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Avoiding Self-Destruction by Outsourcing Information Destruction

Ray Barry, President, Total Training Services

In 2006 top executives from 300 companies ranked the security of company records as one of the top five critical issues facing business, according to a survey by the National Association for Information Destruction (NAID).

That was no surprise to me. Since 1997, when two partners and I launched Shred First in Spartanburg, South Carolina, with a single truck, the document-shredding industry has grown to more than 500 independently owned companies.

Shred First, in fact, became the largest independently owned shredding business in the country. Eventually, although shredding continued to account for 50 percent of our business, we diversified into product destruction services and created "Shred School" to train shredding-industry entrepreneurs in how to grow and operate their businesses efficiently.

Ultimately, in August 2006 we sold Shred First to a large business services provider seeking entry to the paper-shredding business. We continued to develop and grow our product destruction, training, and consultation services as Total Product Destruction and Total Training Services.

The Law and the Competition 

To make a sale ten years ago I would walk in through the back door and look for someone to talk to. Today, shredding salespeople come in through the front door and meet with the president or CEO.

What's changed? Entrepreneurs and business owners today recognize the importance of document security from both legal and competitive standpoints.

Legally, every business is entrusted with such information as basic as names, addresses, and telephone numbers. Employees and customers have a right to expect that information to be protected. Discarding private or proprietary data without destruction can expose a business to criminal and civil prosecution as well as result in lost business. Beyond legal considerations, every business has documents (old brochures, telephone logs, memos, customer lists, reports) that competitors could benefit from seeing.

The level at which businesses safeguard their documents varies widely and more by industry than by the business stage of the company. Document security is most advanced in industries like health care and consumer reporting, in which federal legislation mandates stiff rules for safeguarding information.

Do It Yourself or Outsource?  

At Shred School, we treat every piece of paper as sensitive. The most secure, efficient, and cost-effective way for a company to ensure that kind of approach is to outsource document destruction to a third party.

"But I only have five employees, and I can buy an office shredder for $50," you say. "We can shred our own stuff."

That's true. But what are your real costs and risks? You'll pay someone to spend at least an hour a week at $10 or more an hour to feed documents into a low-capacity office shredder. As such shredders break or wear out, you’ll pay to repair or replace them. Ongoing costs will be buying supplies and hauling extra trash.

You also put your company at risk, probably without even knowing it. For example, are you aware that there are businesses that use special software to put strip-shredded material back together? In addition, employees who do their own shredding have other duties that they consider to be much higher priorities. Sensitive information will inevitably be thrown into the dumpster where it's easily and legally available to anybody.

In contrast, reputable document destruction companies will:

  • Mingle shredded materials so that they are virtually impossible to piece back together.
  • Provide lockable security bins for discarded paper.
  • Conduct background checks on their employees.
  • Charge about $50 to shred all the paper several people generate in a month.
  • Record the date, time, and amount of material destroyed and supply a verifying legal document called a "certificate of destruction."
  • Recycle shredded material using a secure, environmentally safe method.

Choose a Certified Company  

Unfortunately, anyone with a shredder can set up a "document destruction" business. So, not only do I recommend outsourcing document destruction but doing so with a company that is a certified member of NAID and that carries professional liability insurance. With a certified company, you're assured the company's security, hiring and screening, operational destruction processes, and insurance have been thoroughly audited.

For an extra measure of confidence, make an unannounced visit to see the vendor's facility. A mobile shredding operation should be pleased to provide a demonstration in your parking lot.

To date, no privacy legislation has been enacted that requires outsourcing of document destruction. You can shred your own documents, but you're taking a chance every single day. It's not the most secure option or the least expensive.

Outsourcing document destruction is a lot like locking your front door and buying insurance. You wouldn't leave your door unlocked and you wouldn't go without insurance. Why give identity thieves, competitors, and lawsuit-happy clients or competitors a chance to make your life miserable?

© 2007 Ray Barry. All rights reserved.

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