RECORDS MANAGEMENT IN 1998
By Cary McGovern
Records management in the second half of the '90s offers self-storage entrepreneurs new opportunities to expand their business and increase revenue. Whether you realize it or not, if you operate a self-storage facility, you may be in the records-storage business already. Think about it: Do you have customers stacking boxes of records in their units? Unfortunately, if you're not offering management services of these records, you're probably short-changing yourself extra income.
The "Big Boys" Are Active in the Commercial Records Center Business. Iron Mountain and Pierce-Lehey are the two largest commercial records centers in the United States. Each has centers in many U.S. cities and is acquiring businesses at an increasing rate. They are usually the biggest players in most large markets. There is more acquisition activity now than at any time in the past. But, while the "big boys" are acquiring additional locations, new start-up operations are growing as well--all of this at a time that technology is zipping at rates not thought of in the past.
What does this mean for self-storage entrepreneurs? It appears that although they typically corner the large corporate market, local or regional businesses prefer doing business with local folks. Of course, there are many medium and small businesses, and they far outnumber the corporate giants. Although no one knows what the future holds, it is likely that records-management and storage services will continue to be needed.
This new column will provide current information about records management in both its traditional form and in technology-related areas. Additionally, I will be available for questions and answers anytime. (See address information at the end of article.) As an extra service to readers, I will post a summary of the questions I receive, along with my comments, on my Web site at http://www.fileman.
The column will cover topics that are current concerns in the records-management business. Here are some of the topics that we will focus on this year:
- A perspective for records management and storage in the second half of the '90s.
- A look at what forces are driving records management and records storage, and how technology will affect traditional forms of records management.
- A spotlight on the players in the marketplace--the experts, the suppliers and the market-share leaders in the storage business--with a focus on how you can beat the "big boys" on your own terms.
- Developing a business plan for a commercial records center.
- "Prospecting for gold!"
The business plan. Records management is a "horse of a different color." Nevertheless, to be successful in any business you must have a plan. The typical business concerns are a bit different in this business than in most other enterprises. It has been said that records-storage businesses are more like annuities because they grow annually from existing accounts at a rate of 15 percent to 20 percent or more. This requires a plan that looks at the need for capital and facilities on an on-going basis. We will look at service levels, costs and revenue streams and how to predict them.
What is records management anyway and why do we do it? Why do businesses and organizations keep records? We will discover the requirements from government, protection from litigation, fiduciary responsibilities and sound business practice. These are just a few reasons that records are not a choice but a requirement. In a sea of paper and computer data, which documents represent business records? All records are documents, but not all documents are records. If this is true, then how do you tell the difference and what does that mean to your business?
Records management expertise: What is it, who are the experts and where do I find the best sources for my needs?Who are the experts in records management and what makes them the experts? What are the organizations that the industry recognizes? Do I need an expert on my staff or do I outsource the expertise? These are a few of the questions that can help your business be successful. We will discuss the options.
The records management and storage market--vertical and horizontal. Positioning your business may depend on your specific community. You may provide services to a specific industry type, such as healthcare, environmental protection or energy. If so, what services will these industries need as far as records management? What expectations do vertical markets have of their records management and storage provider? We will discuss the value of your market-segmentation strategy.
Normal, everyday services in the records-management market. The basis of records management is the homogeneous grouping of like records. This in itself creates opportunity. Providing boxes, packaging, purging and indexing services is not only helpful to your customers but also profitable to your business. Once boxes are in your facility, you will provide storage and retrieval services. There are many ways to provide these; we will discuss the alternatives.
Indexing: What is it and how can I make money at it? Indexing creates metadata, or "data about data." One of the most important issues in records management is defining "what it is and where it is." The "it" I refer to is of course the record. The most expensive part of a records-management program is finding your files when you need them. Research by management consulting firms conclude that 50 percent or more of all administrative work is relative to finding information. Companies have discovered the need for indexing but do not typically have the inclination or resources to do it themselves. Productivity is essential; you can provide this service and earn as much as a 50 percent profit margin. We will discuss the alternatives and methods that you have in providing this much needed service.
The movement to digital and how it will affect paper records storage. Computers are everywhere, so why is there so much paper? And...the $64 question is, "Will this paper phenomenon continue and for how long?" No one really knows for sure, but we will discuss what the experts believe and how it creates opportunity.
The high end of the records management business. Records storage and retrieval services are the basis for records management. However, this is just the beginning. You can offer a wide array of services without a huge overhead. Records-management professionals and service organizations have found that partnering is a key to profitability. No one has the resources for all requirements. This column will address the alternatives and how to find the resources.
Regular columnist Cary F. McGovern is a certified records manager and owner of File Managers Inc., a records-management consulting firm that also provides outsourcing services, file-room management and litigation support services for the legal industry. For more information about records management, contact Mr. McGovern at File Managers Inc., P.O. Box 1178, Abita Springs, LA 70420; phone (504) 871-0092; fax (504) 893-1751; e-mail firstname.lastname@example.org ; Web site http://www.fileman.com.