How Does Digital Data Hoarding Put Companies at Risk?
Today’s business world is drowning in data. Cisco projects that the amount of data transmitted over the internet in 2016 will surpass 1 zettabyte, equivalent to 1 billion terabytes or 1 trillion gigabytes. A percentage of this is valuable, but much is useless. Eighty percent of data that companies store in active files has not been accessed for three to five years, creating excessive storage costs.
Digital hoarding can become even more costly when data results in lawsuits. For instance, Target, which aggressively mines consumer data from sources such as cell phones, web cookies and purchase histories, was forced to accept a $10 million settlement for a 2013 data breach that exposed the credit and debit card information of 40 million people.
Companies that hoard data place themselves and their customers at unnecessary risk. Here are some of the things that can go wrong when companies hoard data and how the risks of digital hoarding can be avoided.
When Data Collection Becomes Digital Hoarding
Digital hoarding stems from a few main underlying causes, says CIO Insight. Big data hype and the assumption that more is better are two key drivers. Another contributor is the fear that deleting data may result in legal repercussions. This is especially true in industries that require companies to maintain records for a set period of time. Reliance on email records, lack of organizational procedures and low data storage costs can be other contributing factors.
There are a few ways you can tell when your data collection habits have become digital hoarding, says Data Informed. One symptom is when collecting data becomes more of a focus than analyzing and deploying data. Another sign is feeling a need to save everything your company collects. This can often be accompanied by a fear of deleting data because it might be needed later. Data hoarders are also constantly running out of space and moving files without actually deleting them.
Risks of Digital Hoarding
Digital hoarding habits hurt companies in several ways. First, even though storage is cheap, it’s not free, and excessive file storage costs companies money. Digital clutter can also hurt employee productivity, making it more difficult and time-consuming to find relevant records that are buried in junk.
Data accumulation habits can also disrupt a company’s file organization system, creating duplicate records that confuse data retrieval efforts and cause miscommunication. Accumulating excessive data can also increase a company’s litigation costs in time and money in cases that require all records to be produced. Finally, legal and financial risks arise when data gets hacked, an increasingly common problem.
Getting Digital Clutter under Control
To clean up excessive data accumulations, IBMadison.com recommends that companies start by realizing that legal obligations require businesses only to make and document good-faith efforts to meet record-keeping obligations for relevant records, not to store every scrap of information.
Along these lines, companies should not confuse backups with archives. Archived information is intended for long-term storage, while backups are intended for short-term disaster recovery and typically have a life cycle of about 30 days before they outlive their usefulness. Online backup services have clear policies about what data needs to be backed up and for how long.
Baseline magazine emphasizes the value of having an experienced outside consultant walk a company through a digital housekeeping process. Where company insiders may be inclined to keep everything, an outside consultant will have a fresh perspective on what needs to be kept and what is disposable. Such a housecleaning process should include a review to ensure that record retention and legal obligations are being met.
A third step is categorizing transitory electronic data that is not currently on a records retention schedule. Data that is required for operations, retention or legal purposes should be placed on a retention schedule; anything else should be disposed of. Following and documenting such a data review and disposal procedure can help companies demonstrate that their record-keeping obligations have been met in the event of a legal challenge.
