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RM: Compliance rules, litigation advances

This article appears in the issue May 2006, [Vol 15, Issue 5]
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The records management (RM) market is projected to grow at a robust 25 percent per year over the next five years, according to Gartner, reaching nearly $200 million per year in software revenue. More broadly, the costs of compliance, including products and professional services, are predicted by IDC to reach $20 billion within the next three years.

Compliance remains the primary driver for RM because new financial regulations such as Sarbanes-Oxley have placed additional requirements on companies, but the potential cost of discovery for litigation is of increasing concern. And some companies are facing fines not because they were found guilty, but because they could not find records that would have proved they followed proper procedures. Others have settled because the cost of discovery would have exceeded that of the fine.

In heavily regulated industries such as pharmaceuticals and energy, RM was a requirement long before software was available to do the job, and before the documents were in digital format. But the number of regulations under which they operate has increased, along with the number and variety of records that must be managed. Reports, letters, spreadsheets and e-mail messages that are used to document project milestones, decisions and other events all must be tracked.

Nuclear cleanup

Fluor Hanford operates a cleanup site in Hanford, Wash., for nuclear waste generated by the Manhattan Project, initiated during World War II to develop America's nuclear weapons program. The Hanford project, funded by the U.S. Department of Energy (DOE, doe.gov), began in 1996 and employs about 3,500 people from Fluor Hanford. Fluor has cleaned up nearly 300 waste sites along the Columbia River corridor and has sent several thousand drums of nuclear waste to permanent storage.

The work is technically challenging and requires extensive record keeping. A typical cleanup activity is vacuuming radioactive sludge from indoor basins into storage containers. A variety of departments, ranging from engineering to contracting, need to sign off for the work that is carried out, in order to document the procedures that were followed or the date by which the tasks were accomplished.

Two years ago, the chief information office (CIO) at Fluor Hanford sought a software solution that would handle records management, and began pilot testing Open Text. "We wanted a product we could use off the shelf that would handle both document management and records management functions," says Benay Doolittle, IT consultant in the department. "Also, security for our records is a huge issue, so we wanted a permission-based system that would enable us to allow different levels of access."

In addition, the department placed a high priority on having a strong search function, so that information could be readily retrieved. After successful pilot tests, the CIO rolled out Open Text's document and records management modules.

Letters sent to DOE are one category of documents that become managed records. More than 1,000 per year are sent, noting project milestones or confirming a response to an action requested by DOE. An automated workflow handles the movement of documents from creation through retention. Initially, the workflow was modeled after Fluor Hanford's paper workflow. The CIO subsequently revised the process, reducing the number of steps by 40 percent, but the complex nature of the work still mandates a significant number of steps. Responsibility for the production of the letters was consolidated into one staff position in order to ensure a uniform approach.

The retention schedule is set up according to DOE Records Schedules (DOERS), and advice from multiple stakeholders helps determine what constitutes a record. "Not every document is a record," says Doolittle. "We use both records management specialists assigned to departments throughout the organization as well as subject matter experts to make decisions on how to handle the information."

In addition to using Open Text for records management going forward, Fluor Hanford is also migrating a large backlog of records from other systems into Open Text. Eventually, the system will manage millions of records.

Fortunately, records management software is more able to meet this challenge than it was previously. "We have reached a point where software can manage records across many systems, which was not possible before," says Mark Por senior VP and general manager of compliance solutions at Open Text. "Content management, ERP and other systems may all have records that need to be managed in a consistent way."

In addition, Portu sees RM becoming more user-friendly. "When users send e-mail," Portu says, "a pop-up screen can appear, giving them a simple set of choices to classify the message."

Today's reality, Portu observes, is that organizations are expected to be managing their records properly, and the cost of failing to do so can be very high in several respects. On the one hand, fines and penalties for non-compliance with either technical or financial regulations may be imposed. On the other hand, a company's inability to produce records during discovery when faced with litigation can result in stunningly large judgments.

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