Brief History of Commercial Records Management


The Evolving Commercial Records Center Industry

By Mike Faber, Paxton Records Storage

For approximately 50 years, the commercial records center (CRC) business has evolved from a repository of mostly inactive or, as some have said, “dead,” records in having a much more interactive, high-tech relationship with its clients. Employing some of the latest computer technologies, CRCs now offer very sophisticated computer-based indexing, file tracking, fireproof vault storage of computer media, electronic vaulting of cus­tomers’ data, disaster recovery, and contingency planning programs, as well as a number of other new services (e.g., consulting) and products.

The article was originally published in the July 2001 issue of the Information Management Journal.

This article takes a look at how the CRC industry began and how it has developed over the last half century. It also addresses some of the new technologies, such as radio frequency identification (RFID) and global positioning satellite (GPS), to learn how new technological developments may impact the future of the CRC business. Far from being in decline, the CRC business is a growing industry.

Development of US Records Management Programs
Until the mid-1930s, no formal records management programs were in place in the United States. The federal government and private busi­nesses kept records in whatever form they felt appropriate without the benefit of retention schedules, dispo­sition guidelines, or other formal information life-cycle procedures. The federal government, however, recog­nized that some controls needed to be implemented to manage the massive volume of U.S. government files being created. In 1934 the National Archives was established with the primary task of identifying federal records that should be retained as opposed to those that might be eligible for disposal. By 1937, the National Archives was completing the initial survey of federal government records and was becoming aware of a serious lack of uniformity of procedures and an enormous amount of duplication in the records programs of different agencies. During World War II, the U.S. government experienced a proliferation of new agencies and departments. Along with that growth, the government also experienced an unprecedented explosion in the vol­ume of documents it needed to create, store, and manage.

Franklin D. Roosevelt (FDR), who signed the legislation creating the National Archives in 1934, was the first U.S. president to take an active interest in the management and preservation of U.S. government records. He had his own long-term plans for the gigantic Pentagon, which was built at breakneck speed at the outset of World War II and was the world’s largest building at the time. “FDR hated the Pentagon [architecturally] but recognized the need for it; his plan for it after World War II was to use it to store records.” (Brinkley 1991). Little did FDR know that the Pentagon would have nowhere near the space needed for the govern­ment’s records.

The Records Disposal Act of 1943 was revised by the National Archives and amended in 1945 to include the government-wide general schedule (GS), which authorized the systematic disposal of government records com­mon to most agencies. In 1948, the first Hoover Commission extended the efforts to control government records and awarded a contract to the National Records Management Council of New York to study and make recommendations to improve efficiency in governmental records management programs.

At about this time, the U.S. business community began to see the emergence of what is now the CRC industry. That emergence was led by Emmett J. (Ed) Leahy, who was with the National Archives from 1935 until 1941. He became the director of records coordination for the Department of the Navy during World War II. Leahy received the Navy Commendation Ribbon for his innovations and cost-saving initia­tives and was released from duty with the Navy Department in 1945. In 1948 Leahy became the first executive director of the National Records Management Council. That same year, Leahy formed the Business Archives Center, which was probably the first CRC in the United States. In 1953 he formed the records manage­ment consulting firm of Leahy & Company and Leahy Archives, which later became Pierce-Leahy Archives of Pennsylvania. Leahy continued in his role as a pioneer and innovator in the records management industry until his death in 1964. Each year, the Institute of Certified Records Managers (ICRM) confers the “Emmett J. Leahy Award,” one of the highest honors for an individual in the records management field.

1950s-1960s Early Development of CRCs
During the 1950s and ‘60s, the CRC industry continued to develop, primarily in the northeastern United States (New York City and Philadelphia) and in other large metropolitan areas around the country (e.g., Chicago and Los Angeles). During the 25 years following World War II, the economy of the United States grew steadily but slowly when compared with the exponential growth of the 1970s and 1980s. A large proportion of CRC expansion was focused on large cor­porations and organizations, and most records center holdings were inactive. Almost all CRCs during the ‘50s and ‘60s were single location or regional in scope.

Many moving and storage com­panies (and later, office moving companies as well) began records storage operations during this period. Moving and storage companies were in an ideal position to provide records management services for several reasons. They had warehouse and transportation facilities in metropolitan areas as well as existing relationships with other established businesses in their communities. Many moving and storage companies, as well as independent entrepreneurs, began successful records storage operations during this period. Larger regional operations and national-level CRCs would develop over the following few decades.

1970s - CRC Development Quickens
The 1970s witnessed several developments that triggered dramatic growth in the records center business. With the exception of an economic slump towards the end of the decade, U.S. businesses grew at a furious pace during the 1970s. The introduction of word processors (and word process­ing centers) had a tremendous impact on the volume of documents that could be produced and on the time required to produce them. Compounding this development, a continuing growth of federal, state, and local laws and regulations dictated numerous types of records that must be retained to satisfy legal and audit requirements.

For the first time, many relatively small businesses saw their valuable office space being swallowed up by the mounting volume of docu­ments they were required to retain. Pierce-Leahy and Bekins Records Management (a division of Bekins Moving & Storage, later to become Bell & Howell, then Iron Mountain) were among the first CRCs to expand into multi-city markets. During this period, records centers, using early generation word processors and computers, first had the capability to produce automated reports and index information for clients.

The CRC business was no longer limited to merely warehousing and retrieving documents. For the first time, CRCs could take advantage of new computer technologies to provide valuable database information to their cus­tomers – and to themselves. Some CRCs were hiring data entry person­nel to assist in the creation of huge databases for indexing, cross-refer­encing, and tracking files and boxes of records. A new, technology-oriented relationship was developing between CRCs and their customer bases.

1980s - ACRC and Continued Rapid Growth
The 1980s saw a virtual explosion in the CRC industry. Fueled by a rapidly growing economy and the advent of the personal computer and desktop printers, American businesses consumed more business paper than in any previous decade. In 1980 the Association of Commercial Records Centers (ACRC) was formed. The original membership of this trade association represented compa­nies from the United States and Canada: Mohawk Business Records of Minneapolis; Records Management Services Inc., of Chicago; Leonard Brothers Records Service Center of Detroit; the File Room of Chicago; Iron Mountain Group of Boston; and STACS Records Management from Canada. During this decade, the CRC business developed into a nationally known industry. Almost every major city in the United States (and many in other countries) had one or more CRCs. Again, the combination of an explosive growth in the creation of documents and the creation of new regulations and laws requiring their retention fueled the growth of this industry.

Several important technical devel­opments also took place in the early 1980s. Bar code labels and scanners were introduced and became widely used to track inventory of many kinds - including files and records containers - more efficiently. The new bar code technology enabled CRCs to process large volumes of files and containers quickly and accu­rately while reducing error rates to insignificant levels. Soon, a number of sophisticated bar code-based software programs became available to auto­mate other functions of CRC opera­tions. If other areas of a records center were well managed, bar code efficiency and software programs helped CRCs offer a compelling cost-effective and accurate alternative to storing and managing records in-house.

Another technology introduced in the mid-1980s was expected to have a profound effect on the CRC industry: the optical disk or “platter.” When introduced, the 14-inch optical platters had a storage capacity of more than 80,000 pages of documentation. The optical disk was touted as the begin­ning of the end for both microfilm services and CRCs because it was originally thought to be the precursor of the “paperless office.” Many CRCs took advantage of optical disk tech­nology and formed service bureaus to convert paper documents into images for storage on the disks.

A number of CRCs are still converting paper documents to CD-ROM (CD) optical media for their customers. However, compared with the original predic­tions, conversion from paper to CDs still represents a very small percentage of inactive and semi-active documents. In a May 2000 in a conference address in Acapulco, Mexico, David O. Stephens, CRM CMC, of Zasio Enterprises, gave a presentation on the future of the commercial records storage industry. Stephens indicated that although elec­tronic record keeping may be on the verge of an exponential growth peri­od, the traditional CRC industry should remain fairly stable for at least the next 10 to 15 years.

1990s - Explosive Growth and New Technologies
By almost any measure, the 1990s will probably be remembered as one of the most phenomenal decades in American economic history, and the growth in the commercial records center industry reflects that boom. In 1991 ACRC (now PRISM) member­ship stood at 380 companies. By the end of the 1990s, PRISM membership had grown to more than 500 members, and a recent strategic plan by PRISM projects that by 2004 the association will have more than 650 members. According to some estimates, more than 2,000 CRCs are now operating in the United States. This estimate includes small and specialized organ­izations; therefore, it is greater than the numbers suggested by PRISM membership.

Once again, a number of factors contributed to this growth, including a continuation of the pattern in which more documents were created at the same time that new laws requiring longer retention periods were passed. As records managers know, the rate of disposal of records tends to be slower than the rate of accession. In addition to these factors, one of the key devel­opments contributing to the growth of the CRC industry during the 1990s was the trend towards outsourcing.

As the trend towards organiza­tional downsizing and merging became more widespread, many companies became aware of the eco­nomic advantages of subcontracting or outsourcing administrative services such as printing, copying, courier, and file room management. Records stor­age services came to be considered an ideal function for outsourcing. Many companies that would not have con­sidered CRC services before now chose to store and manage inactive records with CRCs.

A significant trend that developed in the 1990s was the move towards consolidation or acquisition of smaller CRCs by the larger companies. During the last half of the 1990s, this trend accelerated dramatically and culminated in the $1.1 billion merger of Iron Mountain and Pierce-Leahy, finalized in February 2000, with 115,000 customer accounts. Many observers of the CRC industry are concerned about where this trend is going and what effect it will have on the business and end users. However, other industries and businesses (airlines, automobile companies, utilities, and banks) have gone through similar consolidations without a sacrifice in services. Today, the lines are beginning to blur between the CRC industry and the information destruction/shredding business. Some significant merger/acquisition activity may occur between these two industries in the very near future.

Other developments and services that helped accelerate the growth of CRCs in the 1990s were vault storage, electronic vaulting, disaster recovery and contingency planning, hot site services, and computer fulfillment. Vault, fireproof, and temperature and humidity­ controlled storage generally offer a secured area with a monitored temperature’ between 60 degrees and 70 degrees and a humidity level between 40 and 50 percent. Vault stor­age actually began in the early to mid­1980s but became a more significant factor in the 1990s with the explosive growth of computer use in organiza­tions and their need for data backup. Electronic vaulting uses a central computer, usually located in a CRC vault, to poll a client’s local area network (LAN) on a daily basis and create a 30-day emergency backup for the client. Electronic vaulting has met with various degrees of suc­cess in certain markets, but it does offer another valuable service for CRC clients. In May 2000, Iron Mountain and Computer Network Technology announced a joint effort to offer elec­tronic vaulting on a national basis. CRCs are in an ideal position to team with organizations in their overall disaster recovery/contingency plan­ning efforts. CRCs can function as a backup for computer data, supplies, or even as a hot site as part of a larger recovery strategy. Computer fulfill­ment, or the storage and distribution of computers, boards, and compo­nents, is another area in which CRCs can assist existing clients. Because CRCs usually have sophisticated bar code programs, climate controlled areas, and courier services, they are in an ideal position to receive, store, and distribute computer equipment as needed by customers.

Trends, Technology, and the “Paperless Office”
The “paperless office” remains an elusive target at best for most com­panies and organizations, although technological advances will make that goal easier to attain in the future. At this time, however, the commercial records center industry should contin­ue to function traditionally at least for the next 12 to 15 years. The simple fact that consumption of business paper has continued to increase annually through last year indicates a strong possibility that inactive records stor­age will continue to increase or at least remain stable for a minimum of 10 years. So, for the foreseeable future, records will not be paper or digital; they will be digital and paper.

Questions about the stability and longevity of some computer media are of interest to CRCs. A recent Business Week article reported the following cases of missing or lost computer data:
•     twenty percent of the informa­tion collected by the 1976 Viking mission to Mars
•     some POW and MIA records from Vietnam
•     almost 3,000 Pennsylvania State University student records (Business Week 1998)

Jeff Rothenberg, senior scientist at the Rand Corporation, is quoted in the article: “Digital information lasts forever, or 5 years, whichever comes first.” That is, the drives read the media will become obsolete about every 5 years, and thus the durability of the media may not be the central problem as many have assumed. The article concludes with a statement from Tom Antoginni, whose MA company mar­kets a backup product called PaperDisk, which uses paper to print out complex patterns of dots and dashes representing digitized files. Antoginini claims, “It should last for centuries or about as long as old fash­ioned, high-quality paper.” Printing digitized patterns on high-quality paper may sound a little like “back to the future,” but such alternate tech­nology will almost certainly make some promising inroads in the next few years. After all, the use of papyrus and clay recording media overlapped for some 1,700 years, as did paper and papyrus for some 800 years.   

Interesting new technologies that will influence services in the CRC industry are in development. RFID bar codes, for example, have some major implications and advantages for CRCs. Using a new technology developed by Motorola called “BiStatix,” bar code labels include a tiny radio transmitter not much bigger than a coffee ground and a printed circuit antenna to trans­mit up to 110 characters of updateable information to a host computer. When queried through a computer, they literally “talk back” or respond to the system with location, date fields, description of contents, or other perti­nent information. If a file or container is removed from a given area without being properly checked out, the sys­tem can sound an alarm and ensure that proper procedures are followed.

One of the most interesting RFID applications for CRCs is inventory control. Using RFID technology, a complete warehouse inventory could be accomplished in a matter of minutes or hours rather than days, weeks, or months. This technology could be applied to files and records cartons as well. RFID has the capabil­ity to revolutionize many business applications just as linear bar code technology has since the early-1980s.

GPS technology also presents some very interesting possibilities for CRCs. Each delivery vehicle from a records center can be identified and tracked on a computer screen map in a CRC operations center. The GPS system automatically updates new locations for each vehicle every 15 minutes. If a “next day” delivery becomes an “emergency delivery,” the exact loca­tion of the appropriate vehicle can be obtained by clicking on that vehicle on the screen; the precise, real-time position and speed of the vehicle is displayed. A message can be keyed in and transmitted via GPS. The up­dated information is displayed on a liquid crystal display panel on the vehicle’s dashboard, and the delivery information can be appropriately updated.

Database transmission and com­munication via the World Wide Web, high-speed transmission of informa­tion via fiber optic cable, and other technologies are today’s realities. The CRC industry has undergone many changes in the first 50 years of its evolution, many of them in just the last 10 to 15 years. The possibilities for the next 50 years are endless. Looking forward, one thing is predictable and certain. Only the CRCs that concentrate on service and technology will survive and thrive in the coming years.

Companies that do not continually strive to provide a high level of quality service will not be successful in the future. The inno­vative companies that remain focused on customer; service will. Because technology is changing so quickly, successful CRCs must also stay abreast of the very latest advance­ments and pass the benefits of those developments on to their clients. The CRC industry has evolved and changed over the last 50 years to bet­ter serve the records management community. The changes the industry will face in the next few years will be even more profound. The CRCs that are prepared to adapt to and embrace these changes are the companies that will be most successful in coming years.