The increasing number of amendments and new Acts passed by Parliament has forced open the door for document management and it is believed the estimated R700 million market could double in size.
"Document managing is increasingly becoming a necessity for all companies," says Reinhardt Buys, MD of Internet and media law firm Buys Incorporated. "The consequences of not having complete and concise document systems are far-reaching. In fact, documentation is now as unavoidable as death and taxes."
Recently a number of laws, such as the Electronic Communications and Transactions (ECT) Act, have been enacted by Parliament and soon the Financial Intelligence Centre (FIC) Act will make its appearance. While the first Act could be considered more of a regulatory and enabling law, the latter comes with sharp teeth, as its prime role is to counter money laundering, especially that committed by organised crime.
Furthermore, amendments to the Companies Act are in the making and will incorporate many of the recommendations made in the second King report on corporate governance and this will also place increasing pressure to ensure accurate record-keeping is done.
Buys Inc has allied with MGX subsidiary Metrofile, a document management specialist company. The law firm will take care of the legal aspects, while Metrofile will handle the implementation of systems on behalf of clients.
Metrofile marketing director Paul Mullon says document management is becoming a strategic business process within companies which has to be handled correctly from the beginning.
"A company has basically three options. Firstly, it either ignores the new Acts altogether and runs the risk of facing something like a R10 million fine as provided for in the FIC Act. Secondly, it could go for partial compliance, but there is still a risk involved. And thirdly, it could go for full compliance, which may be the cheaper option in the longer run," he says.
An example cited by Buys and Metrofile was a large medical aid administrator that in its year-end results showed that while it had paid out R900 million in benefits to its clients, it was spending R3.5 billion on administration and document-handling costs.
"That kind of ratio shows that the company is being sidetracked from its prime role of medial aid administrator and becoming bogged down in an area where it should be a lot more competent," says Buys Inc partner Francis Cronje.
Buys and Metrofile say that companies are using more and more paper-based documents in their processes and the age of the paperless office is as far off as it ever was.
"While the use of electronic storage is rising at a faster rate than the use of paper, the latter is still extremely important," says Mullon.
"Most companies are in some form of hybrid stage and look set to continue that way for a long time," says Reinhardt Buys.
The two companies will be conducting a series of seminars with Judge William Heath to highlight the importance of document management and the legal security aspects. The seminars will take place in Durban on 1 April, in Johannesburg on 2 April and in Cape Town on 3 April.
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