The ubiquitous use of the internet and high-tech communications has perpetuated the notion that filing cabinets and sky-high piles of paper are a thing of the past.

But while the dawn of the internet and the growth of e-mail communication were supposed to create a paperless office, research has shown that they have had the opposite effect. A survey conducted by the University of California, Berkeley found that offices worldwide used 43 per cent more paper in 2002 than they did in 1999.

More than half of Irish companies are storing documents indefinitely and just a quarter believe their records are completely secure, according to information management provider DMG Services.

The average Irish company still devotes about 6 per cent of its office space to document storage - not the best use of resources considering the cost of commercial rents.

On top of this, a litany of regulations affecting the way data is stored means companies are obliged to document processes more rigorously.

Company directors are now personally responsible for any information that is deliberately held for longer than necessary and can face fines of up to €100,000. Individuals can also sue companies that fail to produce records they are required to hold on demand. Combined with the fact that corporate identity theft is an increasing threat to Irish companies, careless record management can prove disastrous.

This is why the market for companies such as DMG Services has proven so lucrative. The indigenous firm has taken on the multinationals in this sector and still managed to double turnover to €12 million in just four years.

Managing director Cecil Ryan expects 2007 to show the fastest sales growth in the company's 18-year history, with turnover of €14.5 million.

By the end of 2010, the Dublin-based company expects to generate some €20 million in revenue, he says.

This is minuscule in comparison to the $2.1 billion (€1.58 billion) recorded by world leader Iron Mountain in 2005. The US company, which also operates in Ireland, is used by about 70 per cent of all Fortune 1,000 companies and is partly owned by billionaire financier Warren Buffett. Yet DMG Services is dominant in the Irish market for document shredding and ranks in the top three for document storage and scanning, according to Ryan.

"A couple of years ago, we had to choose whether to remain a small Irish player or compete with the big guys," he says. "But we learnt a lot from international best practice, and some of our top customers have dealt with our large competitors in the past and choose us now.

"Competition keeps you on your toes and the proof of the pudding is the number of multinationals who use us."

DMG comprises four brands - Filestores, Shred-it, Scan Image Services and Archives Consulting Services. The company has made three acquisitions to bulk up its divisions and is considering more.

Ryan believes the strategy of providing a one-stop shop for the entire area of information management, along with staying on top of developments in the industry worldwide, enables the group to compete with its larger rivals.

The company evolved from one brand, Filestores, which was set up by Tom Hefferon and Michael Kearns, who are now part of the executive board of the group.

In 2001, Filestores moved from its original base in Foster's Avenue, Dublin to a purpose-built records centre in Park West. It opened a second such centre in Kilkenny in 2002, and acquired Arcane Datastore in Northern Ireland two years later, which it rebranded to Filestores.

DMG Services spent €2 million expanding its Park West facility in September and added Ireland's first Firelock, a media storage vault capable of withstanding temperatures of 1,000 degrees.

In 1992 the company introduced trucks with shredding machines to Ireland under the Shreddit brand, in a bid to complement Filestores by allowing customers to store, manage and shred their information securely with one company.

Shreddit became part of Canadian global information security provider Shred-It in 2000 after DMG Services secured the franchise for it in the Republic and Northern Ireland.

The service expanded to Galway, Cork and Northern Ireland in 2002. It is currently being rolled out in other parts of the country and now has 15 trucks.

Shred-it Northern Ireland was recently awarded a €1 million contract to dispose of confidential and non-confidential paper and cardboard for civil service offices throughout the region.

In 2005 DMG Services acquired Scan Image Services, a scanning bureau based in Gorey, Co Wexford, to extend its service range to the electronic document management market.

In the same year, it set up Archives Consulting Services with the help of records management consultant Martin Bradley, to meet growing demand for advice on document management.

The group now employs 185 people, compared to just eight in 1989, and has some 3,500 customers in both the public and private sectors in Ireland.

"There is huge potential in terms of what we do," says Ryan, who joined DMG Services in 2001 after working as the commercial manager for the mail services division of Hays recruitment company.

"It's an exciting time to move up the food chain because of all the new legislation, such as the Data Protection Act. The number of regulations is increasing every year," he says.

In addition, tighter compliance rules introduced in the US, such as Securities and Exchange Commission laws and health records privacy regulations, may soon find their way into Ireland, Ryan says.

With all this legislation in place and more potential laws in the pipeline, the fact that 71 per cent of Irish companies don't seek advice on the length of time they are required to store important documents doesn't bode well for their compliance with Irish law.

"I still see companies that are keeping information in wooden sheds out the back," Ryan says.