Putting a comprehensive records management system in place across the entire organization not only increases the accessibility of information, it also can significantly drive down compliance and legal costs. That's a key finding from a recent AIIM (a non-profit association serving the ECM industry) survey and paper, "Records Management Strategies -- Plotting the Changes," which Viewpointe co-sponsored.
The majority of the 783 respondents to the AIIM survey indicated their companies could reduce audit costs, legal costs, court costs, fines and damages by 25 percent if they implemented best practices in their records management. However, while many recognize the cost-saving benefits, few actually have such comprehensive strategies in place. Only 13 percent of the survey respondents think their organizations already follow a best practices records management program.
Manual Searches Cost Time, Money
Responding to a pre-litigation discovery request would be a timely and costly process for more than half of the survey respondents, who said their company relies on manual searches across file shares, email and physical records. Previous AIIM research revealed that discovering electronic records takes twice as long for companies with no management system as it does for those with a system.
Clearly, an efficient e-discovery system includes more than just searching for relevant documents and records. As noted in AIIM's report, "Possible discovery candidates need to be put on hold, de-duplicated, assessed for relevance, moved into a case management area, and on completion, released back to normal retention policies." Only 35 percent of the participants believe their company has or is close to having a consistent and effective e-discovery mechanism across physical and electronic records.
These trends suggest many companies are allocating significant time and resources to inefficient e-discovery efforts. More important, they also may be exposing their companies to costly and potentially damaging legal action due to their limited ability to identify and isolate key records across the organization.
Putting Reputations at Risk
Further underscoring the importance of a best-practices-based recordkeeping strategy are the potential damages to a company's reputation that can arise from not having one. For example, 28 percent of the participating organizations in the Viewpointe-sponsored survey said they have faced auditor criticism in the last three years for poor records management and security practices. Six percent admitted their records management practices have led to criticism from industry regulators, while 5 percent said their records management had been criticized by their lawyers. Meanwhile, "one in 25 organizations has made the news for their poor records management," according to AIIM's research.
When AIIM asked respondents if their organizations have suffered a loss of business or loss of reputation due to poor records-keeping practices, 6 percent indicated it was a frequent occurrence, while 21 percent reported isolated incidents. In today's challenging business climate, customer service and company reputation carry substantial weight. The lost opportunities and damages to a company's reputation stemming from an inefficient records-keeping system underscore the importance of automating and upgrading the records-management process.
Deleting Records Just As Important As Storing Them
A key component of a comprehensive records-keeping strategy is the need for retention and deletion management to overcome rapidly increasing storage volumes. In addition to creating additional costs, undeleted records held beyond their retention periods influenced the outcome of court cases for 26 percent of the participants in a 2010 AIIM survey on e-discovery and ERM. More important, these "outdated" records were much more likely to weaken the case than to help it.
Organizations are beginning to realize the volume of information is only going to expand, presenting ongoing content-management challenges. Meeting the challenge head on, with a proactive strategy for managing all forms of company records, reducing records duplication and forcing the safe and timely deletion of outdated files, is the only real solutions to the cost, knowledge-sharing, e-discovery and space challenges facing financial services corporations.
Rich Walsh is President, OnPointe Services, at Viewpointe. He has more than 25 years of operational information technology experience.