Press & Events

Records Management Emerges

Good records management is a requirement for all companies, everywhere.
By James R. Dukart

October 2002 - edoc - Consider the Enron and WorldCom scandals something of a "wake-up call" for any executive who has not been paying attention to records management (RM). Though records maintenance may not have been the key culprit to corporate malfeasance at Enron, Arthur Anderson, WorldCom, and other high-profile cases this past year, no one can deny that records have been central to piecing together what happened where and when. Records management also promises to figure prominently in both the penalty and remedy stage of this year's corporate failures. Congressional committees are already talking about ways to beef up recordkeeping vigilance, and organizations such as the Securities and Exchange Commission are hiring numerous accountants and attorneys who will be charged with making sure corporations not only follow the rules, but create records to prove they have done so. Prominent bankruptcies, though, are hardly the only driver behind invigorated interest in records management. Vendors and analysts point to several ways in which the records management world has changed-becoming both more prominent and more challenging-over the past several years.

First among these changes is the emergence of electronic records and recordkeeping. Gone are the days when records keepers or corporate librarians were concerned primarily with paper documents, typed or signed in triplicate and stored away in some basement filing cabinet. Gone too is the ability to simply store data on microfiche, confident that many years hence any and all necessary data will be accessible via a simple reader. Today's electronic records often contain much more than simple text-critical data is stored in video or sound files, electronic signatures and electronic "metadata" about the context of a record or document-things that are not easily stored or reproduced on paper or microfiche. Records today also come from many more points of origin-no longer is the legal or contracts department always the organization's primary record generator. Records-particularly electronic records such as email and attachments sent via email-are now being created by just about anyone at any level within a large organization, from the mailroom on up to the top executive suite.

"Records management is mushrooming in several directions," says Bassam Zarkout, director of Product Development for eManage. "Records are coming from more and more diversified sources. It is no longer just paper and microfiche but electronic formats and email and XML records. That diversity is exposing challenges, and the records management industry is trying to cope with those challenges."

Of Documents And Records
Many say the first step in confronting new RM challenges is to recognize that records management is not necessarily document management, or vice-versa.

"They are two completely different things," claims Craig Rhinehart, vice president of Sales for Tarian Software. "A record may be any form of content and might or might not be a document. It might be video or a sound file. It might be engineering drawings, an audio cassette, or a CD." Rhinehart says many customers believe document management (DM) software includes everything needed to manage records, only to find out that their DM software cannot adequately store, file, or identify all the non-document-based data an organization needs to keep.

Frank McGovern, president of Tower Software, talks about the need to capture not only what is in a document or record itself, but also what went into creating that record. Sales contracts or case files, he says, may need to be backed up with information such as the history of the contract or case, information about other cases or contracts that preceded or superceded the one at hand, corporate governance at the time of creation, legal jurisdiction within which the document was created, and numerous other pieces of contextual data.

"Don't just build an electronic basement," McGovern says. "You need to categorize or classify your information. You have to preserve the context as well as the content. Otherwise you may have a case file and not know its relevance."

Diane Carlisle, director of Professional Resources for ARMA International and a certified records manager A key to any archival CRM), defines records as "documentation of transactions that have taken place." That, she says, holds whether the record or documentation is paper-based or electronic, and encompasses not only the specific transaction being examined but also information surrounding its creation.

"Records are information that is received and has value in its retention over time," Carlisle says. "It proves that transactions took place." One of the bigger challenges facing records managers today, Carlisle notes, is that many find themselves working in a "hybrid situation," where they have older paper records as well as newer electronic documents. "One thing we stress is that records are records no matter what medium they are in," Carlisle adds.

Spreading The Gospel
Another challenge comes in getting enterprise-wide buy-in on RM. Even if corporate management or records specialists understand and accept the crucial role records can play, getting that word to records creators is not always easy.

"A key issue is getting users to accept records management," says Rhinehart. Typically, he says, RM and DM has meant removing records or documents from end-user control and giving them over to the organization, something end users resent. "That approach s not being accepted," he suggests. "We don't remove the document. We just put a lasso around it and prevent it from being deleted."

A key to any archival record, everyone agrees, is that it be preserved in its original form at the time of creation. Subsequent updates or modifications must be stored as separate records. The key to doing this without alienating end users is to have RM software that automatically and inconspicuously creates, saves, and stores information once it reaches a level at which the organization has deemed it is of archival status.

Records management stakes are also being raised due to the spread of records creation throughout an organization. "The average business person is now creating their own records," says Sharon Hines, director of Business Development for eManage. "It used to be a senior vice president had a secretary typing up documents, so they [the executives] forgot about records management. With cost-cutting, admin services are not as strong as they were, and they were the records management team."

"Today everybody has a computer and they are all creating more and more records," says McGovern. "You will have the people say they are not involved in records, but they are. You need awareness and education, setting up programs and having good policies about what is and is not a record and what can and cannot be done with records."

Carlisle says ARMA provides an online bookstore complete with numerous resources, including those to help organizations just getting started on setting records creation, retention, and maintenance policies. The organization is also working with national and international standards, government agencies, and industry groups to create universal records management policies. Other good sources for RM information include industry-specific trade groups or associations, regulatory bodies such as the SEC, and other government agencies such as the U.S. Department of Defense or National Archives and Records Administration (NARA).

Increased Scrutiny
As if the proliferation of electronic records and the spread of record creation into every nook and cranny of corporate or organizational life were not enough to spur RM, along have come significant U.S. corporate scandals that can only serve to heighten records management awareness.

"Two things are going to happen," says Charles Dollar, a consultant with RM consultancy Cohasset Associates. "Number one, businesses that have not established a policy for retention are going to pay more attention to destruction. If a record is not needed for business purposes, and it is an accepted industry standard to destroy it after three years, you will do so. You are also going to see the regulatory agencies try to put a few more teeth into the regulatory mechanism."

They may do so, Hines says, because while the most recent scandals were not necessarily founded on poor RM policies, records are playing a key role in proving what went wrong when and creating new policies in an attempt to prevent it from happening again. Proving all of the allegations is going to be done with the documents of the organization," Hines says. Solving corporate crimes, she says, "all boils down to documents, not bullets and a gun. Every CEO and CIO is reviewing that issue [records management] now."

Rhinehart also sees today's headlines bringing RM into clearer focus for corporate executives. "It puts a spotlight on something that has been generally lower profile," he says. "Historically the records managers have been thought of as the people who sat in the basement and minded the file cabinets. That is no longer the case. Records management is a pretty strategic thing. Now it is part of risk mitigation. That awareness will be good, even if the [Enron and WorldCom] scandals themselves are not good for business in general."

Dollar contends that good RM is simply good for business. "If you have a good records retention policy, articulated from the top down, you in essence can say that there is no pending litigation or regulatory investigation," Dollar says. "This gives you the tool to prove the negative-to say that you are not doing something illegal. Companies that are regulated are all accountable, at least to their stockholders. Records are the way you establish accountability."

Here, There, And Everywhere
Awareness of the benefits of solid records management appears to be spreading to all types and sizes of business and organizations, even though both the stakes of RM and RM practices differ from industry to industry.

"Awareness is clearly strongest in the most regulated industries," Rhinehart says, noting that the biggest driver behind strong RM is the fear of legal or regulatory action against a company in an industry such as the healthcare, financial services, or transportation industries. In industries such as these, he contends, organizations of all sizes understand the importance of strong RM. "It tends to be even more among large companies," he says, "but if you are in a heavily regulated industry like the airlines, the smaller companies have requirements just as onerous as anyone."

Dollar, though, points out that company size may contribute in a less obvious way. "There are certain kinds of organizations-young companies, entrepreneurs-where everyone is working their butts off to get a product out and it is very, very difficult to maintain a records management system," he says. "Getting the product out is clearly more important. In older, more established, organizations there is more of a culture of record-keeping and a greater sense of the requirements."

Carlisle agrees that awareness is spreading among organizations of all sizes, but adds another way in which company size matters. "The large corporations have more resources to do it the right way," she says. "Smaller organizations sometimes can't afford to hire a records manager to be there and do the work for them."

Observers also see the growth of records management as a truly global-rather than regional or national-phenomenon.

"Wherever a company is located, it has a responsibility to conform to that country's or that state's laws and rules," McGovern says. "There is a tax authority for each country, and there are federal regulatory agencies in all those countries. Every organization still has to have a program in place in every country."

"With the expansion of global multinational companies, it is something we all face," concludes Carlisle. "You still have to manage the information. Technology is bringing the same challenges to all of us."

James R. Dukart is a freelance writer based in Minnesota. He can be reached at jdukart@mn.rr.com.

RM Fundamentals
Following are a few things to keep in mind about records management today:

1. Not all documents are records. Organizations need to define what is a record and what is not, and set up guidelines that say what happens when something is determined to be a record.
2. Not all records are documents. Today's records-particularly electronic records-often contain more than text. Video, audio and other electronic information (e.g., security keys) may be a crucial part of a record.
3. Mixed media. Records are records, whether they are on paper, in microfiche, or stored as bits of data in computers. Destruction or preservation of records does not change based on the media on which the information is stored.
4. Spread the word. Records management is fast becoming the responsibility of everyone in an organization. With computers widely accessible, records creation has spread to all levels of most organizations.
5. Plan for the future. The records management field is one of rapid change. Watch industry standards and pay attention to what is happening in the courts and regulatory agencies that affect your company. Watch the technology. Ask trade associations, government agencies, vendors, and consultants for help.
6. Don't be caught off guard. Improper records management can result in large fines, significant court judgments, and even bankruptcy. Implement a records management policy now-today-before it is too late.