How Much Do Misplaced Records REALLY Cost?

illust_money-bag_clear$26 Million.  Dollars.

That’s how much it cost Pacific Gas & Electric (PG&E).

Investigators determined that a natural gas explosion in 2008 was directly related to their poor record-keeping practices.

Spokesmen for PG&E have stated that they had the necessary records.  Somewhere in their multiple databases and file storage locations.

They just couldn’t find them.

And they still couldn’t find them in 2010, when yet another explosion destroyed an entire neighborhood in San Bruno, CA.  This error cost 8 people their lives. And the potential cost to PG&E?  Nearly $2 billion.

Investigators once again found that PG&E’s record keeping was so poor that it directly contributed to the second explosion and continues to pose a safety threat to customers and workers.  According to the report:

“Records and safety-related documents were scattered, disorganized, duplicated and were difficult, if not impossible, to access in a prompt and efficient manner.”

~Kevin Fagan, 3/13/2012;
“PG&E’s poor record keeping poses risk, agency says”

The report concluded that PG&E could have addressed the problems if it had put “the right people, process and systems in place over time.” In the mid-90’s, it appears that many of their pipeline history files were accidentally destroyed.  Today, even after pledging to correct the records management issues, PG&E has admitted it cannot find complete safety records for about 500 miles of pipeline.

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In the end, PG&E was left without access to the information they needed about the pipelines, when they needed it.

Yet, they were told of the problems by their records manager nearly 2 decades ago.

Unfortunately, this is a really just a classic horror story of a records management disaster. Sadly, we see it all the time in our business.  And it costs businesses real money every day, in both lost productivity and lost information.  Sometimes it even costs them their business.

Who knows why the utility chose to allow such poor records management (RM) processes to continue for so long.  Heck, they didn’t even appear to have even the most basic of records management plans in place. They clearly knew it was a significant problem. Perhaps it just seemed too difficult, or too expensive to develop and implement a reasonable RM system.  Maybe the thought of instituting the necessary behavior changes across their organization was too overwhelming.  It could be that they were waiting for next quarter, or next year, or until the next database system was installed before they got started on an RM program.  Perhaps it just wasn’t in the budget.

In the end, the reality is simple:  They failed to make efficient, effective records management a priority.

The Business Case for Records Management

Records management is an important, and necessary, part of business operations.  Yes, it’s challenging.  It’s the rare employee that enjoys “doing the filing.” It’s not sexy or fun.   It’s definitely not as exciting as developing a nifty new web app, or implementing a cool new sales tool.   And something always seems to be more important at the moment.

Yet, there are plenty of good, affordable solutions that can make managing all of the details of records management much easier.  They can even make your business better in the process.

Get records management wrong, and someone (probably you!) will inevitably have to pay for that choice – in fines, lost business, in the hours needlessly spent hunting for misplaced files, and in the direct costs of replacing lost files.

But if you get it right, your business will save time and money.  If you choose to implement an electronic records management system as part of the process, you’ll even see a real return on investment for your efforts.

And you’ll protect your business and your customers from damages and loss.

Have you had a similar records disaster that affected you?  Share your thoughts and stories with us here!

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