Electronic Renaissance

As more companies and organizations begin to look for solutions to their data destruction needs, successful document destruction firms may be distracted from their core business by the promise of electronic media destruction. While the need for security is critical in both areas, the materials streaming out of the shredder are very different and must be handled in different ways.

These variants are causing some document destruction companies to consider partnering with electronic asset management and recycling firms who can guarantee the same level of security for electronic data as the document destruction companies guarantee for sensitive data that has been committed to paper. Such a solution allows the document destruction firm to accept electronics without having to justify the capital expenditure involved in adding an additional processing line. It also enables companies that offer only mobile shredding services to offer a one-stop solution without having to add a stationary shredding plant.

Bob Duncan of Shred-It, Birmingham, Ala., runs a mobile document destruction service. "I tell customers that anything they give us, we will destroy," he says. Sometimes this means taking a shredding truck out on the weekends to handle cases of electronic storage media, such as CD-ROMs or tapes. At other times, Duncan says he tells his customers to include small quantities of CDs or other electronic media in with their documents.

"We are a security firm first and foremost," he says, adding that he is willing to put up with a small amount of contamination in the paper if it means meeting his clients’ secure destruction needs.

However, customer requests to destroy computer hard drives are "few and far between," Duncan says, adding that the most drives a customer has had at once was 1,000.

These small and inconsistent volumes make Duncan hesitant to take on electronic media destruction, as do concerns about the marketability of the resultant material streams.

"The other thing that concerns me about that line of business is that it’s going to be a one-time deal," Duncan says, adding that customers will engage in such purges on an inconsistent basis. "We survive off repeat customers who we go to weekly, bi-weekly or monthly [schedules]," Duncan says.

Brad Schofield of Safeguard Shredding, a mobile shredding firm based in Falls Church, Va., receives the occasional request to destroy backup tapes or discs. "These requests account for less than 1 percent of our business," he says.

To handle such requests, Schofield has partnered with a company that specializes in electronic media destruction and he has no intention at this time of shredding electronic media.

Among the primary concerns that keep Schofield from shredding electronic media is the concern about the hazardous materials they contain. "Of course there is a great deal of liability also because a disc or backup tape holds a great deal of information," he says. "We have the same concerns about the paper documents, which is why we are providing on-site shredding."

Schofield continues, "The ultimate benefit of on-site shredding vs. off-site is that the period of time we have actual custody of documents prior to shredding is usually very brief (the time it takes us to collect the paper documents and transport them to the shredding truck under padlock). With the non-paper media, all media is transported to an off-site destruction facility."

The special requirements and considerations involved in electronic data destruction can make partnering with a firm that specializes in electronics look like a practical solution to meeting a document destruction firm’s customer requests for secure electronic media destruction. But choosing the right electronics recycler to partner with involves asking the right questions.

"Although on the surface the two industries have some similarities, there are far more differences between the two when you get down to the actual operation, and it can be an incredible distraction," Angie Keating of information technology asset recovery and recycling firm Reclamere, Tyrone, Pa., says. "Partnering allows both businesses to grow and to compete without taking focus away from their core business."

Keating suggests that document destruction firms should work with electronics recyclers that use bonded, background-checked employees, carry the right insurance coverage, offer a documented chain of custody and have written, recognized procedures in place.

"Due diligence is absolutely key," she says, suggesting that document destruction firms partner with electronics recyclers that have a zero-landfill policy and that they verify this by checking the company’s Dumpster.

Insurance is also a critical issue. "You want them to have at least the same or more insurance than you yourself carry," Keating says. "You do not want to be working with an electronics recycler that does not have coverage for pollution liability. This stuff, at the end of the day, contains hazardous waste."

Electronics recyclers should offer indemnification, as well. "We offer an indemnification to our customers for any legal liabilities related not only to the data destruction, but also to environmental issues," says Cindy Brannon, CEO and president of Intechra, an I.T. asset management and recycling firm based in Carrollton, Texas.

On the topic of indemnification, Brannon adds that while many companies say they offer indemnification, they may be referring only to the value of the work they just did. "So, if they wiped a drive and they charge $4 to wipe a drive, that is all they are going to cover," she says. "That is not real indemnification."

Intechra holds a $10 million insurance policy for environmental liability and a $2 million indemnification for data privacy, Brannon says.

Non-compete and non-disclosure contracts are an important part of any agreement between a secure document destruction firm and a company that specializes in e-destruction.

Reclamere and the document destruction firm it partners with have signed such agreements, Keating says. By having such contracts in place, neither firm has to worry about the other entering its core market and taking away its customers.

In addition, both companies can benefit from preferred rates under the terms of their contract. "The company that we partner with gives us a preferred rate on the shredding that we need, and we give that company a preferred rate on the electronics recycling that we do, so there is a chance to make a little additional revenue," she says.

For those secure document destruction firms considering tackling electronics on their own, it’s important to keep in mind that some companies will prefer data wiping while others will specify physical destruction, Brannon says. She says data wiping can be time and labor intensive.

In terms of adding a shredding line for electronic equipment, Brannon says, "there is a break-even analysis and a return-on-investment analysis that they would have to do" to determine if it’s a viable addition. "But partnering is certainly a very viable thing."

By using due diligence when investigating e-destruction firms to partner with and by drafting the proper contracts, a document destruction firm can ensure its clients will receive the same standard of care for their electronic media as they do for their documents, all while protecting its core business.