Compliance Cost Associated With Storage of Unstructured Information

Novell, Inc. published a report that quantifies the cost of compliance associated with storing files, also called unstructured data. 

Ponemon Institute, a research center dedicated to privacy, data protection and information security policy, conducted the analysis. Entitled, Compliance Cost Associated with the Storage of Unstructured Information, the report identifies an average cost of $2.1 million per year to organizations who fail to properly manage their corporate intellectual capital.

The proliferation of unstructured data such as documents, presentations and spreadsheets that contain an organization’s intellectual capital is creating critical storage, control and compliance challenges for customers. Using a benchmark analysis of approximately 100 organizations, Ponemon Institute researchers validated the fact that deploying enabling technologies that reduce the complexity of file management can decrease the overall compliance cost associated with the storage of unstructured information. 

 The following table summarizes the benchmark results
 on compliance cost associated
 with the storage of unstructured information:

Key Findings
While compliance cost varies with organizational headcount, company size does affect the cost burden of compliance with smaller-sized organizations susceptible to a proportionally high rate of compliance costs associated with the storage of unstructured information. The average cost for organizations with fewer than 5,000 employees is $1.23 million, while the average cost for organizations with more than 75,000 employees is $2.71 million, indicating that smaller businesses pay six times more per employee than larger businesses.

Heavily regulated industries such as financial services, pharmaceuticals, communications and healthcare are susceptible to the highest compliance costs, incurring an average of $2.5 million annually. 

The most expensive compliance costs associated with the storage of unstructured information include: e-discovery, access governance and internal auditing activities. Together, these activities cost businesses over $1.9 million annually.  

The results of the study present a business case for file management solutions that help customers manage unstructured data based on today’s regulated business environment.

"Early evidence suggests that companies deploying enabling technologies that reduce the complexity of file or volume management can decrease the overall compliance cost associated with the storage of unstructured information," said Larry Ponemon, Chairman and Founder of the Ponemon Institute.

"The struggle to manage and maintain file systems on a regular basis is a consistent challenge for businesses. Factor in crippling compliance costs, and it’s clear that organizations need a better way to intelligently govern their information," said Sophia Germanides, product marketing manager, Novell. "To reduce the pain points associated with unstructured data, Novell recommends automation based on identity which helps organizations plan and deploy an efficient and cost-effective storage infrastructure as well as execute on compliance and governance requirements."

Novell File Management Suite helps customers establish control over their file storage environment using three products that together assess, provision, and optimize file storage based on user identity. Novell File Reporter inventories file systems to provide visibility into an organization’s storage patterns, delivering intelligence that can be used to define policies for storage compliance and management. Novell Storage Manager automates all user and group storage administration tasks driven by customized business policies. Novell Dynamic File Services optimizes the use of storage resources by transparently directing less valuable files to less expensive storage devices in a way that lowers costs and improves backup processes.

"Since launching Novell File Management Suite, we’ve seen great success among our customer base in a variety of vertical markets," continued Germanides. "No longer do organizations have to just ‘save everything,’ hoping to meet compliance requirements. The solution gives organizations a logical way to govern data while driving down excessive administrative costs."