Fortune 1000 Companies are Scrambling to Update Records Management

New Study Shows Litigation, Regulation Defining Investments; The Catch: Despite Increased Spending, Compliance Risk Remains High

September 29, 2003

Boston, MA - The combination of stringent new federal regulations on document retention and privacy, and the financial burden of new litigation-discovery rules is sending Fortune 1000 companies scrambling to update their records management programs, according to a study released today by Iron Mountain Incorporated (NYSE:IRM).

The survey indicates that Fortune 1000 companies are waking up to the importance of records management, with more than 60% having updated their records-management policies within the past year. And nearly half of the Fortune 1000 companies surveyed (44%) are planning on spending more on records management next year than they did this past year (21% substantially more).

Although 77% of those surveyed report they are making progress, companies still have a long way to go with many ignoring critical aspects of compliance. Specifically, a full 87% of those surveyed have failed to deploy the tools needed to assure efficient and automated records management and more than half (56%) fail to regularly evaluate and improve their records management programs. Furthermore, a full 44% do not even test their records management program on a regular basis.

“The good news is that executives clearly recognize this as a risk-management issue, not just another information-technology project,” said Iron Mountain’s executive vice president of marketing, Ken Rubin. “However, companies are making a big mistake believing that a policy manual is an adequate records management program. They don’t have the processes and controls in place to mitigate compliance and litigation risks. Companies must go beyond rules and procedural definitions and make sure those rules are executed automatically and consistently across the entire organization.”

Litigation driving additional investments
The primary driver of the new spending is compliance with records management mandates buried within new regulations including Sarbanes-Oxley, The Health Insurance Portability and Accountability Act (HIPAA), and those issued by the Securities and Exchange Commission.

In addition, 23% of companies surveyed said litigation is a primary driver of their records management investment. Indeed, nearly half of the companies surveyed (44%) have had to retrieve e-mails from backup tapes in connection with legal matters.

“Two worlds have collided – the challenges of litigation and regulatory investigations are escalating and falling on the shoulders of IT organizations because of the focus on digital records,” added Pete Delle Donne, president of Iron Mountain’s Enterprise Solutions and Services division. “Faced with the enormous cost and labor-intensive procedure of responding to litigation demands, companies are realizing they need to be more proactive about reducing litigation discovery risk and cost.”

Conducted by Penn, Schoen & Berland Associates and commissioned by Iron Mountain, the study polled senior executives at more than 100 Fortune 1000 companies about their current and future efforts related to records management. Interviews were conducted in August 2003 and the Penn Schoen & Berland study has an error margin of 9.8%.

Contact:

Melissa Mahoney
Corporate Communications
Iron Mountain
Phone: 617-535-8310
melissa.mahoney@ironmountain.com

Ray Yeung
Brainerd Communicators
Phone: 212-739-6735
yeung@braincomm.com