With the current speed of technological advancement and the scope of business change, other tasks often seem to have a higher priority. However, the repercussions of neglecting proper record management can be far more costly than you may think.
Beyond the immediate provision of convenience and organisation, effective record management is crucial in mitigating the various hidden costs that can negatively affect a business’s bottom line. Read on to understand the many costs associated with poor record management and why conducting effective record management should be higher on your priority list.
Productivity and Efficiency
Poor record management’s toll on productivity and efficiency is one of the most glaring costs. Inadequate documentation systems, disorganised files, and misplaced records can lead to hours of wasted time as employees struggle to locate critical information. Unnecessarily exhausting working hours in such a way means that less time can be spent on more important tasks, leading to decreased productivity and efficiency.
Efficient record management, on the other hand, streamlines processes, allowing employees to access necessary information swiftly and concentrate on value-added tasks.
Missed Business Opportunities
In our current economy, making decisions on time can be the difference between grasping an opportunity and missing it. As discussed above, poor record management can demand more time than necessary, lowering your chances of seizing a business opportunity. Missed contracts, delayed responses, and overlooked leads can translate to lost revenue and potential growth.
An effective record management system ensures that important information is readily available, enabling businesses to respond promptly to opportunities and gain a competitive edge.
Legal and Regulatory Consequences
Businesses that deal with record management, especially those that work in highly regulated industries, will operate within a complex web of legal and regulatory requirements. Failing to maintain accurate records in compliance with these obligations can result in severe consequences. In the event of an audit or legal dispute, the inability to produce the necessary records can lead to financial penalties, legal liabilities, and reputational damage. A robust record management system ensures that all necessary documentation is organised and easily accessible, minimising the risk of legal repercussions.
Data Breaches and Security Risks
An additional consequence of rapid technological advancement is the increased prevalence of cyber-attacks. Poor IT controls can invite more cyber-attacks your way and such attacks are generally for the purpose of targeting sensitive information, so keeping your data safe is a must. Data Breaches can not only lead to financial losses but also erode customer trust and tarnish a company’s reputation.
Implementing secure record management practices, including encryption and access controls, is essential to safeguarding sensitive data and maintaining customer confidence.
Storage Costs
Physical storage space comes at a premium in many businesses. Poor record management often leads to the accumulation of unnecessary documents, both in digital and physical formats. This excess of records demands more storage space, whether on servers or in filing cabinets, resulting in increased costs. Adopting streamlined record management practices, including regular purging of outdated records, can lead to significant savings in storage costs and reduce the risk of GDPR problems.
Companies that deal with excessive amounts of paper storage, such as firms in law, medicine, architecture etc., would benefit from working with a record management provider rather than storing in-house. Record management providers can provide storage space at a far cheaper rate than directly renting space yourself.
However, there are a few things you need to be aware of before jumping into a record management contract. Read about some of the challenges and their solutions here.
Poor Customer Service
Effective record management isn’t just an internal matter; it also impacts how businesses serve their customers. Inaccurate or inaccessible records can lead to customer service lapses, such as delayed responses or providing incorrect information. In turn, this can damage customer relationships and lead to customer attrition. A well-organised record management system allows customer-facing teams to provide quick, accurate, and personalised assistance, fostering customer loyalty and repeat business.
While the consequences of poor record management may not always be immediately apparent, their cumulative impact on a business’s operations and financial health is undeniable. From lost productivity and missed opportunities to legal risks and security breaches, the hidden costs can be substantial. Businesses that recognise the value of robust record management systems position themselves for success by improving efficiency, reducing risks, and ensuring compliance.
Seeking a reputable and trustworthy record management provider can reduce costs. For companies that deal with a large number of physical paper storage, this is by far the cheaper and easier option. However, it can also come with its issues. Numerous companies in the industry have shown an inability to provide a satisfactory service, especially to those who have been loyal customers. Alongside this, providers will add clauses into contracts that act as a barrier to switching providers, so selecting the right provider can take time and effort.
At Elless Solutions, we connect companies with their perfect record management supplier, help with the switching process and assist with renegotiation of contracts. Through our extensive experience in the industry, we have helped many companies reduce their record management costs by up to 50%, saving them significant money. You could be next, get in touch with us today to see how we can help you lower your record management costs.
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