Managing information in the form of corporate data, documents and records is arguably one of the most crucial activities for any organization and its employees. Organizations depend on information to make critical strategic decisions, serve customers, protect legal rights and process transactions. Most large companies even create entire departments to maximize the value of that information and help employees quickly and easily access it to make better decisions.
While most organizations recognize the value of effectively managing information, many of them do not dedicate the necessary resources to an important subset of this activity, records management, despite the fact that successful records programs are critical for effectual governance, risk management, reputation protection and strategic decision making. When organizations fail to enact a thorough records management policy, they risk severe penalties for not producing pertinent information when requested and could be held liable for damages suffered by the corporation or any third party who relied on the documents. This failure to maintain substantive procedures can end up causing severe financial pain and damage to corporate reputations. Under certain legislation, formidable monetary fines could even be levied on anyone who advertently or inadvertently alters, destroys, falsifies or covers up entries in records or documents.
Not only is it considered an industry best practice to retain vital records as part of a business continuity plan and to limit the amount of time that is spent searching for data, but there have been several legal decisions issued specifically for records management compliance. The technological training and operational complexities of records management can be daunting, however, and as a result, many information technology professionals are often left in the dark about how to proceed. When handled properly, though, information and records management programs can be entirely symbiotic, creating exponentially synergistic cross-program value and risk mitigation.
What exactly is a record, and why is maintaining records so complex?
Before diving into records management best practices, it is important for companies to understand exactly what qualifies as a record. According to ARMA International (Association of Records Managers and Administrators), a record is "evidence of what an organization does, and captures business activities and transactions, such as contract negotiations, business correspondence, personnel files and financial statements. Records can come in many forms, including physical paper files, electronic content, such as emails, attachments and instant messages, website content, and information captured in various databases."
The challenge is that each state has varying degrees of regulation that affect each industry differently, and these variances can alter critical aspects of a records management policy, such as the definition of a record, the duration of time a record needs to be maintained and the format in which it is retained. Different industries are bound by various legislation, making records management an even more complex and evolving endeavor.
In response to these complex legal requirements that may or may not coincide with operational needs, many companies that operate internationally and domestically across state lines have taken the "hold on to everything" approach. While this may ensure that vital information is not prematurely discarded, it can cause hours of wasted time for office workers searching for potentially mislabeled information, not to mention additional digital and physical storage costs. This loss of time can be significant and can be costly to business continuity. Combating the complex legal mandates to keep information, while preventing the possibility for significant loss of time and money when retrieving them, involves a difficult balancing act that many organizations do not realize exists.
Companies today are forced to deal with these strict regulations amidst rapid changes in technology, which place a growing reliance on electronic records. Further, records management is generally not a core competency for most companies. Training employees with different job functions on effective records management can require a dedicated staff and needs to be maintained consistently, while offering training frequently, to ensure standardized adherence to policies and procedures. As a result of these challenges, many companies turn to records management firms for help in sorting out the intricacies of these critical business processes.
Effective records management considerations
Implementing a records management program that addresses specific needs at all stages of the information life cycle can control the price of doing business by effectively managing resources in several ways. Companies could eliminate time that was previously spent accessing information and reduce financial risk from pre-discovery in government investigations and civil litigation. Ensuring compliance with regulations and legal statutes can also help avoid fines and damage to corporate reputations.
In a real-life example of how records management policies have been used to prevent catastrophic losses, the records manager of a food company updated the program just in time to protect the company from a possible Superfund lawsuit concerning a toxic waste site. The program review recommended indexing and organizing the firm's insurance contracts. Once sued, the company was able to quickly pinpoint a contract from 1942 that held the company harmless. The insurance company covered the fine, which was upwards of four million dollars.
Managing electronic records, including records already in digital format and those in the process of being converted, is also vital to an effective records program. Following are some insights to keep in mind for improving your management of electronic and paper-based records:
Process analysis: Analyze current processes and procedures to create a benchmark between the current state and desired outcome.
Records classification: Either at creation or upon receipt, classify each record as such to ensure that it is recognized appropriately, and then separate the documents that have no value or are copies and can, thus, be discarded.
Retention and disposition: Create a retention schedule that will help determine what data or information should be declared a record, and how each record should be managed throughout its life cycle. This also includes the later stages such as disposition, when either permanent archiving or destruction takes place.
Electronic records management: Managing records electronically can dramatically reduce document retrieval time, freeing up staff to work on tasks of higher value than filing, storing and searching.
Physical records management: Establishing a records center for secure access to physical records is important but should involve rigorous electronic tracking to allow for more efficient archiving and retrieval. It is important to note that electronic- and paper-based records should be managed in a similar fashion, not disjointedly as is the norm within many corporations.
Imaging and data capture: Utilize paper to digital conversion services and technology that includes scanning, coding, OCR and document discovery.
IT departments are expected to maintain an organization's network to ensure speed and security, topics which are very visible and are generally top of mind. This emphasis often causes a diversion of resources away from the records management program, however, as records management is not something that affects everybody's daily lives in the way that Internet speed and password security does. Enterprises tend to forget about records management programs until they are needed and sometimes official records have already been prematurely disposed of by this point or simply cannot be located within the digital chaos. An effective records management program can help your company mitigate risks, manage complaints, support reputation management initiatives, provide employees easy access to information and save money in the event of legal proceedings.
MELISSA CARLIS is director of records development for Océ Business Services, a leader in managed business process services. For more information, visit www.ocesolutions.com.