Any system designed to calculate the cost or benefi t of a business strategy is inher- ently political. That is, it is an argument designed to convince an t audience. Well-known models like TCO and ROI are primarily decision tools designed to help organizations predict the economic consequences of a decision. While there are certainly objective truths about the information environment, human decision making is a complex and imperfect process. There are plenty of excellent guides on how to create a standard TCO or ROI. That is not our purpose here. Rather, we want to inspire creative think- ing about how to calculate the cost of owning unstructured information and help or- ganizations minimize the risk—and maximize the value—of unstructured information.
Any economic model for calculating the cost of unstructured information depends on reliable facts. But facts can be hard to come by. A client recently went in search of an accurate number for the annual cost per terabyte of Tier 1 storage in her company. The company’s storage environment was completely outsourced, leading her to believe that the number would be transparent and easy to fi nd. However, after days spent poring over the massive contract, she was no closer to the truth. Although there was a line item for storage costs, the true costs were buried in “complexity fees” and other opaque terms.
Organizations need tools that help them establish facts about their unstructured information environment. The business case for better management depends on these facts. Look for tools that can help you:
■ Find unstructured information wherever it resides across the enterprise, including s e-mail systems, shared network drives, legacy content management systems, and archives.
Organizations can learn from accounting models used by cities to calculate the total cost of managing municipal waste and apply them to the IG problem.
■ Enable fast and intuitive access to basic metrics , such as size, date of last access,s and fi le type.
■ Provide sophisticated analysis of the nature of the content itself to drive classifi ca-s tion and information life cycle decisions.
■ Deliver visibility into the environment through dashboards that are easy to fors nonspecialists to confi gure and use.
Sources of Cost
Unstructured information is ubiquitous. It is typically not the product of a single-pur- pose business application. It often has no clearly defi ned owner. It is endlessly duplicat- ed and transmitted across the organization. Determining where and how unstructured information generates cost is diffi cult.
However, doing so is possible. Our research shows that at least 10 key factors that s drive the total cost of owning unstructured information. These 10 factors identify where organizations typically spend money throughout the life cycle of managing un- structured information. These factors are listed in Figure 7.1 , along with examples of elements that typically increase cost (“Cost Drivers,” on the left side) and elements that typically reduce costs (“Cost Reducers,” on the right side).
1. E-discovery: fi nding, processing, and producing information to support law- suits, investigations, and audits. Unstructured information is typically the most common target in e-discovery, and a poorly managed information environment can add millions of dollars in cost to large lawsuits. Simply reviewing a gigabyte of information for litigation can cost $14,000 or more. 9
2. Disposition: getting rid of information that no longer has value because it is duplicate, out of date, or has no value to the business. In poorly man- aged information environments, separating the wheat from the chaff can cost large organizations millions of dollars. For enterprises with frequent litigation, the risk of throwing away the wrong piece of information only increases risk and cost. Better management and smart IG tools drive costs down.
3. Classifi cation and organization: keeping unstructured information organized so that employees can use it. It also is necessary so management rules supporting privacy, privilege, confi dentiality, retention, and other requirements can be applied.
4. Digitization and automation. Many business processes continue to be a combi- nation of digital, automated steps and paper-based, manual steps. Automating Identifying and building consensus on the sources of cost for unstructured information is critical to any TCO or ROI calculation. It is critical that all stake- holders agree on these sources, or they will not incorporate the output of the calculation in their strategy and planning.
and digitizing these processes requires investment but also can drive signifi - cant returns. For example, studies have shown that automating accounts pay- able “can reduce invoice processing costs by 90 percent.”10
5. Storage and network infrastructure: the cost of the devices, networks, software, and labor required to store unstructured information. Although the cost of the baseline commodity (i.e., a gigabyte of storage space) continues to fall, for most organizations overall volume growth and complexity means that storage budgets go up each year. For example, between 2000 and 2010, organization more than doubled the amount they spent on storage-related software even though the cost of raw hard drive space dropped by almost 100 times. 11 6. Information search, access, and collaboration: the cost of hardware, software, and
services designed to ensure that information is available to those who need it, when they need it. This typically includes enterprise content management systems, enterprise search, case management, and the infrastructure necessary to support employee access and use of these systems.
7. Migration: the cost of moving unstructured information from outdated sys- tems to current systems. In poorly managed information environments, the cost of migration can be very high—so high that some organizations maintain legacy systems long after they are no longer supported by the vendor just to avoid (more likely, simply to defer ) the migration cost and complexity.rr
8. Policy management and compliance: the cost of developing, implementing, enforcing, and maintaining IG policies on unstructured information. Good policies, consistently enforced, will drive down the total cost of owning un- structured information.
9. Discovering and structuring business processes: the cost of identifying, improv- ing, and systematizing or “routinizing” business processes that are currently ad hoc and disorganized. Typical examples include contract management and
Cost Drivers: Examples
Outdoted, unenforced policies Poorly defined information ownership and governance
Open loop, reactive e-discovery processes Uncontrolled information
respositiories Modernist, paper-focused
information rules Ad hoc, unstructured
business processes Disconnected governance
programs
Formal, communicated, and enforced policies Automated classification and
organization Defensible deletion and selective
content migration Data maps Proactive, repeatable e-discovery procedures Clear corporate governance
Managed and structured repositories Cost Reducers: Examples
1 2 3 4 5 6 7 8 9 10
E-Discovery Disposition
Classification and Organization Digitization and Automation Storage and Network Infrastructure Information Search, Access, Collaboration Migration
Policy Management and Compliance Discovering and Structuring Business Processes Knowledge Capture and Transfer
Figure 7.1 Key Factors Driving Cost Source: Barclay T. Blair
accounts receivable as well as revenue-related activities, such as sales and cus- tomer support. Moving from informal e-mail and document-based processes to fi xed work fl ows drives down cost.
10. Knowledge capture and transfer: the cost of capturing critical business knowl- edge held at the department and employee level and putting that information in a form that enables other employees and parts of the organization to ben- efi t from it. Examples include intranets and their more contemporary cousins such as wikis, blogs, and enterprise social media platforms.