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In my first blog post last week, I talked about foundational requirements that, in my opinion, support maintaining trustworthy electronic records in lieu of paper - unless there is a specific requirement to maintain hard-copy. I mentioned, for example, UETA and the E-Signature Act in the US that I believe establish the equivalency of trustworthy hard-copy and digital records, unless there is a required exception. Here are some reasons that would/might justify the retention of paper and other hard-copy records:

• Laws, regulations and industry standards that require hard-copy for specific functions or content.

• Existing contracts that require maintaining and/or providing hard-copy records to external stakeholders (e.g., customers). Of course, if you are contractually bound to maintain or provide hard-copy records, then you must comply with this requirement. In these cases, though - unless hard-copy or a “wet signature” is prescribed by law - I suggest conducting a cost-benefit analysis to compare electronic with hard-copy record-keeping and provision. The analysis may reveal that converting to digital record-keeping and eliminating paper in these cases would provide major financial benefits without incurring unreasonable risk. If so, then I strongly encourage working with your attorneys to examine the possibility of renegotiating and amending the contract to eliminate the hard-copy requirement. Going forward, I recommend executing contracts that do not include a hard-copy stipulation (better yet – that stipulate that you will provide digital records) unless there is a legal or strong business case for hard-copy.

• Expectations of key stakeholders that – while not stipulated in law – might influence whether or not paper retention is advisable. For instance, your company may receive funding. If your funder expects the documentation evidencing collateral for the funds to be maintained in hard-copy, you may not want to convert to digital record-keeping if you believe that doing so would jeopardize your funding.

• If other unreasonable risk would be incurred by not maintaining hard-copy records. Risk should be assessed for each unique business scenario.

• Situations in which it is more cost-effective to maintain existing paper records rather than to digitize them and destroy the source documents. This is often true related to legacy records stored offsite that have relatively short remaining retention periods. It may be cost-effective to let these existing paper records live out their remaining retention periods. In those cases, you would create and retain the content electronically only on a go-forward basis.

Please note that, even when hard-copy is required for specific records, it is often beneficial (when the media permits) to also retain those records digitally. There are several reasons for this.

• A given rule requiring hard-copy records for specific content may be eliminated. If the impacted records are already maintained digitally as well as in hard-copy, the organization will be positioned to quickly eliminate paper from the process when those rules do change.

• It is usually more efficient to retain records that should be maintained together (read “records series”) in the same format. If the other records in that file are maintained electronically, it doesn’t make sense (and can be problematic) to not digitize a sub-set of records (sometimes only a few record types) that are needed in hard-copy.

• Having the records digitally stored can provide important efficiencies related to distribution. And….

• Storing records electronically enables workflow functionality to be used, as needed, related to all pertinent records related to a process.

Best regards,

Susan

The opinions expressed here represent my own and not those of Bank of America (BAC) or AIIM.