Is it worth investing in records management?
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The document discusses measuring the return on investment of records management programs. It reviews literature on quantifying benefits and finds that retrospective appraisal projects rarely show monetary returns due to high upfront costs. Implementing retention schedules for ongoing records can yield cost savings. Records management is only cost-effective above a certain scale due to fixed retrieval and storage costs. Improving processes and systems is more efficient than relying on cheaper labor. The document raises questions around accurately and empirically quantifying records management benefits.
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Is it worth investing in records management?
- 1. Don’t waste your money appraising records 7 th April 2011 | Steve Bailey The surprising implications for records management of measuring our impact
- 2. Hands up Who here thinks investing in RM will deliver a positive return on investment for an organisation?
- 4. Does this matter anyway?
- 5. 2000-10 “The compliance decade” 2010-20 “The efficiency decade?”
- 6. RM: Obligation or opportunity?
- 9. Decision Time Business case built on contribution to compliance and governance RM becomes a corporate obligation akin to Health & Safety We drop any pretence that RM delivers positive ROI as this cannot be verified Business case built on demonstrable benefit to the operation of the business Compliance and governance still part of ‘the offer’ but as a lower profile ‘given’ We develop the techniques & evidence base to prove the claims we make
- 10. Which path should we take? Pros and cons?
- 11. Identify processes subject to a change initiative Agree discrete measurable benefits Record process ‘as is’ performance Record actual process performance post change Capture implementation and ongoing costs Compare the measured benefits and costs to calculate impact
- 12. 2.1 Identified measureable benefits 1. Business Processes “… a new software system will be used to capture, manage, store, preserve and deliver content and documents relating to organisational processes” 1. Reduction in time taken to post case files from Governance Team to schools 2. Reduction in time taken to post case files from Schools to Governance Team 3. Reduction in time taken to post case files from Governance Team to Adjudicators
- 13. 2.2 Metric data capture Reduction in time taken to post case files to schools Measurements Descriptions Year 1 Benchmark Year 1 Actual Unit of measurement Minutes Area of change Minutes per case file (per year) Performance 17.25 5 Annual multiplier 312 280 Performance change 71% Conversion of unit to £ Salary per minute £0.152 £0.323 Annualised performance (£/pa) £807.30 £448.00 Monetary benefits obtained from the redesigned process £359.30
- 14. 3. Comparative cost information Costs Implementation costs Year 1 Year 2 Year 3 Year 4 Year 5 Staff costs £3,383.57 £1,691.78 £845.89 £256.52 £256.52 £256.52 Non staff costs £10,000.00 £2,400.00 £2,880.00 £3,024.00 £3,175.00 £3,334.00 Overall costs £13,383.57 £4,091.78 £3,725.89 £3,280.52 £3,431.52 £3,590.52
- 15. 4. Monetary impact 4. Non - monetary impact Monetary Measurement Year 1 Year 2 Year 3 Year 4 Year 5 Monetary benefits £7,800 £7,912 £7,958 £8,066 £8,110 Comparative cost information £17,475 £3,725 £3,280 £3,431 £3,590 Monetary impact - £9,675 £4,186 £4,677 £4,634 £4,519 Cumulative monetary impact - £9,675 - £5,488 - £811 £3,823 £8,343 Unit of non monetary benefit Year 1 Year 2 Year 3 Year 4 Year 5 Savings in linear metres of storage space 31.68 34.76 37.84 40.92 44
- 19. Finding 1: retrospective appraisal exercises rarely deliver ROI Cardiff University – Monetary Impact Large up front implementation costs due to appraisal & scanning On-going nature of maintenance costs ‘ One off’ nature of benefits (paper reduction) Monetary Measurement Year 1 Year 2 Year 3 Year 4 Year 5 Monetary benefits £17,546 £3,627 £656 £656 £656 Comparative cost info £83,089 £13,541 £1,680 £1,680 £1,680 Monetary impact - £65,542 - £9,913 - £1,023 - £1,023 - £1,023 Cumulative monetary impact - £65,542 - £75,455 - £76,479 - £77,503 - £78,526
- 20. Finding 1: retrospective appraisal exercises rarely deliver ROI (Continued) Kings College London Impressive 96% time saving in retrieving file from accessioned & listed box = £33 saving per retrieval But only c.5 retrievals per year Very similar ongoing appraisal costs to Cardiff Monetary Measurement Year 1 Year 2 Year 3 Year 4 Year 5 Monetary benefits £1,182 £1,146 £1,110 £1,074 £1,038 Comparative cost info £6,040 £1,120 £1,120 £1,120 £1,120 Monetary impact - £4,857 £26.00 - £9.10 - £45.10 £81.10 Cumulative monetary impact - £4,857 - £4,830 - £4,839 - £4,884 - £4965
- 21. Finding 2: Implementing a retention schedule ‘from this point on’ can deliver ongoing cost savings University of Oxford No investment in implementation costs (IT, staff effort etc) Instant (if modest) ROI Reasonable return over 5 years Monetary Measurement Year 1 Year 2 Year 3 Year 4 Year 5 Monetary benefits £2,429 £2,953 £3,589 £4,357 £5,294 Comparative cost info £1,825 £1,880 £1,974 £2,033 £2,094 Monetary impact £604 £1,073 £1,615 £2,324 £3,200 Cumulative monetary impact £604 £1,677 £3,292 £5,617 £8,817
- 22. Finding 3a: Records management is only cost effective above a certain scale of operation (retrieval costs) King’s College London Time taken to retrieve a file from an accession £1,120 costs per year £33 saving per retrieval 34 retrievals required PA to break even Measurements Descriptions Year 1 Benchmark Year 1 Actual Unit of measurement Minutes Area of change Retrieval of file Performance 82 3 Annual multiplier 5 5 Performance change 96% Conversion of unit to £ Salary per minute £0.420 £0.420 Annualised performance (£/pa) £172.20 £6.30 Monetary benefits obtained from the redesigned process £165.90
- 23. Finding 3b: Records management is only cost effective above a certain scale of operation (electronic storage costs) University of Nottingham Kings College London Cumulative monetary impact by Year 5 = 85p Cumulative monetary impact by Year 5 = £45,390 Descriptions Year 1 Benchmark Year 1 Actual Descriptions Year 1 Benchmark Year 1 Actual Total MB data stored 66.73 0 Total GB data stored 870 87 Performance change 100% Performance change 90% Server costs per MB £0.003 £0.000 Server costs per GB £10.00 £10.00 Total costs £0.17 £0.00 Total costs £8,700.00 £870.00 Monetary benefit £0.17 Monetary benefit £7,830.00
- 24. Finding 4: Investment in better processes and systems is more efficient than increased reliance on cheaper labour University of Nottingham Measurements Descriptions Year 1 Benchmark Year 1 Actual Unit of measurement Minutes Area of change Minutes per case file (per year) Performance 17.25 5 Annual multiplier 312 280 Performance change 71% Conversion of unit to £ Salary per minute £0.152 £0.323 Annualised performance (£/pa) £807.30 £448.00 Monetary benefits obtained from the redesigned process £359.30
- 25. Areas for debate How accurate, robust and empirical should we seek to be? Are there dangers to seeking to quantify the benefit of RM? Can we / should we find ways of capturing qualitative benefits? Do records managers have the skills required to undertake this type of activity?
- 26. Thank you Questions? [email_address] www.jiscinfonet.ac.uk/impact-calculator
Editor's Notes
- The degree to which RM must be able to prove its impact and economic worth is essentially dependent on what we feel its true purpose is within the organisation. If we believe its true calling is to increase corporate accountability, ensure legal governance and preserve the evidential and historical record then arguably the need to prove ROI is much less. As these are things which any organisation worth its salt must invest in and maintain regardless of the cost or prevailing economic climate. We must also acknowledge that it is virtually impossible to measure improvements in any of these in any empirical sense and it would largely be a waste of time trying to do so (how do you measure that you are more accountable than last year?). These are the traditional strengths of RM and a large part of the arguments we have used to sell it – especially over the past decade
- However, a strong case to say that the tide is turning. Based largely, but not exclusively on the changing economic climate you can make a convincing case to say that the past decade was one where arguments for investment in RM were largely made based on the need for compliance. The signs are that the current decade may be driven by very different considerations. Yes factors such as governance, accountability etc will still feature, but are likely to be subject to far more stringent risk assessment and minimal possible investment. Days of gold plating compliance are over
- But we should also note that the arguments put forward for investment in RM in recent years have made much grander claims. The business case for RM routinely makes claims that it will improve productivity, reduce overheads and improve collaboration and innovation. The benefits of positioning RM in this light are that it moves it closer to the business, into a role which overtly adds value to the enterprise. That shifts it from an obligation to an opportunity and that turns every penny spent on it from a negative investment to a positive. Arguably this is the ground RM wants to occupy – to be seen to be an integral and value part of the business, rather than a bureaucratic overhead. But if this is a ground we want to occupy the stakes are higher. The rewards may be better but, equally so are the risks. Here we really do need to be able to justify our existence and to be able to demonstrate the value we are adding. There is no room for passengers here.
- At first glance, yes – many is the conference paper, paper in the professional journals or vendor white paper which makes a seemingly clear and compelling case for the evidence of the positive ROI that investment in RM can bring.
- The IC has been developed as a tool for those who believe we need to be able to quantify the benefits Released in 2009 Freely available number of downloads to date 6 pilots 2010 – 6 different RM projects. All using the same methodology and found some interesting (and in some cases surprising) findings Rest of this presentation is based on an analysis of some of their main findings
- But first a real whistle-stop tour of how the IC works. Only enough to provide some context. Detail can be gathered from the website.
- Blue = user entered text
- Cardiff For Cardiff, many of the drivers behind this work stemmed from the need to reduce the accumulated backlog of HR files stored by the university, thus ensuring its compliance with the Data Protection Act and helping to prepare the ground for the University’s new electronic employee information management system (‘Cardiff People’) by reducing the volume of records requiring scanning for entry into the new system. This resulted in a ‘front-loaded’ appraisal project specifically designed to address these legacy issues, as well as putting in place the foundations for a future managed approach on this basis. It led to Year 1 project costs (including implementation costs) of £83,089.28 and a resulting Year 1 deficit of £65,542.36. The percentage changes in performance achieved by the project were significant, estimated to result in a 55% reduction in the time taken by HR staff to find information on personnel files from Year 2 onwards (from 47% in Year 1) and a 72% reduction in the time taken to process a personnel file in response to a Subject Access Request during the same period. The project also achieved a one-off reduction of 45% in the volume of paper stored; resulting in a saving of £19,960.79 in anticipated scanning costs. And yet these significant process improvements did not equate to monetary savings anywhere near sufficient to deliver a return on investment. The huge upfront Year 1 costs meant the project was always going to have to deliver some spectacular savings to claw this back, but do not account for the full story. For even in Years 3-5, after the main backlog of records had been addressed, the revised process was estimated to be running at an ongoing deficit of £1,023.54 per annum. The reasons for this deficit were due to the ongoing nature of project costs (reflecting the fact that appraisal activity needs to be a rolling activity if a future backlog is to be avoid) compared with the one-off nature of the main financial benefit (the 45% reduction in paper requiring scanning). It should also be noted that as with Oxford, Cardiff chose not to include internal storage space saved as a monetary benefit, despite the project estimating to save them 52.73 shelves of space by Year 5.
- KCL The KCL project separated the measurable benefits relating to the appraisal of their physical estates records – as discussed here - from their electronic (addressed in the following section) and represents another interesting take on the relative merits of undertaking appraisal exercises. The headline figure of a 96% saving in the time taken to retrieve a file from an average accession with a box list, compared with one without is certainly an impressive improvement and one which it is calculated results in a saving of £33.18 per retrieval. However, the low retrieval rate of the records affected by this project, with just five such records being requested in 2009/10, significantly reduces the overall impact. This combined with ongoing costs of over £1000 per annum to operate the appraisal process, means that this represents yet another instance of where an investment in records appraisal based purely on economic grounds will never demonstrate a return on investment.
- In contrast to the previous projects discussed, the Oxford project produced an immediate return on investment from Year 1 (£604.28) and predicted increased year-on-year savings resulting in a cumulative monetary impact of £8,817.95 by Year 5. This instant ROI reflects the fact that the Oxford project required no investment in IT systems, or initial heavy investment in additional staff resources to achieve. The project chose to take a gradual ‘from this point on’ approach to appraisal and retention management with no initial surge to tackle the backlog. Such an approach may lack an immediate impact but it is interesting to compare the experience and data from Oxford, with that of Cardiff University (see the following section, 3.4) which did seek to tackle legacy issues as part of an expensive retrospective appraisal initiative.
- The headline figure of a 96% saving in the time taken to retrieve a file from an average accession with a box list, compared with one without is certainly an impressive improvement and one which it is calculated results in a saving of £33.18 per retrieval . However, the low retrieval rate of the records affected by this project, with just five such records being requested in 2009/10, significantly reduces the overall impact. This combined with ongoing costs of over £1000 per annum to operate the appraisal process, means that this represents yet another instance of where an investment in records appraisal based purely on economic grounds will never demonstrate a return on investment. With this data and the logic underpinning it we start to move into a situation where it is possible to calculate where the tipping point would come in terms of how many retrievals of a record would be required per annum in order to start to realise an economic ROI. Based on the Kings data it could be argued that a minimum of 34 retrievals of such records are required each year to offset the costs of maintaining the appraisal process (based on costs of £1,120 per annum and savings of £33.18 per retrieval). Such data could well help inform future decision making by helping to establish where best to target further appraisal activity
- Changes to the storage of electronic records within the KCL estates department will achieve a return on investment of over £10,000 per annum, resulting in a cumulative monetary impact of £45,390 by the end of Year 5. As all these savings are being realised solely as a consequence of reduced electronic storage costs this represents an interesting contrast to the experience at Nottingham where such savings were negligible. The main difference with the Kings experience is the volume of data affected, once again intimating that the economic argument for investment in records management often only becomes apparent when applied to a substantial volume of records. The logic behind this statement may be self-evident, but raises interesting (and, one suspects, largely hitherto un-examined) questions about what constitutes the minimum volume of records required to justify investment in records management based purely on economic factors.
- All these savings were achieved as a direct result of a 71% reduction in the amount of time taken to complete processes relating to the management of student case files when conducted electronically via ‘Knowledge Worker’, compared with the previous, manual, processes (down from 17.25 to 5 minutes). Interestingly, this monetary benefit was achieved even though the per minute salary costs increased as a result of the change initiative (doubling from £0.152 per minute previously to £0.323 per minute post-change due to the process now being undertaken by a higher grade member of staff) and clearly demonstrates the benefits of automating and streamlining a process, rather than simply devoting a greater amount of cheaper labour to it.