Records Management: A Sleeping Giant

Companies that have neglected documenting and recording the right information are waking up to the fact that it's a must-do for Sarbanes-Oxley compliance.

Not long ago, most CFOs regarded records management as a minor administrative function, and not one that finance should particularly be concerned about. Finance executives were usually content to let company records gather dust. These days, though, CFOs are brushing the cobwebs off their organization's records systems and taking a hard look at the data they contain and their ability to secure it and deliver it on demand.

The Sarbanes-Oxley Act is a big reason for the shift. "Records management is a sleeping giant" of compliance, observes Lee Dittmar, principal and leader of the enterprise governance consulting practice at Deloitte Con-sulting LLP in Philadelphia. "There's a tremendous amount of data to manage, and most companies don't have the policies or tools to find what they need when they need it. That represents one of the biggest compliance risks any company can have."

The initial impact of Sarbanes-Oxley had most businesses scrambling to bring their internal controls up to scratch and shopping for compliance management software that could help them do so. At many organizations, the records management imperative never emerged from the background. Now, though, there's a growing awareness of the importance of that mandate for compliance efforts. "Records management has moved from a second thought to an enterprise initiative," says Dan Ryan, executive vice president of marketing and business development at Stellent Inc., an enterprise content management (ECM) software vendor in Eden Prairie, Minn.

Dynamic records management delivers benefits beyond compliance, too. It helps companies defend themselves against lawsuits, for example. Ryan also cites "the reduced IT costs that can be realized through more efficient content storage methods and by the easier access to data."

Add to that the growing need to protect trade secrets and intellectual property, along with mounting pressure to prevent fraud, and it's easy to see why companies are revamping their records management policies and processes. Whether it's in paper documents or electronic files, long-forgotten information can come back to haunt you if it's not stored and protected properly.