Why do we need information and record management?


The world and more especially, the business ecosystem, has steadily evolved in the last few decades. We have moved past the industrial age, and even now, we are slowly transcending the boundaries of the digital age approaching what many have called Industry 4.0. Concurrent with this metamorphosis is a systemic change in the way data is generated and handled.

Think of it, practically every known entity today generates data – cars, digital devices, people (in a population), and more so businesses, compared to, say, 50 years ago when there were very few digital devices, and cars were practically combustion engines with a seating arrangement.

Today data is everywhere, and this data is the substrate of the process that defines insights, which ultimately guide decisions making at every level. Whether it is determining which cars fit the world’s plan of going greener; figuring out which healthcare plan provides better health coverage to the general population; or outlining a viable supply chain for an oil/gas company, data (in the form of insights) is the lifeblood of decision making.

The caveat, however, one that most enterprises must contend with is the fact that today’s data available for insight generation and for fostering decision acuity is both dynamic and voluminous.

Traditional methods of managing it (think rudimentary document management) is in very practical terms, obsolete.

For the 21st-century enterprise looking to scale efficiently, modern-day information and records management is a need must. It is no surprise that the world’s richest companies are founded in information technology (which is by default heavily tilted towards manipulating data) and not banking or real estate.

The world order has changed, and disruption to the incumbent hierarchy is the new norm. Digital assets, what companies that emphasize information and record management wield, have proven to be extremely valuable resources.

In many cases, they distantly outclass traditional factors of production, think capital, human resource, or real estate. And that’s because data fosters the transition from a culture that bases its decision-making process on heuristics to one that is objective, efficient and perhaps more importantly, consistent with delivering disruptive results.

The legal and regulatory perspective

Aside from sharpening competitive advantage and fostering business sustainability, a robust IRM architecture is also essential for keeping up with legal and regulatory requirements. This fact has been well established in the last few decades, specifically in the oil and gas sector, following a barrage of industry incidents involving ‘big names’ like Shell, Repsol, El Paso and Stone Energy, amongst others.

Figure 1. Compliance considerations

Figure 1. Compliance considerations

Shell, in particular, found itself cast in an unwanted spotlight after an audit discovered that it had for a significant while, overstated the extent of its oil reserve volume – an indices directly correlated to the publicly traded value of the company. Whether this overstatement was a deliberate attempt to game the system is still a subject of debate; one thing that is however clear is that the company was unable to present the appropriate documentation and records needed to substantiate its earlier reserve declarations. It could have if it had a capable IRM architecture.

Following the step down of Sir Philip Watts, former CEO of the company’s EP unit, an assessment conducted by his replacement, resolved that ‘the internal reserves audit was both understaffed and undertrained.’

Shell had to downgrade approximately 4 billion barrels of oil formerly classified as ‘proven’ to the ‘probable’ category, a development that rocked both the company’s fiscal projections and global equity markets.

Of course, this precipitated a major redesign of the company’s information and records management strategy. The company kick-started a global record management program with a renewed emphasis on handling information and records as per the requirements of the overly diligent 21st-century business ecosystem.

Shell’s experience provides a witting perspective on just how critical efficient information handling, retention, and propagation is to the survival of any enterprise. More especially for companies nested in the finance, environment and the many other ‘sensitive’ industries where lawsuits are rife and regulations more than superfluous.