There is nothing sexy about information management but it can bring a company to its knees if it isn't handled properly, Maureen Duffy, manager of Clayton Utz legal technology support group, said last week.
A lack of well-founded information management structures will push many businesses to an unpleasant and potentially costly brink, she said. "Unless Australian business wakes up to the need to reprioritize its handling of information management systems, many companies could be in big trouble if they are ever taken to court," Duffy said.
"The business world faces high-risk exposure in an environment where burgeoning instant communication often means increasing volumes of unorganized information.
"A lack of corporate memory is one of the most significant issues facing businesses today. The way we create information has changed so dramatically and we don't have adequate built-in systems to deal with it properly."
Duffy said IT managers need to ask themselves what will happen if something goes wrong?
Six years ago, she said, most information was hard copy that was centrally filed and typically managed by junior staff.
"Because e-mail was rarely used for business it was routinely printed and filed as well. So, when litigation occurred, you could walk to a file, pick it up and read it, and you generally had the relevant information in your hands.
"Since then the way companies run their businesses has changed dramatically. Today, everyone creates documents from their desktops; most organizations don't have document creation software and people draft and maintain their information on their desktop hard drives," she said.
"If there is a central system it often relies on the individual's interpretations of what should be retained based on their definition of what is official and what is unofficial."
There is also a long list of consultants and temporary workers supporting the company and they are also creating untracked records.
"So they're creating documents, they're sending them out on company letterhead, they leave and quite often, IT takes over and simply wipes the hard drives and archives the e-mail boxes. If something goes wrong there is no corporate memory," she said.
"At its most basic level, litigation is about disputing parties convincing a 'Trier of Fact' that their version is the correct version. That is done by the presentation of evidence - witnesses and documents. If there is ever the slightest likelihood that your company could face litigation you need to understand how you manage your information to protect yourself."
A company's ability to access and track information could determine its very survival.
"It is a serious risk management issue for most organizations," she added.
Duffy estimates that as much as 90 percent of electronic information is no longer converted to a hard copy in most businesses. She recommends that part of a company's protection strategy should be to ensure that senior staff work alongside their IT managers in establishing appropriate protocols and procedures.
"Companies must understand this is a serious business issue that needs to be considered when making decisions about how their business is to be run and how the information is to be managed."
In making a recent submission to the Australian Law Reform Council's review of the Evidence Act, Clayton Utz recommended that changes to the Act should be made to reflect the way that Australia does business. At the heart of the firm's submission was the point that the federal and state governments have passed Electronic Transaction Acts to encourage the new electronic way of doing business and now the Evidence Act needs to be brought into line so that businesses are protected if they are brought to litigation.