Information is a central resource for modern organizations, and managing business records is both a key activity and an important overhead expense. Records Management, also called Records and Information Management or Recorded Information Management (RIM), is defined as “both a discipline and management function concerned with the systematic application of management techniques to and control of the information created or received in the normal information of an organization’s business.”
The global records management market is currently valued between $23-25 billion (USD). In the U.S., records management services account for the largest revenue share at 76 percent. Due to strict regulations that are driving demand for digitization and electronic record services, it is expected that by 2018, revenue shares will grow at the CAGR of 3-4 percent in the U.S. and 5 percent in the UK.
According to Iron Mountain’s Compliance Benchmark Report, around 80 percent of organizations have formal records and information management policies and about 37 percent of respondents consistently apply records and information management policies across their enterprises.
The growing importance for organizations to store and maintain records has led to the emergence of numerous players competing in the records management space, and this has created a fragmented global market that accounts for 55-60 percent of the total with 1500 players in U.S. alone. Accounting for approximately 40-45 percent of the market, some of the largest suppliers worldwide include Iron Mountain, Recall (acquired by Iron Mountain) and Restore Plc in the U.K.
Slower growth for larger players has led to consolidation as a way to obtain market share and expand their presence geographically. For example, Iron Mountain, the leading player worldwide, recently completed the acquisition of its closest competitor and second largest supplier, Recall, for $2.2 billion (USD) in 2015. With Recall’s acquisition, Iron Mountain achieved its goal of doubling its market share by controlling 78-80 percent of the Australian market. Additionally, it also gained market share in other countries; in the U.S, it grew its market share from 33 percent to 40 percent and in the UK, from 25 percent to 28 percent.
The rise in mergers and acquisitions (M&A) activity by larger players is expected to reduce competition and result in price increases for services in certain regions. Iron Mountain’s proposition to acquire Recall came under scrutiny by regulatory authorities including the United States Department of Justice (DoJ), the Australian Competition and Consumer Commission (ACCC), Canadian Competition Bureau (CCB) and the United Kingdom's Competition and Markets Authority (CMA), all of them citing competition concerns from a reduced supply of records management services that involve high switching costs. Iron Mountain agreed to divest and sell subsidiary records management assets in 15 U.S. metro markets and in 6 Canadian cities to restore competition amongst suppliers.
Electronic Health Records
Healthcare organizations are the second largest market in records management, accounting for 17 percent of total industry revenue. The demand for Electronic Health Record (EHR) systems is expected to increase due to strict regulations for healthcare organizations to convert physical records into digitized formats. The American Recovery and Reinvestment Act requires healthcare organizations to transition from paper-based records to EHR systems or face cuts in Medicare reimbursement rates.
Several healthcare organizations were already facing challenges in physical records management that prompted them to go paperless. Among these challenges were that paper records typically require a lot of administration and data entry. There were also concerns about the accuracy and compliance of paper systems. Most organizations have moved to EHR systems and according to ISR, 91 percent of users now prefer EDC (Electronic Data Capture) over paper CRF’s as compared to 77 percent two years ago.
Impact on Healthcare Technology
Many organizations are embracing cloud storage for records when going paperless. This is due to both the opportunity for cost savings along with increased data security in cloud storage.
Cloud-based EHRs in mobile devices, the use of Big Data and other emerging storage types like Erasure Coding (EC) are some of the emerging trends for 2016-2017 that will enable accessibility of data records by healthcare employees.
With organizations adapting increasing digitization, the impression might be that the relevance of records management has decreased. On the contrary, records management and retrieval is an activity that should be a long term focus and a priority for all companies, especially those in the life sciences and financial services industries. It protects legal interests and, when approached in the right manner, increases accountability and governance.