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Information Economics:  Making the Case for a Modern Retention Schedule

| Published: 9/9/2013 8:39 AM | Category: COBIT-Governance of Enterprise IT | Permalink | Email this Post | Comments (0)
Jake FrazierJake Frazier, J.D.
Let’s assume you are convinced by my recent ISACA Journal article to create a modern, transparent and executable retention schedule that is based on COBIT principles and meets the needs of your information stakeholders. The next step is convincing the rest of your executive team. To build a strong case, many organizations focus on improving their overall information economics. Think of it this way… By “economics,” we typically mean analyzing the production, distribution and consumption of goods and services. Information economics, then, is analyzing the production, distribution and consumption of information to ensure that the value derived from it is greater than the total cost of producing, distributing and consuming it.
On the value side of this equation, as I note in my Journal article, research from the suggests that typically 1 percent of corporate information is on litigation hold, 5 percent is in a records retention category and 25 percent has current business value. This means that as much as 69 percent of all the data collected by organizations today has no business, legal or regulatory value at all.
On the cost side of the information economics equation, the problem is that most organizations do not have a clear understanding of the total cost of the information they manage. The total cost includes not only IT storage unit costs, but also bandwidth, servers, application licenses, personnel, and e-discovery and compliance costs. A full analysis could even include lost productivity due to business users being unable to find the information they need because of the massive amount of data debris cluttering file shares.
Even if we set e-discovery, compliance and lost productivity aside and just consider IT costs, we confront some pretty staggering numbers. According to the Gartner IT Key Metrics Data 2012 report, the total cost of storing and managing one petabyte of information is nearly US $5 million per year. This means that a large enterprise saddled with 10 petabytes of data is spending about US $50 million per year and could be allocating as much as US $34.5 million of this to data with no business value! That is a significant amount of budget that could be spent on more meaningful IT projects and, at the very least, it would free up 6.9 petabytes of capacity for new data.
Read Jake Frazier and Lorrie Luellig’s recent Journal article:
A COBIT Approach to Regulatory Compliance and Defensible Disposal,” ISACA Journal, volume 5, 2013.


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