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Oct 27, 2015 1:30:00 AM Michael Myers Governance & Compliance

How are Document and Records Management different within an ECM solution when considering governance and compliance?

Automated Contract Management Solution

When do you need Document Management and Record Management?

At the most basic level, document management is the storage and retrieval of documents. However, records management is not the storage and retrieval of records, at its base level, it is the administration of the record retention schedule. What we find with many companies and organizations is that they are concerned about either efficiency or compliance when ideally it should be both.

When the discussion revolves around efficiency, typically they are looking to eliminate the storage of paper documents. We all want our staff to be able to access any of their documents from any location via the document management system. The issues they face arise from lost documents, time wasted, duplication of effort and the need to foster collaboration within their organization. Online document management addresses these issues and more.

When the discussion revolves around compliance they are worried about audit trails and the ability to track and keep records. We see this in government agencies, nonprofits and all regulated industries. However, compliance is an issue that affects all organizations. Government record requirements are not just for the organizations listed previously, all organizations must comply with governmental record requirements. Failure to do so can be costly in fines and, even worse, in legal actions.

Many documents do become records. For example, a final, signed contract becomes a legal business record. However when you think about contracts, they don’t spring into existence without creation, revisions, collaboration and reviews through contract management. Iterations of a contract until it is finalized are not individual records. They don’t reflect the transaction.

You are required by law to keep certain records for specific amounts of time. This record retention period varies by the type of record and you should confirm what the record retention requirements are in your state. However, in addition to legal requirements, your organization should have a document record retention policy for all your business records. Failure to have one, and the failure to safely store and then destroy documents, leaves you in the position where all your business documents can be required in a legal action or an audit. One of the items typically mentioned in a subpoena is your records retention policy.

If you do not follow your own policy, then all of your records and documents are potentially “discoverable” and can be used in a legal action or audit. While documents can become records in the normal course of business, keeping documents past their retention schedule can enable them to become records when you least want them to. With the documents and records more clearly defined, the difference between document management and records management also becomes easy to define.

A valid document retention policy must be reasonable, consistent, and uniform in the context of the facts and circumstances surrounding the relevant documents. A reasonable policy reflects deadlines and requirements imposed by the applicable law or regulation. It preserves documents as needed to support good business practice in a manner consistent and conforming with industry practice. In addition, in today's world, a retention policy must adequately manage electronic discovery demands. It should include standardized practices for retaining information unique to electronic files, such as computer-generated meta-data. The policy should also anticipate the need to produce electronic documents in a variety of native file formats.

A retention policy in general must contain the following factors:

  • How long, how and where to store both paper and electronic records, specifying specific retention periods for specific categories of records
  • Accounting for all forms of electronic data in all devices and media
  • Specifying the procedure to dispose of the documents when their retention period has expired
  • Specifying how the disposition of documents shall be suspended under the retention policy when a litigation or investigation is reasonably or probably anticipated
  • Its implementation should be consistent, uniform, and reasonable. For example: In Rambus' case Federal Trade Commission assailed Rambus' retention policy with suspicion by propounding "Rambus' document retention policy required Rambus employees to search out and maintain evidence that might be useful to Rambus in litigation, such as documents relating to patent disclosures and proof of invention dates that are of “great value to Rambus," as well as material relating to trade secrets….. In sharp contrast, however, Rambus' document retention policy never once mentioned any obligation to preserve any other documents relevant to litigation."
  • Identifying the individuals responsible for enforcing, monitoring and updating the policy
  • Defining penalties for non-compliance and ensuring their imposition
  • Describing the manner in which to organize and catalog stored records so that they can be retrieved effectively and expediently

Using an enterprise content management (ECM) system, with integrated document management and records management, can allow documents to automatically become records. This means that only the documents that should become records do become records. Once a document becomes a record, it automatically gets assigned its appropriate record retention schedule. No one can modify or destroy your business records which ensures your compliance with government regulations. And once your records hit the end of their retention period, a combined system can enable the destruction or purging of expired records.

So when do documents become records? If you have a combined document management and records management system, they become records when they meet the legal definition of a record. Without a combined system, your documents may become records just because you kept them, which can lead to all sorts of unnecessary complications. Document Management Best Practices