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Commonwealth Document Management (CDM), Danville, Va., was launched in May 2011. This division of The Commonwealth Group, a home medical equipment and home health business, naturally focused on the health care industry, using its existing customer relationships and knowledge of the Health Insurance Portability and Accountability (HIPA) and the Health Information Technology for Economic and Clinical Health (HITECH) acts to its advantage.
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Common Knowledge
Rob Giannini, COO and general sales manager of CDM, says customer inquiries led The Commonwealth Group to expand into records and information management (RIM) services. “Our health care customers had asked if we ever considered getting into the destruction business,” he says, adding that most of the company’s customers were using service providers outside of the area or the state for their destruction services. Commonwealth was interested in providing a local solution that could leverage its existing business relationships, he says. “We knew we had support from our health care customers.”
Giannini continues, “As a health care provider, we understand what document management customers have had to do,” he says. “It is easier to deliver what the client wants when you’ve been on the other side of the fence.
“Our 30-plus years of experience in the health care business and knowledge of HIPAA give us a perspective that other document destruction companies do not have,” he says. “We have the ability to help our customers understand and stay abreast of regulatory changes (particularly now with the implementation of HITECH) as we deal with these issues every day as a ‘covered entity’ in our health care business.”
After six to nine months of research into the RIM industry and the local market, CDM was formed, offering mobile destruction, hard drive and records storage services. While Giannini says CDM launched all of these services simultaneously, its marketing efforts focused on document destruction initially.
Service Menu
CDM operates a Predator G3 shred truck from Ultrashred, Spokane Valley, Wash., to destroy documents and hard drives on site and a discharge and conveyor system from Allegheny Shredders to bale its shredded paper at its Danville facility. “This allows us to provide secure on-site destruction and bale our paper, offering customers a complete chain of custody,” Giannini says.
Currently, 85 percent of the company’s revenue is derived from its destruction services, while records storage accounts for 15 percent, he says. “We think they both offer good growth potential,” Giannini adds, saying that CDM has not aggressively promoted its records storage services until recently.
By the end of this year, he says, CDM hopes its destruction services will generate 75 percent of its revenue while its records storage services will account for 25 percent. Giannini says he expects the business will continue trending in that direction throughout 2014.
Giannini also says CDM plans to add imaging in the near future. “With all of the health care industry going to electronic medical records, if we don’t diversify in that area, we are going to miss big opportunities,” he says. “Down the road, we would like to offer a complete digital option to our customers for imaging and storage.”
Before the end of the year, CDM will offer off-site destruction services. The company is currently equipped to handle off-site destruction at its Danville document destruction and records center, owning a system supplied by Allegheny Shredders, Delmont, Pa. However, Giannini says CDM plans to secure certification from the National Association for Information Destruction (NAID), Phoenix, for its plant-based operations before actively marketing the services to its clients. The company is presently NAID certified with endorsements for mobile and hard drive destruction, having been awarded the certification in September 2012.
CDM also is in the process of adding a second destruction truck. Giannini says the company is shopping for a non-CDL (non-commercial driver’s license) truck for better maneuverability in tight downtown areas.
The company currently serves clients in a 150-mile radius of Danville, Giannini says, including Southside Virginia, the Roanoke Valley, the New River Valley and the Piedmont Triad.
Not only has CDM leveraged its existing client relationships in its formation and growth, the company also uses routing software The Commonwealth Group developed for its home health care business to manage its destruction routes. The Commonwealth Group’s IT department has designed software for CDM’s records storage business, though Giannini says the company plans to transition to software from Andrews Software, Cleveland, Ohio, within a year.
Size Advantage
With just five employees, CDM certainly qualifies as a small company, which offers it some advantages, Giannini says.
“Our business motto is ‘We make business personal,’” he says. “What sets CDM and The Commonwealth Group apart is our attention to detail and our ability, as a small company, to provide personal, customized service packages to our clients.”
He adds, “This approach will help us meet expectations consistently and build solid relationships and customer loyalty.”
Currently unvended businesses are among the companies CDM hopes to build solid business relationships with. Giannini says CDM is surprised by the number of smaller businesses that have never been approached by companies offering document destruction services. With these companies, he says CDM tries to find out how they handle document destruction currently and how it affects their operations.
He adds that most companies CDM approaches understand what regulations require in terms of destroying documents and data to prevent unauthorized access. “We get really specific and talk about what types of documents need to be shredded and why,” Giannini says, adding that the company stresses the security, convenience and cost effectiveness of using a contracted service. This approach, he says, sometimes makes unvended clients look closely at what they are doing to safeguard this information, with some realizing they are spending more per hour to have an employee shred documents than they would spend with a commercial shredding service.
Good Advice
Giannini credits some of CDM’s success to advice the company’s management received from suppliers early in the company’s formation. “One of the first things we heard was, ‘Don’t take a commodity approach,’” Giannini says. Suppliers also warned CDM not to rely heavily on revenue from paper sales. Instead, they advised the company to maintain a focus on security and service.
“While pricing is important, if you can provide secure, dependable, quality services, you may not win all clients over but in the long run it puts your business in a good position,” he says of CDM’s philosophy.
Giannini also says CDM recognizes the importance of listening to clients. “Don’t make assumptions about what customers need,” he says. “Ask them; find out what they want.”
While these are critical factors to CDM’s success, Giannini says change and flexibility also are integral parts of the company’s business model. “You have to remake yourself to a certain degree to stay alive in this business,” he says. “In our case, this may include offering digital storage down the road for our customers.”
Giannini predicts more regulations in the area of privacy, particularly when it comes to digital data. “I believe there will be more legislation leading to regulations to help protect businesses and individuals from hacking and cyber crimes more prevalent today with the shift to more electronic storage and online business transactions,” he says. “Companies that anticipate and adjust to these changes most effectively will be better positioned to survive in the ‘new’ market.”
He continues, “By developing effective marketing strategies; providing consistent, quality, cost-effective services; and staying abreast of regulatory changes and business diversification opportunities that fit our business model, we feel we can establish long-term success for CDM.”
The author is editor of Storage & Destruction Business magazine and can be contacted at dtoto@gie.net.