Study: Lack of Data Organization Costs Enterprises Millions

It really does pay to be organized, according to a new study from IDC and Iron Mountain (IRM) examining the financial ramifications of proper data archive management.

The white paper, titled, “Mining for Insight: Rediscovering the Data Archive,” confirms that enterprises that effectively manage and organize their data stand to make up to $10 million in revenue each year once they tidy up their data stores. On average, companies surveyed in the study reported an average revenue increase of $7.5 million per year, in addition to saving several million dollars by avoiding lawsuits and reducing overall risk.

Organizations with well-defined data archives typically realize value on two fronts, including cost savings and added revenue from monetizing their archives, according to IDC. More than half of organizations polled reported $1 million in savings by reducing risk mitigation and avoiding litigation, with 21 percent reporting savings in excess of $10 million, according to the study.

Another 44 percent of organizations saw $1 million or more in savings from reduced operational and capital costs, with 18 percent exceeding $10 million in additional revenue per year simply by cleaning up their data archives.

“Data archiving isn’t just about meeting legal and compliance requirements anymore. The research shows that there are real financial benefits to be realized by implementing an effective data archiving strategy,” said Eileen Sweeney, senior vice president and general manager of Data Management at Iron Mountain, in a statement. “To truly leverage the power of enterprise information, organizations must first take a hard look at their data management program. Even organizations with advanced archiving processes can stand to gain cost savings and additional revenue streams.”

However, 76 percent of organizations surveyed said they believe they are already getting the maximum value out of their archives, which makes data storage a potential problem area for these businesses, according to IDC. Currently, only 38 percent of companies reported using archives for business analysis, which leads IDC to believe that business leaders are overlooking market signals and potential opportunities for improvement.

About three quarters of the remaining 24 percent of businesses who believe they could be utilizing their archives more effectively believe they could be extracting at least two times more value than they currently realize today.

“There’s a real disconnect between the value people think they’re currently realizing from their archives and the potential additional revenue they could stand to gain by simply managing their data more effectively,” said Sean Pike, program director, eDiscovery and Information Governance Research at IDC. “However, organizations of all sizes and across all industries can expect to see an uptick in revenue and cost savings by revisiting their archives to fulfill business objectives.”

For companies looking to boost their data organizational skills, IDC recommends hiring a chief data officer to oversee the company’s data archive, as well as to develop a clear strategy that includes data retention schedules and the overall value of data. Companies can also work to reduce the number of electronic archives where files are stored and institute a uniform process for archiving their data. This includes clear labeling of data and determining which information is worth archiving and which is not.

The bottom line? Treat your data archives like you would organize a closet or a bookshelf, and not only will you have easier access to information, but you’ll make money to boot.