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The Records Management and Storage Market

May 1, 1998

5 Min Read
The Records Management and Storage Market

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 theindustries in your community. You may provide services to a specific industry, such asmanufacturing, legal, accounting, financial, healthcare, environmental, technology, energyand others. If you target a specific market, what records-management services do each ofthese industries need? What expectations do vertical markets have of theirrecords-management and storage provider? What is the value of your market-segmentationstrategy?

Vertical vs. Horizontal Markets

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

Vertical Markets

Healthcare. The healthcare industry has medical records at its core. These representthe primary records in any healthcare provider's operation. Medical records make up thevast majority of that volume. They typically contain files that are indexed by patientname 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 holdsmany opportunities for service providers to this growth market. The current needs inmedical records include storage in open-shelf filing systems rather than boxes. Thecustomer generally expects "STAT" (very fast) retrieval and delivery, usually inone hour or less. Both storage and retrieval costs for the medical industry are higherthan others because of the "life-or-death" potential of these records.

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

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

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

Energy companies have long been a significant source of revenue to commercial-recordscenters, not only because of their storage demands, but also because they require vastamounts of indexing. Both "seismic data" and "well logs" have varioustechnical descriptors and are valuable to their owners for many years after they arecreated.

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

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

Manufacturing. Manufacturing companies have diverse record-keeping requirements. Sincemost manufacturers today build and distribute products worldwide, records management is anightmare for them. They must be aware of record-keeping requirements in every countrythat they do business in. Variances by country are broad. Additionally, the InternationalStandards Organization (ISO) has numerous record-keeping requirements. If a companymanufactures or sells in Europe, for example, they must be ISO-certified. ISO conductsrigorous audits of their certified members.

Technology. You would think that technology-related companies have all their records inan electronic form, but experience is that these companies are among the worst paperhoarders. I have been in software and hardware firms in Silicone Valley that had thousandsof boxes of records. One of my favorite stories is about a research consortium that didprimary research for an entire industry. Their biggest records nightmare was their"lab notebooks." As you may know, research scientists keep their notes andproofwork in notebooks that have very important long-term value to support the researchthat was done. These scientists refused to let their notebooks go, and consequently everyoffice 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 belost. Talk about dangerous.

Conclusion

Each of these and other industries will be discussed in detail in future columns. Ofcourse, you may choose to be a general-purpose records center. If so, you may lose thebusiness that goes to the expert in that records-management industry. In building yourbusiness plan, you will have critical decisions about marketing and selecting your marketapproach. 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 FileManagers Inc., a records-management consulting firm that also provides outsourcingservices, file-room management and litigation support services for the legal industry. Formore 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: [email protected]  or Web: www.fileman.com.

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