E-Records management: a sad state of affairs or golden opportunity? 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-today 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 organization's 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:

* If electronic records are retained without a clearly defined disposition time, the volume of records will grow rapidly and that growth will be mirrored in the overall cost for electronic records storage.

* Unnecessarily retained records can be the subject of legal discovery, making the costs associated with producing records that should have been destroyed unnecessary expenses.

* These records can be used against the organization in future litigation.

Of course, retention is only part of the equation. The organization also must be able to access some records many years after they were created. Unfortunately, nearly two-thirds of the respondents (62 percent) expressed little or no confidence in their organization's ability to successfully demonstrate that its electronic records are accurate, reliable, and trustworthy many years later.

This is understandable given that 53 percent don't believe IT realizes it will have to migrate many of the organization's electronic records in order to comply with established records retention policies. An even larger number, 70 percent, reported their organization does not have in place formal policies and procedures for migrating older records so that they will be accessible throughout the prescribed records retention schedule. Only 15 percent have specifically budgeted for record migration.

Room for Growth

The results of the ARMA/AIIM/ Cohasset survey contain several lessons for records managers. For example, the results suggest that records management professionals have not adequately communicated the fundamental importance of including electronic records in their organization's records management program. Nor have they effectively educated their employers and colleagues about the significance of electronic records and the special challenges associated with their management. Rather than think of this as a failure, records managers should view this as an opportunity. The survey results clearly illustrate just how much at risk organizations are today. This may well provide some of the ammunition needed to drive that point home to senior management.

Perhaps more importantly, though, records managers are not in this alone. As long as the overwhelming majority of records created today are electronic, IT undoubtedly will continue to play a primary role in their management. Addressing the serious issues related to that management will require the concerted effort of both records management and IT.

One way or the other, the role of records managers is changing and must continue to if they want to lead their organization's records management program. In the survey white paper, Cohasset identifies three specific ways in which records managers' professional responsibilities are chang-ing significantly:

* from a traditional role of being records custodians to a new role that requires true management of both media- and content-centric records

* from having singular responsibility for managing media-centric records to being a key member of a team (legal, IT, and records management) that oversees the management of all types of records

* from having all the resident knowledge about managing media-centric records to recognizing the technical and fiscal necessity of an operational partnership with IT

"To successfully meet the full spectrum of the newfound challenges associated with managing electronic records," states the report, "records management professionals need to proactively evolve their roles and responsibilities and concurrently acquire the skill sets necessary to win the increasingly important position of leading an organization's records management program."

Concludes the report: "The electronic records survey results provide compelling evidence of the sea change that businesses and government entities are experiencing with regard to their management of their information assets and records. The fundamentally different nature of electronic records, the complexity of today's business information systems, and the steady rise in regulation and litigation over the past decade have combined to create enormous pressure on organizations to adopt new and more integrated ways of protecting and preserving their 'corporate memories.'"

Sarbanes-Oxley's Impact Slow to Emerge

Although the Sarbanes-Oxley Act has awakened senior management to the importance of having accurate records and good records management practices, its impact to date on records management programs appears to be limited.

According to the 2003 ARMA International/AIIM International/ Cohasset Associates "Electronic Records Management Survey" results, the Sarbanes-Oxley Act has had a modest impact on records management programs. Only a relatively small number (16 percent) indicated any substantive impact, while 61 percent said that it had no impact. As a result, the overwhelming majority--87 percent--of respondents reported that there had been no increase in their records management budgets. Only 13 percent said any budget increases were attributable to the legislation.

Read More About It

Tillman, Bob. "Electronic Records Management: The Legal Problem That Lurks Behind the Scenes." The Corporate Counselor. March 2004. Available at http://www.ljnonline.com/pub/ljn_corpcounselor/18_10/news/142038-1.html (accessed 1 April 2004).

To access the full report on the electronic records survey, visit www.merresource.com/whitepapers/survey.htm/ The survey includes a self-assessment test to help readers determine the degree to which their organization has one or more of the significant records management problems highlighted in the survey findings.

Cynthia Launchbaugh is Editor in Chief of The Information Management Journal. She may be contacted at [e-mail].