What is Record Management System? How is it different from a Document Management System?

Amazon, the eCommerce giant, was fined €746 million in 2021 due to GDPR non-compliance. The contention of Luxembourg’s National Commission for Data Protection was that the eCommerce giant was collecting data on its customers and partners.

That was just a glimpse of what’s been happening around the globe since these regulations regarding record management compliances became stringent.

Similarly, many other big names of the world have been facing repercussions for such non-compliances, including Whatsapp, Fastweb, and more.

To be precise, Record Management is the process of protecting the organization’s vital records like agreements and financial records as evidence to make the same available for business operations and regulatory compliances.

The process includes the creation, organization, and disposal of such records, the retention schedule of which is predefined by the state’s regulatory requirements. 
A software that automates the same for companies and helps them define clear policies and standards to manage different organizational records is a Record Management System.

But that definition does not answer all your questions, does it? 

This is why we’ll be discussing the following: 

1. What documents are considered records?
2. What purpose does an RMS fulfill?
3. Benefits of an RMS
4. How is it different from a document management system?

What documents are considered records?

To begin with, we need to understand that all documented transactions of businesses are not considered records. Meaning thereby all records are documents, but not all documents are records. 

Only those documents that are required to be protected for the sake of regulatory compliance subject to the company’s geographical establishment and operations are considered records. 

Generally, all records fall under the following categories: 

1. Documentation of business operations. 
2. Documents that point towards regular organizational activities. 
3. Documents mandated to be preserved for the purpose of regulatory compliance. 
4. Documents that are clear proof of any business transaction, legal claim, or the financial obligation. 
5. Documents specifically required to be maintained within different industries, like batch Manufacturing Records in Pharmaceutical industries. 

Unlike a document management system, a record management system focuses on setting up a lifecycle of these records within the organization, from creating and distributing such records to retaining them till the retention schedule ends and disposing of them safely. Every step of a record lifecycle is expected to be automated with the assistance of a record management system. 

What purpose does an RMS fulfill? 

Since the GDPR was redefined, 1186 fines have been levied on companies from across the globe. These fines have been valued at around €2,040,213,207, and many renowned and well-established organizations have paid penalties for their negligence. 

Thus as far as the purpose of record management is concerned, it is clearly to create a more streamlined and automated process of record handling to avoid such consequences.

Nevertheless, here’s a list of reasons to switch to a Record Management System:

1. To avoid risks and penalties

The primary reason to opt for a record management system that will help you automate the lifecycle of your records is to avoid possible penalties and risks. 

A non-compliance, if caught, can put you in a lot of trouble as a business. It will not only cause monetary losses but also tarnish your goodwill within your industry; resultantly, one might even lose their market share.

Moreover, having records of your organization’s regular activities will help you defend yourself better if and when you get into any legal trouble apart from compliance issues. 

Because what is better than coupling your arguments in a court of law with original records of the same? 

2. To maintain accountability for actions

Being a business in 2022 means more than just going out there where your target audience resides and selling them your products or services. It’s about owning up to your values, missions, and visions as a separate entity and living up to them at every stage. 

Moreover, it would help if you were accountable for what you do and how you do it. This is the only way you can gain the trust of your audience and stakeholders. To put yourself in the shoes of an authority in the industry, you must first put in the work. And managing your records is a step in that direction. 

3. To improve overall efficiency 

A record management system does improve your organization’s efficiency; however, it might not be as effective as a DMS. The reason being the following: 

1. A document management system is focused on handling an organization’s documents per se, so it does everything from organization to retrieval and indexing. On the other hand, a record management system is focused on managing compliance. 
2. The capabilities of a DMS can not be compared with the capabilities of an RMS.
3. A DMS is set up for the very reason of having a system that increases efficiency. An RMS is there to manage records and improve the efficiency of the entire process. 

To support long-term goals and initiatives.

When it comes to planning your long-term goals and executing the same, documents and records of past years, like financial statements, business plans, and more, always come in handy. 

Record management will help you plan strategically by leveraging past records. 

Also, it is worth noting that both Document Management Systems and Record Management Systems share a common objective, which is to keep a company’s operations rolling no matter the circumstances.

Benefits of an RMS: 

By opting for a Record Management system, you set your company up for the following advantages: 

1. Risk management and mitigation in situations where documentation proofs are required. 
2. The entire organizational interest is preserved since a system keeps them from falling into any legal troubles and also assures employees that their personal information is safe with the company. 
3. Quick retrieval of required documents helps in improving work efficiency. 
4. Risks associated with paper-based documents are eliminated, and confidential information is kept safe. 
5. Stakeholders’ confidence in the organization increases.

How is it different from a document management system? 

Confused if you should go for an RMS or a DMS? 

Well, we’ve distinguished between the capabilities of both clearly in the following points so you can reach a better understanding of what both do and which one will suit your requirements better. Let’s have a look: 

1. Document management systems today are advanced and built to keep up with many requirements, and one of those capabilities is record management, which helps maintain regulatory compliance. 
2. An advanced document management system like dox2U can help you with many requirements like document handling, quicker retrieval, secured collaboration, and more. In contrast, an RMS is entirely dedicated to creating a system of records for compliance and is beneficial for automating the disposal of such records. 
3. A document management solution is more like a comprehensive solution for companies, whereas an RMS precisely focuses on a single issue and provides a solution for the same.

Honestly, we think in today’s time, almost every organization is going through issues related to document management. Whether they wish to go paperless is one thing, but if they have to opt for a software or not necessarily is another fundamental question. 

The reality is the requirements regarding documentation and management will only increase as time changes, and your organization will grow even more. This is why we believe opting for a comprehensive solution makes more sense. If we are on the same page, might we suggest you check out dox2U’s website?