The Records Management and Storage Market

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The Records Management and Storage Market

Industry-Specific Services

By Cary F. McGovern

Abstract: Positioning your records-storage business may depend on the make-up of the industries in your community. You may provide services to a specific industry, such as manufacturing, legal, accounting, financial, healthcare, environmental, technology, energy and others. If you target a specific market, what records-management services do each of these industries need? What expectations do vertical markets have of their records-management and storage provider? What is the value of your market-segmentation strategy?

Vertical vs. Horizontal Markets

Records-management services vary widely by industry and so do the expectations of these market-segment customers. In this column, we will discuss several major market segments and how you might service them. This column will serve as a basis for several future columns that will be industry-specific.

Vertical Markets

Healthcare. The healthcare industry has medical records at its core. These represent the primary records in any healthcare provider's operation. Medical records make up the vast majority of that volume. They typically contain files that are indexed by patient name and date of service. These records have multiple forms and include file folders, x-rays and digital files such as MRI and CAT scans.

Today's medical environment is fast moving to technical solutions, and the future holds many opportunities for service providers to this growth market. The current needs in medical records include storage in open-shelf filing systems rather than boxes. The customer generally expects "STAT" (very fast) retrieval and delivery, usually in one hour or less. Both storage and retrieval costs for the medical industry are higher than others because of the "life-or-death" potential of these records.

There are several large providers of medical-records services both nationally and internationally. Their services include traditional file management, storage and retrieval, and also many professional services. Services provided by outsourced vendors include chart-coding and copying services.

Healthcare organizations generally have a medical-records director. Directors typically have a degree in medical records, have been tested and have obtained one of two professional certifications. They usually report to an assistant administrator of operations.

Energy. The energy market has long been the highest volume user of records storage around the world. It is common for oil and mineral companies to have hundreds of thousands of boxes of data. Usually these companies are headquartered in oil centers such as Houston, Dallas, New Orleans, Denver, Tulsa, Okla., and Bakersfield, Calif., as well as areas around the North Sea and in the Middle East. Nuclear energy companies today represent a major subcomponent of the energy market that requires long-term storage because of government regulation.

Energy companies have long been a significant source of revenue to commercial-records centers, not only because of their storage demands, but also because they require vast amounts of indexing. Both "seismic data" and "well logs" have various technical descriptors and are valuable to their owners for many years after they are created.

Legal and Accounting. These two categories are usually grouped together because of their similarity. Each has client files as its core. Accounting firms generally have three file types: tax, audit and consulting. They are usually maintained on-site for two years and off-site for five years or more. Legal files are segmented by practice group within a law firm, i.e., corporate, litigation, trust and intellectual property practices. Both accounting and law firms tend to have specialties. By far, the largest providers of legal records are those that engage in "mass tort litigation." Several law firms can be working on cases that literally have millions of documents represented by hundreds of thousands of files and thousands of boxes. Service requirements include imaging and full-text search capabilities. Accounting firms and law firms are very conservative in nature and tend to keep client records forever.

Financial Services. These industries include insurance, investment brokers, commercial banking, mortgage companies, credit unions, etc. These companies are generally paper-centric, although there is a major move to technology as a solution. Typically these solutions include insurance-claims processing, imaging work groups and document management workflow processes. Over time, these companies will continue to move to technology to reduce the paper flow. These companies range from large international companies to very small community operations. It is not necessarily true that the small ones are the least technically adept. For example, some small banks have gone totally digital while others are still in the Dark Ages of records management.

Manufacturing. Manufacturing companies have diverse record-keeping requirements. Since most manufacturers today build and distribute products worldwide, records management is a nightmare for them. They must be aware of record-keeping requirements in every country that they do business in. Variances by country are broad. Additionally, the International Standards Organization (ISO) has numerous record-keeping requirements. If a company manufactures or sells in Europe, for example, they must be ISO-certified. ISO conducts rigorous audits of their certified members.

Technology. You would think that technology-related companies have all their records in an electronic form, but experience is that these companies are among the worst paper hoarders. I have been in software and hardware firms in Silicone Valley that had thousands of boxes of records. One of my favorite stories is about a research consortium that did primary research for an entire industry. Their biggest records nightmare was their "lab notebooks." As you may know, research scientists keep their notes and proofwork in notebooks that have very important long-term value to support the research that was done. These scientists refused to let their notebooks go, and consequently every office was literally stacked in every nook-and-cranny with these vital notebook records. If there was a disaster in this facility, half of the proof for major research would be lost. Talk about dangerous.

Conclusion

Each of these and other industries will be discussed in detail in future columns. Of course, you may choose to be a general-purpose records center. If so, you may lose the business that goes to the expert in that records-management industry. In building your business plan, you will have critical decisions about marketing and selecting your market approach. Visit our Web site at www.fileman.com, where we are building a FAQ page (frequently asked questions) with resource lists and Web links to more information.

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: fileman@acadiacom.net  or Web: www.fileman.com.

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