Cohasset Associates, Inc. NOTES Managing Electronic Records Conference 1.1. The discipline of analyzing the. Value Costs and Risks

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1 Understanding Today s Economics of Information Get Your Act Together Now! Sylvan Sibito H Morley III IBM Worldwide Director Information Lifecycle Governance Information Economics: The discipline of analyzing the Value Costs and Risks associated with the production, distribution and consumption of information 2 Common Information Stakeholders Across All Industries Often part of Legal or Compliance Managing Electronic Records Conference 1.1

2 Stakeholders Value Information Assets Differently LEGAL RISK & DUTIES BUSINESS VALUE REGULATORY DUTIES Values: Reduced legal risk Preserving information (by custodian, subject) Avoiding spoliation Privacy obligations Values: Generating revenue Finding information (by various topics) Analytics Collaboration Mobility Values: Compliance Retaining information (by Record type) Record Repository Audit obligations Values: Efficient operations Managing information (per service levels) Enhancing value (for all stakeholders) Controlling data costs 4 Understand All Information is Not Equal, Especially Over Time Risk Cost Risk-to- Value Gap Cost-to- Value Gap Value CGOC 2012 Summit Survey 5 Information Silos Can Create Confusion on Value, Cost & Risk Legal Records Executive Board End Users IT Line of Business Executives Difference in stakeholder demands often creates silos Stakeholder disconnect is a function of how we operate Managing data in isolation can be very misleading Managing Electronic Records Conference 1.2

3 Information Economics is About Finding a Holistic Approach The whole is greater than the sum of its parts. Aristotle Eat the elephant a bite at a time, but know you are eating an elephant! 7 Maximize Value by Linking Demand and Supply DEMAND: what the organization says it needs SUPPLY: what IT can provide BUSINESS VALUE Customer, product, and market data LEGAL RISK & DUTIES Preserve, protect, and dispose of data REGULATORY DUTIES Retain and manage data appropriately Application portfolio Collaboration and office tools Messaging Storage Back up and D/R Does this satisfy Demand? 8 Stakeholders Try to Work Together But Disconnects Remain LEGAL RISK & DUTIES BUSINESS VALUE REGULATORY DUTIES Because Value & Duties are not tied to Systems and Information, IT Ends up keeping everything! Managing Electronic Records Conference 1.3

4 The Experience of the Corporate Move Movers are focused on moving: Work on tight timelines Safely pack your belongings Will tag and box everything (still pulling tags off!) Held accountable only for loss and breakage of inventory Just about everything but flammables, pets and kids 10 Labels Are Often Not Enough to Find What You Need Finding is not part of the service: You may have to unpack everything to find one thing Labels are wrong or misleading Sometimes inventory is wrong If you don t dump the garbage, they will pack that too! 11 If you aren t careful, its very easy to lose important items (I m sure its there somewhere!) What Corporate Movers Teach Us About Information Economics Don t leave it up to the movers Inventory what you care about Treat valuables as valuables Just because you can move it If you don t know what its for Garage sales give perspective! Paying by the pound for shipping Managing Electronic Records Conference 1.4

5 External Factors Amplify Stakeholder Disconnects LEGAL RISK & DUTIES BUSINESS VALUE REGULATORY DUTIES ediscovery costs $18,000 per gigabyte 3 Data volume doubles every months 1 (Up to half of litigation budget) (Can t find what business needs) More regs than ever before Many jurisdictional differences 13 $4M to store 1PB 2 (Data storage overwhelming IT budget) (Can t reliably identify records) 1 Source: Big data: The next frontier for innovation, competition, and productivity McKinsey & Company, 2011 Study 2 CGOC 2012 Summit Survey 3 Gartner e-discovery Report Poor Information Economics The Tipping Point Risk not been reduced by keeping all data it has increased materially. The exposure to cost to produce vintage data is over taking the risks of sanctions and settlements. 0.05% of vintage data is $13B in ediscovery cost exposure a material financial risk 14 Poor Information Economics The Tipping Point No effective means for disposing of unnecessary data today retention schedule tuned for paper, legal holds tuned for . Neither is the source of high data growth or IT cost, so 33PB used today at $4m/PB will bloat to 310PB in just 5 years Managing Electronic Records Conference 1.5

6 Information Economics Very Simple Savings Proposition Enterprise Information Subject to Legal Hold 1% Regulatory Record Keeping 5% Hold & Collect Evidence Retain Records & Dispose Cost & Risk Reduction Enables Disposal Everything Else 69% Has Business Utility 25% Archive for Value & Dispose DISPOSE OF UNNECESSARY DATA Cost Reduction Normalizes growth curve %s based on CGOC Summit 2012 Survey 16 Understanding Business Value: Capability Mapping Know where the strategic capabilities are Strategic capabilities almost always tied to highest value data Supporting capabilities almost always subject to highest duty 17 Business Capability + Records Management View Can Help Strategize 51 + develop Set company direction Develop brand strategy Design & Engineer products Plan facilities and factories Market Size and select markets Create business plan Create demand Manage demand Sell Generate leads Manage accounts Manage orders Manufacture 87 + distribute Engineer product to order Plan production Procure materials Manufacture Distribute Support 42 customers Field support + operations Service marketing Technical support Call center 3 Parts planning + operations Freight/ logistics Education services Service readiness Corporate functions HR 23 Finance 50 Legal 10 IT Count of unique record types Functional area with high IT fragmentation 2014 Managing Electronic Records Conference 1.6

7 Understand the Core ILG Processes Drive Information Economics BUSINESS VALUE LEGAL RISK & DUTIES H I Departmental Information Practices Realize Information Value PRIVACY DUTIES A B C D E F Employees on Legal Holds Data on Legal Hold Hold publication Evidence Collection Evidence Analysis & Cost Controls Legal Record REGULATORY DUTIES J Secure Information of value K Privacy & Data Protection G 19 Master Retention Schedule & Taxonomy L Data Source Catalog & Stewardship M System Provisioning N Active Data Management O Disposal & Decommissioning P Legacy Data Management Q Storage Alignment Use the Core ILG Processes As a Barometer of Risk A B C D E F G H I J K L M N O P Process Employees on Legal Holds Data on Legal Hold Hold publication Legal Interviews Evidence Collection Evidence Analysis & Cost Controls Legal Record Master Retention Schedule & Taxonomy Departmental Information Practices Privacy & Data Protection Data Source Catalog & Stewardship System Provisioning Disposal & Decommissioning Legacy Data Management Storage Alignment Audit High risk Requires constant monitoring and review, immediate escalation on failure or impending failure. 50% likelihood of at least one occurrence in the future. Moderate risk Requires frequent monitoring to prevent and detect; costly to correct or mitigate. Between 10% 50% likelihood of at least one occurrence in the future. Low risk Does not require constant monitoring and is easy to prevent, detect, correct, defend. Less than 10% likelihood of at least one occurrence in the future. 20 Level 1: Ad Hoc, Manual Level 3: Instrumented, Silo ed Level 2: Manual structure, Silo ed Level 4: Instrumented, Integrated Core ILG Processes Correlate to Typical Information Cost Levers 4 Target Cost Compression Areas for Defensible Disposal and ILG Effectiveness Infrastructure storing data with no utility 1 Dispose of data with no utility Data that can and should be disposed Application data Files and end user docs Back up Storing data at a cost higher than its value 2 Archive aging data and store at right cost Data that can and should be tiered and archived as its utility wanes or when its cost exceeds its value Aging application data, end user files, and Non prod instances Records and regulatory content with no business need Application costs without business value 3 Decommission applications, Dispose of data Applications, infrastructure and data that can be retired Moth balled applications with vague legal requirements Cycle time and throughput acceleration Consolidation and decommissioning E Discovery external vendor spend 4 Reduce data processed and reviewed Legal vendor spend that can be reduced, avoided and eliminated Pre assess data before and after collection More precise hold scoping with higher transparency Cull and review internally IBM Internal and Business Partner use only 5/13/ Managing Electronic Records Conference 1.7

8 Define Future State and the Path to Achieve Through ILG 22 Align ILG Organization to Achieve Future State Governance, Oversight & Organization Improved Business Process Capabilities Process Enablement & Technology Legal Holds Hold definition expanded to data, execution of hold Evidence collection, culling, and ECA Defensibility of disposal Compliance and Retention Extend MRS to include business value Enable automated execution on data Governance and Disposal Decision Enablement Platform Business Inventories Linked to Retention Schedule Executive Steering Committee ILG PMO Legal Compliance LoB EDS Collection to Archival and Disposal of Unstructured Data System File Shares and Log Files Legal Holds and Collections Client Information Repositories Business Information inventory Duration of value Governance and Disposal Execution Classification and Federation of Regulated Data File Shares, SharePoint, Content Mgmt Systems EI IT Manage data by value and duty Execute Value based archiving and disposal Catalog of sources Governance Map and Policy Syndication to Data Sources System Data Archival and Disposal Applications & Systems Program Elements Required to Achieve Benefits Organizational Structure and Alignment Defined program model, leadership and structure Charter and mandate Management metrics and measurement cadence Workstreams that drive Process Capabilities and Execution of Program Program roadmap defining workstream activities, roles, and technology deployment in a coordinated manner across stakeholders Unified approach to define and syndicate governance policies and decisions Set of integrated tools for systemic linkage of legal data, business value to assets Enable rapid, parallel execution to begin achieving savings in Define ILG Solution Architecture to Support Future State Dynamic Policy Management: Precisely define what is needed, why, how long Retention & Privacy Policy Management Legal Holds & Collections Management (Taxonomy, law library, master schedules, business inventory, privacy (Legal holds across data and custodians, collection coordination, activity requirements) record, and cost forecasts) Governance Map & Defensible Disposal Interface (Data source catalog, risk dashboard, asset/obligation transparency) Policy Synthesis & Syndication (Policy connectors syndicate to systems with data custody) Policy Syndication: Distribute reconciled policies to data sources Policy Execution: Apply the right policy to data wherever it is Policy and rules for what and when to retain, hold, collect and dispose Early Case Assessment Records Management (Event based and time based & Culling retention, DoD disposal) (Hold automation, evidence analysis, bulk tagging & export) Structured Data Archive Analytics Enhanced Unstructured Data Repository (Archive and offload aging data, apply (Single instance storage of unstructured data by value, automatic execution of retention and disposal policy) legal holds & retention policy, end user collaboration, search and analytics) Unstructured Content Classification (Auto classification using analytics & scoring thresholds) Structured Data Management (Database prioritization, data masking, test data management, data model discovery) Retain and Manage in Place (Assess, retain, move, copy, dispose) Archive (De duplicate, stub, journal, extract and ingest) Hold, Analyze & Collect (Early data assessment, application of legal holds, collections) Data Infrastructure: Contain consumption, align cost to value Structured Data Sources (Applications) Unstructured Data Sources (File Shares, Desktops, SharePoint, systems & archives, ECM repositories, etc.) Managing Electronic Records Conference 1.8

9 Information Lifecycle Governance Will Address Gaps LEGAL RISK & DUTIES BUSINESS VALUE REGULATORY DUTIES Narrow Hold Scoping Early Case Assessment Change Management Input on Business Value Taxonomy, Metadata Standards Configuration and Implementation (Holds enablement) Configuration and Implementation (Records enablement) IT Manages Data Based Upon Value 25 Data Disposal Will Help Align Value with Cost & Risk Over Time Reduce artificial Demand driven by unnecessary data INFO VALUE Quantity Analytics & Collaboration Inflection Point: Realize Value as Context Erodes Archiving & Tiering Inflection Point: Align Cost as Value Declines Disposal & Decom Inflection Point: Eliminate Cost When No Value Time 26 Copyright IBM Corporation 2014 All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, these materials. Nothing contained in these materials is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software. References in these materials to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in these materials may change at any time at IBM s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way. IBM, the IBM logo, Cognos, the Cognos logo, and other IBM products and services are trademarks of the International Business Machines Corporation, in the United States, other countries or both. Other company, product, or service names may be trademarks or service marks of others Managing Electronic Records Conference 1.9