulatory sector, or e-discovery processes.
• Industry Inefficiencies
Transaction consolidation through private or individual ledges is prone to errors in addition to being time-consuming. The systems may suffer from slow processing, high costs, and inconsistent or inaccuracy —here are some document management systems examples for managed document services.
Entry of Blockchain Technology in Document Management
Blockchain technology comes with unique and distinct benefits in the development of enterprise document management systems. The most prominent of the advantages is anonymity. Blockchain allows for transparent, trustworthy transactions where parties don’t need to reveal their identities. There’s also no need to register with any central authority, effectively eliminating the costs of third parties in a transaction.
Now to how blockchain helps in document management. Blockchain technology offers the benefits provided by the traditional online document management systems but enhances each feature and quality. Blockchain improves document management in the ways below:
Through blockchain document management systems, a business can store documents and data in an immutable form. This ensures that no one can tamper with documents, and every action taken on a document is recorded for transparency and traceability.
Document sharing is a normal part of the document cycle, and blockchain eliminates the risk of unauthorized access or data corruption. It provides a reliable and secure way of sharing data across an organization.
For a document management system to be effective, tracking is a vital element. With blockchain, any change starting from creating a document, changes, signatures, delivery, or receipt is tracked and verified.
Only the relevant parties access a particular document. The lesser people involve in document processing, the lower the chances of errors and data breaches. Access to documents in storage is also limited to the persons allowed, which are also recorded making enhancing transparency in document tracking.
• Cost efficiency
Blockchain eliminates the need for intermediaries and document management services, significantly reducing business costs. There’s also no need for legal professionals or auditors to verify the accuracy of documents and data. The technology keeps a clean record of every change within the document cycle with no chance of manipulation.
Overall, blockchain offers something that traditional document management services can’t. That’s efficiency, transparency, and trust.
The Bottom Line
Document management is an essential part of business processes. Implementing blockchain-based document management systems can save time, costs while making the process more efficient, reliable, and secure. Besides, it digitizes the entire paper process, ensuring there are no loopholes for document manipulation or alteration.