E-Records Management: A Sad State of Affairs or Golden Opportunity?

Information Management Journal, May/Jun 2004 by Launchbaugh, Cynthia

The Use & Misuse of Information

Records management professionals have an opportunity - and an obligation - to communicate the importance of including electronic records in their organization's records management program

Records management is increasingly recognized as an important piece of corporate compliance. In this day of stricter regulations - whether in the form of laws such as the Sarbanes-Oxley Act or international privacy laws - records management may be one of the most powerful tools in the compliance arsenal.

Fortunately, according to a recent survey of 2,200 records and information management (RIM) professionals, 85 percent of organizations today have a formal records management program. Unfortunately, almost half of those organizations, 41 percent, rate that program as being fair or marginal in quality.

Some say this reflects the fact that many records management programs do not encompass electronic records. Indeed, 41 percent of the respondents to the 2003 "Electronic Records Management Survey" conducted by Cohasset Associates, ARMA International, and AIIM International reported that electronic records are not part of their organization's records management program. A similar number, 40 percent, said electronic records are not even addressed in their records management policies and procedures.

This is disconcerting given that experts predict between 80 and 90 percent of all business records created today are in electronic form. Add to this the increasing quantity of records being requested as part of legal discovery and regulatory inquiry, and the importance of a comprehensive records management program becomes that much clearer.

Now more than ever it is critical that organizations at the very least establish - and consistently apply - records retention schedules for all records, including electronic. Yet 47 percent of survey respondents reported they do not have comprehensive records retention schedules that include electronic records. Furthermore, 38 percent of those that do revealed that those schedules are not generally followed.

Risky Business

Failure to include electronic records in records management programs can be risky business. For instance, if records that no longer have operational or legal value are retained unnecessarily, not only are there increased storage costs, but those records are also subject to potential discovery in case of litigation.

The escalating costs associated with electronic discovery are one reason that a discovery response plan is an important element of a successful, comprehensive records management program. A discovery response plan contains policies and procedures for responding to legal discovery requests. The goal, of course, is for the organization to be able to respond in a timely and legally responsive manner.

"The presence and successful administration of a records hold order process is an essential component of every records management program especially in today's environment of unprecedented levels of litigation and regulatory inquiries," states Cohasset's white paper of the survey findings. "Anything less can put at serious risk an organization's legal position on a matter. Non-compliance can result in costly and potentially devastating consequences."

According to the survey results, almost half the respondents' organizations are at such a risk. Specifically, 46 percent do not have a formal set of policies and procedures to respond to discovery requests for records or a system for records hold orders.

"For an organization of any size that is the likely target of litigation or regulatory inquiries," asserts the report, "the absence of a formal plan to respond to discovery requests must be considered an unacceptable risk."

Who's Minding the E-Records?

The risk is further magnified when more than 65 percent of those organizations that do have a system for handling records hold orders do not include electronic records in that system. This may be attributable to the fact that information technology (IT) is primarily responsible for the day-to-day management of electronic records in 71 percent of the respondents' organizations. It may well indicate a "major disconnect between those responsible for overseeing the application of an organizations retention schedules (records managers) and those responsible for the day-to-day management of electronic records (IT)," the report notes.

The concern lies in the fact that IT often does not have the skills necessary to manage electronic records beyond the technology. Only one-third of the survey respondents said they believe that their IT department really understands the concept of "life cycle" regarding the management of the organization's electronic records.

The lifecycle concept calls for the ultimate disposition of all records to be defined and integrated into the ongoing management of each record series. Thus, records are retained only as long as they are needed to meet the organization's business and legal requirements.

Cohasset sees three potentially serious consequences from this: