According to a survey conducted by Océ Business Services (now a division of Canon), reducing costs and increasing overall efficiency are the main motives for an increased willingness to allow third-party experts take over some of the document management burden.

The survey, conducted in February 2010, got feedback from around 180 executives, including IT managers, operations managers and chief executives coming from a variety of business categories. The companies surveyed included mostly small-to-midsize businesses, along with a sprinkling of large enterprises.

Results of the survey include:

• A slight majority of companies are planning on increasing spending on document imaging (scanning, sharing and archiving documents) in the upcoming year.
• A growing number of companies are starting to outsource data management services, from managing the printer and copier fleet to managing records.
• A small but growing number (12%) of companies are scanning and distributing incoming paper mail, especially those related to business processes. The reasons for doing this range from increasing delivery speed to better maintaining a digital trail for record keeping.
• 83% of companies have a records management program in place, but relatively few have a clear records retention policy or a fully planned electronic records depository.

Some companies choose to scan all the paper at once, on their own or by hiring a third party to do the scanning.

But there’s another, more gradual method experts recommend for some businesses: the so-called “scan forward” approach.

In that method, the business chooses a cut-off date after which all new documents will be stored electronically. But rather than scanning old files at that time, existing records are only scanned when they’re used. Every time a paper document is accessed, it’s scanned, and the electronic record takes its place.

For example, a health care facility would only scan a patient’s records when that patient visits.

It’s not for everyone — some companies need quick access to all their records. But when possible, it can be a way to ease into the switch to electronic recordkeeping.

On average, documents take up about 6% of a company’s total budget, according to recent research by InfoTrends. Those costs include paper, toner, machines and the infrastructure required to store and retrieve information.

That’s a big chunk of money just spent on paper and electronic documents. Here are some ways to lower that percentage:

1. Use multifunction systems wherever possible. That’ll cut down on machine and maintenance costs.
2. Measure how often each printer is used and find the ones with the lowest cost per page. Putting the least expensive printers in the areas where they’re used the most can lower costs (of course, you need to pay attention to the quality, speed and other needs of those departments).
3. Install a document management system. That’ll help you get more docs in electronic form, and make it easier to retrieve them.

Electronic discovery rules have thrown a wrench into businesses’ document management practices — those that aren’t up-to-date could face big legal trouble.

Passed in December of 2006, the e-discovery rules hold IT responsible for preserving electronic info that could be used as evidence in a court case. Failing to comply can be costly.

One recent court case started as an employment dispute. A worker claimed she was unlawfully fired for taking protected leave under the Family & Medical Leave Act. The company claimed she was let go in a restructuring that would’ve happened even if she didn’t take leave. But the judge didn’t buy it.

One key piece of evidence against the employer: a deleted e-mail explaining why the woman was fired. Here’s what happened, according to the court opinion:

After the woman was fired, her manager sent an e-mail explaining the termination to the rest of the department. When she said she was suing, the manager was told to save all relevant documents — including e-mail — in preparation for litigation. But she deleted the e-mail anyway.

The manager said it was erased by mistake, but the judge didn’t believe her. He ordered the company to be sanctioned. That means when the case goes to trial, the jury will be told the company deleted the e-mail on purpose, presumably to hide incriminating evidence.

Have a policy, enforce holds

The first step to avoiding e-discovery fines and sanctions is having a document retention policy and sticking to it. In most cases, companies can stay safe when info is deleted based on an organizations normal procedures for dumping data. For example, if e-mails are deleted from the server after a month, a company won’t get in trouble for missing a message that’s more than a month old.

However, policies must also include a provision for litigation holds — that is, hanging on to relevant documents when a lawsuit begins. Once a company knows it may be heading to court, the rules demand it protect any data that could play a role in the case.

In the case above, the company didn’t adequately respond to a litigation hold. Instead of setting up a process to archive every e-mail that mentioned the employee, or every message sent by someone involved in planning the reorganization, the company simply trusted managers not to delete relevant e-mails.

So the manager deleted the e-mail from her computer, and IT didn’t back it up — leading to the sanction against the company.

Cite: Connor v. Sun Trust Bank

A discrimination suit was filed against a county government office in New York. The plaintiffs claimed key evidence was to be found in the county’s e-mail servers. But the county said the e-mails in question were no longer stored on the network. They could could get them from the archive of back-up tapes, but they’d have to pay employees or outside consultants an arm and a leg to search through about 420 reels of tape.

Normally courts let companies slide – or at least ask the parties to split the bill – when the cost of discovery is unreasonably high. However, in this case, the county was moving the e-mails to the back-up tapes even after it knew it was getting dragged into court — which is a violation of e-discovery rules. So the county had to perform the e-mail search and pay the full price, and it got fined for breaking the rules on top of that.

What you can learn

Of course, companies aren’t expected to save every piece of data indefinitely just in case a lawsuit comes up. But as the judge in this case said, when a company is in court, they “can’t just throw [their] hands up and say we don’t store [e-mails] in an accessible format and then expect everyone to walk away.”

The key is having a data retention policy and knowing when to go beyond it. As long as companies have a consistent schedule for how long they hang on to e-mails before wiping them from the server, courts have found those policies to be compliant.

The exception is in the case of a so-called “litigation hold.” In other words, when a company can reasonably expect that it’s going to wind up in court, it has to make sure every piece of data that might be relevant to the case is saved in a readily accessible format. That means as soon as HR, or anyone else, gets word about possible legal action, IT needs to know so they work on protecting the necessary info.

Otherwise, the company get hit with a fine, and may even end up losing the case by default.

Cite: Toussie v. County of Suffolk