Paper Chase

The increasing demand for document storage centres in the Middle East is attracting the attention of logistics companies, not only as potential customers, but also as investors.

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By  Robeel Haq Published  November 1, 2005

Paper Chase|~|docstorage3.jpg|~||~|Talk about e-business and the paperless offices is commonplace these days. However, in reality, business is using more paper now rather than less, and printing an ever growing number of documents. Companies importing and exporting goods are particularly guilty in this regard, especially when legal restrictions force them to keep documents for years into the future. However, what to do with these files is a difficult question, especially if you need to be able to find a seven-year-old one at a moment’s notice in. Third party records management company provide an answer to this question, as they can store old documents in an organised and cost effective mannner. They are also becoming an attractive business proposition locally, especially for 3PLs already running warehouse, as the demand for their services is on the rise, in line with the wider growth in outsourcing. “Attitudes towards outsourcing are changing significantly,” says Zaigham Haque, managing director of Docman, which runs a 7500 m2 document storage facility in Jebel Ali. “The demand for records management is experiencing growth as a result of players entering the market, who were previously not considered candidates for outsource services.” The financial sector was the first to embrace the outsourced records management in the Middle East. However, the target market has now since spread to include legal firms, hospitals, government departments and logistics companies. “Companies in the Middle East are learning about the benefits of outsourcing,” says André le Roux, general manager, Metrofile-UAE. “Some of the region’s leading companies are embracing the need for professional records management and this trend is set to continue. The need for these services will therefore increase in the region.” Outsourcing document storage can provide a variety of benefits for companies. The increasing cost of renting office space in the Middle East, for example, means that dedicated space for document storage within the office can prove expensive. “Escalating rental costs are forcing local businesses to find cost effective ways to store and manage their growing archives,” explains le Roux. “They also want to develop the manageability of records and information, whilst improving the overall organisational efficiency. Using a records management company can offer a solution to these important considerations.” Aside from the rental savings, records management companies can also offer easier access to files and better storage conditions. “Companies actually increase the security and availability of their documents by outsourcing to a professional records manager,” states Haque. “Privacy and confidentiality are far more at risk from a disgruntled employee than a disinterested third party records manager.” Many people would assume the increase in digital information would negatively affect demand for document storage, but it seems the opposite is true. Despite the concept of a ‘paperless office’ being the topic of many discussions over the last 10 years, the amount of paper being used globally is rising not falling. Indeed, 2001 research by Surrey University and HP found that organisations using e-mails caused their paper consumption to increase by 40%. As such, document storage companies are not worried about business drying up anytime soon. “The increase in digital information has not impacted the global records storage industry,” says le Roux. “The percentage of information being transferred to paper may be declining, but the sheer bulk of information being produced is increasing at a dramatic rate. This holds promise for the records storage industry, which is set to continue its growth for some time to come.” Demand for third party document storage is rising around the world. However, the Middle East is a particularly hot market because of both the general boom in the local economy and the relative immaturity of the local industry. The outsourcing records management is still fairly new here, and there are only a handful of specalist vendors available. Choice for customers is therefore rather limited at the moment, but new entrants are eyeing opportunities. “The viability of records storage is a direct function of volume. Given that regional countries have small operating bases, there is a relatively low limit to the number of sustainable companies,” says Haque. “However, there is evidence that more and more players are interested in getting into the records storage market across the region.” Logistics companies are obviously the most likely to do this, because of their experience in warehousing and storage. Most notably, earlier this year, Aramex acquired the Dubai-based records management company, InfoFort, which operates five facilities around the region. The Jordanian 3PL is now planning to introduce the document management service to more markets, capitalising on its existing logistics expertise and its regional network of facilities and sales offices. “The acquisition of InfoFort is a strategic move for our company,” explains Hussein Hachem, general manager, Aramex Dubai. “The unique combination of Aramex’s infrastructure and sales organisation and InfoFort’s specialised products and services will result in a range of product offerings that is unparalleled by any other service provider in our industry.” The process of document storage is normally personalised to suit the requirements of each individual company. The first stage is deciding which documents require storage. These are normally old, inactive files that the company cannot destroy, most likely for legal reasons. Once the documents are selected, the company can either pack them inhouse or ask the records management company to take care of the task. In the package stage, each file is individually tagged with a label and/or barcode. The files are then placed inside a box, which is also labelled with a barcode. Input forms are also normally completed during the packing process, listing the contents of each box. If the files can be automatically destroyed after a certain time period, a destruction date is also included on the form. This information is then transferred into the record management company’s computer database. The boxes are stored in a warehouse and customers can retrieve their files — either digitally or physically — within a set time period. This can be as little as two hours. Retrieval requests are commonly made e-mail, telephone, fax, or online. “The process is designed to create a hassle-free experience for the customer,” explains le Roux. “As long as the records storage company is established, they should be able to use their experience and expertise to make sure the process runs smoothly. Collecting and storing the documents is only the beginning. Aftersales is very important too.” Selecting the right records management company to suit your needs is essential. Clients should research the vendors already established in the market and obtain specific details on the services they offer. “When selecting a vendor, the customer should always compare the prospective storage centre with their own storage arrangements, as well as other centres in the market,” says Haque. Common concerns include anxieties over the security and protection of documents, especially if the files are confidential in nature. “Security from fire, flooding and theft is a major component of the investment in setting up a records centre,” says Haque. “Damage or destruction is a risk but typically in this industry, loss of documents has little relief as documents are generally regarded as having no commercial value and cannot be insured. Customers are advised of this clearly.” The document storage centre should have procedures in place to protect files against natural hazards, such as damage from fire and water, in addition to infestations from rodents and other pests. Customers could produce a checklist with security-related questions for the centre to answer. For example, does the facility have ramped entries and elevated shelves to protect against flooding? Does it have no-smoking policies, minimal electrical applicants and smoke alarms to decrease the risk of fire damage? Are regular maintenance, de-infestations and rodent control visits scheduled to prevent pests from damaging the files? The IT system used to track the files is also a key consideration. The document storage industry initially suffered from a bad reputation for misplacing files and being unable to locate the right information within the required time period. This situation has now vastly improved, as document storage companies usually use barcode technology, mobile scanners and records management databases systems. Most companies also provide customers with online access to the records management system. By logging onto the system using a unique username and password, customers can view, search and request records from storage 24 hours a day. “We have implemented our own software, which allows us to track documents effectively. It’s a very secure system that we built ourselves. Customers are also able to access their account details online, which is especially helpful when they need to digitally retrieve documents,” says le Roux. New technologies are being developed to further upgrade the industry. “Radio frequency identification [RFID] tags have some major implications in areas such as inventory control in a warehouse or more specifically, files and record cartons,” says le Roux. “Global positioning satellite [GPS] technology also presents some interesting possibilities, allowing delivery vehicles from a records centre to be identified and tracked on a computer-generated map.” Looking forward, the records management industry in the Middle East looks set to grow further. With constantly evolving technology, increasing demand from local businesses, and investment from companies such as Aramex, the expansion will continue considerably over the next ten years. For those struggling with the storage of important documents, outsourcing records management is certainly a solution worthy of consideration. ||**||

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