On-premises, in the cloud, or both?
If you have to maintain your DMS on-premises, you will need both software and one or more file servers. Maintaining these servers and keeping the software up-to-date is usually your responsibility. If you're not required by law to keep your DMS on-premises, you may find it more convenient and even more secure to use a Web-based (or "cloud-based") DMS. A DMS in the cloud can be even more secure than a standalone system because access is easily monitored, you can force actions such as changing passwords, and you can tap into a nearly unlimited amount of storage for revisions and historical backups. Many DMS providers now offer packages that include both a local file server and a cloud-based interface, providing the local backups you require with the convenience of online access.
What industry are you in? Any special rules?
Many sophisticated document management systems are designed to comply with laws and regulations concerning privacy and disclosure. Think about real estate mortgages, for example. During and after the recession of 2008, many financial institutions paid out large fines for improperly handling mortgage documents. Similarly, doctors, hospitals, and other medical providers are required to follow HIPAA privacy regulations. If your industry or field requires an intensive amount of regulation or oversight regarding document handling, you stand to benefit substantially by using modern document management services. When shopping for a DMS, look for providers with experience in your field and ask for references. Here's a good example: a review of accounting DMS that can handle tax forms.
How many people will be accessing the system?
Unlike most on-premises document management solutions, online DMS usually charge per user, per month. If you have a system that requires a large number of users, you may qualify for multi-user discount packages. Many companies require different levels of access for different users. Fortunately, most online and on-premises DMS now allow for different user access levels.
How much data do you need to store?
While cloud-based data storage is getting cheaper all the time, it's not free. Some businesses will require enormous amounts of data storage. For example, if you must retain retail-establishment surveillance video for a certain period of time, the amount of storage you'll need could be enormous. Most DMS providers charge based on the amount of data you need to store, as well as the number of users.