A data management program – identifying what documents your business keeps, where they are kept, who has access to them, and when to destroy them – is key to keeping a “clean house” and a healthy business. The task can seem daunting, but it is not something to be put off for the distant future.
As businesses generate more and more data and documents (both paper and digital), the need to organize and maintain those vast volumes of records increases. Imagine all the data your business generates as a warehouse of bankers’ boxes of papers. Could you find what you need, when you need it? Could unauthorized intruders (hackers) find what they need, when they need it? Creating a plan to make your records easy for you to access (and difficult for others to access) will provide immediate gains and benefits.
1. Strengthen defenses against cyber attacks
Business owners and managers have a tendency to assign all cyber security issues to IT personnel. Relying only on software and firewalls to keep your information safe is insufficient. It is merely one tool in the toolbox against potential intruders.
The first line of defense should be reducing the volume of sensitive data lurking in your archives and systems. There is no need to hoard treasure troves of information, ripe for the taking. IT personnel, alone, do not necessarily have the full picture of what the business needs to keep or dispose of to maintain its business functions.
Once data is indexed and identified, IT personnel can help delete sensitive information that is no longer needed, or sequester extra-sensitive information with increased security measures. However, these activities need to be part of a bigger plan with the input from managers and system users.
2. Reduce litigation costs
The potential for litigation is a foregone conclusion for any business. No organization is immune to being named in a lawsuit. Even if the plaintiff’s claims are baseless, a business must defend itself. Often, the largest litigation expense occurs early in litigation, during the discovery phase, where both sides must produce documents responsive to requests. This is a very time-consuming process, made even more treacherous when considering the massive attorney hours needed to comb through a tangled mess of irrelevant or redundant data. A data management plan will greatly reduce discovery costs by narrowing document searches and volume.
3. Maintain compliance standards
Your industry may have certain requirements or best practices that can be better served by implementing a data management plan.
For example, some intellectual property regulations require an entity to take “reasonable efforts” to maintain the secrecy of its proprietary information. If your business is subject to any financial reporting and auditing procedures, contemplate whether your current data management program would meet the required threshold for financial systems integrity. Some insurance policies, especially those covering the effects of a data breach, may require certain practices for full-claim coverage. Designing and implementing a data management plan prevents white-knuckling through any compliance review.
4. Efficiently make system and organizational upgrades
An effective data management plan would record where data is kept, and who has access to the information. Data can “live” on servers, laptop hard-drives, smartphones, or inside paper filing cabinets. Often, the same record can have multiple homes. Identifying where information is kept can expose costly redundancies. Different types of data and records require could different levels of care: some may need digital or paper backups, others do not. Is your business due for a technology upgrade? Triage improvements by identifying systems that impact your organization’s data management and data access.
5. Save valuable resources
As computers get smaller and smaller, it is not surprising that we are lulled into the sense that saving every email and business record is of inconsequential cost to store. However, as data production grows exponentially, so do storage costs. Besides paying for more server or cloud space, consider the time it takes to retrieve needed information. An effective data management plan will put those frequently-needed records easily within reach, and can organize your archives in a useable way. Saving masses of data without being able to retrieve information when needed can rob your business of many hours over the course of a year.
For example, rather than searching for a needle in a haystack of data, an employee may find it is faster to recreate the same record or form. If she could find the needed information quickly, your business saves time that otherwise would have been spent on searching for or recreating the needed document.
It is easy to think of data management as a “should do” rather than a “must do.” Sometimes it takes a catastrophic event (such as a cyber attack or costly lawsuit) to spur a change. Even without these data disasters, poor data management practices could be taking resources on a daily basis, undetected. Investing in time to (1) identify records; (2) strategize where they are kept; (3) contemplate who has access; and (4) determine how long each type should be kept will start paying dividends immediately.